YCRM Yuenglings Ice Cream Corporation (CE)

 

As filed with the Securities and Exchange Commission on May 29, 2024

 

File No. 333-277212

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM S-1/A

 

Amendment No. 2

 

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

Yuengling’s Ice Cream Corporation

 

Nevada		2000
(State or jurisdiction of Incorporation or organization)		(Primary Standard Industrial Classification Code)		(I.R.S. Employer Identification No.)

 

8910 West 192^nd Street, Suite N, Mokena, IL 60448

(312) 288-8000

(Address, including zip code, and telephone number, including area code,
of registrant’s principle executive offices)

 

Nevada Agency and Transfer Company

50 West Liberty Street, Suite 880

Reno, NV 89501

(775)–322 0626

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

 

with a copy to:

 

Erika Mariz Pineda, Esq.

2001 Market Street
Philadelphia PA 19103
(267) 710-8995

 

Approximate date of proposed sale to the public: as soon as practicable after the effective date of this Registration Statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

 

Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☒
						Emerging growth company	☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.

 

 

 

The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, Dated May 29, 2024

 

PROSPECTUS

 

YUENGLING’S ICE CREAM CORPORATION

 

600,000,000 SHARES

 

COMMON STOCK

 

This prospectus relates to the resale of up to 600,000,000 shares of our common stock, par value $0.001 per share, by Trillium Partners, LP (“TRILLIUM”), which are Put Shares that we will put to TRILLIUM pursuant to the Purchase Agreement. TRILLIUM may also be referred to in this document as the Selling Security Holder.

 

The Purchase Agreement with TRILLIUM provides that TRILLIUM is committed to purchase up to $3,000,000 of our common stock. We may draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Purchase Agreement.

 

The Put Shares included in this prospectus represent a portion of the shares issuable to TRILLIUM under the Purchase Agreement.

 

TRILLIUM is an “underwriter” within the meaning of the Securities Act in connection with the resale of our common stock under the Purchase Agreement. No other underwriter or person has been engaged to facilitate the sale of shares of our common stock in this offering. This offering will terminate 24 months after the registration statement to which this prospectus is made a part is declared effective by the SEC. TRILLIUM will pay us 85% of the Market Price during the Valuation Period, subject to a floor price of $0.005 per share, below which the Company shall not deliver a Put.

 

We will not receive any proceeds from the sale of these shares of common stock offered by Selling Security Holder. However, we will receive proceeds from the sale of our Put Shares under the Purchase Agreement. The proceeds will be used for general administrative expenses as well as for accounting and audit fees.

 

We will bear all costs associated with this registration.

 

The shares of our common stock registered hereunder are being offered for sale by Selling Security Holder at prices established on OTC Markets during the term of this offering. These prices will fluctuate based on the demand for our common stock. On  February 20, 2024, the closing price of our common stock was $0.0098 per share. We are using the closing price of $0.0098 per share for illustration purposes, as it is close to the average of the 52 week high and low, which are $0.0005 and $0.0235 as of February 20, 2024.

 

INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE RISK FACTORS IN THIS PROSPECTUS BEGINNING ON PAGE 11 FOR A DISCUSSION OF INFORMATION THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN OUR SECURITIES.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy the securities in any circumstances under which the offer or solicitation is unlawful. Neither the delivery of this prospectus nor any distribution of securities in accordance with this prospectus shall, under any circumstances, imply that there has been no change in our affairs since the date of this prospectus.

 

We will receive no proceeds from the sale of the shares of common stock sold by TRILLIUM. However, we will receive proceeds from the sale of securities pursuant to our exercise of the Put Right.

 

The Date of This Prospectus Is: May 29, 2024

 

 

YUENGLING’S ICE CREAM CORPORATION

 

Table of Contents

 

		PAGE
Summary		1
Risk Factors		11
Forward-Looking Statements		32
Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
Use of Proceeds		35
Plan of Distribution		37
Market for Common Equity and Related Stockholder Matters		39
Available Information		41
Directors, Executive Officers, Promoters and Control Persons		42
Legal Proceedings		46
Security Ownership of Certain Beneficial Owners and Management		48
Certain Relationships and Related Transactions		49
Financial Statements		F-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Factors

 

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock, when and if we trade at a later date, could decline due to any of these risks, and you may lose all or part of your investment.

 

We will need to raise additional capital.

 

We will need to obtain additional operating capital either through equity offerings, debt offerings or a combination thereof, in the future. In addition, if, in the future, we are not capable of generating sufficient revenues from operations and its capital resources are insufficient to meet future requirements, we may have to raise funds to allow us to continue to commercialize, market and sell our products. We cannot be certain that funding will be available on acceptable terms or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct business. If we are unable to raise additional capital if required or on acceptable terms, we may have to significantly scale back, delay or discontinue the development and/or commercialization of our technology, restrict our operations or obtain funds by entering into agreements on unattractive terms.

 

Our financial status raises doubt about our ability to continue as a going concern.

 

Our cash and cash equivalents were $0 at October 31, 2023. For the year ended October 31, 2023, the Company has incurred a net loss of $424,031 and used cash in operations of $120,832. The working capital deficit, stockholders’ deficit and accumulated deficit were $1,657,168, $2,014,190 and $4,456,156, respectively, at October 31, 2023. These matters raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of our condensed consolidated financial statements included elsewhere in this Form S-1. Our ability to continue as a going concern is dependent upon management’s ability to further implement its business plan and raise additional capital as needed from the sales of stock or debt. We continue to implement cost-cutting measures, raise equity through our effective S-1 private placement, restructure or repay our secured obligations and structure payment plans, if necessary, with vendors and service providers who are owed money. The accompanying consolidated financial statements elsewhere in this Form S-1 do not include any adjustments that might be required should we be unable to continue as a going concern. We continue to incur significant operating losses, and management expects that significant on-going operating expenditures will be necessary to successfully implement our business plan and develop and market our products. Implementation of our plans and our ability to continue as a going concern will depend upon our ability to market our technology and raise additional capital.

 

Management believes that we have access to capital resources through possible public or private equity offerings, exchange offers, debt financings, corporate collaborations or other means. In addition, we continue to explore opportunities to strategically monetize our technology and our services, although there can be no assurance that we will be successful with such plans. We have historically been able to raise capital through equity and debt offerings, although no assurance can be provided that we will continue to be successful in the future. If we are unable to raise sufficient capital through 2024 or otherwise, we may be required to severely curtail, or even to cease, our operations.

 

If our proposed marketing efforts are unsuccessful, we may not earn enough revenue to expand our operations.

 

Our success will depend on investment in marketing resources and the successful implementation of our marketing plan. Our marketing plan may include advertising and promotional materials and advertising campaigns in print and/or broadcast media. We cannot give any assurance that our marketing efforts will be successful. If they are not, revenue may not be sufficient to cover our fixed costs and we may not become profitable.

 

 

We may be unable to respond to rapid technology changes and innovative products.

 

In a constantly changing and innovative technology market with frequent new product introductions, enhancement and modifications, we may be forced to implement and develop new technologies into our products for anticipation of changing customer requirements that may significantly impact costs in order to retain or enhance our competitive position in existing and new markets.

 

There is intense competition in our market.

 

Our market is very saturated and intensely competitive. Our management is aware that failure to compete with direct market leading companies and new entrants will affect overall business. Therefore, the faster innovative applications and technologies are implemented to the developed product; the better the pricing and commercial business strategies management will be able to offer to businesses. Competitive factors in this market are all related to product performance, price, customer service, training platforms, reputation, sales and marketing effectiveness.

 

Future acquisitions may be unsuccessful and may negatively affect operations and financial condition.

 

The integration of businesses, personnel, product lines and technologies can be difficult, time consuming and subject to significant risks. Any difficulties could disrupt our ongoing business, distract our management and employees, increase our expenses and decrease our revenue.

 

We may be unable to protect our intellectual property.

 

Our ability to protect proprietary technology and operate without infringing the rights of others will allow our business to compete successfully and achieve future revenue growth. If we are unable to protect proprietary technology or infringe upon the rights of others, it could negatively impact our operating results.

 

If we lose our key personnel or are unable to hire additional personnel, we will have trouble growing our business.

 

We depend to a large extent on the abilities of our key management. The loss of any key employee or our inability to attract or retain other qualified employees could seriously impair our results of operations and financial condition.

 

Our future success depends on our ability to attract, retain and motivate highly skilled technical, marketing, management, accounting and administrative personnel. We plan to hire additional personnel in all areas of our business as we grow. Competition for qualified personnel is intense. As a result, we may be unable to attract and retain qualified personnel. We may also be unable to retain the employees that we currently employ or to attract additional technical personnel. The failure to retain and attract the necessary personnel could seriously harm our business, financial condition and results of operations.

 

Because our executive officers collectively own a majority of our outstanding shares, they can elect our directors without regard to other stockholders’ votes.

 

Our CEO, Richard Jordan, has majority voting control through his ownership of 475,000 shares of Series A preferred stock. As a result, he may elect all of our directors, who in turn elect all executive officers, without regard to the votes of other stockholders. The voting control of Mr. Jordan gives him the ability to authorize change-in-control transactions, amendments to our Articles of Incorporation and other matters that may not be in the best interests of our minority stockholders. In this regard, Mr. Jordan has absolute control over our management and affairs.

 

Acquisitions, investments and other strategic relationships and alliances, if pursued, may involve significant cash expenditures, debt incurrence, operating losses, and expenses that could have a material adverse effect on our financial condition and operating results. Acquisitions involve numerous other risks, including:

 

 

●

Diversion of management time and attention from daily operations;

 

●

Difficulties integrating acquired businesses, technologies and personnel into our business;

 

●

Inability to obtain required regulatory approvals and/or required financing on favorable terms;

 

●

Entry into new markets in which we have little previous experience;

 

●

Potential loss of our key employees, key contractual relationships or key customers of acquired companies; and

 

●

Assumption of the liabilities and exposure to unforeseen liabilities of acquired companies.

 

If these types of transactions are pursued, it may be difficult for us to complete these transactions quickly and to integrate these acquired operations efficiently into its current business operations. Any acquisitions, investments or other strategic relationships and alliances by us may ultimately harm our business and financial condition. In addition, future acquisitions may not be as successful as originally anticipated and may result in impairment charges.

 

We may be required to record a significant charge to earnings as we are required to reassess our goodwill or other intangible assets arising from acquisitions.

 

We are required under U.S. GAAP to review our intangible assets, including goodwill for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment annually or more frequently if facts and circumstances warrant a review. Factors that may be considered a change in circumstances indicating that the carrying value of our amortizable intangible assets may not be recoverable include a decline in stock price and market capitalization and slower or declining growth rates in our industry. We may be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined.

 

 

Risks Related to Consolidated Operations

 

Since we have acquired ReachOut and changed our focus to cyber security, it is difficult for potential investors to evaluate our future consolidated business.

 

We completed the ReachOut acquisition on November 9, 2023. Therefore, our limited consistent operating history makes it difficult for potential investors to evaluate our business or prospective operations and your purchase of our securities. Therefore, we are subject to the risks inherent in the financing, expenditures, complications and delays inherent in a newly combined business. These risks are described below under the risk factor titled “Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results.”

 

Failure to manage our growth may be detrimental to our business because our infrastructure may not be adequate for expansion

 

The Reachout acquisition and any planned acquisition require a substantial expansion of our systems, workforce and facilities. We may fail to adequately manage our anticipated future growth. The substantial growth in our operations as a result of the Reachout and planned acquisitions is expected to place a significant strain on our administrative, financial and operational resources, and increase demands on our management and on our operational and administrative systems, controls and other resources. Reachout’s growth strategy includes broadening its service and product offerings, implementing an aggressive marketing plan and employing leading technologies. There can be no assurance that our systems, procedures and controls will be adequate to support our operations as they expand. We cannot assure you that our existing personnel, systems, procedures or controls will be adequate to support our operations in the future or that we will be able to successfully implement appropriate measures consistent with our growth strategy. As part of this growth, we may have to implement new operational and financial systems, procedures and controls to expand, train and manage our employee base, and maintain close coordination among our staff. We cannot guarantee that we will be able to do so, or that if we are able to do so, we will be able to effectively integrate them into our existing staff and systems.

 

To the extent we acquire other businesses, we will also need to integrate and assimilate new operations, technologies and personnel. The integration of new personnel will continue to result in some disruption to ongoing operations. The ability to effectively manage growth in a rapidly evolving market requires effective planning and management processes. We will need to continue to improve operational, financial and managerial controls, reporting systems and procedures, and will need to continue to expand, train and manage our work force. There can be no assurance that we would be able to accomplish such an expansion on a timely basis. If we are unable to affect any required expansion and are unable to perform under contracts on a timely and satisfactory basis, the reputation and eligibility to secure additional contracts in the future could be damaged. The failure to perform could also result in a contract terminations and significant liability. Any such result would adversely affect our business and financial condition.

 

We will need to increase the size of our organization, and we may experience difficulties in managing growth, which would hurt our financial performance.

 

In addition to employees hired from Reachout and any other companies which we may acquire, we will need to expand our employee infrastructure for managerial, operational, financial and other resources at the parent company level. Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees. Our future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.

 

In order to manage our future growth, we will need to continue to improve our management, operational and financial controls and our reporting systems and procedures. All of these measures will require significant expenditures and will demand the attention of management. If we do not continue to enhance our management personnel and our operational and financial systems and controls in response to growth in our business, we could experience operating inefficiencies that could impair our competitive position and could increase our costs more than we had planned. If we are unable to manage growth effectively, our business, financial condition and operating results could be adversely affected.

 

 

Our business depends on experienced and skilled personnel, and if we are unable to attract and integrate skilled personnel, it will be more difficult for us to manage our business and complete contracts.

 

The success of our business depends on the skill of our personnel. Accordingly, it is critical that we maintain, and continue to build, a highly experienced management team and specialized workforce, including sales professionals. Competition for personnel, particularly those with expertise in government consulting and a security clearance is high, and identifying candidates with the appropriate qualifications can be costly and difficult. We may not be able to hire the necessary personnel to implement our business strategy given our anticipated hiring needs, or we may need to provide higher compensation or more training to our personnel than we currently anticipate. In addition, our ability to recruit, hire and indirectly deploy former employees of the U.S. Government is subject to complex laws and regulations, which may serve as an impediment to our ability to attract such former employees.

 

Our business is labor intensive and our success depends on our ability to attract, retain, train and motivate highly skilled employees, including employees who may become part of our organization in connection with future acquisitions. The increase in demand for consulting, technology integration and managed services has further increased the need for employees with specialized skills or significant experience in these areas. Our ability to expand our operations will be highly dependent on our ability to attract a sufficient number of highly skilled employees and to retain our employees and the employees of companies that we have acquired. We may not be successful in attracting and retaining enough employees to achieve our desired expansion or staffing plans. Furthermore, the industry turnover rates for these types of employees are high and we may not be successful in retaining, training or motivating our employees. Any inability to attract, retain, train and motivate employees could impair our ability to adequately manage and complete existing projects and to accept new client engagements. Such inability may also force us to increase our hiring of independent contractors, which may increase our costs and reduce our profitability on client engagements. We must also devote substantial managerial and financial resources to monitoring and managing our workforce. Our future success will depend on our ability to manage the levels and related costs of our workforce.

 

In the event we are unable to attract, hire and retain the requisite personnel and subcontractors, we may experience delays in completing contracts in accordance with project schedules and budgets, which may have an adverse effect on our financial results, harm our reputation and cause us to curtail our pursuit of new contracts. Further, any increase in demand for personnel may result in higher costs, causing us to exceed the budget on a contract, which in turn may have an adverse effect on our business, financial condition and operating results and harm our relationships with our customers.

 

We expect to expand our business, in part, through future acquisitions, but we may not be able to identify or complete suitable acquisitions, which could harm our financial performance.

 

Acquisitions are a significant part of our growth strategy. We continually review, evaluate and consider potential investments and acquisitions. In such evaluations, we are required to make difficult judgments regarding the value of business opportunities and the risks and cost of potential liabilities. We plan to use acquisitions of companies or technologies to expand our project skill-sets and capabilities, expand our geographic markets, add experienced management and increase our product and service offerings. Although we have identified several acquisition considerations, we may be unable to implement our growth strategy if we cannot reach agreement with acquisition targets on acceptable terms or arrange required financing for acquisitions on acceptable terms. In addition, the time and effort involved in attempting to identify acquisition candidates and consummate acquisitions may divert members of our management from the operations of our company.

 

Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results.

 

If we are successful in consummating acquisitions, those acquisitions could subject us to a number of risks, including, but not limited to:

 

 

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the purchase price we pay and/or unanticipated costs could significantly deplete our cash reserves or result in dilution to our existing stockholders;

 

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we may find that the acquired company or technologies do not improve market position as planned;

 

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we may have difficulty integrating the operations and personnel of the acquired company, as the combined operations will place significant demands on the Company’s management, technical, financial and other resources;

 

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key personnel and customers of the acquired company may terminate their relationships with the acquired company as a result of the acquisition;

 

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we may experience additional financial and accounting challenges and complexities in areas such as tax planning and financial reporting;

 

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we may assume or be held liable for risks and liabilities (including environmental-related costs) as a result of our acquisitions, some of which we may not be able to discover during our due diligence or adequately adjust for in our acquisition arrangements;

 

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our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises;

 

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we may incur one-time write-offs or restructuring charges in connection with the acquisition;

 

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we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; and

 

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we may not be able to realize the cost savings or other financial benefits we anticipated.

 

We cannot assure you that we will successfully integrate or profitably manage any acquired business. In addition, we cannot assure you that, following any acquisition, our continued business will achieve sales levels, profitability, efficiencies or synergies that justify acquisition or that the acquisition will result in increased earnings for us in any future period. These factors could have a material adverse effect on our business, financial condition and operating results.

 

Insurance and contractual protections may not always cover lost revenue, increased expenses or liquidated damages payments, which could adversely affect our financial results.

 

Although we maintain insurance and intend to obtain warranties from suppliers, obligate subcontractors to meet certain performance levels and attempt, where feasible, to pass risks we cannot control to our customers, the proceeds of such insurance, warranties, performance guarantees or risk sharing arrangements may not be adequate to cover lost revenue, increased expenses or liquidated damages payments that may be required in the future.

 

We may be subject to damages resulting from claims that the Company or our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

 

Upon completion of any acquisitions by the Company, we may be subject to claims that our acquired companies and their employees may have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers or competitors. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in defending such claims, in addition to paying money claims, we may lose valuable intellectual property rights or personnel. A loss of key research personnel or their work product could hamper or prevent our ability to commercialize certain products, which could severely harm our business.

 

 

The loss of our Chief Executive Officer (CEO) or other key personnel may adversely affect our operations.

 

The Company’s success depends to a significant extent upon the operation, experience, and continued services of certain of its officers, including our CEO, as well as other key personnel. While our CEO and the executive officers of Reachout are expected to be employed under future employment contracts, there is no assurance we will be able to retain their services. The loss of our CEO or several of the other key personnel could have an adverse effect on the Company. If the CEO or other executive officers were to leave, we would face substantial difficulty in hiring a qualified successor and could experience a loss in productivity while any successor obtains the necessary training and experience. In addition, our CEO, CFO and other key personnel do not have prior experience in SEC reporting obligations. Furthermore, we do not maintain “key person” life insurance on the lives of any executive officer and their death or incapacity would have a material adverse effect on us. The competition for qualified personnel is intense, and the loss of services of certain key personnel could adversely affect our business.

 

Internal system or service failures could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability.

 

Any system or service disruptions, including those caused by ongoing projects to improve our information technology systems and the delivery of services, if not anticipated and appropriately mitigated, could have a material adverse effect on our business including, among other things, an adverse effect on our ability to bill our customers for work performed on our contracts, collect the amounts that have been billed and produce accurate financial statements in a timely manner. We are also subject to systems failures, including network, software or hardware failures, whether caused by us, third-party service providers, cyber security threats, natural disasters, power shortages, terrorist attacks or other events, which could cause loss of data and interruptions or delays in our business, cause us to incur remediation costs, subject us to claims and damage our reputation. In addition, the failure or disruption of our communications or utilities could cause us to interrupt or suspend our operations or otherwise adversely affect our business. Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, our future results could be adversely affected.

 

We expect to enter into joint ventures, teaming and other arrangements, and these activities involve risks and uncertainties.

 

We expect to enter into joint ventures, teaming and other arrangements. These activities involve risks and uncertainties, including the risk of the joint venture or applicable entity failing to satisfy its obligations, which may result in certain liabilities to us for guarantees and other commitments, the challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements.

 

Our business and operations expose us to numerous legal and regulatory requirements and any violation of these requirements could harm our business.

 

We are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, immigration, taxation, anticorruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition. Compliance with diverse and changing legal requirements is costly, time-consuming and requires significant resources. We are also focused on expanding our business in industries, which are highly regulated and may expose us to increased compliance risk. Violations of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.

 

 

If we do not adequately protect our intellectual property rights, we may experience a loss of revenue and our operations may be materially harmed.

 

We rely upon confidentiality agreements signed by our employees, consultants and third parties to protect our intellectual property. We cannot assure you that we can adequately protect our intellectual property or successfully prosecute potential infringement of our intellectual property rights. Also, we cannot assure you that others will not assert rights in, or ownership of, trademarks and other proprietary rights of ours or that we will be able to successfully resolve these types of conflicts to our satisfaction. Our failure to protect our intellectual property rights may result in a loss of revenue and could materially adversely affect our operations and financial condition.

 

Difficult conditions in the global capital markets and the economy generally may materially adversely affect our business and results of operations.

 

Our results of operations are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. Weak economic conditions sustained uncertainty about global economic conditions, concerns about future U.S. budgetary cuts, or a prolonged or further tightening of credit markets could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. In the event of extreme prolonged adverse market events, such as a global credit crisis, we could incur significant losses.

 

 

Risks Related to Our Common Stock

 

We are eligible to be treated as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

 

We are an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which we refer to as the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive compensation in this Form S-1 and our periodic reports and proxy statements and (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this Form S-1. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700.0 million as of any June 30 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately. Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the later of our second annual report or the first annual report required to be filed with the Commission following the date we are no longer an “emerging growth company” as defined in the JOBS “Act. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal controls in the future.

 

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

 

Our directors and executive officers beneficially own a significant number of shares of our common stock. Their interests may conflict with our outside stockholders, who may be unable to influence management and exercise control over our business.

 

As of the date of this Form S-1, our executive officers directors and the original equity investors in ReachOut Technology together beneficially own approximately 87.5% of our shares of common stock through the ownership of Series C Convertible Preferred Stock and the CEO owns 475,000 shares of Series A preferred stock the voting rights for the Series A shares entitles the shareholder to voting rights equal to the number of common shares outstanding 232,977,455 which will always grant the holder a majority voting capability. As a result, our executive officers and directors may be able to: elect or defeat the election of our directors, amend or prevent amendment to our certificates of incorporation or bylaws, effect or prevent a merger, sale of assets or other corporate transaction, and control the outcome of any other matter submitted to the shareholders for vote. Accordingly, our outside stockholders may be unable to influence management and exercise control over our business.

 

 

We do not intend to pay cash dividends to our stockholders, so you will not receive any return on your investment in our Company prior to selling your interest in the Company.

 

We have never paid any dividends to our common stockholders as a public company. We currently intend to retain any future earnings for funding growth and, therefore, do not expect to pay any cash dividends in the foreseeable future. If we determine that we will pay cash dividends to the holders of our common stock, we cannot assure that such cash dividends will be paid on a timely basis. The success of your investment in the Company will likely depend entirely upon any future appreciation. As a result, you will not receive any return on your investment prior to selling your shares in our Company and, for the other reasons discussed in this “Risk Factors” section, you may not receive any return on your investment even when you sell your shares in our Company.

 

Anti-Takeover, Limited Liability and Indemnification Provisions

 

Some provisions of our Articles of Incorporation and by-laws may deter takeover attempts, which may inhibit a takeover that stockholders consider favorable and limit the opportunity of our stockholders to sell their shares at a favorable price.

 

Under our Articles of Incorporation, our Board of Directors may issue additional shares of common or preferred stock. Our Board of Directors has the ability to authorize “blank check” preferred stock without future shareholder approval. This makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us by means of a merger, tender offer, proxy contest or otherwise, including a transaction in which our stockholders would receive a premium over the market price for their shares and/or any other transaction that might otherwise be deemed to be in their best interests, and thereby protects the continuity of our management and limits an investor’s opportunity to profit by their investment in the Company. Specifically, if in the due exercise of its fiduciary obligations, the Board of Directors were to determine that a takeover proposal was not in our best interest, shares could be issued by our Board of Directors without stockholder approval in one or more transactions that might prevent or render more difficult or costly the completion of the takeover by:

 

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diluting the voting or other rights of the proposed acquirer or insurgent stockholder group,

 

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putting a substantial voting block in institutional or other hands that might undertake to support the incumbent Board of Directors, or

 

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effecting an acquisition that might complicate or preclude the takeover.

 

Our indemnification of our officers and directors may cause us to use corporate resources to the detriment of our stockholders.

 

Our Articles of Incorporation eliminates the personal liability of our directors for monetary damages arising from a breach of their fiduciary duty as directors to the fullest extent permitted by Nevada law. This limitation does not affect the availability of equitable remedies, such as iGAunctive relief or rescission. Our Articles of Incorporation requires us to indemnify our directors and officers to the fullest extent permitted by Nevada law, including in circumstances in which indemnification is otherwise discretionary under Nevada law.

 

Under Nevada law, we may indemnify our directors or officers or other persons who were, are or are threatened to be made a named defendant or respondent in a proceeding because the person is or was our director, officer, employee or agent, if we determine that the person:

 

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conducted himself or herself in good faith, reasonably believed, in the case of conduct in his or her official capacity as our director or officer, that his or her conduct was in our best interests, and, in all other cases, that his or her conduct was at least not opposed to our best interests; and

 

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in the case of any criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.

 

 

These persons may be indemnified against expenses, including attorneys’ fees, judgments, fines, including excise taxes, and amounts paid in settlement, actually and reasonably incurred, by the person in connection with the proceeding. If the person is found liable to the corporation, no indemnification will be made unless the court in which the action was brought determines that the person is fairly and reasonably entitled to indemnity in an amount that the court will establish.

 

Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers or persons controlling us under the above provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

The obligations associated with being a public company require significant resources and management attention, which may divert from our business operations.

 

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and The Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition, proxy statement, and other information. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. Our Chief Executive Officer and Chief Financial Officer will need to certify that our disclosure controls and procedures are effective in ensuring that material information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We may need to hire additional financial reporting, internal controls and other financial personnel in order to develop and implement appropriate internal controls and reporting procedures. As a result, we will incur significant legal, accounting and other expenses. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. In addition, we cannot predict or estimate the amount of additional costs we may incur in order to comply with these requirements. We anticipate that these costs will materially increase our selling, general and administrative expenses.

 

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting. In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies. If we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act of 2002, then we may not be able to obtain the independent account and certifications required by that act, which may preclude us from keeping our filings with the SEC current, and interfere with the ability of investors to trade our securities or our ability to list our shares on any national securities exchange.

 

If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately or prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

 

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. With each prospective acquisition we may make we will conduct whatever due diligence is necessary or prudent to assure us that the acquisition target can comply with the internal controls’ requirements of the Sarbanes-Oxley Act. Notwithstanding our diligence, certain internal controls deficiencies may not be detected. As a result, any internal control deficiencies may adversely affect our financial condition, results of operations and access to capital. We have not performed an in-depth analysis to determine if historical undiscovered failures of internal controls exist, and may in the future discover areas of our internal controls that need improvement.

 

 

Public company compliance may make it more difficult to attract and retain officers and directors.

 

The Sarbanes-Oxley Act and rules implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, these rules and regulations increase our compliance costs and make certain activities more time consuming and costly. As a public company, these rules and regulations may make it more difficult and expensive for us to maintain our director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers, and to maintain insurance at reasonable rates, or at all.

 

Our stock price may be volatile.

 

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

 

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our ability to execute our business plan and complete prospective acquisitions;

 

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changes in our industry;

 

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competitive pricing pressures;

 

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our ability to obtain working capital financing;

 

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additions or departures of key personnel;

 

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limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;

 

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sales of our common stock;

 

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operating results that fall below expectations;

 

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regulatory developments;

 

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economic and other external factors;

 

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period-to-period fluctuations in our financial results;

 

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our inability to develop or acquire new or needed technologies;

 

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the public’s response to press releases or other public announcements by us or third parties, including filings with the SEC;

 

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changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;

 

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the development and sustainability of an active trading market for our common stock; and

 

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any future sales of our common stock by our officers, directors and significant stockholders.

 

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

 

 

Our shares of common stock are thinly traded, the price may not reflect our value, and there can be no assurance that there will be an active market for our shares of common stock either now or in the future.

 

Our shares of common stock are thinly traded, our common stock is available to be traded and is held by a small number of holders, and the price may not reflect our actual or perceived value. There can be no assurance that there will be an active market for our shares of common stock either now or in the future. The market liquidity will be dependent on the perception of our operating business, among other things. We will take certain steps including utilizing investor awareness campaigns and firms, press releases, road shows and conferences to increase awareness of our business. Any steps that we might take to bring us to the awareness of investors may require that we compensate consultants with cash and/or stock. There can be no assurance that there will be any awareness generated or the results of any efforts will result in any impact on our trading volume. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business, and trading may be at an inflated price relative to the performance of the Company due to, among other things, the availability of sellers of our shares.

 

If an active market should develop, the price may be highly volatile. Because there is currently a low price for our shares of common stock, many brokerage firms or clearing firms are not willing to effect transactions in the securities or accept our shares for deposit in an account. Many lending institutions will not permit the use of low-priced shares of common stock as collateral for any loans. Furthermore, our securities are currently traded on the OT Markets where it is more difficult (1) to obtain accurate quotations, (2) to obtain coverage for significant news events because major wire services generally do not publish press releases about these companies, and (3) to obtain needed capital.

 

Our common stock may be deemed a “penny stock,” which would make it more difficult for our investors to sell their shares.

 

Our common stock is currently subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on The Nasdaq Stock Market or another national securities exchange and trades at less than $4.00 per share, other than companies that have had average revenues of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in these securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

 

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

 

If our stockholders sell substantial amounts of our common stock in the public market upon the expiration of any statutory holding period under Rule 144, or shares issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an “overhang” and, in anticipation of which, the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

 

Our Form S-1 filings disclose the dilutive effect of the Company’s stock sales under various offerings.

 

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the price of our common stock and impair our ability to raise capital through the sale of shares.

 

 

Because we became public by means of a reverse merger, we may not be able to attract the attention of major brokerage firms.

 

There may be risks associated with us having become public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of us since there is no incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will, in the future, want to conduct any offerings on our behalf.

 

Any substantial sale of stock by existing shareholders could depress the market value of our stock, thereby devaluing the market price and causing investors to risk losing all or part of their investment.

 

Stockholders, including our directors and officers hold a large number of our outstanding shares. We can make no prediction as to the effect, if any, that sales of shares, or the availability of shares for future sale, will have on the prevailing market price of our shares of common stock. Sales of substantial amounts of shares in the public market, or the perception that such sales could occur, could depress prevailing market prices for the shares. Such sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price which it deems appropriate.

 

Our issuance of preferred stock in the future may adversely affect the rights of our common stockholders.

 

Our Articles of Incorporation, as amended, permits us to issue up to 20,000,000 shares of preferred stock with such rights and preferences as the Board of Directors may designate. As a result, our Board of Directors may authorize a series of preferred stock that would grant to preferred stockholders’ preferential rights to our assets upon liquidation; the right to receive dividends before dividends become payable to our common stockholders; the right to redemption of the preferred stock prior to the redemption of our common stock; and super-voting rights to our preferred stockholders. To the extent that we designate and issue such a class or series of preferred stock, the rights of our common stockholders may be impaired.

 

 

Risks Related to Our IP

 

Our Success May Depend on Our Ability to Obtain and Protect the Proprietary Information.

 

As we acquire companies with intellectual property (“IP”) that is important to the development of our business model, we will need to:

 

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obtain valid and enforceable patents;

 

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protect trade secrets; and

 

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operate without infringing upon the proprietary rights of others.

 

We will be able to protect our proprietary technology from unauthorized use by third parties only to the extent that such proprietary rights are covered by valid and enforceable patents or are effectively maintained as trade secrets. Any non-confidential disclosure to or misappropriation by third parties of our confidential or proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.

 

The patent application process, also known as patent prosecution, is expensive and time-consuming, and we and our current or future licensors and licensees may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we or our current licensors, or any future licensors or licensees, will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Therefore, these and any of our patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims or inventorship. If we or our current licensors or licensees, or any future licensors or licensees, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our current licensors or licensees, or any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form or preparation of our patents or patent applications, such patents or applications may be invalid and unenforceable. Any of these outcomes could impair our ability to prevent competition from third parties, which may harm our business.

 

The patent applications that we may own or license may fail to result in issued patents in the United States or in other countries. Even if patents do issue on such patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. For example, U.S. patents can be challenged by any person before the new USPTO Patent Trial and Appeals Board at any time within the one-year period following that person’s receipt of an allegation of infringement of the patents. Patents granted by the European Patent Office may be similarly opposed by any person within nine months from the publication of the grant. Similar proceedings are available in other jurisdictions, and in the United States, Europe and other jurisdictions third parties can raise questions of validity with a patent office even before a patent has granted. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims. If the breadth or strength of protection provided by the patents and patent applications we hold or pursue with respect to our product candidates is successfully challenged, then our ability to commercialize such product candidates could be negatively affected, and we may face unexpected competition that could harm our business. Further, if we encounter delays in our clinical trials, the period of time during which we or our collaborators could market our product candidates under patent protection would be reduced.

 

The degree of future protection of our proprietary rights is uncertain. Patent protection may be unavailable or severely limited in some cases and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

 

 

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we might not have been the first to invent or the first to file the inventions covered by each of our pending patent applications and issued patents;

 

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others may be able to make, use, sell, offer to sell or import products that are similar to our products or product candidates but that are not covered by the claims of our patents; others may independently develop similar or alternative technologies or duplicate any of our technologies;

 

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the proprietary rights of others may have an adverse effect on our business;

 

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any proprietary rights we do obtain may not encompass commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties;

 

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any patents we obtain or our in-licensed issued patents may not be valid or enforceable; or

 

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we may not develop additional technologies or products that are patentable or suitable to maintain as trade secrets.

 

If we fail to prosecute, maintain and enforce patent protection for our product candidates, our ability to develop and commercialize our product candidates could be harmed and we might not be able to prevent competitors from making, using and selling competing products. This failure to properly protect the intellectual property rights relating to our product candidates could harm our business, financial condition and operating results. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

 

Even where laws provide protection, costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and the outcome of such litigation would be uncertain. If we or one of our collaborators were to initiate legal proceedings against a third party to enforce a patent covering the product candidate, the defendant could assert an affirmative defense or counterclaim that our patent is not infringed, invalid and/or unenforceable. In patent litigation in the United States, defendant defenses and counterclaims alleging non-infringement, invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, anticipation or obviousness, and lack of written description, definiteness or enablement. Patents may be unenforceable if someone connected with prosecution of the patent withheld material information from the USPTO, or made a misleading statement, during prosecution. The outcomes of proceedings involving assertions of invalidity and unenforceability are unpredictable. It is possible that prior art of which we and the patent examiner were unaware during prosecution exists, which would render our patents invalid. Moreover, it is also possible that prior art may exist that we are aware of, but that we do not believe are relevant to our current or future patents, that could nevertheless be determined to render our patents invalid. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability of our patents covering one of our product candidates, we would lose at least part, and perhaps all, of the patent protection on such product candidate. Such a loss of patent protection would harm our business. Moreover, our competitors could counterclaim in any suit to enforce our patents that we infringe their intellectual property. Furthermore, some of our competitors have substantially greater intellectual property portfolios, and resources, than we do.

 

Our ability to stop third parties from using our technology or making, using, selling, offering to sell our technology is dependent upon the extent to which we have rights under valid and enforceable patents that cover these activities. If any patent we currently or in the future may own or license is deemed not infringed, invalid or unenforceable, it could impact our commercial success. We cannot predict the breadth of claims that may be issued from any patent applications we currently or may in the future own or license from third parties.

 

To the extent that consultants or key employees apply technological information independently developed by them or by others to our product candidates, disputes may arise as to who has the proprietary rights to such information and product candidates, and certain of such disputes may not be resolved in our favor. Consultants and key employees that work with our confidential and proprietary technologies are required to assign all intellectual property rights in their inventions and discoveries created during the scope of their work to our company. However, these consultants or key employees may terminate their relationship with us, and we cannot preclude them indefinitely from dealing with our competitors.

 

 

If we are unable to prevent disclosure of our trade secrets or other confidential information to third parties, our competitive position may be impaired.

 

We also may rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable. Our ability to stop third parties from obtaining the information or know-how necessary to make, use, sell, offer to sell or import our products or practice our technology is dependent in part upon the extent to which we prevent disclosure of the trade secrets that cover these activities. Trade secret rights can be lost through disclosure to third parties. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our trade secrets to third parties, resulting in loss of trade secret protection. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how, which would not constitute a violation of our trade secret rights. Enforcing a claim that a third party is engaged in the unlawful use of our trade secrets is expensive, difficult and time consuming, and the outcome is unpredictable. In addition, recognition of rights in trade secrets and a willingness to enforce trade secrets differs in certain jurisdictions.

 

If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation could harm our business.

 

Our commercial success depends significantly on our ability to operate without infringing, violating or misappropriating the patents and other proprietary rights of third parties. Our own technologies we acquire or develop may infringe, violate or misappropriate the patents or other proprietary rights of third parties, or we may be subject to third-party claims of such infringement. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties, exist in the fields in which we are developing our product candidates. Because some patent applications may be maintained in secrecy until the patents are issued, because publication of patent applications is often delayed, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that we were the first to invent the technology or that others have not filed patent applications for technology covered by our pending applications. We may not be aware of patents that have already issued that a third party might assert are infringed by our product candidates. It is also possible that patents of which we are aware, but which we do not believe are relevant to our product candidates, could nevertheless be found to be infringed by our product candidates. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect. In the future, we may agree to indemnify our manufacturing partners against certain intellectual property claims brought by third parties.

 

Intellectual property litigation involves many risks and uncertainties, and there is no assurance that we will prevail in any lawsuit brought against us. Third parties making claims against us for infringement, violation or misappropriation of their intellectual property rights may seek and obtain iGAunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. Defense of these claims, regardless of their merit, would cause us to incur substantial expenses and, would be a substantial diversion of resources from our business. In the event of a successful claim of any such infringement, violation or misappropriation, we may need to obtain licenses from such third parties and we and our partners may be prevented from pursuing product development or commercialization and/or may be required to pay damages. We cannot be certain that any licenses required under such patents or proprietary rights would be made available to us, or that any offer to license would be made available to us on commercially reasonable terms. If we cannot obtain such licenses, we and our collaborators may be restricted or prevented from manufacturing and selling products employing our technology. These adverse results, if they occur, could adversely affect our business, results of operations and prospects, and the value of our shares.

 

 

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

 

The defense and prosecution of contractual or intellectual property lawsuits, USPTO interference or derivation proceedings, European Patent Office oppositions and related legal and administrative proceedings in the United States, Europe and other countries, involve complex legal and factual questions. As a result, such proceedings may be costly and time-consuming to pursue and their outcome is uncertain.

 

Litigation may be necessary to:

 

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protect and enforce our patents and any future patents issuing on our patent applications;

 

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enforce or clarify the terms of the licenses we have granted or may be granted in the future;

 

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protect and enforce trade secrets, know-how and other proprietary rights that we own or have licensed, or may license in the future; or

 

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determine the enforceability, scope and validity of the proprietary rights of third parties and defend against alleged patent infringement.

 

Competitors may infringe our intellectual property. As a result, we may be required to file infringement claims to stop third-party infringement or unauthorized use. This can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patent claims do not cover its technology or that the factors necessary to grant an iGAunction against an infringer are not satisfied. An adverse determination of any litigation or other proceedings could put one or more of our patents at risk of being invalidated, interpreted narrowly, or amended such that they do not cover our product candidates. Moreover, such adverse determinations could put our patent applications at risk of not issuing, or issuing with limited and potentially inadequate scope to cover our product candidates or to prevent others from marketing similar products.

 

Interference, derivation or other proceedings brought at the USPTO, may be necessary to determine the priority or patentability of inventions with respect to our patent applications or those of our licensors or potential collaborators. Litigation or USPTO proceedings brought by us may fail or may be invoked against us by third parties. Even if we are successful, domestic or foreign litigation or USPTO or foreign patent office proceedings may result in substantial costs and distraction to our management. We may not be able, alone or with our licensors or potential collaborators, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States.

 

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or other proceedings. In addition, during the course of this kind of litigation or proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.

 

Some of our competitors may be able to sustain the costs of patent-related disputes, including patent litigation, more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

 

 

We may not be able to enforce our intellectual property rights throughout the world.

 

Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive. The requirements for patentability may differ in certain countries, particularly in developing countries. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. Additionally, laws of some countries outside of the United States do not afford intellectual property protection to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our ability to enforce our patents to stop infringing activities is inadequate. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

 

Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business. Furthermore, while we intend to protect our intellectual property rights in major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

 

 

Risks Related to this Offering.

 

TRILLIUM WILL PAY LESS THAN THE PREVAILING MARKET PRICE FOR OUR COMMON STOCK.

 

The common stock to be issued to TRILLIUM pursuant to the Equity Financing Agreement will be purchased at an 85% discount to the (“Market Price”, which is the lowest closing trading price (the closing trading price as reported by Bloomberg LP) of the common stock for any single trading day during the ten consecutive trading days immediately following the date of our notice to TRILLIUM of our election to put shares pursuant to the Equity Financing Agreement (the “Valuation Period”). TRILLIUM has a financial incentive to sell our common stock immediately upon receiving the shares to realize the profit equal to the difference between the discounted price and the market price. If TRILLIUM sells the shares, the price of our common stock could decrease. If our stock price decreases, TRILLIUM may have a further incentive to sell the shares of our common stock that it holds. These sales may have a further impact on our stock price.

 

Future issuances of common shares may be adversely affected by the Equity Line.

 

The market price of our common stock could decline as a result of issuances and sales by us, including pursuant to the Equity Line under the Equity Financing Agreement, or sales by our existing shareholders, of common stock, or the perception that these issuances and sales could occur. Sales by our shareholders might also make it more difficult for us to issue and sell common stock at a time and price that we deem appropriate. It is likely that the sale of shares by TRILLIUM will depress the market price of our common stock.

 

Draw downs under the Equity Financing Agreement may cause dilution to existing shareholders.

 

Under the terms of the Purchase Agreement, TRILLIUM has committed to purchase up to $3,000,000 worth of shares of our common stock. From time to time during the term of the Purchase Agreement, and at our sole discretion, we can present TRILLIUM with a Put Notice requiring TRILLIUM to purchase shares of our common stock. The purchase price (the “Purchase Price”) to be paid by TRILLIUM will be 85% of the Market Price, subject to a floor price of $0.005 per share, below which the Company shall not deliver a Put. provided that the number of shares to be purchased by TRILLIUM may not exceed the number of shares that, when added to the number of shares of our common stock then beneficially owned by TRILLIUM, would exceed 9.99% of our shares of common stock outstanding. As a result, our existing shareholders will experience immediate dilution upon the purchase of any of the shares by TRILLIUM. The issue and sale of the shares under the Purchase Agreement may also have an adverse effect on the market price of the common shares. TRILLIUM may resell some, if not all, of the shares that we issue to it under the Purchase Agreement and such sales could cause the market price of the common stock to decline significantly. To the extent of any such decline, any subsequent puts would require us to issue and sell a greater number of shares to TRILLIUM in exchange for each dollar of the put amount. Under these circumstances, the existing shareholders of our company will experience greater dilution. The effect of this dilution may, in turn, cause the price of our common stock to decrease further, both because of the downward pressure on the stock price that would be caused by a large number of sales of our shares into the public market by TRILLIUM, and because our existing stockholders may disagree with a decision to sell shares to TRILLIUM at a time when our stock price is low, and may in response decide to sell additional shares, further decreasing our stock price. If we draw down amounts under the Equity Line when our share price is decreasing, we will need to issue more shares to raise the same amount of funding.

 

There is no guarantee that we will satisfy the conditions to the Equity Financing Agreement.

 

Although the Purchase Agreement provides that we can require TRILLIUM to purchase, at our discretion, up to $3,000,000 worth of shares of our common stock in the aggregate, there can be no assurances given that we will be able to satisfy the closing conditions applicable for each put. Further, there are limitations on the number of shares in that each draw down amount is limited to the lowest closing bid price during the Valuation Period, subject to the floor. In addition, the number of shares to be purchased by TRILLIUM may not exceed the number of shares that, when added to the number of shares of our common stock then beneficially owned by TRILLIUM, would exceed 9.99% of our shares of common stock outstanding. Other conditions include requiring that the registration statement of which this prospectus forms a part remains effective at all times during the term of the Purchase Agreement, that there is no material adverse change to our business on the date of delivery of a Put Notice and that our common stock continues to trade of the OTC Markets. If we fail to satisfy the applicable closing conditions, we will not be able to sell the put shares to TRILLIUM.

 

 

There is no guarantee that we will be able to fully utilize the Equity Line.

 

There are limitations on the number of put shares that may be sold in each put. The number of put shares that TRILLIUM shall be obligated to purchase in a given put shall not exceed the number of shares that, when added to the number of shares of our common stock then beneficially owned by TRILLIUM, would exceed 9.99% of our shares of common stock outstanding. Thus, our ability to access the bulk of the funds available under the Purchase Agreement depends in part on TRILLIUM’s resale of stock purchased from us in prior puts. If with regard to a particular put, the share volume limitation is reached, we will not be able to sell the proposed put shares to TRILLIUM. Accordingly, the Equity Line may not be available at any given time to satisfy our funding needs.

 

Sales of put shares under the Purchase Agreement could result in the possibility of short sales.

 

Although TRILLIUM has agreed not to enter into any “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act), of our common stock, the sale after delivery of a put notice of such number of shares of common stock reasonably expected to be purchased under a put notice is not deemed a “short sale.” Accordingly, TRILLIUM may enter into sales or other arrangements it deems appropriate with respect to shares of our common stock after it receives a put notice under the Purchase Agreement so long as such sales or arrangements do not involve more than the number of put shares expected to be purchased under the applicable put notice. Any downward pressure on the market price of our common stock due to the issue and sale of common stock under the Equity Line could encourage short sales. If the market price of our common stock decreases during the put period it will reduce the amount paid by TRILLIUM for the put shares. In a short sale, a prospective seller borrows common shares from a shareholder or broker and sells the borrowed common shares. The prospective seller hopes that the common share market price will decline, at which time the seller can purchase common shares at a lower price for delivery back to the lender. The seller profits when the common share market price declines because it is purchasing common shares at a price lower than the sale price of the borrowed common shares. Such sales could place downward pressure on the market price of the common stock by increasing the number of common shares being sold, which could further contribute to any decline of the market price of the common shares.

 

There is uncertainty as to number of subscription shares and the amount TRILLIUM will pay for the put shares.

 

The actual number of shares we will issue in any particular put or in total under the Purchase Agreement is uncertain. Subject to certain limitations in the Purchase Agreement, we have the discretion to give a put notice at any time throughout the term. The number of shares we must issue after giving a put notice will fluctuate based on the market price of the common shares during the put Valuation Period. TRILLIUM will receive more shares if the market price of our common stock declines. Since the price per share of each put share will fluctuate based on the market price of our common stock during the put Valuation Period, the actual amount TRILLIUM will pay for the put shares included in any particular put will decrease if the market price of our common stock declines.

 

Where You Can Find Us

 

Our principal executive offices are located at:

 

Yuengling’s Ice Cream Corporation

8910 West 192^nd Street North, Mokena, IL 60448

Our telephone number at this address is: (312) 288-8000

Our website address is http://www.reachoutit.com

 

 

Forward-Looking Statements

 

Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results

 

This S-1 contains forward-looking statements regarding our business, financial condition, results of operations and prospects. The Securities and Exchange Commission (the “SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This filing and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. Factors that could cause our actual results of operations and financial condition to differ materially are set forth in our Annual Report on Form 10-K for the fiscal year ended October 31, 2022, as filed with the SEC on February 14, 2023.

 

We caution that these factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

The safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to the offering made in this prospectus

 

Overview

 

Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” “we,” “us,” or the “Company”) was incorporated in Nevada on April 19, 2013, under the name “Aureus Incorporated.” We were initially organized to develop and explore mineral properties in the state of Nevada. Effective December 15, 2017, we changed our name to “Hohme, Inc.,” and, effective February 7, 2019, we changed our name to “Aureus, Inc. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. We are currently active in the state of Nevada.

 

In November, 2023, after the close of the 2023 fiscal year, YCRM completed its acquisition of ReachOut Technology (“ReachOut”). ReachOut is a Managed Service Provider (MSP) that provides cybersecurity and IT services to Small to Medium Sized Businesses (SMBs). Management is highly experiences with business operation as well as acquisition and integration. After the closing of the ReachOut transaction, the Company agreed to assign the ice cream assets to Mid Penn Bank in return for the cancellation of the bank debt. The Company also ceased its Aureus Micro Markets operations at the time the ReachOut agreement was signed.

 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Results of Operations for the Year Ended October 31, 2023, compared to the Year Ended October 31, 2022

 

Revenue

 

We had $20 in revenue for the year ended October 31, 2023, compared to $0 for the year ended October 31, 2022. This is a very small increase in revenue and the overall lack of sales is due to a loss in retail food service customers. As the Company reorganized, it sold through its remaining inventory and did not produce additional product while it worked on plans to relaunch the Yuengling’s Ice Cream brand.

 

Cost of Goods Sold

 

We incurred $56,211 in costs of goods sold for the year ended October 31, 2023, compared to $0 for the year ended October 31, 2022. In the current period we had a large write down of our inventory due to expired or goods sold below cost.

 

General and administrative expenses

 

We had $23,200 of general and administrative expenses (“G&A”) for the year ended October 31, 2023, compared to $89,687 for the year ended October 31, 2022, a decrease of $66,487 or 74.13%

 

Bad debt expense

 

We had $0 in bad debt expense during the year ended October 31, 2023 compared to $80,000 of bad debt expense written off in the year ended October 31, 2022.

 

Officer compensation

 

We had $7,000 in officer compensation for the year ended October 31, 2023 compared to $63,000 of officer compensation for the year ended October 31, 2022. During this period, we compensated Mr. Bohorad, CEO, $5,000 per month. The remaining $53,000 in accrued compensation was forgiven by Mr. Bohorad during the year ended October 31, 2023.

 

Professional fees

 

We incurred $79,522 of professional fees for the year ended October 31, 2023, compared to $107,583 for the year ended October 31, 2022, a decrease of $28,061 or 26.08%. Professional fees generally consist of audit, legal, accounting and investor relation service fees. The decrease is due to a decrease in investor relation expenses and other professional fees.

 

Other income (expense)

 

For the year ended October 31, 2023, we had total other expense of $258,118, compared to total other expenses of $141,082 for the year ended October 31, 2022. In the current period we incurred $336,465 of interest expense, a gain of $60,833 for the change in the fair value of derivatives, a $38,477 loss on issuance of convertible notes, a loss on the write-off of $30,300 fixed asset, a $7,608 gain on debt conversion, and a gain on forgiveness of debt of $78,683.

 

In the prior period we incurred $108,677 of interest expense, which included $27,978 of debt discount amortization, earned $174 of interest income and recognized a gain on forgiveness of debt of $80,637. We also incurred a gain of $73,670 for the change in the fair value of derivatives and an 186,886 loss on issuance of convertible notes.

 

Net loss

 

We incurred a net loss of $424,031 for the year ended October 31, 2023, compared to a net loss of $481,352 for the year ended October 31, 2022. Our net loss decreased due to reasons discussed above.

 

 

Liquidity and Capital Resources

 

Cash flow from operations

 

Cash used in operating activities for the year ended October 31, 2023 was $120,832 compared to $268,238 of cash used in operating activities for the year ended October 31, 2022.

 

Cash Flows from Investing

 

We used $0 for investing activities for the year ended October 31, 2023, compared to $80,000 for investing activities for the year ended October 31, 2022, which was paid to Revolution Desserts (Note 5).

 

Cash Flows from Financing

 

For the year ended October 31, 2023, we netted $116,085 from financing activities. We received $85,175 from proceeds from notes payable and $55,000 from proceeds from convertible notes payable. We repaid $35,500 on convertible debt and $6,000 on payments on notes payable. We received $17,410 on proceeds from related party loans.

 

For the year ended October 31, 2022, we netted $2,080 from financing activities. We received $187,520 from proceeds from the sale of common stock and $113,500 for the issuance of convertible promissory notes. We repaid $153,411 on our notes payable and $106,201 towards our LOC. We also returned $39,328 that was previously received for the purchase of preferred stock.

 

Going Concern

 

As of October 31, 2023, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our operations.

 

We have suffered recurring losses from operations and have not yet generated any revenue. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Our future success and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues or raise additional capital may have a material and adverse effect upon us and our shareholders.

 

Management’s plans with regard to these matters encompass the following actions: (i) obtaining funding from new investors to alleviate our working capital deficiency, and (ii) implementing our plan of operation to generate sales. Our continued existence is dependent upon our ability to resolve our liquidity problems and increase profitability in our business operations. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. Our financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.

 

Critical Accounting Policies

 

Refer to Note 2 of our financial statements contained in our Form 10-K for a summary of our critical accounting policies and recently adopting and issued accounting standards.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to smaller reporting companies.

 

 

Use of Proceeds

 

We will not receive any proceeds from the sale of common stock offered by TRILLIUM. However, we will receive proceeds from the sale of our common stock to TRILLIUM pursuant to the Equity Financing Agreement. The proceeds from our exercise of the Put Right pursuant to the Equity Financing Agreement will be used for general administrative expenses, legal expenses, as well as for accounting and audit fees.

 

 

SELLING SECURITY HOLDER

 

The following table details the name of each selling stockholder, the number of shares owned by Trillium Partners, LP (“TRILLIUM”) the sole selling stockholder, and the number of shares that may be offered by Trillium Partners, LP is not a broker-dealer. TRILLIUM is deemed an underwriter in this offering. TRILLIUM may sell up to 600,000,000 shares, which are issuable upon the exercise of our put right with TRILLIUM. TRILLIUM will not assign its obligations under the equity line of credit.

 

Name

Total number of shares owned prior to offering

Percentage of shares owned prior to offering

Number of shares being offered

Percentage of shares owned after the offering assuming all of the shares are sold in the offering(1)

Trillium Partners, LP(2)

-

-

600,000,000

Less than 1%

 

	(1)	The number assumes the Selling Security Holder sells all of its shares being offered pursuant to this prospectus.
	(2)	Does not possess voting power and investment power over shares which may be held by TRILLIUM.

 

 

Plan of Distribution

 

This prospectus relates to the resale of 600,000,000 Shares of our common stock, par value $0.001 per share, by the Selling Security Holder consisting of Put Shares that we will put to TRILLIUM pursuant to the Equity Financing Agreement.

 

The Selling Security Holder may, from time to time, sell any or all of its shares of our common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. The Selling Security Holder may use any one or more of the following methods when selling shares:

 

●

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

●

block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

 

●

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

●

an exchange distribution in accordance with the rules of the applicable exchange;

 

●

privately negotiated transactions;

 

●

broker-dealers may agree with the Selling Security Holder to sell a specified number of such shares at a stipulated price per share;

 

●

through the writing of options on the shares;

 

●

a combination of any such methods of sale; and any other method permitted pursuant to applicable law.

 

According to the terms of the Equity Financing Agreement, neither TRILLIUM nor any affiliate of TRILLIUM acting on its behalf or pursuant to any understanding with it will execute any short sales during the term of this offering.

 

The Selling Security Holder may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Security Holder and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a Selling Security Holder will attempt to sell shares of Common Stock in block transactions to market makers or other purchasers at a price per share which may be below the then market price. The Selling Security Holder cannot assure that all or any of the shares offered in this prospectus will be issued to, or sold by, the Selling Security Holder. In addition, the Selling Security Holder and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus are “underwriters” as that term is defined under the Securities Act or the Exchange Act, or the rules and regulations under such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

 

Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a Selling Security Holder. The Selling Security Holder may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act.

 

We are required to pay all fees and expenses incident to the registration of the shares of common stock. Otherwise, all discounts, commissions or fees incurred in connection with the sale of our common stock offered hereby will be paid by the Selling Security Holder.

 

 

The Selling Security Holder acquired the securities offered hereby in the ordinary course of business and has advised us that it has not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by the Selling Security Holder. We will file a supplement to this prospectus if the Selling Security Holder enters into a material arrangement with a broker-dealer for sale of common stock being registered. If the Selling Security Holder uses this prospectus for any sale of the shares of common stock, it will be subject to the prospectus delivery requirements of the Securities Act.

 

The anti-manipulation rules of Regulation M under the Exchange Act, may apply to sales of our common stock and activities of the Selling Security Holder. The Selling Security Holder will act independently of us in making decisions with respect to the timing, manner and size of each sale.

 

TRILLIUM is an “underwriter” within the meaning of the Securities Act in connection with the sale of our common stock under the Equity Financing Agreement. For each share of common stock purchased under the Equity Financing Agreement, TRILLIUM will pay 85% of the Market Price during the Valuation Period, subject to a floor price of $0.005 per share, below which the Company shall not deliver a Put.

 

We will pay all expenses incident to the registration, offering and sale of the shares of our common stock to the public hereunder other than commissions, fees and discounts of underwriters, brokers, dealers and agents. If any of these other expenses exists, we expect TRILLIUM to pay these expenses. We have agreed to indemnify TRILLIUM and its controlling persons against certain liabilities, including liabilities under the Securities Act. We estimate that the expenses of the offering to be borne by us will be approximately $35,976. We will not receive any proceeds from the resale of any of the shares of our common stock by TRILLIUM. We may, however, receive proceeds from the sale of our common stock under the Equity Financing Agreement.

 

Sales Pursuant to Rule 144

 

Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.

 

Regulation M

 

We have advised the Selling Security Holder that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the Selling Security Holder and their affiliates. Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for, or purchasing for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Accordingly, the selling stockholder is not permitted to cover short sales by purchasing shares while the distribution it taking place. Regulation M also governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. In addition, we will make copies of this prospectus available to the Selling Security Holder for the purpose of satisfying the prospectus delivery requirements of the Securities Act.

 

State Securities Laws

 

Under the securities laws of some states, the shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless the shares have been registered or qualified for sale in the state or an exemption from registration or qualification is available and is complied with.

 

Expenses of Registration

 

We are bearing all costs relating to the registration of the common stock. These expenses are estimated to be $32,000, including, but not limited to, legal, accounting, printing and mailing fees. The selling stockholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.

 

 

Interests of Named Experts and Counsel

 

The legality of the shares offered under this registration statement is being passed upon by Erika Mariz Pineda, Esq. The financial statements included in this prospectus and the registration statement has been audited by Fruci & Associates II, PLLC to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

 

Market for Common Equity and Related Stockholder Matters

 

Market Information

 

There is a limited public market for our common shares. Our common shares are quoted on the OTC Markets under the symbol “YCRM”. Trading in stocks quoted on the OTC Markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.

 

OTC Markets securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Markets securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Markets issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

Our common stock became eligible for quotation on the OTC Markets on July 31, 2015. As of  May [  ], 2024, approximately 5% of the fiscal 2023 weighted average (fiscal 2023) of our shares have traded on OTC Markets and the current market price for our common shares is $0.0083 per share.

 

Stockholders of Our Common Shares

 

As of May [  ], 2024, there were approximately 1,000 holders of record of our common stock.

 

Rule 144 Shares

 

A person who has beneficially owned restricted shares of our common stock for at least six months is entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding the sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.

 

Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding the sale, are subject to additional restrictions. Such person is entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

 

●

1% of the total number of securities of the same class then outstanding, which will equal 3,494,887 shares as of the date of this prospectus; or

 

●

the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

 

Provided, in each case that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.

 

Such sales must also comply with the manner of sale and notice provisions of Rule 144.

 

As of the date of this prospectus none of our shares are eligible for resale pursuant to Rule 144.

 

 

Stock Option Grants

 

None

 

Registration Rights

 

As part of the Equity Financing Agreement entered into with TRILLIUM, on January 8, 2024, the Company and TRILLIUM entered into a Registration Rights Agreement (the “Registration Agreement”). Under the terms of the Registration Agreement the Company agreed to file a registration statement with the Securities and Exchange Commission with respect to the Shares within 30 days of January 8, 2024. The Company is obligated to keep such registration statement effective until (i) three months after the last closing of a sale of Shares under the Purchase Agreement, (ii) the date when TRILLIUM may sell all the Shares under Rule 144 without volume limitations, or (iii) the date TRILLIUM no longer owns any of the Shares.

 

We have not granted registration rights to any other persons other than TRILLIUM at this time.

 

Dividends

 

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

 

1.

We would not be able to pay our debts as they become due in the usual course of business; or

 

2.

Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

 

We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

 

Available Information

 

We have filed with the Securities and Exchange Commission a registration statement on Form S-1. For further information about us and the shares of common stock to be sold in the offering, please refer to the registration statement and the exhibits and schedules thereto. The registration statement and exhibits may be inspected, without charge, and copies may be obtained at prescribed rates, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The registration statement and other information filed with the SEC are also available at the web site maintained by the SEC at http://www.sec.gov.

 

 

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

 

The names of our director and executive officers as of January 25, 2024, their ages, positions, and biographies are set forth below. Our executive officers are appointed by, and serve at the discretion of, our board of directors.

 

Name		Age		Position(s)
Richard Jordan		44		Chairman, Chief Executive Officer, President, Secretary and Treasurer*
Kevin Harrington		65		Director*
Kingsley Charles		57		Director*
Everett M. Dickson		59		Former Chairman of the Board of Directors
Robert C. Bohorad		50		Former President and Chief Executive Officer

 

On October 28, 2021, Everett M. Dickson, elected to step down as President and Chief Executive Officer, and retain his position as sole director and chairman of the board. Robert C. Bohorad was appointed as the new President and Chief Executive Officer.

 

*

On November 9, 2023 following the Closing of the Share Exchange Agreement and Control Block Transfer Agreement with ReachOut Technology Corp. (“ReachOut”) referenced in the Current Report filed on Form 8-K on November 13, 2023, and the appointment of Rick Jordan, Kevin Harrington, and Kingsley Charles, as officers and directors, Everett Dickson and Robert Bohorad resigned from all officer and director positions with the Company. The Company did not have any committees, and therefore Mr. Dickson and Mr. Bohorad never served on any committees. Mr. Dickson and Mr. Bohorad did not resign as a result of any disagreement with the Company.

 

Rick Jordan, Chairman, Chief Executive Officer, President, Secretary and Treasurer

 

Rick Jordan, age 44, the CEO and Founder of ReachOut Technology, is a model of resilience, vision, and expertise in the cybersecurity and entrepreneurial arenas. His journey with ReachOut Technology, from its inception during a challenging personal and economic period to its evolution into a publicly held industry leader, is a true embodiment of the American dream. Rick has shaped his path through unwavering perseverance, a relentless ‘never-quit’ attitude.

 

Rick Jordan is emerging as a nationally recognized voice in business and cybersecurity. He is frequently featured on global networks such as Bloomberg, Newsmax, Cheddar, NewsNation, Reuters, Fox, and NBC for his expert insights in cybersecurity, business, and social topics. His expertise is so renowned that it has been sought after in the White House, highlighting his significant influence and authority in the cybersecurity sector.

 

Rick’s leadership style is deeply involved and motivational. He hosts a weekly “CEO Talk” every Monday, where he engages with and inspires the entire company, setting a positive tone for the week ahead. This approach not only fosters a strong company culture but also aligns the team with the company’s goals and vision.

 

Rick has a strategic mind with unique ability to foresee industry trends and futures, allowing him to be a disruptor in the space. A key milestone in Rick’s leadership was partnering with Kevin Harrington, the Original Shark from Shark Tank, to take ReachOut Technology public. This strategic partnership has been instrumental in the company’s growth trajectory, positioning it for greater success and market impact.

 

Rick is a master communicator and passionately shares his knowledge and inspiration through his podcast, “ALL IN with Rick Jordan.” The podcast, which enjoys a global audience in over 70 countries and ranks in the top 2.5% worldwide, explores the nuances of building successful businesses, fostering meaningful relationships, and leading a fulfilling life. Rick’s ability to connect with and motivate his audience is evident in the podcast’s widespread acclaim.

 

 

Rick Jordan’s skills and knowledge span a broad spectrum, making him a unique figure in the industry. Known for never shying away from a challenge and remaining steadfast in adversity, Rick lives life on his own terms. Whether tackling new challenges, disproving doubters, or enjoying a glass of his favored MaCallan Scotch, Rick Jordan is an inspiration, encouraging others to embrace life fully.

 

Follow Rick’s journey and get inspired by connecting with him on social media @MrRickJordan.

 

Kevin Harrington, Director

 

Kevin Harrington, age 65, is a Director of ReachOut Technology, a globally acclaimed entrepreneur and a pioneer in the realms of business and direct marketing, serves as a distinguished member of the Board of Directors at ReachOut Technology. His tenure at ReachOut Technology is marked by strategic guidance and visionary leadership, leveraging over four decades of entrepreneurial and investment expertise.

 

As an original “Shark” on ABC’s “Shark Tank,” Kevin Harrington gained fame for his sharp investment insights and his ability to identify and nurture promising business ventures. His tenure on the show cemented his status as a savvy investor and a fervent supporter of entrepreneurship.

 

Harrington’s entrepreneurial journey began in the early 1980s with the creation of the infomercial, a groundbreaking concept that revolutionized television marketing and direct response advertising. This innovation not only transformed product marketing but also democratized the way entrepreneurs and startups could reach global audiences.

 

Throughout his career, Harrington has launched over 20 businesses that have exceeded $100 million in revenue. His exceptional ability to spot market opportunities and convert them into successful enterprises is a testament to his entrepreneurial genius.

 

Harrington is also a respected author, with books like “Act Now: How I Turn Ideas into Million-Dollar Products” under his belt. His writings offer a wealth of knowledge and inspiration to aspiring entrepreneurs and established business leaders alike.

 

In his role at ReachOut Technology, Kevin Harrington plays a pivotal role in shaping the company’s strategic direction, particularly in the realms of technology and cybersecurity. His insights are instrumental in driving innovation and ensuring that ReachOut Technology stays at the forefront of its industry.

 

ReachOut Technology, renowned for its expertise in cybersecurity and IT services, benefits immensely from Harrington’s strategic foresight. The company specializes in providing top-tier cybersecurity solutions, IT management, and consulting services, helping businesses safeguard their digital assets and navigate the complexities of the modern technological landscape.

 

Kevin Harrington’s involvement with ReachOut Technology is not just a reflection of his illustrious career but also a commitment to driving the company towards new heights of innovation and success. His vision and leadership continue to be pivotal in the company’s journey towards becoming a leader in cybersecurity and technology solutions.

 

Kingsley Charles, Director

 

Kingsley Charles, age 57, Director of ReachOut Technology, brings to the Board of Directors of a rich tapestry of experience in business and financial consultancy, honed over more than fifteen years of dedicated service. His career is distinguished by his extensive work with a diverse range of private firms, regional entrepreneurs, and small business owners across the United States.

 

Charles’s professional journey is marked by significant achievements and contributions. He has been a pivotal consultant for dozens of start-ups and operating companies, with revenues scaling up to $200 million. His expertise was further sharpened by his tenure managing operations within a Fortune 500 company, where he gained invaluable insights into the workings of large-scale corporate environments.

 

 

A hallmark of Charles’s career has been his collaborative approach, working closely with a spectrum of professionals including Master of Taxation experts, CPAs, CFPs, accountants, valuation experts, and attorneys. This multidisciplinary engagement has been a cornerstone of his professional life for over two decades, enabling him to offer comprehensive and nuanced advice to his clients.

 

Under Kingsley Charles’s leadership, his team has established a robust network of legal partners and financial professionals. This network supports his firm’s commitment to providing clients with interactive, comprehensive financial and strategic management services. His approach is characterized by a keen focus on ‘eyes-wide-open’ strategies, ensuring that clients are fully informed and strategically positioned in their financial decisions.

 

At ReachOut Technology, Kingsley Charles leverages his extensive experience in financial and strategic management to provide invaluable guidance and oversight. His expertise is particularly crucial in steering the company through complex financial landscapes, ensuring robust financial health, and aligning strategic goals with market realities.

 

Everett M. Dickson– Former Chairman

 

On December 31, 2018, our Board of Directors appointed Everett M. Dickson as President, Chief Executive Officer, Treasurer, and Secretary. Since 2017, Mr. Dickson has served as CEO and Chief Financial Officer (CFO) at Cruzani, Inc., a publicly traded food service Company (OTC Pink: CZNI). From 2012 until joining the Company in June 2017, Mr. Dickson worked in the moist tobacco and alternative fuels industry. From 2005 through 2011, Mr. Dickson worked in the alternative fuels industry. Mr. Dickson has extensive Board, Corporate Finance, Restructuring, and Capital Markets experience, having worked, most recently, in the food service and moist tobacco industries. From 2005 through 2011, Mr. Dickson’s work was focused on MBO / LBO opportunities in the restaurant sector and on assisting startup companies in the alternative fuels industry.

 

Robert C. Bohorad–Former President and CEO

 

Mr. Bohorad was appointed as our Chief Operating Officer of YICA on June 18, 2019 and is the co-founder of Yuengling’s Ice Cream. Mr. Bohorad has 20+ years of experience working for companies in various stages of their life cycles. Mr. Bohorad previously ran his own logistics, tracking, and security solutions consulting practice aside from mentoring several startups and early-stage companies. Throughout his career, Mr. Bohorad has worked in numerous capacities, including business + strategic development, marketing, finance, accounting, operations, and human resources (HR). Mr. Bohorad brings broad industry experience, with a particular focus on medical devices and software. Mr. Bohorad is a graduate of the University of Pennsylvania Wharton School and received his Masters in Business Administration (MBA) from Fordham University.

 

Indemnification of Directors and Officers

 

Our Articles of Incorporation and Bylaws both provide for the indemnification of our officers and directors, to the fullest extent, permitted by Nevada law.

 

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than ten percent of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock. Officers, directors and 10% or greater beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based upon a review of those forms and representations regarding the need for filing for the year ended October 31, 2022, we believe all necessary forms have been filed.

 

 

Involvement in Certain Legal Proceedings

 

Our directors and executive officers have not been personally involved in any of the following events during the past ten years:

 

	●	any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
	●	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
	●	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;
	●	being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
	●	being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
	●	being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Family Relationships

 

There are no familial relationships among any of our directors or officers.

 

Director Independence

 

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system, which has requirements that a majority of the Board of Directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.”

 

Board Committees

 

Our board does not currently have a standing Audit Committee, Compensation Committee or Nominating/Corporate Governance Committee due the board’s limited size and the Company’s limited operations. The entire Board of Directors performs all functions that would otherwise be performed by committees. Given the present size of our Board, it is not practical for us to have committees other than those described above, or to have more than two directors on such committees. If we are able to grow our business and increase our operations, we intend to expand the size of our board and our committees and allocate responsibilities accordingly.

 

 

Legal Proceedings

 

No officer, directors or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:

 

-

Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

-

Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

-

Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and

 

-

Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

 

The following table sets forth the total compensation awarded to, earned by or paid to our named executive officers during the fiscal years ended October 31, 2023, and 2022.

 

 

Summary Compensation

 

The following table provides information as to cash compensation of all executive officers of the Company, for each of the Company’s last two fiscal years.

 

Name and principal position		Year			Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Everett M. Dickson		2023			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Chairman		2022			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Robert C. Bohorad		2023			$	60,000			$	0			$	0			$	0			$	0			$	0			$	0			$	60,000
President and CEO		2022			$	22,000			$	0			$	0			$	0			$	0			$	0			$	0			$	22,000

 

Rick Jordan, Kevin Harrington, and Kingsley Charles were appointed to their respective officer and director position in November of 2023 and have received no compensation from the Company.

 

Director Compensation

 

At this time, our directors do not receive cash compensation for serving as members of our Board of Directors. The term of office for each director is one year or until his/her successor is elected at our annual meeting and qualified. The duration of office for each of our officers is at the pleasure of the Board of Directors. The Board of Directors has no nominating, auditing committee, or compensation committee. Therefore, the selection of a person or election to the Board of Directors was neither independently made nor negotiated at arm’s length.

 

During the fiscal years ended October 31, 2023 and 2022, our sole director, Mr. Dickson, received no compensation for director services.

 

Outstanding Equity Awards at Fiscal Year End. There were no outstanding equity awards as of October 31, 2023.

 

Board Committees

 

We do not currently have any committees of the Board of Directors. Additionally, due to the nature of our intended business, the Board of Directors does not foresee a need for any committees in the foreseeable future.

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth, as of May [  ], 2024, certain information with respect to the beneficial ownership of shares of our common stock by: (i) each person known to us to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock, (ii) each director or nominee for director of our Company, (iii) each of the executives, and (iv) our directors and executive officers as a group. Unless otherwise indicated, the address of each shareholder is c/o our company at our principal office address:

 

Name and Address of Beneficial Owner(1)(2)		Common Stock Beneficially Held				Percent of Class
Named Executive Officers and Directors
Richard Jordan – Series A(3)			699,082,277	(3)			66.67	%
Richard Jordan – Series C(4)			2,365,687,358				84.61	%
KHBH LLC – Series C(4)			56,325,836				2.01	%
Kingsley Charles – Series C(4)			24,407,776				0.87	%
All Executive Officers and Directors as a group
5% or More Stockholders
Trillium Partners, LP – Series D(5)			49,926,959				12.50	%

 

(1)	Unless as otherwise indicated in the following table and the footnotes, our named executive officers and directors’ address in the following table is c/o ReachOut Technology, 8910 W. 192nd St. Suite N, Mokena, IL 60448.
(2)	Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) because of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power concerning the number of shares of common stock outstanding on the date of this Form 10.
(3)	In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table is based on 349,488,710 shares of common stock, outstanding as of the filing date of this Form 10-K and 699,082,277 shares of common stock issuable upon the conversion of the 475,000 shares of Series A Preferred Stock held by Mr. Jordan. (The Shares A Preferred Stock are convertible into such number of shares of common stock resulting in two-thirds (66.67%) of the outstanding shares of common stock of the Company on a post-conversion basis.)
(4)	In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table is based on 349,488,710 shares of common stock, outstanding as of the filing date of this Form 10-K. 2,365,687,358 shares of common stock issuable upon the conversion of the 7,338,079 shares of Series C Preferred Stock held by Richard Jordan, 24,407,776 shares of common stock issuable upon the conversion of the 75,710 shares of Series C Preferred Stock held by Kingsley Charles, and 56,325,836 shares of common stock issuable upon the conversion of the 174,716 shares of Series C Preferred Stock held by KHBH LLC (The Shares C Preferred Stock are convertible into such number of shares of common stock resulting in 87.50% of the outstanding shares of common stock of the Company on a post-conversion basis.)
(5)	In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein, the following table is based on 349,488,710 shares of common stock, outstanding as of the filing date of this Form 10-K and 49,926,959 shares of common stock issuable upon the conversion of the 1,000,000 shares of Series D Preferred Stock held by Trillium Partners, LP. (The Shares D Preferred Stock are convertible into such number of shares of common stock resulting in 12.50% of the outstanding shares of common stock of the Company on a post-conversion basis.)

 

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

In June 2022, Everett Dickson advanced the Company $6,000 for a general operating expense. The $6,000 was repaid the following month.

 

During the year ended October 31, 2022, a $5,500 payment was mistakenly made to a company controlled by Everett Dickson. The amount is to be repaid. This amount was applied to the note payable during the year ended October 31, 2023.Pickle Jar the company benefiting from this error, advanced the Company $22,000, on September 1, 2023. The amount due to the Company from Pickle Jar was offset against this new advance leaving a note payable to Pickle Jar of $16,500. The funds advanced were used by the Company to repay the balance due on a convertible note held by Quick Capital, LLC. (see note 8)

 

On August 17, 2023, Everett Dickson paid $1,910, to a consultant of the Company’s. The transaction is considered a loan advance and is evidenced by a note payable (below) issued to Everett Dickson.

 

On September 1, 2023, Everett Dickson directly paid $13,500 to Diagonal Lending LLC on behalf of the Company paying the amount of the agreed settlement extinguishing the balance due on the convertible note due. The transaction is considered a loan advance and is evidenced by a note payable (below) issued to Everett Dickson.

 

On September 1, 2023, Everett Dickson deposited $2,000, into the Company’s bank accounts to fund payments. The transaction is considered a loan advance and is evidenced by a note payable issued to Everett Dickson. As of October 31, 2023 the note balance due to Everett Dickson is $17,410, is due upon demand and does not bear interest.

 

On January 14, 2023, the Company granted 30 million restricted common shares to Robert C. Bohorad. The Company signed a letter of intent with Mr. Charles Green and Mr. Bohorad on October 26, 2022, where Mr. Bohorad will become Chief Operating Officer and Chief Financial Officer. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $0.006, the closing stock price on the date of grant, for total non-cash compensation of $180,000. The amount was to be recognized over a one-year period. On September 15, 2023, Robert C. Bohorad returned the 30 million restricted common shares to the Company.

 

During the year ended October 31, 2023 and 2022, the Company paid Robert C. Bohorad, YICA’s Chief Operating Officer, $7,000 and $22,000 for compensation, respectively. During the year ended October 31, 2023, Mr. Bohorad forgave $53,000 of accrued compensation. The Company and Mr. Bohorad have agreed that the balance due of $30,000, will be paid by March 31, 2024. See Note 9.

 

On October 30, 2023, the Company awarded Mr. Bohorad 3,000,000 shares of restricted common stock to facilitate the preparation of financial statements and in the transition of the Company to new ownership. (see note 15)

 

Director Independence

 

We currently do not have any independent directors, as the term “independent” is defined in Section 803A of the NYSE Amex LLC Company Guide. Since the OTC Markets does not have rules regarding director independence, the Board makes its determination as to director independence based on the definition of “independence” as defined under the rules of the New York Stock Exchange (“NYSE”) and American Stock Exchange (“Amex”).

 

 

PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Audit Fees

 

The aggregate fees billed for professional services rendered by our auditor Fruci & Associates II, PLLC for the audit and review of our financial statements for the fiscal years ended October 31, 2023 and 2022 amounted to $35,000 and $47,531, respectively.

 

 

Audit-Related Fees

 

During the fiscal years ended October 31, 2023 and 2022 our principal accountant rendered assurance and related services reasonably related to the performance of the audit or review of our financial statements in the amount of $0 and $0, respectively.

 

Tax Fees

 

The aggregate fees billed for professional services rendered by our principal accountant for the tax compliance for the years ended October 31, 2023 and 2022 was $0.

 

All Other Fees

 

During the fiscal years ended October 31, 2023 and 2022, there were no fees billed for products and services provided by the principal accountant other than those set forth above.

 

 

Disclosure of Commission Position of Indemnification for Securities Act Liabilities

 

Our officers and directors are indemnified as provided by the Nevada Revised Statutes and our Bylaws. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officer, or controlling person in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to court of appropriate jurisdiction. We will then be governed by the court’s decision.

 

 

YUENGLING’S ICE CREAM CORPORATION

 

Index to Financial Statements

 

Report of Independent Registered Public Accounting Firm (PCAOB #5525)		F-2
Consolidated Balance Sheets as of October 31, 2023 and 2022		F-3
Consolidated Statements of Operations for the Years ended October 31, 2023 and 2022		F-4
Consolidated Statement of Changes in Stockholders’ Deficit for the Years ended October 31, 2023 and 2022		F-5
Consolidated Statements of Cash Flows for the Years ended October 31, 2023 and 2022		F-6
Notes to Consolidated Financial Statements		F-7

 

 

Report of Independent Registered Public Accounting Firm

 

 

To the Board of Directors and Shareholders of

Yuengling’s Ice Cream Corp.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Yuengling’s Ice Cream Corp. and Subsidiary (“the Company”) as of October 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended October 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2023 and 2022 and the results of its operations and its cash flows for each of the years in the two-year period ended October 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has an accumulated deficit, net losses, and negative cash flows from operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

 

 

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2019.

 

Spokane, Washington

February 15, 2024

 

 

YUENGLING’S ICE CREAM CORPORATION

CONSOLIDATED BALANCE SHEETS

 

		October 31, 2023				October 31, 2022
ASSETS
Current Assets:
Cash		$	-			$	4,747
Accounts receivable			20				-
Inventory			-				56,212
Other receivable – related party			-				5,500
Total Current Assets			20				66,459
Other Assets:
Property and equipment, net			-				30,300
Total Assets		$	20			$	96,759
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable		$	217,192			$	214,365
Accrued interest			144,759				49,447
Accrued compensation			15,000				41,000
Notes payable, related parties			17,410				-
Notes payable			184,296				119,121
Loans payable			589,092				595,092
Convertible note payable, net of $0 and $123,813 discount, respectively			-				14,255
Derivative liability			-				247,034
Line of credit			489,439				693,798
Total Current Liabilities			1,657,188				1,974,112
Total Liabilities			1,657,188				1,974,112
Commitments and contingencies			-				-
Temporary Equity:
Preferred stock to be issued			357,022				392,022
Total temporary equity			357,022				392,022
Stockholders’ Deficit:
Preferred stock, Series A; par value $0.0001; 10,000,000 shares authorized, 475,000 and 5,000,000 shares issued and outstanding, respectively			48				500
Common stock: $0.001 par value; 2,500,000,000 shares authorized; 332,488,710 and 14,828,595 shares issued and outstanding, respectively			332,489				14,827
Additional paid in capital			2,109,429				1,747,423
Accumulated deficit			(4,456,156	)			(4,032,125	)
Total Stockholders’ Deficit			(2,014,190	)			(2,269,375	)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT		$	20			$	96,759

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

YUENGLING’S ICE CREAM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		For the Years Ended October 31,
		2023				2022
Revenue		$	20			$	-
Cost of goods sold			56,211				-
Gross margin			(56,191	)			-
Operating Expenses:
General and administrative expenses			23,200				89,687
Bad debt expense			-				80,000
Officer compensation			7,000				63,000
Professional fees			79,522				107,583
Total operating expenses			109,722				340,270
Loss from operations			(165,913	)			(340,270	)
Other income (expense):
Interest expense			(336,465	)			(108,677	)
Interest income			-				174
Change in fair value of derivative			60,833				73,670
Loss on issuance of convertible notes			(38,477	)			(186,886	)
Loss on impairment of fixed asset			(30,300	)			-
Gain on debt conversion			7,608				-
Gain on extinguishment of debt			78,683				80,637
Total other expense			(258,118	)			(141,082	)
Loss before provision for income tax			(424,031	)			(481,352	)
Provision for income tax			-				-
Net loss		$	(424,031	)		$	(481,352	)
Basic loss per share		$	(0.00	)		$	(0.04	)
Diluted loss per share		$	(0.00	)		$	(0.04	)
Basic weighted average shares			161,178,454				12,827,048
Diluted weighted average shares			161,178,454				12,827,048

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

YUENGLING’S ICE CREAM CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED OCTOBER 31, 2023 AND 2022

 

Year ended October 31, 2023

 

		Common Stock								Series A Preferred Stock								Additional Paid in				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Deficit
Balance October 31, 2022			14,828,595			$	14,827	500			5,000,000			$	500			$	1,747,423		-	$	(4,032,125	)		$	(2,269,375	)
Surrender and cancellation of Series A Preferred Stock			-				-				(4,525,000	)			(452	)			452				-				-
Stock issued for conversion of debt			264,660,115				264,662				-				-				142,194				-				406,856
Stock issued for conversion of temporary equity			50,000,000				50,000				-				-				(15,000	)			-				35,000
Stock to be issued for services			3,000,000				3,000				-				-				30,000				-				33,000
Capital deemed as contributed																			204,360								204,360
Net Loss			-				-	-			-				-				-		-		(424,031	)			(424,031	)
Balance, October 31, 2023			332,488,710			$	332,489	-			475,000			$	48			$	2,109,430		-	$	(4,456,156	)		$	(2,014,190	)

 

The year ended October 31, 2022

 

		Common Stock								Preferred Stock								Additional Paid in				Common Stock To Be				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Issued				Deficit				Deficit
Balance, October 31, 2021			10,235,262			$	10,235				5,000,000			$	500			$	1,392,994			$	165,000			$	(3,550,773	)		$	(1,982,044	)
Stock issued for cash			3,293,333				3,292				-				-				349,229				(165,000	)			-				187,521
Stock issued for conversion of preferred			1,300,000				1,300				-				-				5,200				-				-				6,500
Net Loss			-				-				-				-				-				-				(481,352	)			(481,352	)
Balance, October 31, 2022			14,828,595			$	14,827				5,000,000			$	500			$	1,747,423			$	-			$	(4,032,125	)		$	(2,269,375	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

YUENGLING’S ICE CREAM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Years Ended
		October 31,
		2023				2022
Cash flows from operating activities:
Net loss		$	(424,031	)		$	(481,352	)
Adjustments to reconcile net loss to net cash used in operating activities:
Default penalty			17,100				-
Debt discount amortization			188,619				27,978
Gain on extinguishment of debt			(78,683	)			(80,637	)
Gain on debt conversion			(7,608	)
Loss on fixed asset impairment			30,300				-
Loss on inventory impairment			56,190				-
Loss on issuance of convertible debt			38,496				186,886
Change in fair value of derivative			(60,833	)			(73,670	)
Bad debt expense			-				80,000
Changes in assets and liabilities:
Accounts receivable			(20	)			-
Inventory			21				(5,500	)
Accounts payable			2,867				18,543
Accrued compensation			44,616				41,000
Accrued liabilities			72,134				18,514
Net cash used in operating activities			(120,832	)			(268,238	)
Cash flows from investing activities:
Issuance of note receivable			-				(80,000	)
Net cash used in investing activities			-				(80,000	)
Cash flows from financing activities:
Net (payments) proceeds from the sale of preferred stock			-				(39,328	)
Sale of common stock			-				187,520
Payment on LOC			-				(106,201	)
Proceeds from notes payable			85,175				-
Proceeds from convertible notes payable			55,000				113,500
Repayment of convertible debt			(35,500	)			-
Payments on notes payable			(6,000	)			(153,411	)
Proceeds – related party loans			17,410				-
Payments – related party loans			-				-
Net cash provided by financing activities			116,085				2,080
Net change in cash			(4,747	)			(346,158	)
Cash, beginning of year			4,747				350,905
Cash, end of year		$	-			$	4,747
Cash paid during the period for:
Interest		$	-			$	62,823
Income taxes		$	-			$	-
Supplemental Disclosure of Non-Cash Activity:
Conversion of principal and interest into common stock		$	330,830			$	-
Issuance of common stock for conversion of temporary equity		$	35,000			$	-
Deemed capital contribution to extinguish debt		$	204,360			$	-

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

YUENGLING’S ICE CREAM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” “we,” “us,” or the “Company”) was incorporated in Nevada on April 19, 2013, under the name “Aureus Incorporated.” We were initially organized to develop and explore mineral properties in the state of Nevada. Effective December 15, 2017, we changed our name to “Hohme, Inc.,” and, effective February 7, 2019, we changed our name to “Aureus, Inc. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. We are currently active in the state of Nevada.

 

In November, 2023, after the close of the 2023 fiscal year, YCRM completed its acquisition of ReachOut Technology Corp. (“ReachOut”). ReachOut is a Managed Service Provider (MSP) that provides cybersecurity and IT services to Small to Medium Sized Businesses (SMBs). Management is highly experiences with business operation as well as acquisition and integration. After the closing of the ReachOut transaction, the Company agreed to assign the ice cream assets to Mid Penn Bank in return for the cancellation of the bank debt. The Company also ceased its Aureus Micro Markets operations at the time the ReachOut agreement was signed.

 

ReachOut is on a relentless pursuit to revolutionize the Cybersecurity & IT Service Provider landscape for SMBs, with the goal of creating the first nationwide brand in its sector. The company is leveling the playing field, ensuring that businesses, regardless of size or location, have access to top-tier security solutions.

 

Founded in 2010 by Rick Jordan to fill a critical gap in the IT services market, ReachOut is evolving into a formidable nationwide cybersecurity entity. The Company’s innovative approach and resolute commitment to superior solutions have established ReachOut as industry trailblazers, redefining standards and crafting extraordinary client experiences. ReachOut’s, clients are more than just clients; they are integral members of a movement that is reshaping the future of cybersecurity.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for bad debt on accounts receivable, reserves on inventory, valuation of intangible assets for impairment analysis, valuation of the lease liability and related right-of-use asset, valuation of stock-based compensation, valuation of redeemable preferred stock and the valuation allowance on deferred tax assets.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary YIC Acquisitions Corp. All material intercompany transactions and balances have been eliminated on consolidation.

 

F-7

 

 

Concentrations of Credit Risk

 

The Company maintains cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors the banking relationships and consequently have not experienced any losses in our accounts. The Company believes it is not exposed to any significant credit risk on cash.

 

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended October 31, 2023 or 2022.

 

Restricted Cash

 

The Company no longer has an obligation to transfer $50,000 to Mid Penn Bank as security pursuant to the Agreement of Sale and Security Agreement between Mid Penn Bank and Yuengling’s Ice Cream Corp., last amended July 31, 2023. On January 9, 2024, the Company signed an agreement with Mid Penn Bank assigning the ice cream-related assets to Mid Penn Bank in return for Mid Penn Bank cancelling the two bank loans with Yuengling’s Ice Cream Corporation.

 

Reclassifications

 

Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the year ended October 31, 2023.

 

Deferred Financing Costs

 

All unamortized deferred financing costs related to the Company’s borrowings are presented in the consolidated balance sheets as a direct deduction from the related debt. Amortization of these costs is reported as interest and financing costs included in the consolidated statement of operations.

 

Inventory

 

Inventory is stated at the lower of cost and net realizable value on a first-in, first-out basis. Cost is principally determined using the last-in, first-out (LIFO) method. The Company periodically assesses if any of the inventory has expired or if the value has fallen below cost. When this occurs, the Company recognizes an expense for inventory write down. Total inventories at October 31, 2023 and 2022 were $0 and $56,212, respectively. Inventory consists of lids for pint size containers. During the year ended October 31, 2023, $56,190 of expired inventory was written off.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. During the year ended October 31, 2023, $30,300 of property related to an abandoned business venture were written off.

 

F-8

 

 

Net Loss Per Share

 

Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings (loss) of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution. As of October 31, 2023, there are obligations to issued Series A Preferred Stock which are convertible into 1,020,062,029 shares of common stock. The total potentially dilutive shares calculated is 1,020,062,029. It should be noted that contractually the limitations on obligation to issue Series A Preferred Stock that limit the number of shares converted to either 9.99% of the then outstanding shares. The Company’s Chairman of the Board of Directors holds a control block of Series A Preferred Stock which confers upon him a majority vote in all Company matters including authorization of additional common shares or to reverse split the stock. As of October 31, 2023, and 2022, potentially dilutive securities consisted of the following:

 

Schedule of anti-dilutive shares
		October 31, 2023				October 31, 2022
Series A Preferred Stock Payable			1,020,062,029				89,095,509
Third party convertible debt			-				17,607,000
Total			1,020,062,029				106,702,909

 

Stock-based Compensation

 

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. We adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on our consolidated financial statements.

 

Convertible Notes with Fixed Rate Conversion Options

 

The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”.

 

Derivative Financial Instruments

 

The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

 

F-9

 

 

Fair Value Measurements

 

The Company follows the FASB Fair Value Measurements standard, as they apply to its financial instruments. This standard defines fair value, outlines a framework for measuring fair value, and details the required disclosures about fair value measurements.

 

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy in determining the fair value of an asset or liability. The fair value hierarchy has three levels of inputs, both observable and unobservable. Level 1 inputs include quoted market prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data. The standard requires the utilization of the lowest possible level of input to determine fair value and carrying amounts of current liabilities approximate fair value due to their short-term nature.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

The Company’s non-financial assets, such as property and equipment, are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

 

Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

 

Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.

 

Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates.

 

Level 3: Level 3 inputs are unobservable inputs.

 

The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

 

The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable. The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values.

 

The carrying amounts of Notes Payable approximate the fair value as the notes bear interest rates that are consistent with current market rates.

 

The table below classify the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022.

 

2022:

 

Schedule of liabilities measured at fair value
Description		Level 1				Level 2				Level 3				Total Gains
Derivative		$	-			$	-			$	247,034			$	73,670
Total		$	-			$	-			$	247,034			$	73,670

 

F-10

 

 

Income Taxes

 

Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term.

 

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of October 31, 2023, and 2022, no liability for unrecognized tax benefits was required to be reported.

 

Revenue recognition

 

Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. YIC Acquisitions Corp (Yuengling’s Ice Cream) generates its revenue through the sale of pints to retailers, through the online sales of pints directly to consumers, and through the sale of 3gallon tubs to food service establishments, such as restaurants, stadiums, and universities. Revenue is recognized at the time of delivery or, for online sales, at the time of the transaction. Retailers and food service customers’ terms are generally 15 or 30 days. Online sales are paid via credit card and funds are generally received within 30 days.

 

Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

 

NOTE 3 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $4,456,156, had a net loss of $424,031, and net cash used in operating activities of $120,832 for the year ended October 31, 2023. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

F-11

 

 

NOTE 4 – PROPERTY & EQUIPMENT

 

Property and Equipment are first recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows between three and five years.

 

Long lived assets, including property and equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

 

Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.

 

Property and equipment stated at cost, less accumulated depreciation consisted of the following:

 

Schedule of property and equipment
		October 31, 2023				October 31, 2022
Property and equipment		$	-			$	30,300
Less: accumulated depreciation			-				-
Property and equipment, net		$	-			$	30,300

 

Property and equipment consisted of shelving and racks purchased for the Aureus Micro Markets business, which has been put on hold. Since the Company has yet to place the fixed assets into service management determined that they should be fully impaired. The Company recognized impairment expense of $30,300 for the year ended October 31, 2023.

 

NOTE 5 – LOAN RECEIVABLE

 

On May 17, 2022, the Company and Revolution Desserts, LLC (“Revolution”) terminated the Definitive Agreement entered into on April 30, 2022. The primary reason for the termination is the regulatory delays in qualifying the Company’s Reg 1-A. Per the terms of the original agreement, the Company has advanced Revolution $80,000, which has been accounted for as a note receivable. No loan terms have been established as of October 31, 2022. Due to the uncertainty of the collection of this receivable the Company has written the receivable off and recognized $80,000 of bad debt expense, during the year ended October 31, 2022.

 

NOTE 6 – NOTES PAYABLE

 

Schedule of notes payable
		October 31, 2023				October 31, 2022
Note principal		$	184,296			$	119,121

 

On September 9, 2015, the Company issued to Backenald Corp. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing on the first anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. As of October 31, 2023, accrued interest amounted to $15,151.

 

On February 23, 2017, the Company issued Travel Data Solutions a promissory note in the principal amount of $17,500, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $12,180.

 

F-12

 

 

On March 27, 2017, the Company issued Craigstone Ltd. A promissory note in the principal amount of $12,465, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $8,265.

 

On May 16, 2017, the Company issued Travel Data Solutions a promissory note in the principal amount of $4,500, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $2,905.

 

On July 28, 2017, the Company issued Backenald Trading Ltd. A promissory note in the principal amount of $20,000, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $12,405.

 

On January 24, 2020, the Company issued a third party a promissory note in the principal amount of $15,000, bearing interest at the rate of 10% per annum, and maturing on April 30, 2020. As of October 31, 2023, there is $0 and $1,155, principal and interest, respectively, due on this note.

 

On March 24, 2020, the Company issued a third party a promissory note in the principal amount of $20,000, bearing interest at the rate of 10% per annum, and maturing on May 30, 2020. As of October 31, 2023, following forgiveness of $5,000 and $6,131 of principal and interest respectively the balance due on this note for principal and interest is $0 and $0, respectively.

 

On June 1, 2023, the Company issued a third party a promissory note in the principal amount of $40,675, bearing interest at the rate of 5% per annum, and maturing on June 1, 2024. During the three months ending October 31, 2023, an additional $15,000 was advanced to the Company bringing the total principal due to $55,675, ss of October 31, 2023.

 

The Company was also indebted to a third party for a total of $24,656, for a non-interest-bearing note. This note was in default since December 30, 2015.

 

NOTE 7 – LOANS PAYABLE

 

The Company has an SBA loan with monthly payments that matures on March 13, 2026. The balance due on this loan as of October 31, 2023 and 2022, is $589,092 and $595,092, respectively. As of July 31, 2023, the interest rate on this loan has increased to 10.25% from its original 5.25%. (see note 15)

 

The Company has a line of credit requiring monthly payments. On December 24, 2021, $106,201 from a CD was applied to the Line of Credit balance. On April 5, 2023, a property pledged as collateral by David Yuengling was taken over by Mid Penn Bank. The property’s appraised value of $204,360 was applied to the principal of the Line of Credit and recognized as gain on extinguishment of debt. The balance due on this loan as of October 31, 2023 and October 31, 2022, is $489,439 and $693,799, respectively. As of October 31, 2023, the interest rate on this loan has increased to 9.5% from its original 4.25%. (see note 15)

 

NOTE 8 – CONVERTIBLE NOTE PAYABLE

 

On March 2, 2022, the Company issued a convertible promissory note to Quick Capital, LLC in the amount of $87,222. The company received $73,500, after a 10% OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $13,722 was recorded as a debt discount. The note is convertible into shares of common stock at $0.0005 per share. On October 21, 2022, the total principal and accrued interest of $93,818, was exchanged for a new convertible note. The new note bears interest at 12% and matures on March 21, 2023. The note is convertible into shares of common stock at 65% of the lowest trade price during the ten days prior to the date of conversion. During the year ended October 31, 2023, Quick Capital converted $93,818 and $5,457 of principal and interest, respectively, into 84,358,767 shares of common stock.

 

F-13

 

 

On September 7, 2022, the Company issued a convertible promissory note to 1800 Diagonal Lending LLC in the amount of $44,250. The company received $40,000, after $4,250 of OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $4,250 was recorded as a debt discount. The note is convertible into shares of common stock at 63% of the average of the two lowest trades during the fifteen days prior to the date of conversion. During the year ended October 31, 2023, 1800 Diagonal converted $44,250 and $2,655 of principal and interest, respectively, into 43,165,536 shares of common stock.

 

On December 8, 2022, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC in the amount of $39,250. The Company received $35,000 with $4,250 retained for fees. The difference of $4,250 was recorded as a debt discount. The Note bears interest at 12% and matures in one year. The note is convertible into shares of common stock at 63% of the average of the two lowest trades during the fifteen days prior to the date of conversion. During the year ended October 31, 2023, 1800 Diagonal Lending LLC converted $42,850 of principal (including default penalty) into 100,691,857 shares of common stock.

 

On September 1, 2023, 1800 Diagonal Lending LLC accepted a payment of $13,500, settling the December 13, 2022, Convertible Promissory Note in full, including a $10,640 default penalty. The funds for the payment to 1800 Diagonal were advanced to the Company by Mr. Dickson.

 

On February 3, 2023, the Company issued a convertible promissory note to Quick Capital, LLC in the amount of $25,556. The company received $20,000, after $5,556 of OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $5,556 was recorded as a debt discount. The note is convertible into shares of common stock at 65% of the lowest trade price during the ten days prior to the date of conversion. During the year ended October 31, 2023, Quick Capital LLC, converted $9,565 and $1,700 of principal and interest, respectively, into 36,443,955 shares of common stock.

 

On September 1, 2023, Quick Capital LLC accepted a payment of $22,000 settling the February 3, 2023, Convertible Promissory Note in full. The funds for the payment to Quick Capital were advanced to the Company by Pickle Jar Holdings Inc.

 

The following table summarizes the convertible notes outstanding as of October 31, 2023:

 

Schedule of convertible notes and related activity
Note Holder		Date		Maturity Date		Interest			Balance October 31, 2022				Additions				Conversions/ Repayments				Balance October 31, 2023
Quick Capital, LLC		10/21/2022		3/21/2023		12%			$	93,818			$	-			$	(93,818	)		$	-
1800 Diagonal Lending LLC		9/7/2022		9/7/2023		12%				44,250				-				(44,250	)			-
1800 Diagonal Lending LLC		12/8/2022		12/8/2023		12%				-				56,350				(56,350	)			-
Quick Capital, LLC		2/3/2023		2/3/2024		12%				-				25,556				(25,556	)			-
Total									$	138,068			$	81,906			$	(219,974	)		$	-
Less Debt Discount										(123,813	)							-				-
									$	14,255							$	-			$	-

 

A summary of the activity of the derivative liability for the notes above is as follows:

 

Schedule of derivative liability
Balance at October 31, 2021			-
Increase to derivative due to new issuances			320,704
Decrease to derivative due to repayments			-
Derivative loss due to mark to market adjustment			(73,670	)
Balance at October 31, 2022		$	247,034
Increase to derivative due to new issuances			93,496
Decrease to derivative due to conversions			(230,871	)
Decrease to derivative due to repayments			(35,095	)
Derivative gain due to mark to market adjustment			(74,564	)
Balance at October 31, 2023		$	-

 

F-14

 

 

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy for the year ended October 31, 2023 is as follows:

 

Schedule of derivative liabilities at fair value
Inputs		October 31, 2023				Initial Valuation
Stock price			$0.0012				$0.01 - 0.038
Conversion price			$0.0006 - 0.0007				$0.0025 - 0.0069
Volatility (annual)			230.13% - 240.8	%			222.7% - 326.6%
Risk-free rate			5.3	%			3.6% - 4.8%
Dividend rate			-				-
Years to maturity			0 - 0.85				0.41 - 1

 

NOTE 9 – RELATED PARTY TRANSACTIONS

 

In June 2022, Everett Dickson advanced the Company $6,000 for a general operating expense. The $6,000 was repaid the following month.

 

During the year ended October 31, 2022, a $5,500 payment was mistakenly made to a company controlled by Everett Dickson. The amount is to be repaid. This amount was applied to the note payable during the year ended October 31, 2023.Pickle Jar the company benefiting from this error, advanced the Company $22,000, on September 1, 2023. The amount due to the Company from Pickle Jar was offset against this new advance leaving a note payable to Pickle Jar of $16,500. The funds advanced were used by the Company to repay the balance due on a convertible note held by Quick Capital, LLC. (see note 8)

 

On August 17, 2023, Everett Dickson paid $1,910, to a consultant of the Company’s. The transaction is considered a loan advance and is evidenced by a note payable (below) issued to Everett Dickson.

 

On September 1, 2023, Everett Dickson directly paid $13,500 to Diagonal Lending LLC on behalf of the Company paying the amount of the agreed settlement extinguishing the balance due on the convertible note due. The transaction is considered a loan advance and is evidenced by a note payable (below) issued to Everett Dickson.

 

On September 1, 2023, Everett Dickson deposited $2,000, into the Company’s bank accounts to fund payments. The transaction is considered a loan advance and is evidenced by a note payable issued to Everett Dickson. As of October 31, 2023 the note balance due to Everett Dickson is $17,410, is due upon demand and does not bear interest.

 

On January 14, 2023, the Company granted 30 million restricted common shares to Robert C. Bohorad. The Company signed a letter of intent with Mr. Charles Green and Mr. Bohorad on October 26, 2022, where Mr. Bohorad will become Chief Operating Officer and Chief Financial Officer. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $0.006, the closing stock price on the date of grant, for total non-cash compensation of $180,000. The amount was to be recognized over a one-year period. On September 15, 2023, Robert C. Bohorad returned the 30 million restricted common shares to the Company.

 

During the year ended October 31, 2023 and 2022, the Company paid Robert C. Bohorad, President and CEO, $7,000 and $22,000 for compensation, respectively. During the year ended October 31, 2023, Mr. Bohorad forgave $53,000 of accrued compensation. The Company and Mr. Bohorad have agreed that the balance due of $30,000, will be paid by March 31, 2024. See Note 15.

 

On October 30, 2023, the Company awarded Mr. Bohorad 3,000,000 shares of restricted common stock to facilitate the preparation of financial statements and in the transition of the Company to new ownership. (see note 15)

 

F-15

 

 

NOTE 10 – TEMPORARY EQUITY

 

Commitment to Purchase Series A Convertible Preferred Stock

 

On January 18, 2019, The Company entered into a Series A Preferred Stock Purchase Agreement with Device Corp. (“the Agreement”), of up to $250,000. On May 1, 2023, a second stock purchase agreement was executed by Device Corp. for $250,000. Under the terms of the Agreement the Series A Preferred Stock is Convertible into shares of common stock at a 50% discount to the lowest close price of the common stock for the prior thirty trading days. Under the Agreement Device Corp. has advanced the Company approximately $562,000, of which approximately $170,000 had been repaid by October 31, 2022, leaving a balance due of $392,000.

 

As of October 31, 2023, the Company has preferred stock to be issued in the amount of $357,022, following conversions to 50,000,000 common shares. Based on the terms of the Agreement as of October 31, 2023, the preferred Series A can be converted at $0.00035 per share, into 1,020,062,029 shares of common stock. As of the balance sheet date and the date of this report, these shares have not been issued to the Purchaser. S99-3A(2) ASR 268 requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the control of the issuer. Given that there is an unknown number of preferred shares to be issued and the preferred shares are convertible at the option of the holder, the Company determined that the shares to be issued shall be treated as temporary equity.

 

Series B Preferred Stock

 

On August 25, 2023, the Company Amended its Articles of Incorporation, to designate 5,000,000 of the Authorized preferred stock, par value $0.0001, as Series B Preferred Stock (“Series B”). The Series B is convertible into shares of common stock at the average price of the previous five trading days. The Series B shares are not entitled to dividends and have no voting rights.

 

Following the amendment above the Series B preferred stock is convertible into shares of common stock at the option of the holder at a 50% discount to the average price for the five trading days prior to conversion. As of the balance sheet date and the date of this report, these shares have not been issued to the Purchaser. S99-3A(2) ASR 268 requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the control of the issuer. Given that there is an unknown number of preferred shares to be issued and the preferred shares are convertible at the option of the holder, the Company determined that the shares to be issued shall be treated as temporary equity.

 

On August 25, 2023, the Company and Device Corp amended the January 18, 2019, and the May 1, 2023 Series A Preferred Stock Purchase Agreements, so that any purchased Series A preferred stock is now Series B preferred stock.

 

NOTE 11 – COMMON STOCK

 

On October 31, 2023 and 2022, the Company had 2,500,000,000 shares of common stock authorized. There were 332,488,710 and 14,828,595 common shares of stock outstanding on October 31, 2023 and 2022, respectively.

 

During the year ended October 31, 2023, Quick Capital LLC converted $102,087 and $7,157 of principal and interest, respectively, into 120,802,722 shares of common stock.

 

During the year ended October 31 2023, 1800 Diagonal Lending LLC, converted $87,100 and $2,655 of principal and interest, respectively, into 143,857,393 shares of common stock.

 

F-16

 

 

On January 14, 2023, the Company granted 30 million restricted common shares each to Charles Green and Robert C. Bohorad The Company signed a letter of intent with Mr. Green and Mr. Bohorad on October 26, 2022, where Mr. Green will join the company as President and CEO. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $0.006, the closing stock price on the date of grant, for total non-cash compensation of $180,000. On September 15, 2023, Robert C. Bohorad and Charles Green returned a combined 60 million restricted common shares to the Company. These original issuance charges were reversed leaving no expense, or prepaid expense the common stock and additional paid in capital were charged as the offset.

 

During the year ended October 31, 2023, Device Corp converted $35,000 of the amount due in Series A preferred stock to 50,000,000 shares of common stock.

 

On October 30, 2023, the Company issued 3,000,000 shares of restricted common stock for services. (see note 9)

 

On August 5, 2022, the Company effectuated a reverse stock split at a ratio of 1-for-150 common shares. All shares throughout these financial statements have been retroactively restated to reflect the reverse split.

 

On March 1, 2022, the Company increased its authorized common stock from 2,000,000,000 (2 billion) to 2,500,000,000 (2.5 billion) shares.

 

On January 21, 2022, the Company increased its authorized common stock from 1,750,000,000 (1.75 billion) to 2,000,000,000 (2 billion) shares.

 

During the year ended October 31, 2022, the Company sold 2,560,000 shares of common stock, for total cash proceeds of $187,520.

 

During the year ended October 31, 2022, Device Corp converted $6,500 of the amount due in Series A preferred stock to 1,300,000 shares of common stock.

 

NOTE 12 – PREFERRED STOCK

 

Series A Preferred Stock

 

The Company has designated Ten Million (10,000,000) shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $0.0001 per share. The holders of the Series A Convertible Preferred Stock are not entitled to receive any dividends.

 

Except as otherwise required by law or by the Articles of Incorporation and except as set forth below, the outstanding shares of Series A Convertible Preferred Stock shall vote together with the shares of Common Stock and other voting securities of the Corporation as a single class and, regardless of the number of shares of Series A Convertible Preferred Stock outstanding and as long as at least one of such shares of Series A Convertible Preferred Stock is outstanding shall represent Sixty Six and Two Thirds Percent (66 2/3%) of all votes entitled to be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders. Each outstanding share of the Series A Convertible Preferred Stock shall represent its proportionate share of the 66 2/3% which is allocated to the outstanding shares of Series A Convertible Preferred Stock. The Certificate of Designation was amended on September 12, 2023, among other changes the Series A Convertible Preferred Stock must be held for one year following issuance or reissuance prior to conversion.

 

The entirety of the shares of Series A Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into two thirds of the after conversion outstanding fully paid and non-assessable shares of Common Stock. Each individual share of Series A Convertible Preferred Stock shall be convertible into Common Stock at a ratio determined by dividing the number of shares of Series A Convertible Stock to be converted by the number of shares of outstanding pre-conversion Series A Convertible Preferred Stock. Such initial Conversion Ratio, and the rate at which shares of Series A Convertible Preferred Stock may be converted into shares of Common Stock. On August 25, 2023, Everett Dickson, Chairman of the Board, agreed to return 4,525,000 shares of Series A preferred Stock to the Company. The shares will be retired by the Company. His remaining 475,000 shares are to be sold to Mr. Richard Jordan (see note 15).

 

F-17

 

 

NOTE 13 – COMMITMENTS AND CONTINGENCIES

 

On January 20, 2022, the Company entered into a Service Agreement with Desmond Partners, LLC for consulting services to be provided. The agreement is effective on February 1, 2022 for a term of three months. Per the terms of the agreement the consultant will receive a fee of $10,000 per month and 5% equity in the Company. The initial term has expired with no issuance of equity to date. The Company needs to file a written termination to satisfy the agreement terms. (see note 15).

 

An individual has asserted that the Company owes approximately $500,000, for a promissory note issued by a company that was never owned by the public company nor its subsidiary. Legal counsel has reviewed the claim and found no relationship to this debt nor any assumptions of the debt by the Company. While there is risk that there may be litigation over this claim, the Company believes that it is more unlikely that the claim would prevail.

 

NOTE 14 – INCOME TAX

 

The Company recognizes deferred tax assets and liabilities for the tax effects of differences between the financial statement and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.

 

As of October 31, 2023, the Company has net operating loss carryforwards of approximately $1,263,000 to reduce future taxable income. A valuation allowance for the entire amount of deferred tax assets has been established as of October 31, 2023 and 2022. Additionally, due to the expected change in control of the Company, the net operating loss carryforwards will be fully impaired. See note 15

 

A reconciliation of the provision for income taxes at the federal and state statutory rates of 21% and 5.75% respectively to the Company’s provision for income tax is as follows:

 

Schedule of provision for income tax
		Year Ended October 31, 2023				Year Ended October 31, 2022
U.S. Federal (tax benefit) provision at statutory rate		$	(16,295	)		$	(101,100	)
State (tax benefit) income taxes, net of federal benefit			(4,462	)			(24,100	)
Permanent differences			(66,028	)			(11,900	)
Temporary differences			-				(10,700	)
Changes in valuation allowance			86,785				147,800
Total		$	-			$	-

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented:

 

Schedule of deferred tax amount net
		October 31, 2023				October 31, 2022
Deferred Tax Assets
Net operating losses			337,900				244,100
Total deferred tax assets			337,900				10,700
Valuation allowance			(337,900	)			(233,400	)
Net deferred tax assets			-				-
Deferred Tax Liabilities
Total deferred tax liabilities			-				-
Net deferred tax		$	-			$	-

 

F-18

 

 

The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of the deferred tax assets in the U.S. can be realized as of October 31, 2023 and 2022, accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.

 

The Company is not currently under any international or any United States federal, state and local income tax examinations for any taxable years. All of the Company’s net operating losses are subject to tax authority adjustment upon examination.

 

NOTE 15 – SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the following.

 

Termination of Agreements to Acquire Pickle Jar Holdings Inc.

 

On August 23, 2023, the Company entered into a binding Letter of Intent (LOI) with Pickle Jar Holdings Inc. The initial term of the LOI runs through September 30, 2023, allowing for the parties to complete their due diligence requirement, with the intent of entering into a definitive agreement prior to September 30, 2023. On November 6, 2023, the parties to the agreement have mutually agreed to terminate the MOU and LOI and to fully release all parties to the agreement.

 

Reverse Merger/Acquisition of ReachOut Technology Corp.

 

On November 9,2023, the Company closed the Share Exchange and Control Block Transfer Agreements with ReachOut Technology Corp. (“ReachOut”) whereby 100% of the membership interests of ReachOut were exchanged for a Series C Preferred Stock which are convertible into 87.5% of the total issued and outstanding shares of common stock of the Company (fully diluted basis) as determined at the consummation of the acquisition.

 

The Share Exchange is intended to constitute a reorganization with the meaning of Section 368 of the Internal Revenue Code of 1986 (as amended), as such existing tax benefits will be fully impaired.

 

As a result of the transaction, ReachOut became a subsidiary of the Company.

 

The Company evaluated the substance of the merger transaction and found it met the criteria for the accounting and reporting treatment of a reverse acquisition under ASC 805 (Business Combinations)-40-45 (Reverse Acquisition and Other Presentation Matters) and accordingly will consolidate the operations of ReachOut and the Company and the financial condition from the closing date of the transaction. The historic results of operations will reflect those of ReachOut. As such, ReachOut is treated as the acquirer while the Company is treated as the acquired entity for accounting and financial reporting purposes. The final accounting for the acquisition is still underway with the audit of the acquired company expected to be completed by mid-February.

 

Under reverse merger accounting, the comparative historical financial statements of the Company, as the legal acquirer, are those of the accounting acquirer, ReachOut, the Company’s financial statements prior to the closing of the reverse acquisition; reflect only the business of ReachOut and its subsidiaries.

 

Under the terms of the Control Block Transfer Agreement, Everett Dickson (former CEO) is to sell all his remaining Series A Preferred Stock to Richard Jordan (new CEO) for $140,000.

 

Following the closing of the agreements, Robert Bohorad and Everett Dickson resigned their positions as CEO and Chairman of the Board of Directors, respectively and Richard Jordan was appointed to those positions.

 

F-19

 

 

The Company has authorized 8,750,000 Series C Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $3.00 per share, earns a 2% dividend on the stated value, which cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 87.5% of the outstanding common stock for a period of twenty-four months from the date of issuance.

 

The Company is obligated under the terms of the Share Exchange Agreement to issue 8,750,000 shares of Series C Preferred Stock to the owners of ReachOut. in exchange for 100% of the shares of ReachOut upon closing the aforementioned acquisition.

 

The Company has authorized 1,250,000 Series D Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $1.00 per share, earns a 2% dividend on the stated value, which cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 12.5% of the outstanding common stock for a period of twenty-four months from the date of issuance.

 

The Company is obligated under the terms of the Security Purchase Agreement to issue 1,000,000 shares of Series D Preferred Stock along with warrants having an exercise price of $0.0003 and a term of seven years for the issuance of 142,424,186 shares of common stock as inducement to lend an aggregate principal amount of $470,000 upon closing the aforementioned acquisition.

 

The Company is obligated under the terms of the Security Purchase Agreement to issue 250,000 shares of Series D Preferred Stock to Everett Dickson as consideration for surrendering 4,525,000, shares of Series A Preferred Stock (see note 12).

 

Securities Issued

 

In November 2023, YCRM issued a convertible note payable, warrants to purchase to the Company’s common stock and Series D Preferred Shares to Trillium Partners, L.P. The convertible note has principal of $470,000, bears interest at 12%, matures on May 31, 2025 and may be converted to common shares at the lower of $0.0003 or 50% of the lowest traded price during the thirty days prior to conversion. The warrants allow the holder to purchase 142,424,186 shares of common stock for $0.0003 (subject to certain specified adjustments) for a period of seven years from the date of issuance. The issuance of 1,000,000 Series D Preferred shares of stock, is entitled to 2% cumulative dividend based on the stated value ($1.00), has voting rights (based upon common stock equivalent shares) and are convertible into common stock at a percentage (10%) of the issued and outstanding.

 

On January 11, 2024, YCRM issued a convertible note payable and warrants to purchase to the Company’s common stock to Trillium Partners, L.P. The convertible note has principal of $539,000, bears interest at 12%, matures on May 31, 2025 and may be converted to common shares at the lower of $0.0003 or 50% of the lowest traded price during the thirty days prior to conversion. The warrants allow the holder to purchase 163,333,333 shares of common stock for $0.0003 (subject to certain specified adjustments) for a period of seven years from the date of issuance.

 

Service Agreement

 

On December 1, 2023, the Company entered into a service agreement with Frondeur Partners LLC (“Frondeur”). Frondeur will provide accounting, reporting and consulting services on monthly basis. On December 1, 2023, the Company executed a corporate services agreement with Frondeur Partners LLC a Nevada limited liability company. Under the terms of the agreement the Company will receive accounting and reporting services. As compensation Frondeur will receive monthly payments of $10,000 in cash and a convertible promissory note for $15000 The notes are convertible into the Company’s common stock at a 50% discount to the market price (defined in the notes). As of the date of issuance of this report the Company has issued three such notes (December 1, 2023, January 1, and February 1, 2024), which are to be accounted for as stock settled debt under ASC 480.

 

F-20

 

 

Debt Cancellation

 

On January 9, 2024, Mid Penn Bank and the Company executed an Assignment of Assets and Cancellation of Debt agreement. The assets assigned include all rights to trademarks and other property related to the Yuengling ice cream business. The debt cancelled consists of an SBA loan have principal of $589,092 and a line of credit having an outstanding principal balance of $489,439, together with unpaid accrued interest pf approximately $113,000.

 

The Company is analyzing the potential tax impact of the debt cancellation. Since the debt was assumed in acquisition the basis of the liability to the Company may negate the potential tax on debt forgiveness.

 

Settlement of Obligations from Service Agreement

 

On January 23, 2024, Desmond Partners, LLC and the Company entered into a Settlement Agreement and Mutual Release relating to the Professional Services Agreement (‘initial agreement”) entered into by the parties on January 20, 2022. Under the terms of the settlement the Company will issue 500,000 common shares to Desmond Partners, LLC thereby settling all claims for service and fees related thereto and releasing both parties from the terms of the initial agreement.

 

On January 26, 2024, Everett Dickson acquired the preferred series A shares formerly held by Device Corp. The shares are convertible into common shares and are fully described at footnote 10.

 

 

Exhibits

 

Exhibit Number		Description
3.1(1)		Articles of Incorporation
3.2(2)		By-Laws
5.1		Legal Opinion of Erika Mariz Pineda, Esq., with consent to use
10.1		Equity Financing Agreement with Trillium Partners, LP dated January 8, 2024
10.2		Registration Rights Agreement with Trillium Partners, LP dated January 8, 2024
10.3		Share Exchange Agreement with Reachout Technology dated November 7, 2023
10.4		Control Block Transfer Agreement dated November 7, 2023
10.5		Assignment of Assets and Cancellation of Debt dated January 9, 2024
10.6		Audited financial statements of ReachOut as of and for the years ended December 31, 2022 and 2021 and Independent Auditors Report thereon
10.7		Unaudited financial statements of ReachOut as of December 31, 2022 and 2023
10.8		Unaudited pro forma combined financial statements and explanatory note for Yuenglings’s Ice Cream Corporation and ReachOut as of October 2023 and December 31, 2023.
23.1		Consent of Fruci & Associates II, PLLC
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
107		Filing Fee Table

 

(1)	Included as Exhibit 2.1 to Form 1-A filed on May 29, 2019, and incorporated herein by reference.
(2)	Included as Exhibit 2.2 to Form 1-A filed on May 29, 2019, and incorporated herein by reference.

 

 

The undersigned registrant hereby undertakes:

 

1.	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(a)

To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(b)

To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; Notwithstanding the forgoing, any increase or decrease in Volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the commission pursuant to Rule 424(b)if, in the aggregate, the changes in the volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

 

(c)

To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement.

 

2.

That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

3.	To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering.

 

4.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to officers, directors, and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted our director, officer, or other controlling person in connection with the securities registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the final adjudication of such issue.

 

5.

Each prospectus filed pursuant to Rule 424(b) as part of a Registration statement relating to an offering, other than registration statements relying on Rule 430(B) or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided; however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by referenced into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

 

In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.

 

 

Signatures

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Mokena, State of Illinois, on the 29th day of May, 2024.

 

	Yuengling’s Ice Cream Corporation
	By:	/s/ Richard Jordan
		Richard Jordan
		Chief Executive Officer

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates stated.

 

SIGNATURE		CAPACITY IN WHICH SIGNED		DATE
/s/ Richard Jordan		President, Chief Executive Officer		May 29, 2024
Richard Jordan		and Director
/s/ Richard Jordan		Principal Accounting Officer,		May 29, 2024
Richard Jordan		Principal Financial Officer and Director

 

 

Exhibit 5.1

 

Erika Mariz Pineda, Esq.

 

2001 Market Street Philadelphia, PA 19103

(267) 710-8995

 

May 29, 2024

 

Mr. Richard Jordan

Chief Executive Officer

Yuengling’s Ice Cream Corporation

One Glenlake Parkway #650

Atlanta, GA 30328

 

Re:	Registration Statement on Form S-1

 

Mr. Jordan:

 

I have acted as counsel to Yuengling’s Ice Cream Corporation (the “Company”) in connection with its filing with the Securities and Exchange Commission of a Registration Statement on Form S-1 (the “Registration Statement”), pursuant to the Securities Act of 1933, as amended (the “Act”). The Registration Statement relates to the proposed sale of up to 600,000,000 shares of common stock held by the Company (the “Shares”).

 

This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5)(i) of Regulation S-K under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus.

 

In connection with the issuance of this opinion letter, I have examined originals or copies, certified or otherwise identified to my satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and such other documents as I have deemed necessary as a basis for the opinion contained herein.

 

In all such examinations, I have assumed the genuineness of all signatures on original documents, and the conformity to originals or certified documents of all copies submitted by the Company. In reviewing certain corporate records and documents of the Company, I have necessarily assumed the accuracy and completeness of the statements made or included therein by the Company, and I express no opinion thereon.

 

Based on my examination mentioned above, I am of the opinion that the Shares are legally and validly issued, fully paid and non-assessable.

 

I am an attorney admitted to practice in New York.  I am familiar with the applicable provisions of the Nevada Revised Statutes, the applicable provisions of the Nevada Constitution and reported judicial decisions interpreting these laws, and I have made such inquiries with respect thereto as I consider necessary to render this opinion with respect to a Nevada corporation.

 

This opinion letter is limited to the current federal securities laws of the United States and, Nevada law, including the statutory provisions, all applicable provisions of the Nevada Constitution and reported judicial decisions interpreting those laws, as such laws and to the facts as they presently exist. I express no opinion with respect to the effect or applicability of the laws of any other jurisdiction.  

 

This opinion letter is rendered as of the date first written above, and I disclaim any obligation to advise you of facts, circumstances, events, or developments that hereafter may be brought to my attention or that may alter, affect, or modify the opinion expressed herein.

 

I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to my firm under the caption “Legal Matters” in the prospectus forming a part of the Registration Statement. In giving such consent, I do not thereby admit that I am included within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations promulgated thereunder. It is understood that this opinion is to be used only in connection with the offer and sale of the Shares being registered while the Registration Statement is effective under the Securities Act.

 

Sincerely,

 

/s/ Erika Mariz Pineda
Erika Mariz Pineda

 

 

Exhibit 10.1

 

EQUITY FINANCING AGREEMENT

 

This EQUITY FINANCING AGREEMENT (the “Agreement”), dated as of January 8, 2024 (the “Execution Date”), is entered into by and between Yuengling’s Ice Cream Corporation, a Nevada corporation (the “Company”), and Trillium Partners, LP, a Delaware limited partnership (the “Investor”).

 

RECITALS:

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Investor shall invest up to Three Million Dollars ($3,000,000) (the “Commitment Amount”), over the course of twenty four (24) months immediately following the Effective Date (the “Contract Period”) to purchase the Company’s common stock, par value $0.0001 per share (the “Common Stock”);

 

WHEREAS, such investments will be made in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), Rule 506 of Regulation D promulgated by the SEC under the 1933 Act, and/or upon such other exemption from the registration requirements of the 1933 Act as may be available with respect to any or all of the investments in Common Stock to be made hereunder; and

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights under the 1933 Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

NOW THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants and agreements set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Investor hereby agree as follows:

 

SECTION I

DEFINITIONS

 

For all purposes of and under this Agreement, the following terms shall have the respective meanings below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms.

 

“1933 Act” shall have the meaning set forth in the recitals.

 

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the same will then be in effect.

 

 

“Affiliate” shall have the meaning set forth in Section 5.7.

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Articles of Incorporation” shall have the meaning set forth in Section 4.3.

 

“By-laws” shall have the meaning set forth in Section 4.3.

 

“Closing” shall have the meaning set forth in Section 2.4.

 

“Closing Date” shall have the meaning set forth in Section 2.4.

 

“Common Stock” shall have the meaning set forth in the recitals.

 

“Control” or “Controls” shall have the meaning set forth in Section 5.7.

 

“Effective Date” shall mean the date the SEC declares effective under the 1933 Act the Registration Statement covering the Securities.

 

“Environmental Laws” shall have the meaning set forth in Section 4.13.

 

“Execution Date” shall have the meaning set forth in the preamble.

 

“Indemnified Liabilities” shall have the meaning set forth in Section 10.

 

“Indemnitees” shall have the meaning set forth in Section 10.

 

“Indemnitor” shall have the meaning set forth in Section 10.

 

“Ineffective Period” shall mean any period of time that the Registration Statement or any supplemental registration statement becomes ineffective or unavailable for use for the sale or resale, as applicable, of any or all of the Registrable Securities (as defined in the Registration Rights Agreement) for any reason (or in the event the prospectus under either of the above is not current and deliverable) during any time period required under the Registration Rights Agreement.

 

“Investor” shall have the meaning set forth in the preamble.

 

“Market Price” shall mean the lowest closing bid price of the Common Stock during the Valuation Period.

 

 

“Material Adverse Effect” shall have the meaning set forth in Section 4.1.

 

“Maximum Common Stock Issuance” shall have the meaning set forth in Section 2.5.

 

“Open Period” shall mean the period beginning on and including the Trading Day immediately following the Effective Date and ending on the termination of the Agreement in accordance with Section 8.

 

“Valuation Period” shall mean the ten (10) consecutive Trading Days commencing the first trading day following a) the Put Notice and b) clearing of the Estimated Shares delivered in connection with a Put Notice. At the end of the Valuation Period, if the number of Estimated Shares delivered to the Investor is greater than the Common Stock issuable pursuant to the Put Notice, then Investor shall return to Company the difference between the Estimated Shares and the actual number of Shares issuable pursuant to the Put Notice. If the number of Estimated Shares is less than the shares issuable pursuant to the Put Notice, then the Company shall issue additional shares to Investor equal to the difference.

 

“Principal Market” shall mean the New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Markets, whichever is the principal market on which the Common Stock is listed.

 

“Prospectus” shall mean the prospectus, preliminary prospectus and supplemental prospectus used in connection with the Registration Statement.

 

“Purchase Amount” shall mean the total amount being paid by the Investor on a particular Closing Date to purchase the Securities.

 

“Purchase Price” shall mean eighty-five percent (85%) of the Market Price. during the relevant Valuation Period, subject to a floor of $0.005 per share, below which the Company shall not deliver a Put.

 

“Put” shall mean the Company is entitled to request equity investments (the “Put” or “Puts”) by the Investor, pursuant to which the Company will issue Common Stock to the Investor with an aggregate Purchase Price equal to the value of the Put, subject to a price per share calculation based on the Market Price.

 

“Put Amount” shall mean the total dollar amount requested by the Company pursuant to an applicable Put. The timing and amounts of each Put shall be at the discretion of the Company. No Put will be made in an amount equaling less than ten thousand dollars ($10,000) or greater than two hundred fifty thousand dollars ($250,000). Puts are further limited to the Investor owning no more than 9.99% of the outstanding stock of the Company at any given time.

 

“Put Notice” shall mean a written notice sent to the Investor by the Company stating the Put Amount in U.S. dollars that the Company intends to sell to the Investor pursuant to the terms of the Agreement and stating the current number of Shares issued and outstanding on such date.

 

 

“Put Notice Date” shall mean the Trading Day on which the Investor receives a Put Notice.

 

“Put Restriction” shall mean a minimum of ten (10) Trading Days following a Closing Date. During this time, the Company shall not be entitled to deliver another Put Notice.

 

“Put Shares” shall have the meaning set forth in Section 2.4.

 

“Registered Offering Transaction Documents” shall mean this Agreement and the Registration Rights Agreement between the Company and the Investor as of the date herewith.

 

“Registration Rights Agreement” shall have the meaning set forth in the recitals.

 

“Registration Statement” means the registration statement of the Company filed under the 1933 Act covering the Securities issuable hereunder.

 

“Related Party” shall have the meaning set forth in Section 5.7.

 

“Resolution” shall have the meaning set forth in Section 7.5.

 

“SEC” shall mean the U.S. Securities and Exchange Commission.

 

“SEC Documents” shall have the meaning set forth in Section 4.6.

 

“Securities” shall mean the shares of Common Stock issued pursuant to the terms of this Agreement.

 

“Settlement Date” shall have the meaning set forth in Section 2.4.

 

“Shares” shall mean the shares of the Common Stock.

 

“Subsidiaries” shall have the meaning set forth in Section 4.1.

 

“Trading Day” shall mean any day on which the Principal Market for the Common Stock is open for trading, from the hours of 9:30 am until 4:00 pm.

 

“Transaction Costs” the Company shall bear the costs of the Registration Statement. At the Closing of the first Put, the Company shall deposit five thousand dollars ($5,000) with the Investor’s designated legal counsel to offset legal costs.

 

 

SECTION II

PURCHASE AND SALE OF COMMON STOCK

 

2.1 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set forth herein, the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, up to that number of Shares having an aggregate Purchase Price of Three Million Dollars ($3,000,000).

 

2.2 DELIVERY OF PUT NOTICES. Subject to the terms and conditions herein, and from time to time during the Open Period, the Company may, in its sole discretion, deliver a Put Notice to the Investor which states the dollar amount (designated in U.S. Dollars), which the Company intends to sell to the Investor on a Closing Date (the “Put”). The Put Notice shall be in the form attached hereto as Exhibit C and incorporated herein by reference. The Purchase Price of the Put shall be eighty-five percent (85%) percent of the Market Price during the relevant Valuation Period, subject to a floor price of $.005 per share, below which the Company shall not deliver a Put. No Put will be made in an amount equaling less than ten thousand dollars ($10,000) or greater than two hundred fifty thousand dollars ($250,000).

 

2.3 CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary in this Agreement, the Company shall not be entitled to deliver a Put Notice and the Investor shall not be obligated to purchase any Shares at a Closing unless each of the following conditions are satisfied:

 

i.

Registration Statement shall have been declared effective and shall remain effective and available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until the Closing with respect to the subject Put Notice;

 

ii.

at all times during the period beginning on the related Put Notice Date and ending on and including the related Closing Date, the Common Stock shall have been listed or quoted for trading on the Principal Market and shall not have been suspended from trading thereon for a period of two (2) consecutive Trading Days during the Open Period and the Company shall not have been notified of any pending or threatened proceeding or other action to suspend the trading of the Common Stock;

 

iii.

the Company has complied with its obligations and is otherwise not in breach of or in default under, this Agreement, the Registration Rights Agreement or any other agreement executed between the parties, which has not been cured prior to delivery of the Put Notice;

 

iv.

no injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the Securities; and

 

v.

the issuance of the Securities will not violate any requirements of the Principal Market.

 

If any of the events described in clauses (i) through (v) above occurs during a Valuation Period, then the Investor shall have no obligation to purchase the Put Amount of Common Stock set forth in the applicable Put Notice.

 

 

2.4 MECHANICS OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of the conditions set forth in Sections 2.5, 7 and 8 of this Agreement, in connection with the delivery of a Put Notice, the Company shall cause its Transfer Agent to electronically transmit by crediting the account of the Investor’s broker through its Deposit Withdrawal Agent Commission (“DWAC”) system an amount of Securities equal to one hundred twenty-five percent (125%) of the Put Amount associated with such Put Notice (the “Estimated Shares”), confirmation of receipt and approval for trading of which Estimated Shares by Investor’s broker shall be required in order to begin a Valuation Period. The number of Estimated Shares shall be derived by dividing the Put Amount by the closing bid price for the Common Stock for the trading day immediately preceding the delivery of the Put Notice. If the number of Estimated Shares delivered to Purchaser is greater than the Common Stock issuable pursuant to the Put Notice, then Purchaser shall return to Company’s transfer agent the difference between the Estimated Shares and the actual number of shares issuable pursuant to the Put Notice. If the number of Estimated Shares is less than the Common Stock issuable pursuant to the Put Notice, then the Company shall issue additional shares to Purchaser equal to the difference.

 

The Closing of a Put shall occur upon the first Trading Day following the end of the Valuation Period. The Investor shall deliver the Purchase Amount specified in the Put Notice (less deposit and clearing fees) by wire transfer of immediately available funds to an account designated by the Company if the aforementioned receipt and approval are confirmed before 9:30 AM ET or on the following Trading Day if receipt and approval by the Investor’s broker is made after 9:30 AM EST (“Closing Date” or “Closing”). In addition, on or prior to such Closing Date, each of the Company and Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

 

2.5 OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained herein to the contrary, if during the Open Period the Company becomes listed on an exchange which limits the number of shares of Common Stock that may be issued without shareholder approval, then the number of Shares issuable by the Company and purchasable by the Investor, shall not exceed that number of the shares of Common Stock that may be issuable without shareholder approval (the “Maximum Common Stock Issuance”). If such issuance of shares of Common Stock could cause a delisting on the Principal Market then the Maximum Common Stock Issuance shall first be approved by the Company’s shareholders in accordance with applicable law and the By-laws and the Articles of Incorporation of the Company. The parties understand and agree that the Company’s failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the issuance and sale of Securities or the Investor’s obligation in accordance with the terms and conditions hereof to purchase a number of Shares in the aggregate up to the Maximum Common Stock Issuance, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance limitation provided in this Section 2.5.

 

 

2.6 LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in this Agreement, in no event shall the Investor be entitled to purchase that number of Shares, which when added to the sum of the number of shares of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor, would exceed 9.99% of the number of shares of Common Stock outstanding on the Closing Date, as determined in accordance with Rule 13d-1(j) of the 1934 Act.

 

2.7 RESERVED.

 

SECTION III

INVESTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS

 

The Investor represents and warrants to the Company, and covenants, that to the best of the Investor’s knowledge:

 

3.1 SOPHISTICATED INVESTOR. The Investor has, by reason of its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (I) evaluating the merits and risks of an investment in the Securities and making an informed investment decision; (II) protecting its own interest; and (III) bearing the economic risk of such investment for an indefinite period of time.

 

3.2 AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

3.3 SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the Investor will comply with the provisions of Section 9 of the 1934 Act, and the rules promulgated thereunder, with respect to transactions involving the Common Stock.

 

3.4 ACCREDITED INVESTOR. Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

 

3.5 NO CONFLICTS. The execution, delivery and performance of the Documents by the Investor and the consummation by the Investor of the transactions contemplated hereby and thereby will not result in a violation of Partnership Agreement or other organizational documents of the Investor.

 

 

3.6 OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to the Company’s business, finance and operations which it has requested. The Investor has had an opportunity to discuss the business, management and financial affairs of the Company with the Company’s management.

 

3.7 INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own account for investment purposes and not with a view towards distribution and agrees to resell or otherwise dispose of the Securities solely in accordance with the registration provisions of the 1933 Act (or pursuant to an exemption from such registration provisions).

 

3.8 GOOD STANDING. The Investor is a limited liability partnership, duly organized, validly existing and in good standing in the State of Nevada.

 

3.9 TAX LIABILITIES. The Investor understands that it is liable for its own tax liabilities.

 

3.10 REGULATION M. The Investor will comply with Regulation M under the 1934 Act, if applicable.

 

3.11 PROHIBITED TRADING. No short sales shall be permitted by the Investor or its affiliates during the period commencing on the Execution Date and continuing through the termination of this Agreement.

 

SECTION IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the Schedules attached hereto, or as disclosed on the Company’s SEC Documents, the Company represents and warrants to the Investor that:

 

4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of its incorporation, and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted. Both the Company and the companies it owns or controls (“Subsidiaries”) are duly qualified to do business and are in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means a change, event, circumstance, effect or state of facts that has had or is reasonably likely to have, a material adverse effect on the business, properties, assets, operations, results of operations, financial condition or prospects of the Company and its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform its obligations under the Registered offering Transaction Documents.

 

 

4.2 AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

 

i.

The Company has the requisite corporate power and authority to enter into and perform this Agreement and the Registration Rights Agreement (collectively, the “Registered Offering Transaction Documents”), and to issue the Securities in accordance with the terms hereof and thereof.

 

ii.

The execution and delivery of the Registered Offering Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation the issuance of the Securities pursuant to this Agreement, have been duly and validly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, or its shareholders.

 

iii.

The Registered Offering Transaction Documents have been duly and validly executed and delivered by the Company.

 

iv.

The Registered Offering Transaction Documents constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

4.3 CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of: (i) 2,500,000,000 shares of the Common Stock, par value $0.0001 per share; and, (ii) 20,000,000 shares of Preferred Stock, par value $0.0001 All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable.

 

Except as disclosed in the Company’s publicly available filings with the SEC and as will be disclosed in the Registration Statement, and based on the best information available and efforts of the Company’s management, or as otherwise set forth on Schedule 4.3:

 

i.

no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company;

 

ii.

there are no outstanding debt securities;

 

iii.

there are no outstanding shares of capital stock, options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries;

 

 

iv.

there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement);

 

v.

there are no outstanding securities of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;

 

vi.

there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described in this Agreement;

 

vii.

the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and

 

viii.

there is no dispute as to the classification of any shares of the Company’s capital stock.

 

The Company has furnished to the Investor, or the Investor has had access through EDGAR to, true and correct copies of the Company’s Articles of Incorporation and all amendments thereto, as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s By-laws and all amendments thereto, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

 

4.4 ISSUANCE OF SHARES. As of the filing of the Registration Statement the Company will have reserved the amount of Shares included in the Registration Statement for issuance pursuant to the Registered Offering Transaction Documents, which have been duly authorized and reserved (subject to adjustment pursuant to the Company’s covenant set forth in Section 5.5 below) pursuant to this Agreement. Upon issuance in accordance with this Agreement, the Securities will be validly issued, fully paid for and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. In the event the Company cannot register a sufficient number of Shares for issuance pursuant to this Agreement, the Company will use its best efforts to authorize and reserve for issuance the number of Shares required for the Company to perform its obligations hereunder as soon as reasonably practicable.

 

4.5 NO CONFLICTS. The execution, delivery and performance of the Registered Offering Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series

 

 

of preferred stock of the Company or the By-laws; or (ii) conflict with, or constitute a material default (or an event which with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Company or any of its Subsidiaries is a party, or to the Company’s knowledge result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and the rules and regulations of the Principal Market or principal securities exchange or trading market on which the Common Stock is traded or listed) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected. Neither the Company nor its Subsidiaries is in violation of any term of, or in default under, the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the By-laws or their organizational charter or by-laws, respectively, or any contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for possible conflicts, defaults, terminations, amendments, accelerations, cancellations and violations that would not individually or in the aggregate have or constitute a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in violation of any law, statute, ordinance, rule, order or regulation of any governmental authority or agency, regulatory or self-regulatory agency, or court, except for possible violations the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the 1933 Act or any securities laws of any states, to the Company’s knowledge, the Company is not required to obtain any consent, authorization, permit or order of, or make any filing or registration (except the filing of a registration statement as outlined in the Registration Rights Agreement between the parties) with, any court, governmental authority or agency, regulatory or self-regulatory agency or other third party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the Registered Offering Transaction Documents in accordance with the terms hereof or thereof. All consents, authorizations, permits, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof and are in full force and effect as of the date hereof. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The Company is not, and will not be, in violation of the listing requirements of the Principal Market as in effect on the date hereof and on each of the Closing Dates and is not aware of any facts which would reasonably lead to delisting of the Common Stock by the Principal Market in the foreseeable future.

 

4.6 SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, and amendments thereto, being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Investor or its representatives, or they have had access through EDGAR to, true and complete copies of the SEC Documents. As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the

 

 

SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC or the time they were amended, if amended, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, by a firm that is a member of the Public Companies Accounting Oversight Board (“PCAOB”) consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided by or on behalf of the Company to the Investor which is not included in the SEC Documents, including, without limitation, information referred to in Section 4.3 of this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstance under which they are or were made, not misleading. Neither the Company nor any of its Subsidiaries or any of their officers, directors, employees or agents have provided the Investor with any material, nonpublic information which was not publicly disclosed prior to the date hereof and any material, nonpublic information provided to the Investor by the Company or its Subsidiaries or any of their officers, directors, employees or agents prior to any Closing Date shall be publicly disclosed by the Company prior to such Closing Date.

 

4.7 ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the SEC Documents, the Company does not intend to change the business operations of the Company in any material way. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings.

 

4.8 ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of Company or any of its Subsidiaries, threatened against or affecting the Company, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a Material Adverse Effect.

 

4.9 ACKNOWLEDGMENT REGARDING INVESTOR’S PURCHASE OF SHARES. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length investor with respect to the Registered Offering Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar

 

 

capacity) with respect to the Registered Offering Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Investor or any of its respective representatives or agents in connection with the Registered Offering Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase of the Securities, and is not being relied on by the Company. The Company further represents to the Investor that the Company’s decision to enter into the Registered Offering Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

 

4.10 NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set forth in the SEC Documents, as of the date hereof, no event, liability, development or circumstance has occurred or exists, or to the Company’s knowledge is contemplated to occur, with respect to the Company or its Subsidiaries or their respective business, properties, assets, prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.

 

4.11 EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is involved in any union labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened. Neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that relations with their employees are good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company’s employ or otherwise terminate such officer’s employment with the Company.

 

4.12 INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. Except as set forth in the SEC Documents, none of the Company’s trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights necessary to conduct its business as now or as proposed to be conducted have expired or terminated, or are expected to expire or terminate within three (3) years from the date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others and, except as set forth in the SEC Documents, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties.

 

 

4.13 ENVIRONMENTAL LAWS. The Company and its Subsidiaries (i) are, to the knowledge of the management and directors of the Company and its Subsidiaries, in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have, to the knowledge of the management and directors of the Company, received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance, to the knowledge of the management and directors of the Company, with all terms and conditions of any such permit, license or approval where, in each of the three (3) foregoing cases, the failure to so comply would have, individually or in the aggregate, a Material Adverse Effect.

 

4.14 TITLE. The Company and its Subsidiaries have good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in the SEC Documents or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

 

4.15 INSURANCE. Each of the Company’s Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for and neither the Company nor its Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

4.16 REGULATORY PERMITS. The Company and its Subsidiaries have in full force and effect all certificates, approvals, authorizations and permits from the appropriate federal, state, local or foreign regulatory authorities and comparable foreign regulatory agencies, necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits which if not obtained, or such revocations or modifications which, would not have a Material Adverse Effect.

 

 

4.17 INTERNAL ACCOUNTING CONTROLS. Except as otherwise set forth in the SEC Documents, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles by a firm with membership to the PCAOB and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s management has determined that the Company’s internal accounting controls were not effective as of the date of this Agreement as further described in the SEC Documents.

 

4.18 NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

 

4.19 TAX STATUS. The Company and each of its Subsidiaries has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

4.20 CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents filed at least ten (10) days prior to the date hereof and except for arm’s length transactions pursuant to which the Company makes payments in the ordinary course of business upon terms no less favorable than the Company could obtain from disinterested third parties, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, such that disclosure would be required in the SEC Documents.

 

 

4.21 DILUTIVE EFFECT. The Company understands and acknowledges that the number of shares of Common Stock issuable upon purchases pursuant to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the period between the Effective Date and the end of the Open Period. The Company’s executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to such limitations as are expressly set forth in the Registered Offering Transaction Documents, its obligation to issue shares of Common Stock upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

4.22 NO GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor any person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Common Stock to be offered as set forth in this Agreement.

 

4.23 NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers, finders or financial advisory fees or commissions will be payable by the Company, its agents or Subsidiaries, with respect to the transactions contemplated by this Agreement.

 

4.24 EXCLUSIVITY. The Company shall not pursue a similar equity financing transaction as envisioned hereunder (the “Equity Financing”) with any other party unless and until good faith negotiations have terminated between the Investor and the Company or until such time as the Registration Statement has been declared effective by the SEC.

 

SECTION V

COVENANTS OF THE COMPANY

 

5.1 BEST EFFORTS. The Company shall use all commercially reasonable efforts to timely satisfy each of the conditions set forth in Section 7 of this Agreement.

 

5.2 REPORTING STATUS. Until one of the following occurs, the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status, or take an action or fail to take any action, which would terminate its status as a reporting company under the 1934 Act: (i) this Agreement terminates pursuant to Section 8 and the Investor has the right to sell all of the Securities without restrictions pursuant to Rule 144 promulgated under the 1933 Act, or such other exemption, or (ii) the date on which the Investor has sold all the Securities and this Agreement has been terminated pursuant to Section 8.

 

 

5.3 USE OF PROCEEDS. The Company will use the proceeds from the sale of the Put Shares (excluding amounts paid by the Company for fees as set forth in the Registered Offering Transaction Documents) for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that the Board of Directors, in good faith, deem to be in the best interest of the Company.

 

5.4 FINANCIAL INFORMATION. During the Open Period, the Company agrees to make available to the Investor via EDGAR or other electronic means the following documents and information on the forms set forth: (i) within five (5) Trading Days after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any Registration Statements or amendments filed pursuant to the 1933 Act; (ii) copies of any notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof to the shareholders; and (iii) within two (2) calendar days of filing or delivery thereof, copies of all documents filed with, and all correspondence sent to, the Principal Market, any securities exchange or market, or the Financial Industry Regulatory Association, unless such information is material nonpublic information.

 

5.5 RESERVATION OF SHARES. The Company shall take all action necessary to at all times have authorized, and reserved the amount of Shares included in the Company’s registration statement for issuance pursuant to the Registered Offering Transaction Documents. In the event that the Company determines that it does not have a sufficient number of authorized shares of Common Stock to reserve and keep available for issuance as described in this Section 5.5, the Company shall use all commercially reasonable efforts to increase the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such additional shares.

 

5.6 LISTING. The Company shall promptly secure and maintain the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) on the Principal Market and each other national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain, such listing of all Registrable Securities from time to time issuable under the terms of the Registered Offering Transaction Documents. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market (excluding suspensions of not more than one (1) Trading Day resulting from business announcements by the Company). The Company shall promptly provide to the Investor copies of any notices it receives from the Principal Market regarding the continued eligibility of the Common Stock for listing on such automated quotation system or securities exchange. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 5.6.

 

5.7 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of its Subsidiaries not to, enter into, amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment or arrangement with any of its or any Subsidiary’s officers, directors, persons who were officers or directors at any time during the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a

 

 

5% or more beneficial interest (each a “Related Party”), except for (i) customary employment arrangements and benefit programs on reasonable terms, (ii) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less favorable than terms which would have been obtainable from a disinterested third party other than such Related Party, or (iii) any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company. For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be a disinterested director with respect to any such agreement, transaction, commitment or arrangement. “Affiliate” for purposes hereof means, with respect to any person or entity, another person or entity that, directly or indirectly, (i) has a 5% or more equity interest in that person or entity, (ii) has 5% or more common ownership with that person or entity, (iii) controls that person or entity, or (iv) is under common control with that person or entity. “Control” or “Controls” for purposes hereof means that a person or entity has the power, directly or indirectly, to conduct or govern the policies of another person or entity.

 

5.8 FILING OF FORM 8-K. On or before the date which is four (4) Trading Days after the Execution Date, the Company shall file a Current Report on Form 8-K with the SEC describing the terms of the transaction contemplated by the Registered Offering Transaction Documents in the form required by the 1934 Act, if such filing is required.

 

5.9 CORPORATE EXISTENCE. The Company shall use all commercially reasonable efforts to preserve and continue the corporate existence of the Company.

 

5.10 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The Company shall promptly notify the Investor upon the occurrence of any of the following events in respect of a Registration Statement or related prospectus in respect of an offering of the Securities: (i) receipt of any request for additional information by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Securities for sale in any jurisdiction or the initiation or notice of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in such Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of a Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the Company’s reasonable determination that a post-effective amendment or supplement to the Registration Statement would be appropriate, and the Company shall promptly make available to Investor any such supplement or amendment to the related prospectus. The Company shall not deliver to Investor any Put Notice during the continuation of any of the foregoing events in this Section 5.10.

 

 

5.11 TRANSFER AGENT. The Company shall deliver instructions to its transfer agent to issue Shares to the Investor that are issued to the Investor pursuant to the Equity Financing and transactions contemplated herein.

 

5.12 ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily entering into this Agreement of its own free will, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.

 

SECTION VI

CONDITIONS OF THE COMPANY’S OBLIGATION TO SELL

 

The obligation hereunder of the Company to issue and sell the Securities to the Investor is further subject to the satisfaction, at or before each Closing Date, of each of the following conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

 

6.1 The Investor shall have executed this Agreement and the Registration Rights Agreement and delivered the same to the Company.

 

6.2 The Investor shall have delivered to the Company the Purchase Price for the Securities being purchased by the Investor.

 

6.3 No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

SECTION VII

FURTHER CONDITIONS OF THE INVESTOR’S OBLIGATION TO PURCHASE

 

The obligation of the Investor hereunder to purchase Securities is subject to the satisfaction, on or before each Closing Date, of each of the following conditions set forth below.

 

7.1 The Company shall have executed the Registered Offering Transaction Documents and delivered the same to the Investor.

 

7.2 The representations and warranties of the Company shall be true and correct as of the date when made and as of the applicable Closing Date as though made at that time and the Company shall have performed, satisfied and complied with the covenants, agreements and conditions required by the Registered Offering Transaction Documents to be performed, satisfied or complied with by the Company on or before such Closing Date. The Investor may request an update as of such Closing Date regarding the representation contained in Section 4.3.

 

 

7.3 The Company shall have executed and delivered to the Investor via DWAC the Securities (in such denominations as the Investor shall request) being purchased by the Investor at such Closing.

 

7.4 The Board of Directors of the Company shall have adopted resolutions consistent with Section 4.2(ii) (the “Resolutions”) and such Resolutions shall not have been amended or rescinded prior to such Closing Date.

 

7.5 No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.6 Within sixty (60) calendar days after the Agreement is executed, the Company agrees to use its best efforts to file with the SEC the Registration Statement covering the shares of stock underlying the Equity Financing contemplated herein. Such Registration Statement shall conform to the requirements of the rules and regulations of the SEC and be subject to the reasonable approval of the Investor. The Company will take any and all steps necessary to have its Registration Statement declared effective by the SEC within 90 calendar days after the Company has filed its Registration Statement. The Registration Statement shall be effective on each Closing Date and no stop order suspending the effectiveness of the Registration statement shall be in effect or to the Company’s knowledge shall be pending or threatened. Furthermore, on each Closing Date (I) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC’s concerns have been addressed), and (II) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist.

 

7.7 At the time of each Closing, the Registration Statement (including information or documents incorporated by reference therein) and any amendments or supplements thereto shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading or which would require public disclosure or an update supplement to the prospectus.

 

7.8 If applicable, the shareholders of the Company shall have approved the issuance of any Shares in excess of the Maximum Common Stock Issuance in accordance with Section 2.5 or the Company shall have obtained appropriate approval pursuant to the requirements of applicable state and federal laws and the Company’s Articles of Incorporation and By-laws.

 

7.9 The conditions to such Closing set forth in Section 2.3 shall have been satisfied on or before such Closing Date.

 

7.10 The Company shall have certified to the Investor the number of Shares of Common Stock outstanding when a Put Notice is given to the Investor. The Company’s delivery of a Put Notice to the Investor constitutes the Company’s certification of the existence of the necessary number of shares of Common Stock reserved for issuance.

 

 

SECTION VIII

TERMINATION

 

This Agreement shall terminate upon any of the following events:

 

8.1 when the Investor has purchased an aggregate of Three Million Dollars ($3,000,000) in the Common Stock of the Company pursuant to this Agreement; or

 

8.2 twenty-four (24) months from the date of this Agreement’s execution have elapsed.

 

Any and all shares, or penalties, if any, due under this Agreement shall be immediately payable and due upon termination of this Agreement.

 

SECTION IX

SUSPENSION

 

This Agreement shall be suspended upon any of the following events, and shall remain suspended until such event is rectified:

 

i.

The trading of the Common Stock is suspended by the SEC, the Principal Market or FINRA for a period of two (2) consecutive Trading Days during the Open Period;

 

ii.

The Common Stock ceases to be quoted, listed or traded on the Principal Market or the Registration Statement is no longer effective (except as permitted hereunder);

 

iii.

The Company breaches representation, warranty, covenant or other such term;

 

iv.

The Company files, threatens or is compelled into Bankruptcy or insolvency; or

 

v.

The Common Stock is no longer DWAC eligible.

 

vi.

Immediately upon the occurrence of one of the above-described events, the Company shall send written notice of such event to the Investor.

 

 

SECTION X

INDEMNIFICATION

 

In consideration of the parties mutual obligations set forth in the Transaction Documents, the Company (the “Indemnitor”) shall defend, protect, indemnify and hold harmless the Investor and all of the investor’s shareholders, officers, directors, employees, counsel, and direct or indirect investors and any of the foregoing person’s agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (I) any misrepresentation or breach of any representation or warranty made by the Indemnitor or any other certificate, instrument or document contemplated hereby or thereby; (II) any breach of any covenant, agreement or obligation of the Indemnitor contained in the Registered Offering Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; or (III) any cause of action, suit or claim brought or made against such Indemnitee by a third party and arising out of or resulting from the execution, delivery, performance or enforcement of the Registered Offering Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, except insofar as any such misrepresentation, breach or any untrue statement, alleged untrue statement, omission or alleged omission is made in reliance upon and in conformity with information furnished to Indemnitor which is specifically intended for use in the preparation of any such Registration Statement, preliminary prospectus, prospectus or amendments to the prospectus. To the extent that the foregoing undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The indemnity provisions contained herein shall be in addition to any cause of action or similar rights Indemnitor may have, and any liabilities the Indemnitor or the Indemnitees may be subject to.

 

SECTION XI

GOVERNING LAW: DISPUTES SUBMITTED TO ARBITRATION.

 

11.1 LAW GOVERNING THIS AGREEMENT. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state or federal courts located in New York City, New York State. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may

 

 

prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Documents by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

11.2 LEGAL FEES; AND MISCELLANEOUS FEES. At the Closing of the first Put, the Company shall deposit six thousand dollars ($6,000) with the Investor’s designated legal counsel to offset legal costs. Except as otherwise set forth in the Registered Offering Transaction Documents (including but not limited to Section V of the Registration Rights Agreement), each party shall pay the fees and expenses of its advisers, counsel, the accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. Any attorneys’ fees and expenses incurred by either the Company or the Investor in connection with the preparation, negotiation, execution and delivery of any amendments to this Agreement or relating to the enforcement of the rights of any party, after the occurrence of any breach of the terms of this Agreement by another party or any default by another party in respect of the transactions contemplated hereunder, shall be paid on demand by the party which breached the Agreement and/or defaulted, as the case may be. The Company shall pay all stamp and other taxes and duties levied in connection with the issuance of any Securities.

 

11.3 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the same force and effect as if such signature page were an original thereof.

 

11.4 HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine.

 

11.5 SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

11.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT between the Company and the Investor with respect to the terms and conditions set forth herein, and, the terms of this Agreement may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the Parties. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Investor,

 

 

and no provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. The execution and delivery of the Registered Offering Transaction Documents shall not alter the force and effect of any other agreements between the Parties, and the obligations under those agreements.

 

11.7 NOTICES. Any notices or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (I) upon receipt, when delivered personally; (II) upon receipt, when sent by email; or (III) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:

 

	If to the Company: One Glenlake Parkway #650, Atlanta, GA 30328
	If to the Investor: 90 Grove Street, Suite 108, Ridgefield, CT 06877

 

Each party shall provide five (5) days prior written notice to the other party of any change in address.

 

11.8 NO ASSIGNMENT. This Agreement may not be assigned.

 

11.9 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges that the rights of the Investor may be enforced by its general partner.

 

11.10 SURVIVAL. The representations and warranties of the Company and the Investor contained in Sections 3 and 4, the agreements and covenants set forth in Sections 5 and 6, and the indemnification provisions set forth in Section 10, shall survive each of the Closings and the termination of this Agreement.

 

11.11 PUBLICITY. The Investor acknowledges that this Agreement and all or part of the Registered Offering Transaction Documents may be deemed to be “material contracts” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the 1933 Act or the 1934 Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

 

11.12 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

 

11.13 PLACEMENT AGENT. If so required, the Company agrees to pay a registered broker dealer, to act as placement agent. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other persons or entities for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Registered Offering Transaction Documents. The Company shall indemnify and hold harmless the Investor, their employees, officers, directors, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorney’s fees) and expenses incurred in respect of any such claimed or existing fees, as such fees and expenses are incurred.

 

11.14 NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party, as the parties mutually agree that each has had a full and fair opportunity to review this Agreement and seek the advice of counsel on it.

 

11.15 REMEDIES. The Investor shall have all rights and remedies set forth in this Agreement and the Registration Rights Agreement and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which the Investor has by law. Any person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any default or breach of any provision of this Agreement, including the recovery of reasonable attorneys’ fees and costs, and to exercise all other rights granted by law.

 

11.16 PAYMENT SET ASIDE. To the extent that the Company makes a payment or payments to the Investor hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

11.17 PRICING OF COMMON STOCK. For purposes of this Agreement, the price of the Common Stock shall be as reported by Quotestream Media.

 

SECTION XII

NON-DISCLOSURE OF NON-PUBLIC INFORMATION

 

The Company shall not disclose non-public information to the Investor, its advisors, or its representatives.

 

 

Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives, and the Company represents that it does not disseminate non-public information to any investors who purchase stock in the Company in a public offering, to money managers or to securities analysts, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 12 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

 

SECTION XIII

ACKNOWLEDGEMENTS OF THE PARTIES

 

Notwithstanding anything in this Agreement to the contrary, the parties hereto hereby acknowledge and agree to the following: (i) the Investor makes no representations or covenants that it will not engage in trading in the securities of the Company, other than as provided in Section 3.12 of this Agreement; (ii) the Company shall, by 8:30 a.m. EST on the fourth Trading Day following the date hereof, file a current report on Form 8-K disclosing the material terms of the transactions contemplated hereby and in the other Registered Offering Transaction Documents; (iii) the Company has not and shall not provide material non-public information to the Investor unless prior thereto the Investor shall have executed a written agreement regarding the confidentiality and use of such information; and (iv) the Company understands and confirms that the Investor will be relying on the acknowledgements set forth in clauses (i) through (iii) above if the Investor effects any transactions in the securities of the Company.

 

 

[Signature page follows]

 

 

Your signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Equity Financing Agreement as of the date first written above. The undersigned signatory hereby certifies that he has read and understands the Equity Financing Agreement, and the representations made by the undersigned in this Equity Financing Agreement are true and accurate, and agrees to be bound by its terms.

 

	TRILLIUM PARTNERS, LP
	By:	/s/
	Name:	Stephen Hicks
	Title:	Manager

 

	YUENGLING’S ICE CREAM CORPORATION
	By:	/s/
	Name:	Richard Jordan
	Title:	Chief Executive Officer

 

 

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of January 8, 2024 (the “Execution Date”), is entered into by and between Yuengling’s Ice Cream Corporation, a Nevada corporation with its principal executive office at One Glenlake Parkway #650, Atlanta, GA 30328 (the “Company”), and Trillium Partners, LP, a Delaware limited partnership, with offices at 90 Grove Street, Suite 108, Ridgefield, CT 06877 (the “Investor”).

 

RECITALS:

 

WHEREAS, pursuant to the Equity Financing Agreement entered into by and between the Company and the Investor of even date (the “Equity Financing Agreement”), the Company has agreed to issue and sell to the Investor an indeterminate number of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), up to an aggregate purchase price of Three Million Dollars ($3,000,000);

 

WHEREAS, as an inducement to the Investor to execute and deliver the Equity Financing Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws, with respect to the shares of Common Stock issuable pursuant to the Equity Financing Agreement.

 

NOW THEREFORE, in consideration of the foregoing promises and the mutual covenants contained hereinafter and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

SECTION I
DEFINITIONS

 

As used in this Agreement, the following terms shall have the following meanings:

 

“Execution Date” shall have the meaning set forth in the preambles.

 

“Investor” shall have the meaning set forth in the preambles.

 

“Person” means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.

 

“Register,” “Registered,” and “Registration” refer to the Registration effected by preparing and filing one (1) or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for

 

 

offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement(s) by the United States Securities and Exchange Commission (the “SEC”).

 

“Registrable Securities” means (i) the shares of Common Stock issued or issuable pursuant to the Equity Financing Agreement, (ii) any shares of capital stock issued or issuable with respect to such shares of Common Stock, if any, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the 1933 Act

 

“Registration Statement” means the registration statement of the Company filed under the 1933 Act covering the Registrable Securities, and (iii) the shares of Common Stock issued or issuable Pursuant to the Equity Financing Agreement as of the date hereof.

 

“Registered Offering Transaction Documents” shall mean this Agreement and the Equity Financing Agreement between the Company and the Investor as of the date hereof.

 

All capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning ascribed to them as in the Equity Financing Agreement.

 

SECTION II
REGISTRATION

 

2.1 The Company shall, within sixty (60) calendar days upon the date of execution of this Agreement, use its best efforts to file with the SEC a Registration Statement or Registration Statements (as is necessary) on Form S-1 (or, if such form is unavailable for such a registration, on such other form as is available for such registration), covering the resale of all of the Registrable Securities, which Registration Statement(s) shall state that, in accordance with Rule 416 promulgated under the 1933 Act, such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable upon stock splits, stock dividends or similar transactions. The Company shall initially register for resale all of the Registrable Securities which would be issuable on the date preceding the filing of the Registration Statement based on the closing bid price of the Company’s Common Stock on such date and the amount reasonably calculated that represents Common Stock issuable to other parties as set forth in the Equity Financing Agreement except to the extent that the SEC requires the share amount to be reduced as a condition of effectiveness.

 

2.2 The Company shall use all commercially reasonable efforts to have the Registration Statement(s) declared effective by the SEC within no more than ninety (90) calendar days after the Company has filed the Registration Statement.

 

 

2.3 The Company agrees not to include any other securities in the Registration Statement covering the Registrable Securities without Investor’s prior written consent which Investor may withhold in its sole discretion. Furthermore, the Company agrees that it will not file any other Registration Statement for other securities, until thirty (30) calendar days after the Registration Statement for the Registrable Securities is declared effective by the SEC.

 

2.4 Notwithstanding the registration obligations set forth in Section 2.1, if the staff of the SEC (the “Staff”) or the SEC informs the Company that all of the unregistered Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single Registration Statement, the Company agrees to promptly (i) inform the Investor and use its commercially reasonable efforts to file amendments to the Registration Statement as required by the SEC and/or (ii) withdraw the Registration Statement and file a new registration statement (the “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-1 to register for resale the Registrable Securities as a secondary offering. If the Company amends the Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the Staff or SEC, one or more registration statements on Form S-1 to register for resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended, or the New Registration Statement (each, an “Additional Registration Statement”).

 

SECTION III
RELATED OBLIGATIONS

 

At such time as the Company is obligated to prepare and file the Registration Statement with the SEC pursuant to Section 2.1, the Company will affect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, with respect thereto, the Company shall have the following obligations:

 

3.1 The Company shall use all commercially reasonable efforts to cause such Registration Statement relating to the Registrable Securities to become effective and shall keep such Registration Statement effective until the earlier to occur of the date on which (A) the Investor shall have sold all the Registrable Securities; or (B) the Investor has no right to acquire any additional shares of Common Stock under the Equity Financing Agreement (the “Registration Period”). The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The Company shall use all commercially reasonable efforts to respond to all SEC comments within ten (10) business days from receipt of such comments by the Company. The Company shall use all commercially reasonable efforts to cause the Registration Statement relating to the Registrable Securities to become effective no later than three (3) business days after notice from the SEC that the Registration Statement may be declared effective. The Investor agrees to provide all information which is required by law to provide to the Company, including the intended method of disposition of the Registrable Securities, and the Company’s obligations set forth above shall be conditioned on the receipt of such information.

 

 

3.2 The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the Investor thereof as set forth in such Registration Statement. In the event the number of shares of Common Stock covered by the Registration Statement filed pursuant to this Agreement is at any time insufficient to cover all of the Registrable Securities, the Company shall amend such Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within thirty (30) calendar days after the necessity therefor arises (based on the then Purchase Price of the Common Stock and other relevant factors on which the Company reasonably elects to rely), assuming the Company has sufficient authorized shares at that time, and if it does not, within thirty (30) calendar days after such shares are authorized. The Company shall use commercially reasonable efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.

 

3.3 The Company shall make available to the Investor and its legal counsel without charge (i) promptly after the same is prepared and filed with the SEC at least one (1) copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, the prospectus included in such Registration Statement (including each preliminary prospectus) and, with regards to such Registration Statement(s), any correspondence by or on behalf of the Company to the SEC or the staff of the SEC and any correspondence from the SEC or the staff of the SEC to the Company or its representatives; (ii) upon the effectiveness of any Registration Statement, the Company shall make available copies of the prospectus, via EDGAR, included in such Registration Statement and all amendments and supplements thereto; and (iii) such other documents, including copies of any preliminary or final prospectus, as the Investor may reasonably request from time to time to facilitate the disposition of the Registrable Securities.

 

3.4 Reserved.

 

3.5 As promptly as practicable after becoming aware of such event, the Company shall notify Investor in writing of the happening of any event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (“Registration Default”) and use all diligent efforts to promptly prepare a supplement or amendment to such Registration Statement and take any other necessary steps to cure the Registration Default (which, if such Registration Statement is on Form S-3, may consist

 

 

of a document to be filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to be incorporated by reference in the prospectus) to correct such untrue statement or omission, and make available copies of such supplement or amendment to the Investor. The Company shall also promptly notify the Investor (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when the Registration Statement or any post-effective amendment has become effective (the Company will prepare notification of such effectiveness which shall be delivered to the Investor on the same day of such effectiveness and by overnight mail), additionally, the Company will promptly provide to the Investor, a copy of the effectiveness order prepared by the SEC once it is received by the Company; (ii) of any request by the SEC for amendments or supplements to the Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate, (iv) in the event the Registration Statement is no longer effective, or (v) if the Registration Statement is stale as a result of the Company’s failure to timely file its financials or otherwise

 

3.6 The Company shall use all commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of the Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor holding Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding concerning the effectiveness of the registration statement.

 

3.7 The Company shall permit the Investor and legal counsel, designated by the Investor, to review and comment upon the Registration Statement and all amendments and supplements thereto at least five (5) calendar days prior to their filing with the SEC.

 

3.8 At the request of the Investor, the Company’s counsel shall furnish to the Investor, within two (2) business days, an opinion letter confirming the effectiveness of the registration statement. Such opinion letter shall be issued as of the date of the effectiveness of the registration statement, in a form suitable to the Investor.

 

3.9 The Company shall hold in confidence and not make any disclosure of information concerning the Investor unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, or (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order covering such information.

 

 

3.10 The Company shall use all commercially reasonable efforts to maintain designation and quotation of all the Registrable Securities covered by any Registration Statement on the Principal Market. If, despite the Company’s commercially reasonable efforts, the Company is unsuccessful in satisfying the preceding sentence, it shall use commercially reasonable efforts to cause all the Registrable Securities covered by any Registration Statement to be listed on each other national securities exchange and automated quotation system, if any, on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange or system. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3.10.

 

3.11 The Company shall cooperate with the Investor to facilitate the prompt preparation and delivery of the Registrable Securities to be offered pursuant to the Registration Statement and enable such Registrable Securities to be in such denominations or amounts, as the case may be, as the Investor may reasonably request.

 

3.12 The Company shall provide a transfer agent for all the Registrable Securities not later than the effective date of the first Registration Statement filed pursuant hereto.

 

3.13 If requested by the Investor, the Company shall (i) as soon as reasonably practical incorporate in a prospectus supplement or post-effective amendment such information as the Investor reasonably determines should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably possible after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Investor.

 

3.14 The Company shall use all commercially reasonable efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to facilitate the disposition of such Registrable Securities.

 

3.15 The Company shall otherwise use all commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

 

3.16 Within three (3) business day after the Registration Statement is declared effective by the SEC, the Company shall deliver to the transfer agent for such Registrable Securities, with copies to the Investor, confirmation that such Registration Statement has been declared effective by the SEC.

 

 

3.17 The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to the Registration Statement.

 

SECTION IV
OBLIGATIONS OF THE INVESTOR

 

4.1 At least five (5) calendar days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Investor in writing of the information the Company requires from the Investor for the Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities and the Investor agrees to furnish to the Company that information regarding itself, the Registrable Securities and the intended method of disposition of the Registrable Securities as shall reasonably be required to effect the registration of such Registrable Securities and the Investor shall execute such documents in connection with such registration as the Company may reasonably request. The Investor covenants and agrees that, in connection with any sale of Registrable Securities by it pursuant to the Registration Statement, it shall comply with the “Plan of Distribution” section of the then current prospectus relating to such Registration Statement.

 

4.2 The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless the Investor has notified the Company in writing of an election to exclude all of the Investor’s Registrable Securities from such Registration Statement.

 

4.3 The Investor agrees that, upon receipt of written notice from the Company of the happening of any event of the kind described in Section 3.6 or the first sentence of 3.5, the Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.6 or the first sentence of 3.5.

 

SECTION V
EXPENSES OF REGISTRATION

 

All legal expenses, other than underwriting discounts and commissions and other than as set forth in the Equity Financing Agreement, incurred in connection with registrations including comments, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, and printing fees shall be paid by the Company.

 

SECTION VI
INDEMNIFICATION

 

In the event any Registrable Securities are included in the Registration Statement under this Agreement:

 

 

6.1 To the fullest extent permitted by law, the Company, under this Agreement, will, and hereby does, indemnify, hold harmless and defend the Investor who holds Registrable Securities, the directors, officers, partners, employees, counsel, agents, representatives of, and each Person, if any, who controls, any Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”) (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which the Investor has requested in writing that the Company register or qualify the Shares (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which the statements therein were made, not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to the Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6.3 the Company shall reimburse the Investor and each such controlling person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6.1: (i) shall not apply to a Claim arising out of or based upon a Violation which is due to the inclusion in the Registration Statement of the information furnished to the Company by any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not be available to the extent such Claim is based on (a) a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company or (b) the Indemnified Person’s use of an incorrect prospectus despite being promptly advised in advance by the Company in writing not to use such incorrect prospectus; (iii) any omission of the Investor to notify the Company of any material fact that should be stated in the Registration Statement or prospectus relating to the Investor or the manner of sale; and (iv) any amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the resale of the Registrable Securities by the Investor pursuant to the Registration Statement.

 

 

6.2 In connection with any Registration Statement in which Investor is participating, the Investor agrees to severally and jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6.1, the Company, each of its directors, each of its officers who signs the Registration Statement, each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act and the Company’s agents (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation is due to the inclusion in the Registration Statement of the written information furnished to the Company by the Investor expressly for use in connection with such Registration Statement; and, subject to Section 6.3, the Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6.2 and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld; provided, further, however, that the Investor shall only be liable under this Section 6.2 for that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the resale of the Registrable Securities by the Investor pursuant to the Registration Statement. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6.2 with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the preliminary prospectus were corrected on a timely basis in the prospectus, as then amended or supplemented. This indemnification provision shall apply separately to each Investor and liability hereunder shall not be joint and several.

 

6.3 Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, the representation by counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due

 

 

to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The indemnifying party shall pay for only one (1) separate legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable, and such counsel shall be selected by the Investor, if the Investor is entitled to indemnification hereunder, or the Company, if the Company is entitled to indemnification hereunder, as applicable. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding affected without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

 

6.4 The indemnity agreements contained herein shall be in addition to (I) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

 

SECTION VII

CONTRIBUTION

 

7.1 To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (ii) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

 

 

SECTION VIII

REPORTS UNDER THE 1934 ACT

 

8.1 With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule 144”), provided that the Investor holds any Registrable Securities are eligible for resale under Rule 144, the Company agrees to:

 

a.

make and keep adequate current public information available, as those terms are understood and defined in Rule 144;

 

b.

file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s obligations under Section 5(c) of the Equity Financing Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

 

c.

furnish to the Investor, promptly upon request, (I) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration.

 

SECTION X

MISCELLANEOUS

 

9.1 NOTICES. Any notices or other communications required or permitted to be given under the terms of this Agreement that must be in writing will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by email; or (iii) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:

 

If to the Company:   One Glenlake Parkway #650, Atlanta, GA 30328
If to the Investor:   90 Grove Street, Suite 108, Ridgefield, CT 06877

 

Each party shall provide five (5) business days prior notice to the other party of any change in address, phone number or facsimile number.

 

 

9.2 NO WAIVERS. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

9.3 NO ASSIGNMENTS. The rights and obligations under this Agreement shall not be assignable.

 

9.4 ENTIRE AGREEMENT/AMENDMENT. This Agreement and the Registered Offering Transaction Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Registered Offering Transaction Documents supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. The provisions of this Agreement may be amended only with the written consent of the Company and Investor.

 

9.5 HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all the parties had prepared the same.

 

9.6 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the same force and effect as if such signature page were an original thereof.

 

9.7 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

9.8 SEVERABILITY. In case any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or impaired thereby.

 

9.9 LAW GOVERNING THIS AGREEMENT. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state or federal courts

 

 

located in New York City, New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Registered Offering Transaction Documents by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

9.10 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges that the rights of the Investor may be enforced by its general partner.

 

 

[Signature page follows]

 

 

Your signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Registration Rights Agreement as of the date first written above. The undersigned signatory hereby certifies that he has read and understands the Registration Rights Agreement, and the representations made by the undersigned in this Registration Rights Agreement are true and accurate, and agrees to be bound by its terms.

 

	TRILLIUM PARTNERS, LP
	By:	/s/
	Name:	Stephen Hicks
	Title:	Member
	YUENGLING’S ICE CREAM CORPORATION
	By:	/s/
	Name:	Richard Jordan
	Title:	Chief Executive Officer

 

 

Exhibit 10.3

 

SHARE EXCHANGE AGREEMENT

 

This SHARE EXCHANGE AGREEMENT (the “Agreement”) is made and entered into as of November 7, 2023, by and among Yuenglings Ice Cream Corporation, a Nevada corporation (the “Company”), ReachOut Technology Corp., a Delaware corporation (“ReachOut”), and the Shareholders of ReachOut identified on Exhibit A attached hereto (each a “Shareholder” and collectively, the “Shareholders”). Capitalized terms used in this Agreement are defined in Annex A attached hereto.

 

WHEREAS, 100% of the authorized Shares in ReachOut (the “ReachOut Shares”) are issued and outstanding, and all of which are held by the Shareholders.

 

WHEREAS, the Shareholders have agreed to exchange ReachOut Shares with Company in exchange for the issuance of such number of shares of newly created Series C Preferred Stock, par value $0.0001 per share of Company (the “Series C Preferred Stock”) which, collectively, shall be convertible into that number of shares of common stock of the Company which shall equal Eighty-Seven Point Five Percent (87.5%) of the total issued and outstanding shares of common stock of the Company as determined at the consummation of the Acquisition (on a fully diluted basis for a period of twenty-four (24) months) as set forth in the certificate of designation attached hereto as Exhibit B, on the terms and subject to the conditions set forth herein (the “Share Exchange” or the “Acquisition”).

 

WHEREAS, the Share Exchange is intended to constitute a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”), or such other tax free reorganization or restructuring provisions as may be available under the Code.

 

WHEREAS, both the board of directors of the Company and of ReachOut have each determined that it is desirable and in the best interests of their respective Shareholders of their respective companies to effect the Share Exchange.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, representations, warranties, covenants and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

EXCHANGE OF SHARES

 

1.1. Exchange by the Shareholder. At the Closing, each Shareholder shall sell, transfer, convey, assign and deliver to the Company, all of their respective ReachOut Shares owned by the Shareholder free and clear of all Liens of in exchange for the Series C Preferred Stock.

 

1.2. Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement shall take place at the offices of the Company, commencing upon the satisfaction or waiver of all conditions and obligations of the parties to consummate the transactions contemplated hereby (other than conditions and obligations with respect to the actions that the respective parties will take at Closing) or such other date and time as the parties may mutually determine (the “Closing Date”).

 

 

ARTICLE II

REPRESENTATIONS OF THE SHAREHOLDERS

 

Each Shareholder represents and warrants to the Company, as follows:

 

2.1 Good Title. The Shareholder is the record and beneficial owner, and has good and marketable title to ReachOut Shares being exchanged by such Shareholder pursuant to this Agreement as set forth on Exhibit A, with the right and authority to sell and deliver such ReachOut Shares to Company as provided herein. Upon registering of the Company as the new owner of such ReachOut Shares in the share register of ReachOut, the Company will receive good title to such ReachOut Shares, free and clear of all Liens.

 

2.2 Power and Authority. All acts required to be taken by the Shareholder to enter into this Agreement and to carry out the transactions contemplated by this Agreement have been properly taken. The obligations of the Shareholder under this Agreement constitute legal, valid and binding obligations of the Shareholder, enforceable against Shareholder in accordance with the terms hereof.

 

2.3 No Conflicts. The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of its obligations hereunder in accordance with the terms hereof: (i) will not require the consent of any Governmental Entity under any Laws; (ii) will not violate any Laws applicable to Shareholder; and (iii) will not violate or breach any contractual obligation to which Shareholder is a party.

 

2.4 No Finder’s Fee. The Shareholder has not created any obligation for any finder’s, investment banker’s or broker’s fee in connection with the transactions contemplated under this Agreement that ReachOut or the Company will be responsible for.

 

2.5 Purchase Entirely for Own Account. The Series C Preferred Stock proposed to be acquired by the Shareholder hereunder will be acquired for investment for its own account, and not with a view to the resale or distribution of any part thereof, and the Shareholder has no present intention of selling or otherwise distributing the Series C Preferred Stock, except in compliance with applicable securities laws.

 

2.6 Available Information. Each Shareholder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Company. Each Shareholder acknowledges that an investment in the Company’s Series C Preferred Stock involves a high degree of risk, is speculative and there can be no assurance of any return on any such investment.

 

2.7 Non-Registration. The Shareholder understands that the Series C Preferred Stock have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and, if issued in accordance with the provisions of this Agreement, will be issued by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Shareholder’s representations as expressed herein. The non-registration shall have no prejudice with respect to any rights, interests, benefits and entitlements attached to the Series C Preferred Stock in accordance with the Company charter documents or the laws of its jurisdiction of incorporation.

 

2.8 Restricted Securities. The Shareholder understands that the Series C Preferred Stock are characterized as “restricted securities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Shareholder pursuant hereto, the Series C Preferred Stock would be acquired in a transaction not involving a public offering. The Shareholder further acknowledges that if the Series C Preferred Stock are issued to the Shareholder in accordance with the provisions of this Agreement, such Series C Preferred Stock may not be resold without registration under the Securities Act or the existence of an exemption therefrom.

 

 

2.9 Legends. The Shareholder understands that the Series C Preferred Stock will bear the following legend or another legend that is similar to the following:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE ISSUER. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

 

and any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.

 

2.10 Accredited Investor. The Shareholder is an “accredited investor” within the meaning of Rule 501 under the Securities Act.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF REACHOUT AND SHAREHOLDERS

 

The Shareholders and ReachOut jointly and severally represent and warrant to Company that, except as set forth in herein:

 

3.1. Organization, Standing and Corporate Power. ReachOut is duly organized, validly existing and in good standing under the Laws of the State of Delaware and has the requisite corporate power and authority and all government licenses, authorizations, Permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. ReachOut is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect.

 

3.2. Subsidiaries. Other than those expressly listed herein, ReachOut does not own directly or indirectly, any equity or ownership interest in any other company, corporation, partnership, joint venture or otherwise.

 

3.3. Capital Structure of ReachOut. As of the date of this Agreement, the number of Shares and type of all authorized, issued and outstanding equity securities of ReachOut or any Subsidiary, and all shares of capital stock reserved for issuance under ReachOut’s various option and incentive plans is specified herein. No shares of Shares or other equity securities of ReachOut are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of ReachOut are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of ReachOut having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters. There are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which ReachOut or any Subsidiary is a party or by which it is bound obligating ReachOut to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of ReachOut or obligating ReachOut to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of ReachOut to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of ReachOut.

 

 

3.4. Corporate Authority; Noncontravention. ReachOut has all requisite corporate and other power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement contemplated hereunder. The execution and delivery of this Agreement by ReachOut and the consummation by ReachOut of the transactions contemplated by this Agreement have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of ReachOut and the Shareholders. This Agreement has been duly executed and when delivered by ReachOut shall constitute a valid and binding obligation of ReachOut, enforceable against ReachOut in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the Share Exchange and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or Default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any Lien upon any of the properties or Assets of ReachOut under, (i) the Certificate of Incorporation, Bylaws or other organizational or charter documents of ReachOut (copies of which have been provided to Company on or prior to the date of this Agreement) (the “ReachOut Charter Documents”), (ii) any, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, Permit, concession, franchise or license applicable to ReachOut or the Shareholder, theirs properties or Assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, Order, decree, statute, Law, ordinance, rule, regulation or arbitration award applicable to ReachOut or the Shareholder, their properties or Assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, Defaults, rights, losses or Liens that individually or in the aggregate could not have a Material Adverse Effect with respect to ReachOut or could not prevent, hinder or materially delay the ability of ReachOut to consummate the Share Exchange.

 

3.5. Governmental Authorization. No consent, approval, Order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to ReachOut in connection with the execution and delivery of this Agreement by ReachOut or the consummation by ReachOut of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act or Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).

 

3.6. Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by ReachOut or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.

 

3.7. Litigation; Compliance with Laws.

 

(a) There is no suit, action or proceeding or investigation pending or, to the Knowledge of ReachOut, threatened against or affecting ReachOut or any Subsidiary or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect with respect to ReachOut or prevent, hinder or materially delay the ability of ReachOut to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or Order of any Governmental Entity or arbitrator outstanding against ReachOut having, or which, insofar as reasonably could be foreseen by ReachOut, in the future could have, any such effect. Except as set forth herein, neither ReachOut, any Subsidiary nor to ReachOut’ Knowledge, any director or officer of ReachOut or any Subsidiary thereof, is or has been the subject of any Order involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of ReachOut there is not pending or contemplated, any investigation by the SEC involving ReachOut.

 

(b) The conduct of the business of ReachOut complies with all statutes, Laws, regulations, ordinances, rules, judgments, Orders, decrees or arbitration awards applicable thereto, except as would not have a Material Adverse Effect with respect to ReachOut.

 

 

3.8. Tax Returns and Tax Payments.

 

(a) ReachOut has filed with the appropriate taxing authorities any Tax Returns required to be filed by it (taking into account all applicable extensions). No claim has ever been made in writing or otherwise addressed to ReachOut or any Subsidiary by a taxing authority in a jurisdiction where ReachOut does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

 

(b) No material claim for unpaid Taxes has been made or become a Lien against the property of ReachOut or is being asserted against ReachOut or any Subsidiary.

 

(c) As used herein, “Taxes” shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, “Tax Return” shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.

 

3.9. Material Agreements.

 

(a) ReachOut has provided to Company all contracts or agreements to which ReachOut or any Subsidiary is a party (the “ReachOut Material Agreements”), including: (i) any agreement (or group of related agreements) for the lease of real or personal property, including capital leases, to or from any person providing for annual lease payments in excess of $25,000; (ii) any licensing agreement, or any agreement forming a partnership, strategic alliances, profit sharing or joint venture; (iii) any agreement (or group of related agreements) under which it has created, incurred, assumed, or guaranteed any indebtedness for borrowed money in excess of $10,000, or under which a security interest has been imposed on any of its Assets, tangible or intangible; (iv) any profit sharing, deferred compensation, severance, or other material plan or arrangement for the benefit of its current or former officers, directors and managers or any employees; (v) any employment or independent contractor agreement providing annual compensation in excess of $10,000 or providing post-termination or severance payments or benefits or that cannot be cancelled without more than thirty (30) days’ notice; (vi) any agreement with any current or former officer, director, Shareholder, , manager or affiliate; (vii) any agreements relating to the acquisition (by merger, purchase of Shares or assets or otherwise) of any operating business or material assets or the capital stock of any other person; (viii) any agreements for the sale of any of the assets, other than in the ordinary course of business; (ix) any outstanding agreements of guaranty, surety or indemnification, direct or indirect; (x) any royalty agreements, licenses or other agreements relating to Intellectual Property (excluding licenses pertaining to “off-the-shelf” commercially available software used pursuant to shrink-wrap or click-through license agreements on reasonable terms for a license fee of no more than $10,000); and (xi) any other agreement under which the consequences of a default or termination could reasonably be expected to have a Material Adverse Effect.

 

(b) ReachOut has made available to Company either an original or a correct and complete copy of each written Material Agreement. With respect to each Material Agreement to which ReachOut or any Subsidiary is a party thereto: (i) the agreement is the legal, valid, binding, enforceable obligation and is in full force and effect in all material respects, subject to bankruptcy and equitable remedies exceptions; (ii) (A) is not in material breach or default thereof and (B) no event has occurred which, with notice or lapse of time, would constitute a material breach or default of, or permit termination, modification, or acceleration under, the Material Agreement; and (iii) no material provision of the agreement has been repudiated.

 

 

3.10. Board Recommendation. The Board of Directors of ReachOut has determined that the terms of the Share Exchange is fair to and in the best interests of the respective Shareholders of ReachOut.

 

3.11. No Registration of Securities. ReachOut understands and acknowledges that except as set forth in this Agreement, the offering, exchange and issuance of the Series CPreferred Stock pursuant to this Agreement will not be registered under the Securities Act on the grounds that the offering, sale, exchange and issuance of securities contemplated by this Agreement are exempt from registration pursuant to Section 4(a)(2) of the Securities Act, and that Company’s reliance upon such exemption is predicated in part upon ReachOut’s and the Shareholders’ representations herein.

 

3.12. Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by ReachOut to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. ReachOut shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

3.13. Registration Rights. No Person has any right to cause ReachOut or any Subsidiary to effect the registration under the Securities Act of any securities of ReachOut or any Subsidiary.

 

3.14. Bad Actor Disqualification. With respect to the Series C Preferred Stock to be issued hereunder in reliance on Rule 506 under the Securities Act (“Regulation D Securities”), except as set forth on herein, none of the Shareholders, ReachOut, any of its predecessors, any affiliated issuer, any director, executive officer, any beneficial owner of 20% or more of the Shareholder’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with ReachOut in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Shareholder has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.

 

3.15. Full Disclosure. All of the representations and warranties made by ReachOut in this Agreement, , and all statements set forth in the certificates delivered by ReachOut at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by ReachOut pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to Company or its representatives by or on behalf of any Company or its Affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

3.16. Other Representations or Warranties. Except for the representations and warranties contained in this ARTICLE III, ReachOut does not make any other express or implied representation or warranty on behalf of ReachOut in connection with this Agreement or the transactions contemplated hereby.

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF COMPANY

 

Company represents and warrants to ReachOut and to the Shareholders that, except as set forth herein:

 

4.1. Organization, Standing, Corporate Power and Quotation of Common Stock. The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the requisite corporate power and authority and all government licenses, authorizations, Permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect with respect to Company. If the Company has no Subsidiaries, all other references to the Subsidiaries or any of them in this Agreement, shall be disregarded.

 

4.2. Subsidiaries. Other than YIC Acquisitions Corp., the Company does not own directly or indirectly, any equity or ownership interest in any company, corporation, partnership, joint venture or otherwise.

 

4.3. Capital Structure of Company. Except as set forth herein, no shares of Company common stock or Company preferred stock will be issuable upon the exercise of outstanding warrants, convertible notes, options or otherwise (except as described below). All outstanding shares of capital stock of Company and all shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, not subject to preemptive rights, and issued in compliance with all applicable state and federal Laws concerning the issuance of securities. Except as set forth herein, there are no outstanding bonds, debentures, notes or other indebtedness or other securities of Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote). Except as set forth herein, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Company or any of its Subsidiaries is a party or by which Company or any of its Subsidiaries is bound obligating Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of Company or any of its Subsidiaries or obligating Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of Company or any of its Subsidiaries. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company common stock or other securities under the Securities Act or other agreements or arrangements with or among any security holders of the Company with respect to securities of the Company. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

 

4.4. Corporate Authority; Noncontravention. Company has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Company and the consummation by Company of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of Company. This Agreement has been duly executed and when delivered by Company, shall constitute a valid and binding obligation of Company, enforceable against Company in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

 

 

4.5. No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Series C Preferred Stock, and the Series D Preferred Stock and the consummation by it of the transactions contemplated hereby and thereby do not and will not: conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected.

 

4.6. SEC Filings; Financial Statements; Information Provided.

 

(a) Except as set forth herein, all of the Company SEC reports, at the time filed (or if amended prior to the date hereof, when so amended), complied as to form in all material respects with the requirements of the Securities Act and the Exchange Act applicable to such Company SEC reports and did not at the time they were filed (or if amended prior to the date hereof, when so amended) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such Company SEC reports or necessary in order to make the statements in such Company SEC reports, in the light of the circumstances under which they were made, not misleading, in any material respect.

 

(b) The consolidated financial statements of the Company complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and at the dates involved and fairly presented in all material respects the consolidated financial position of Company as of the dates indicated and the consolidated assets, liabilities, business, financial condition, results of its operations and cash flows for the periods indicated.

 

(c) Company is not currently an issuer identified in Rule 144(i)(1)(i) of the Securities Act.

 

4.7. Absence of Certain Changes. Other than as disclosed herein there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect.

 

4.8. Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.

 

4.9. Litigation; Labor Matters; Compliance with Laws.

 

(a) Except as set forth herein, there is no suit, action or proceeding or investigation pending or, to the Knowledge of Company, threatened against or affecting Company or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect with respect to Company or prevent, hinder or materially delay the ability of Company to consummate the Share Exchange, nor is there any judgment, decree, injunction, rule or Order of any Governmental Entity or arbitrator outstanding against Company having, or which, insofar as reasonably could be foreseen by Company, in the future could have, any such effect.

 

 

(b) Company is not a party to, or bound by, any collective bargaining agreement, Contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its Knowledge, threatened, any of which could have a Material Adverse Effect with respect to Company. As of the date of this Agreement, there are no employee grievances, complaints or charges pending against Company or, to Company’s Knowledge, otherwise related to the business under any employee dispute resolution procedure. Company is in compliance in all material respects with all applicable federal, state, local and all other applicable laws, regulations, ordinances or orders with respect to employment and employment practices, terms and conditions of employment and wages and hours. Except as would not result in a material liability, neither Company nor, to Company’s Knowledge, any of its Affiliates has misclassified any Employee as an independent contractor, temporary employee, leased employee, volunteer or any other servant or agent compensated other than through reportable wages as an employee (each a “Contingent Worker”) and no Contingent Worker has been improperly excluded from any benefit plan of the Company.

 

(c) Company and each Subsidiary is and has been in compliance in all material respects with all Laws and Governmental Orders applicable to the conduct of its business as described in the Company SEC Reports. Neither Company nor any Subsidiary has received any written notice or other written communication from any Governmental Authority or any other person regarding any actual or alleged violation of or failure to comply with any term or requirement of any such Law or Governmental Order.

 

(d) Neither the Company nor to the best of Company’s Knowledge, any director or officer thereof, is or has been the subject of any Order involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the best knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company.

 

4.10. Benefit Plans. Company is not a party to any benefit plan under which Company currently has an obligation to provide benefits to any current or former employee, officer or director of Company.

 

4.11. Tax Returns and Tax Payments.

 

(a) Except as set forth herein, Company has filed all Tax returns required to be filed by it (taking into account all applicable extensions or agreed payment schedules). No claim has ever been made in writing or otherwise addressed to Company or any of its Subsidiaries by a taxing authority in a jurisdiction where Company does not file Tax returns that it is or may be subject to taxation by that jurisdiction. The Company has not incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice.

 

(b) No material claim for unpaid Taxes has been made or become a Lien against the property of Company or any of its Subsidiaries or is being asserted against Company or any of its Subsidiaries, no audit of any Tax return of Company or any of its Subsidiaries is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by Company or any of its Subsidiaries and is currently in effect. Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party.

 

 

4.12. Environmental Matters. Company is in compliance with all requisite Environmental Laws in all material respects. Neither Company nor any of its Subsidiaries has received any written notice regarding any violation of any Environmental Laws, including any investigatory, remedial or corrective obligations, which, if determined adversely to Company or any of its Subsidiaries, would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Company and each its Subsidiaries holds all Permits and authorizations required under applicable Environmental Laws, unless the failure to hold such Permits and authorizations would not have a Material Adverse Effect on Company, and is compliance with all terms, conditions and provisions of all such Permits and authorizations in all material respects. No releases of hazardous materials have occurred at, from, in, to, on or under any real property currently or formerly owned, operated or leased by Company or any of its Subsidiaries or any predecessor thereof and no hazardous materials are present in, on, about or migrating to or from any such property which could result in any liability to Company or any of its Subsidiaries. Neither Company nor any of its Subsidiaries has transported or arranged for the treatment, storage, handling, disposal, or transportation of any hazardous material to any off-site location which could result in any liability to Company or any of its Subsidiaries. Neither Company nor any of its Subsidiaries has any liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a Material Adverse Effect on Company or any of its Subsidiaries. There are no past, pending or threatened claims under Environmental Laws against Company or any of its Subsidiaries and neither Company nor any of its Subsidiaries is aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against Company or any of its Subsidiaries pursuant to Environmental Laws.

 

4.13. Properties. Company has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible Assets reflected in the latest balance sheet as being owned by Company or acquired after the date thereof which are, individually or in the aggregate, material to Company’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all Material Liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by Company or its Subsidiaries are held by them under valid, subsisting and enforceable leases of which Company is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

4.14. Intellectual Property. The Company intellectual property is set forth in its SEC or OTC filings. Except as set forth in the Company SEC reports, Company owns or has valid rights to use the trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of Company’s licenses to use software programs are current and have been paid for the appropriate number of users. To the Knowledge of Company, none of Company’s intellectual property infringe upon the rights of any third party that may give rise to a cause of action or claim against Company or each of its successors. To the Knowledge of the Company, neither the Company nor its Subsidiary is currently infringing or misappropriating the intellectual property of any other Person that would have a Material Adverse Effect. No licenses or rights from any third parties (or additional payments to any such persons resulting from the transactions contemplated by this Agreement) are required to use and exploit the Intellectual Property as currently used and exploited by Seller.

 

4.15. Due Authorization. Company represents that the issuance of the Series C Preferred Stock, and the Series D Preferred Stock, will be in compliance with Nevada law and the Articles of Incorporation and Bylaws of Company. The Series C Preferred Stock, and the Series D Preferred Stock shall, as of the Closing Date, have been duly and validly authorized and, upon issuance in accordance with this Agreement, will be duly issued, fully paid and non-assessable and free (and not issued or sold in violation) of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights, taxes, claims, liens, charges, encumbrances or other restrictions (other than as provided herein and restrictions under federal and applicable state securities laws).

 

 

4.16. Compliance. Except as set forth herein, to the Knowledge of Company, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

4.17. Compliance with Anti-Corruption Laws. Neither Company nor to the Knowledge of Company, any director, officer, agent, employee or other person acting on behalf of Company has, in the course of its actions for, or on behalf of, Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any applicable U.S. laws; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

4.18. OFAC; Illegal Payments. Neither Company, nor to the Knowledge of Company, any director, officer, agent, employee, affiliate or person acting on behalf of Company, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department. Neither Company, nor to the Knowledge of Company, any director, officer, shareholder, manager, agent, employee or other Person acting on behalf of Company has, in the course of his actions for, or on behalf of, Company: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any similar foreign law or regulation; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

4.19. Liabilities. Except as included in the SEC reports of the Company, the Company has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise).

 

4.20. Transactions Contemplated by this Agreement with Affiliates and Employees. Upon the Closing, no officer, director, employee or stockholder of the Company or any Affiliate of any such Person, will have, either directly or indirectly, an interest in any transaction with Company (other than for services as employees, officers and directors), including any contract or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Person or, to the Knowledge of Company, any entity in which any such Person has an interest or is an officer, director, trustee or partner.

 

4.21. Bank Accounts and Safe Deposit Boxes. Company has delivered to ReachOut records of all such bank accounts at such banks and with such account numbers held by Company.

 

4.22. Investment Company. Neither Company nor any subsidiary is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

 

4.23. Bankruptcy and Indebtedness. Company has not taken any steps to seek protection pursuant to any Law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does Company have any Knowledge or reason to believe that any of its respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.

 

4.24. Quotation and Maintenance Requirements. Company’s common stock is currently quoted on the OTC Pink Market tier maintained by OTC Markets Group, Inc. (“OTC”) under the symbol “YCRM”.

 

4.25. No SEC or FINRA Inquiries. To the Knowledge of the Company, neither the Company nor any of its present officers or directors is the subject of any formal or informal inquiry or investigation by the SEC or FINRA.

 

4.26. DTC Eligible. The Company’s common stock is DTC eligible and DTC has not placed a “freeze” or a “chill” on such securities and neither the Company nor to the best of Company’s Knowledge, any director or officer thereof has any reason to believe that DTC has any intention to make its common stock not DTC eligible, or place a “freeze” or “chill” on such securities.

 

4.27. Promotional Stock Activities. To the Knowledge of the Company, neither the Company, nor its officers, nor any Affiliates or agents of Company have engaged in any stock promotional activity that could give rise to a complaint or inquired by the SEC alleging (i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations of the anti-touting provisions, (iii) improper “gun-jumping; or (iv) promotion without proper disclosure of compensation.

 

4.28. Material Contracts. Company has delivered to ReachOut all contracts and other agreements (“Material Agreements”) to which the Company is a party.

 

(a) The Company has made available to Company either an original or a correct and complete copy of each written Material Agreement. With respect to each Material Agreement to which Company is a party thereto: (i) the agreement is the legal, valid, binding, enforceable obligation of Company and is in full force and effect in all material respects, subject to bankruptcy and equitable remedies exceptions; (ii) To the Knowledge of the Company, (A) Company is not in material breach or default thereof and (B) no event has occurred which, with notice or lapse of time, would constitute a material breach or default of, or permit termination, modification, or acceleration under, the Material Agreement; and (iii) Company has not repudiated any material provision of the agreement.

 

4.29. Organizational Documents. Company has delivered in electronic form, hard copy or made available to ReachOut a true and correct copy of the Articles of Incorporation, as amended and Bylaws, as amended of Company and any other organizational documents of Company, each as amended, and each such instrument is in full force and effect as of the Closing Date (the “Organizational Documents”). Company is not in violation of any of the provisions of its Organizational Documents.

 

4.30. Stock Option Plans. Except as set forth herein, each stock option granted by the Company under any Company’s stock option or equity incentive plan (if any) was granted (i) in accordance with the terms of such plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the financial results or prospects.

 

 

4.31. Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

4.32. Full Disclosure. All of the representations and warranties made by Company in this Agreement, and all statements set forth in the certificates delivered by Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether in written or electronic form, to ReachOut or its representatives by or on behalf of Company or their Affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

ARTICLE V

COVENANTS OF REACHOUT

 

5.1. Conduct of ReachOut Business. From the date of this Agreement and until the Closing Date, or until the prior termination of this Agreement, ReachOut shall not, unless agreed to in writing by Company:

 

(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of its assets or which will not be discharged in full prior to the Closing Date;

 

(b) sell, assign or otherwise transfer any of its assets, or cancel or compromise any debts or claims relating to its assets, other than for fair value, in the ordinary course of business, and consistent with past practice;

 

(c) fail to use reasonable efforts to preserve intact its present business organizations, keep available the services of its employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Closing Date;

 

(d) intentionally permit any Material Adverse Effect to occur with respect to ReachOut;

 

(e) make any material change in its accounting or bookkeeping methods, principles or practices, except as required by GAAP; or

 

(f) authorize any, or commit or agree to take any of, the foregoing actions.

 

5.2. Satisfaction of Conditions Precedent. From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, ReachOut will use its commercially reasonable efforts to satisfy or cause to be satisfied all the conditions precedent that are set forth in Article VIII, and ReachOut will use its commercially reasonable efforts to cause the transactions contemplated by this Agreement to be consummated.

 

 

5.3. No Other Negotiations. As of the date of this Agreement, ReachOut has not entered into any agreement or understanding with, and is not engaging in any discussions with any third party concerning a sale of substantially all of the assets or capital stock of ReachOut to another acquirer (“Alternative Acquisition”)including, without limitation, any agreement or understanding that would require the Company to notify any third party of the terms of this Agreement. From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, neither the Company nor ReachOut shall, directly or indirectly, (a) initiate, solicit, encourage, negotiate, accept or discuss any transaction or series of transactions with any Person, other than Company and its Affiliates involving any Alternative Acquisition, (b) provide information with respect to either Party to any Person, other than in connection with this Agreement, relating to a possible Alternative Acquisition by any Person, (c) enter into an agreement with any Person providing for a possible Alternative Acquisition, or (d) make or authorize any statement, recommendation or solicitation in support of any possible Alternative Acquisition by any Person, other than by Company and its Affiliates.

 

If either party receives any unsolicited offer, inquiry or proposal to enter into discussions or negotiations relating to an Alternative Acquisition, or that could reasonably expected to lead to an Alternative Acquisition, or any request for nonpublic information relating to ReachOut, ReachOut shall promptly notify Company thereof, including information as to the identity of the party making any such offer, inquiry or proposal and the specific terms of such offer, inquiry or proposal, as the case may be, and shall keep Company promptly informed of any developments with respect to same. Notwithstanding the foregoing, ReachOut is not prohibited from continuing negotiations in the ordinary course with those businesses it has identified as ReachOut’s acquisition targets as part of its rollup strategy.

 

5.4. Access. ReachOut shall afford to Company, and to the officers, employees, accountants, counsel, financial advisors and other representatives of Company, reasonable access during normal business hours during the period prior to the Closing Date or the termination of this Agreement to all of ReachOut’ properties, books, contracts, commitments, personnel and records and, during such period, ReachOut shall furnish promptly to Company, (a) a copy of each report, schedule, and other documents filed by it during such period pursuant to the requirements of federal or state securities Laws and (b) all other information concerning its business, properties and personnel as Company or its representatives may reasonably request.

 

5.5. Notification of Certain Matters. ReachOut shall give prompt notice to Company of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would cause any Company representation or warranty contained in this Agreement to be untrue or inaccurate at or prior to the Closing Date and (ii) any failure of ReachOut to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 5.5 shall not limit or otherwise affect the remedies available hereunder to Company.

 

5.6. Audit Requirement. ReachOut shall use commercially reasonable efforts to undertake an audit of its financial statements to be included in the Company SEC Reports to be filed with the SEC after the Closing Date in accordance with the rules and regulations promulgated by the SEC (the “Audit Deadline”). Company and ReachOut shall act in good faith and take such further assurances as are necessary to comply with the requirements set forth in this Section to meet the Audit Deadline.

 

ARTICLE VI

COVENANTS OF THE COMPANY

 

6.1. Conduct of the Company Business. From the date of this Agreement and until the Closing Date, or until the prior termination of this Agreement, the Company shall not, unless agreed to in writing by ReachOut:

 

(a) engage in any transaction, except in the normal and ordinary course of business, or create or suffer to exist any lien or other encumbrance upon any of its assets or which will not be discharged in full prior to the Closing Date;

 

 

(b) sell, assign or otherwise transfer any of its assets, or cancel or compromise any debts or claims relating to its assets, other than for fair value, in the ordinary course of business, and consistent with past practice;

 

(c) fail to use commercially reasonable efforts to preserve intact its present business organizations, keep available the services of its employees and preserve its material relationships with customers, suppliers, licensors, licensees, distributors and others, to the end that its good will and ongoing business not be impaired prior to the Closing Date;

 

(d) intentionally permit any Material Adverse Effect to occur with respect to the Company;

 

(e) make any material change in its accounting or bookkeeping methods, principles or practices, except as required by GAAP; or

 

(f) authorize any, or commit or agree to take any of, the foregoing actions.

 

6.2. Access. Company shall afford to ReachOut and to the officers, employees, accountants, counsel, financial advisors and other representatives of ReachOut reasonable access during normal business hours during the period prior to the Closing Date or the termination of this Agreement to all of the Company’s properties, books, contracts, commitments, personnel and records and, during such period, the Company shall furnish promptly to ReachOut, (a) a copy of each report, schedule, registration statements and other documents filed by it during such period pursuant to the requirements of federal or state securities Laws and (b) all other information concerning its business, properties and personnel as ReachOut or its representatives may reasonably request.

 

6.3. No Other Negotiations. As of the date of this Agreement, the Company has not entered into any agreement or understanding with, and is not engaging in any discussions with any third party concerning an Alternative Acquisition including, without limitation, any agreement or understanding that would require the Company to notify any third party of the terms of this Agreement. From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, neither the Company nor ReachOut shall, directly or indirectly, (a) initiate, solicit, encourage, negotiate, accept or discuss any transaction or series of transactions with any Person, other than Company and its Affiliates involving any Alternative Acquisition, (b) provide information with respect to either Party to any Person, other than in connection with this Agreement, relating to a possible Alternative Acquisition by any Person, (c) enter into an agreement with any Person providing for a possible Alternative Acquisition, or (d) make or authorize any statement, recommendation or solicitation in support of any possible Alternative Acquisition by any Person, other than by Company and its Affiliates.

 

If either party receives any unsolicited offer, inquiry or proposal to enter into discussions or negotiations relating to an Alternative Acquisition, or that could reasonably expected to lead to an Alternative Acquisition, or any request for nonpublic information relating to ReachOut, ReachOut shall promptly notify Company thereof, including information as to the identity of the party making any such offer, inquiry or proposal and the specific terms of such offer, inquiry or proposal, as the case may be, and shall keep Company promptly informed of any developments with respect to same.

 

6.4. Notification of Certain Matters. The Company shall give prompt notice to ReachOut of (i) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would cause any Company representation or warranty contained in this Agreement to be untrue or inaccurate at or prior to the Closing Date and (ii) any failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section shall not limit or otherwise affect the remedies available hereunder to ReachOut.

 

 

6.5. Satisfaction of Conditions Precedent. During the term of this Agreement, Company will use its commercially reasonable efforts to satisfy or cause to be satisfied all the conditions precedent that are set forth in Article VIII, and Company will use its commercially reasonable efforts to cause the transactions contemplated by this Agreement to be consummated.

 

6.6. Delivery of Certificates for Preferred Stock. If requested by ReachOut, the Shareholders, and/or Trillium, as soon as practicable after the Closing Date, the Company shall deliver or cause to be delivered to such parties, certificates for their respective series of preferred stock, otherwise such shares shall be held in book entry format and such share issuances shall be documented in Company’s SEC filings, such as an 8-K.

 

6.7. Filing of Form 8-K. Company shall as promptly as practicable after the Closing Date, file the Form 8-K with the SEC with respect to the transactions described in this Agreement. As soon as practicable on or after the Closing Date, the Company and Shareholders shall provide all information to Company as reasonably required in order to file the Form 8-K with the SEC.

 

6.8. Bank Accounts. Following execution of this Agreement, Company shall take all necessary steps, as soon as commercially practicable after the Closing Date, to close all bank accounts in the name of Company and shall provide evidence of such closures to ReachOut, in form and substance reasonably acceptable to ReachOut. In addition, following the execution of this Agreement, any check, withdrawal, wire or other deduction from any Company bank account shall require the approval and signature of Richard Jordan, or such other representative of ReachOut as may be identified on or after the date of this Agreement.

 

6.9. Effectiveness of Company Shareholder Approval. Upon the Closing date, Company shall provide a Majority Shareholder Consent to the transactions herein.

 

6.10. Post-Closing Actions. The Company shall execute and deliver the documents and complete the tasks set forth in this Section as soon as reasonably practicable and in each case no later than the time limit specified in this Section or such longer time as ReachOut may agree in its sole discretion:

 

ARTICLE VII

COVENANTS OF COMPANY, THE SHAREHOLDERS AND REACHOUT

 

7.1. Notices of Certain Events. ReachOut and Company shall promptly notify each party of:

 

(a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

 

(b) any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement; and

 

(c) any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting such party that, if pending on the date of this Agreement, would have been required to be disclosed pursuant to Articles 3 or 4 or that relate to the consummation of the transactions contemplated by this Agreement or any other development causing a breach of any representation or warranty made by a party hereunder. Delivery of notice pursuant to this Section 7.1 shall not limit or otherwise affect remedies available to any party hereunder.

 

 

7.2. Public Announcements. No party shall have the right to issue any press release or other public statement with respect to this Agreement or the transactions contemplated herein without the prior written consent of each other party (not to be unreasonably withheld, delayed, denied or conditioned), except as required by Law. This does not preclude appropriate announcements by the Company after the closing of the transaction.

 

7.3. Transfer Taxes. Company and ReachOut shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer and stamp taxes, any transfer, recording, registration and other fees, and any similar taxes which become payable in connection with the transactions contemplated hereby that are required or permitted to be filed on or before the Closing Date. Company and ReachOut agree that ReachOut will pay any real property, transfer or gains tax, stamp tax, stock transfer tax, or other similar tax imposed on the transactions contemplated by this Agreement or the surrender of the Shares pursuant thereto (collectively, “Transfer Taxes”), excluding any Transfer Taxes as may result from the transfer of beneficial interests in the Shares other than as a result of the transactions contemplated under this Agreement, and any penalties or interest with respect to the Transfer Taxes. ReachOut agrees to cooperate with Company in the filing of any returns with respect to the Transfer Taxes.

 

7.4. Reasonable Efforts. The parties further agree to use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, and to satisfy all conditions to, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including (i) the obtaining of all other necessary actions or nonactions, waivers, consents, licenses, Permits, authorizations, Orders and approvals from Governmental Entities and the making of all other necessary registrations and filings, (ii) the obtaining of all consents, approvals or waivers from third parties related to or required in connection with the transactions contemplated by this Agreement or required to prevent a Material Adverse Effect on ReachOut from occurring prior to or after the Closing Date, (iii) the satisfaction of all conditions precedent to the parties’ obligations hereunder, and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement contemplated by, and to fully carry out the purposes of, this Agreement.

 

7.5. Fees and Expenses. Each party will be responsible for all of the legal, accounting and other expenses incurred by such party hereto in connection with the transactions contemplated by this Agreement.

 

7.6. Regulatory Matters and Approvals. Each of the Shareholders, ReachOut and the Company will give any notices to, make any filings with, and use its commercially reasonable efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters contemplated by this Agreement.

 

7.7 Post-Closing Financing. At the Closing of the Acquisition, the Company will consummate a bridge financing via convertible promissory note with Trillium Partners, LP, or its affiliates (“Trillium”) for the benefit of ReachOut in an amount of $470,000 (the “Note”) and such funds shall be utilized, in part, to pay for the expenses incurred in connection with the Acquisition and the Audit, and following the Closing, the Company shall provide Trillium with the option for twelve (12) months to provide up to an additional $1,250,000 on the same terms as the Note (the “Initial Financing”). It is anticipated that the Initial Financing will be consummated in tranches over twelve (12) months following the Closing.

 

7.8 Trillium Preferred. At the Closing, Trillium (or its affiliates) shall receive 1,000,000 shares of newly created Series D Preferred Stock, which, collectively, shall be convertible into that number of shares of common stock of the Company which shall equal ten percent (10%) of the total issued and outstanding shares of common stock of the Company as determined at the consummation of the Acquisition (on a fully diluted basis for a period of 24 months) and carry rachet and anti-dilution rights, as set forth on the certificate of designation attached hereto as Exhibit C (the “Series D Preferred Stock”).

 

 

7.9. Dickson Preferred. At the Closing, Everett M. Dickson (or his designee) shall receive 250,000 shares of the Series D Preferred Stock, which, collectively, shall be convertible into that number of shares of common stock of the Company which shall equal two and one-half percent (2.5%) of the total issued and outstanding shares of common stock of the Company as determined at the consummation of the Acquisition (on a fully diluted basis for a period of 24 months) and carry rachet and anti-dilution rights, as set forth on the certificate of designation of the Series D Preferred Stock.

 

ARTICLE VIII

CONDITIONS TO CLOSING

 

8.1. Condition to Obligation of Each Party to Effect the Share Exchange. The respective obligations of Company, each Shareholder and ReachOut to consummate the transactions contemplated herein are subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions.

 

(a) No Injunctions. No temporary restraining Order, preliminary or permanent injunction issued by any court of competent jurisdiction preventing or prohibiting the consummation of the transactions contemplated by this Agreement contemplated herein shall be in effect; provided, however, that each of Company and ReachOut shall have used its commercially reasonable efforts to prevent the entry of such Orders or injunctions and to appeal as promptly as possible any such Orders or injunctions and to appeal as promptly as possible any such Orders or injunctions that may be entered.

 

(b) Director and Officer Appointments. As of the Closing Date, ReachOut shall have received evidence showing that on or prior to the Closing Date, the current board of directors of the Company has adopted resolutions appointing the persons identified and accepting the resignations of the persons identified on Annex A hereto from the board of directors of the Company, which appointments and resignations will be effective on the later of (1) the Closing Date, or (2) a later date agreed to by the Company and ReachOut, following a mutually agreed upon transition period.

 

8.2. Additional Conditions to Obligations of Company. The obligations of Company to consummate the transactions contemplated by this Agreement are also subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions.

 

(a) Representations and Warranties. The representations and warranties of ReachOut and each Shareholder contained in this Agreement and in any certificate or other writing delivered to Company pursuant hereto shall be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date, and Company shall have received a certificate to such effect signed by the President and the Chief Executive Officer of ReachOut.

 

(b) Agreements and Covenants. ReachOut and each Shareholder shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and Company shall have received a certificate to such effect signed by the Chief Executive Officer of ReachOut.

 

(c) Consents Obtained. All consents, waivers, approvals, authorizations or Orders required to be obtained, and all filings required to be made, by ReachOut for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby shall have been obtained and made by ReachOut, except for such consents, waivers, approvals, authorizations and Orders, and such filings, which would not be reasonably likely to have a Material Adverse Effect on ReachOut.

 

(d) Absence of Material Adverse Effect. Since the date of this Agreement, there shall not have been any Material Adverse Effect on ReachOut other than any change that shall result from general economic conditions or conditions generally affecting the industry in which ReachOut conducts operations.

 

 

8.3. Additional Conditions to Obligations of ReachOut and the Shareholders. The obligations of ReachOut and each Shareholder to consummate the transactions contemplated by this Agreement are also subject to the satisfaction or waiver in writing at or prior to the Closing Date of the following conditions.

 

(a) Representations and Warranties. The representations and warranties of Company contained in this Agreement and in any certificate or other writing delivered to ReachOut pursuant hereto shall be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date, and ReachOut shall have received a certificate to such effect signed by the President and the Chief Executive Officer of Company.

 

(b) Agreements and Covenants. Company shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and ReachOut shall have received a certificate to such effect signed by the President and Chief Executive Officer of Company.

 

(c) Consents Obtained. All consents, waivers, approvals, authorizations or Orders required to be obtained, and all filings required to be made, by Company for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby shall have been obtained and made by Company, except for such consents, waivers, approvals, authorizations and Orders, and such filings, which would not be reasonably likely to have a Material Adverse Effect on Company.

 

(d) Absence of Material Adverse Effect. Since the date of the this Agreement, there shall not have been any Material Adverse Effect on Company, other than any change that shall result from general economic conditions or conditions generally affecting the industry in which Company conducts operations.

 

(e) Resignations. The current officers and directors of Company shall submit written resignations from their respective positions with Company and Company shall provide copies of such resignations to ReachOut.

 

(f) Due Diligence. ReachOut and the Shareholders shall be satisfied with its due diligence investigations.

 

ARTICLE IX

TERMINATION; SURVIVAL

 

9.1. Termination. This Agreement may be terminated at any time prior to the Closing Date:

 

(a) by mutual written agreement of ReachOut and Company duly authorized by the boards of directors of ReachOut and Company;

 

(b) by either ReachOut or Company, if the other party (which, in the case of Company, shall mean ReachOut or any Shareholder) has breached any representation, warranty, covenant or agreement of such other party set forth in this Agreement and such breach has resulted or can reasonably be expected to result in a Material Adverse Effect on such other party or would prevent or materially delay the consummation of the transactions contemplated by this Agreement;

 

(c) by any party, if all the conditions to the obligations of such party for Closing the transactions contemplated by this Agreement shall not have been satisfied or waived on or before the Final Date (as defined below) other than as a result of a breach of this Agreement by the terminating party; or

 

(d) by any party, if a permanent injunction or other Order by any Federal or state court which would make illegal or otherwise restrain or prohibit the consummation of the transactions contemplated by this Agreement shall have been issued and shall have become final and nonappealable.

 

As used herein, the “Final Date” shall be November 10, 2023.

 

 

9.2. Notice of Termination. Any termination of this Agreement under Section 9.1 above will be effective immediately upon by the delivery of written notice of the terminating party to the other parties hereto specifying with reasonable particularity the reason for such termination.

 

9.3. Effect of Termination. In the case of any termination of this Agreement as provided in this Section 9, this Agreement shall be of no further force and effect and nothing herein shall relieve any party from liability for any prior breach of this Agreement.

 

9.4. Nonsurvival of Representations, Warranties and Agreements. None of the representations, warranties, covenants and agreements in this Agreement shall survive the Effective Time. This Section 9.4 shall have no effect upon any other obligations of the Parties hereto, whether to be performed before or after the consummation of the transactions contemplated by this Agreement.

 

ARTICLE X

GENERAL PROVISIONS

 

10.1. Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient; (ii) when sent by electronic mail, on the date of transmission to such recipient; and (iii) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid); in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section. All communications shall be sent to the parties at the following information specified below (or at such other information for a party as shall be designated in advance written notice to the other parties hereto):

 

	(a)	If to Company:
		Yuenglings Ice Cream Corporation One Glenlake Parkway #650 Atlanta, GA 30328 Attention: Everett M. Dickson Email: everettmdickson@gmail.com
	(b)	If to ReachOut or Shareholders:
		ReachOut Technology Corp. 8910 W. 192nd Street Suite N Moneka, IL 60448 Attention: Richard Jordan, CEO Email: rick@rickjordan.tv

 

10.2. Amendment. This Agreement may be amended by a subsequent writing signed by each of the parties.

 

10.3. Waiver. At any time prior to the Closing, any party hereto may with respect to any other party hereto (a) extend the time for performance of any of the obligations or other acts, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, or (c) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.

 

 

10.4. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other rights. Except as otherwise provided hereunder, all rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

10.5. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

10.6. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible, in a mutually acceptable manner, to the end that transactions contemplated hereby are fulfilled to the extent possible.

 

10.7. Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and undertakings both oral and written, among the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein.

 

10.8. Assignment. No party may assign this Agreement or assign its respective rights or delegate their duties (by operation of Law or otherwise), without the prior written consent of the other parties. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

 

10.9. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their permitted assigns and respective successors, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, including, without limitation, by way of subrogation.

 

10.10. Governing Law; Submission of Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEVADA IN EACH CASE LOCATED IN THE STATE OF NEVADA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

 

10.11. Counterparts. This Agreement may be executed and delivered in one or more counterparts (including by electronic means and by electronic mail in portable document format, and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

10.12. Attorneys’ Fees. If any action or proceeding relating to this Agreement, or the enforcement of any provision of this Agreement is brought by a party hereto against any party hereto, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements (in addition to any other relief to which the prevailing party may be entitled).

 

10.13. Representation. Each party to this Agreement, severally, and not jointly and only as to itself, represents that it: (a) has been represented in connection with the negotiation and preparation of this Agreement by counsel of that party’s choosing; (b) has authority to enter into and sign the Agreement; and (c) enters into and signs the same by its own free will.

 

10.14. Interpretation. For purposes of this Agreement, references to the masculine gender shall include feminine and neuter genders and entities. Where a reference in this Agreement is made to a Section or Exhibit, such reference shall be to a Section of, Exhibit to this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” References to a “party” or “parties” shall mean Company, ReachOut and/or Shareholders, as applicable. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

10.15. Specific Performance. The parties hereto agree that irreparable damage may occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that monetary damages or other legal remedies would not be an adequate remedy for such damage. It is accordingly agreed that the parties hereto shall be entitled to seek equitable relief, including in the form of an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that they shall be entitled to specifically enforce the provisions of this Agreement on the terms and subject to the conditions set forth herein.

 

10.16. Further Assurances. Each of the parties hereto will co-operate with the others and execute and deliver to the other parties hereto such other instruments and documents and take such other actions as may be reasonably requested from time to time by any other party hereto as necessary to carry out, evidence, and confirm the intended purposes of this Agreement.

 

 

[Remainder of Page Intentionally Left Blank; Signature Pages to Follow]

 

 

IN WITNESS WHEREOF, each of the parties has executed or caused this Share Exchange Agreement to be executed as of the date first written above.

 

	Company:
	YUENGLINGS ICE CREAM CORPORATION
	By:	/s/
	Name:	Everett M. Dickson
	Title:	Chairman
	REACHOUT TECHNOLOGY CORP.
	By:	/s/
	Name:	Richard Jordan
	Title:	Chief Executive Officer

 

	SHAREHOLDERS OF REACHOUT TECHNOLOGY CORP.,
	/s/
	Richard Jordan

 

 

EXHIBIT A

 

REACHOUT SHAREHOLDER LIST

 

To be provided to the Company’s transfer agent post closing.

 

 

EXHIBIT B

 

SERIES C PREFERRED STOCK TO BE ISSUED

 

          shares of Series C Preferred Stock to the Shareholders of ReachOut Technology Corp.

 

AND

 

CERTIFICATE OF DESIGNATION

FOR SERIES C PREFERRED STOCK

 

 

EXHIBIT C

 

SERIES D PREFERRED STOCK TO BE ISSUED

 

1,000,000 shares of Series D Preferred to Trillium Partners, LP; and

 

250,000 shares of Series D Preferred to Everett M. Dickson

 

AND

 

CERTIFICATE OF DESIGNATION

FOR SERIES D PREFERRED STOCK

 

 

ANNEX A

 

CERTAIN DEFINITIONS

 

The following terms, as used in the Agreement, have the following meanings:

 

“Affiliate(s)” shall have the meaning set forth in Rule 12b-2 of the regulations promulgated under the Share Exchange Act.

 

“Alternative Acquisition” means any recapitalization, restructuring, financing, merger, consolidation, sale, license or encumbrance or other business combination transaction or extraordinary corporate transaction of ReachOut or the Company (as applicable) which would or could reasonably be expected to impede, interfere with, prevent or materially delay the transactions contemplated by this Agreement, including a firm proposal to make such an acquisition.

 

“Assets” of a Person shall mean all of the assets, properties, businesses and rights of such Person of every kind, nature, character and description, whether real, personal or mixed, tangible or intangible, accrued or contingent, or otherwise relating to or utilized in such Person’s business, directly or indirectly, in whole or in part, whether or not carried on the books and records of such Person, and whether or not owned in the name of such Person or any Affiliate of such Person and wherever located.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contract” means any written or oral agreement, arrangement, commitment, contract, indenture, instrument, lease, obligation, plan, restriction, understanding or undertaking of any kind or character, or other document to which any Person is a party or by which such Person is bound or affecting such Person’s capital stock, Assets or business.

 

“Default” means (i) any breach or violation of or default under any Contract, Order or Permit, (ii) any occurrence of any event that with the passage of time or the giving of notice or both would constitute a breach or violation of or default under any Contract, Order or Permit, or (iii) any occurrence of any event that with or without the passage of time or the giving of notice would give rise to a right to terminate or revoke, change the current terms.

 

“Environmental Laws” mean any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, Permits, concessions, grants, franchises, licenses, agreements and governmental restrictions, relating to human health, the environment or to emissions, discharges or releases of pollutants, contaminants or other hazardous material or wastes into the environment, including without limitation ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants or other hazardous material or wastes or the clean-up or other remediation thereof.

 

“GAAP” means U.S. generally accepted accounting principles.

 

“Governmental Entity” shall mean any government or any agency, bureau, board, directorate, commission, court, department, official, political subdivision, tribunal, or other instrumentality of any government, whether federal, state or local, domestic or foreign.

 

“Knowledge” means the actual knowledge of the officers of a party, and knowledge that a reasonable person in such capacity should have after due inquiry.

 

“Law” means any code, law, ordinance, regulation, reporting or licensing requirement, rule, or statute applicable to a Person or its Assets, liabilities or business, including those promulgated, interpreted or enforced by any Governmental Entity.

 

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect to such asset.

 

“Material” and “Materially” for purposes of this Agreement shall be determined in light of the facts and circumstances of the matter in question; provided that any specific monetary amount stated in this Agreement shall determine materiality in that instance.

 

“Material Adverse Effect” means, with respect to any Person, a material adverse effect on the condition (financial or otherwise), business, Assets, liabilities or the reported or reasonably anticipated future results or prospects of such Person and its Subsidiaries taken as a whole; to be free from doubt, any breach of any agreement between ReachOut and/or the Shareholders shall be considered a Material Adverse Effect; provided, however, that any adverse change, event, development or effect arising from or relating to any of the following shall not be taken into account in determining whether there has been a Material Adverse Effect: (a) general business or economic conditions, (b) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (c) financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (d) changes in United States generally accepted accounting principles, (e) changes in laws, rules, regulations, orders, or other binding directives issued by any Governmental Entity or (f) the taking of any action required by this Agreement and the other agreements contemplated hereby.

 

“Order” means any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling, or writ of any federal, state, local or foreign or other court, arbitrator, mediator, tribunal, administrative agency or Governmental Entity.

 

“Person” means an individual, a corporation, a partnership, an association, a trust, a limited liability company or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.

 

“Permit” shall mean any federal, state, local, and foreign governmental approval, authorization, certificate, consent, easement, filing, franchise, letter of good standing, license, notice, permit, qualification, registration or right of or from any Governmental Entity (or any extension, modification, amendment or waiver of any of these) to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, Assets or business, or any notice, statement, filing or other communication to be filed with or delivered to any Governmental Entity.

 

“SEC” means the Securities and Exchange Commission.

 

“Subsidiary” means, with respect to any Person, (i) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of shares of capital stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

 

“Transaction Documents” means the Agreement, and any other document executed and delivered pursuant hereto together with any exhibits or schedules to such documents.

 

 

ANNEX B

 

Directors to be Appointed

 

Richard Jordan, Chairman of the Board

Kevin Harrington, Director

Kingsley Charles, Director

 

Officers to be Appointed

 

Richard Jordan, President, Secretary, Treasurer, Chief Executive Officer, Chief Financial Officer

 

Resigning Officers and Directors

 

Everett M. Dickson, Chairman of the Board and Director

Robert Bohorad, President, Chief Executive Officer, and Chief Financial Officer

 

Mr. Dickson and Mr. Bohorad will each resign as Officers and Directors at Closing. Mr. Bohorad will continue to provide assistance to the Company post-closing for a transition period to be mutually agreed upon.

 

 

Exhibit 10.4

 

CONTROL BLOCK SHARE TRANSFER AGREEMENT

 

THIS CONTROL BLOCK SHARE TRANSFER AGREEMENT (the “Agreement”) is made effective as of the 7th day of November 2023, by and among YUENGLINGS ICE CREAM CORPORATION, a Nevada corporation (“Pubco” or “YCRM”) and Everett M. Dickson, the majority voting shareholder in Pubco, (“Controlling Shareholder”) and RICHARD JORDAN.

 

WHEREAS, the Controlling Shareholder is the registered and beneficial owner of 475,000 shares of Series A Preferred Stock in Pubco, (which represents all of the issued and outstanding shares of Pubco’s Series A Preferred Stock, following the cancellation by the Controlling Shareholder of 4,525,000 shares of Series A Preferred Stock in September of 2023), which represents majority voting control over Pubco on all matters submitted to a vote of the holders of Pubco common and preferred stock (the “Control Block”); and

 

WHEREAS, in connection with his resignation from all officer and director positions of YCRM, the Controlling Shareholder has agreed to transfer and assign to Richard Jordan the Control Block; and

 

WHEREAS, that upon the execution of this Agreement, Richard Jordan shall pay the Controlling Shareholder $140,000 as consideration for the Control Block;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:

 

1.

REPRESENTATIONS AND WARRANTIES OF controlling shareholder and pubco

 

Title and Authority of Controlling Shareholder. The Controlling Shareholder is and will be as of the Closing, the registered and beneficial owner of and will have good and marketable title to the Control Block held by Everett M. Dickson and will hold such Control Block free and clear of all liens, charges and encumbrances whatsoever; and such Control Block of YCRM held by the Controlling Shareholder have been duly and validly issued and are fully paid and non-assessable. The Controlling Shareholder has due and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the registered, legal, and beneficial title and ownership of the Control Block.

 

MISCELLANEOUS PROVISIONS

 

Further Assurances. Each of the parties hereto will co-operate with the others and execute and deliver to the other parties hereto such other instruments and documents and take such other actions as may be reasonably requested from time to time by any other party hereto as necessary to carry out, evidence, and confirm the intended purposes of this Agreement.

 

Amendment. This Agreement may not be amended except by an instrument in writing signed by each of the parties.

 

Expenses. Each party will bear their own respective costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby, including the legal fees, all fees and expenses of agents, representatives and accountants, and other costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby.

 

 

Entire Agreement. This Agreement, and the other documents in connection with this transaction contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior arrangements and understandings, both written and oral, expressed or implied, with respect thereto. Any preceding correspondence or offers are expressly superseded and terminated by this Agreement.

 

Notices. All notices and other communications required or permitted under to this Agreement must be in writing and will be deemed given if sent by personal delivery or internationally recognized express courier to the parties at the addresses (or at such other address for a party as will be specified by like notice) on file with YCRM’s transfer agent.

 

Headings. The headings contained in this Agreement are for convenience purposes only and will not affect in any way the meaning or interpretation of this Agreement.

 

Benefits. This Agreement is and will only be construed as for the benefit of or enforceable by those persons party to this Agreement.

 

Assignment. This Agreement may not be assigned (except by operation of law) by any party without the consent of the other parties.

 

Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Nevada applicable to contracts made and to be performed therein.

 

Counterparts. This Agreement may be executed in one or more counterparts, including by electronic means and by email in portable document format, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF the parties hereto have executed this Control Block Share Transfer Agreement as of the day and year first above written.

 

YUENGLINGS ICE CREAM CORPORATION

 

By:	/s/
	Authorized Signatory
	Name:	Everett M. Dickson
	Title:	Chairman

 

EVERETT M. DICKSON
/s/
Everett M. Dickson
RICHARD JORDAN
/s/
Richard Jordan

 

 

Exhibit 10.5

 

ASSIGNMENT OF ASSETS FOR CANCELLATION OF DEBT

 

THIS AGREEMENT, made this January 9, 2024, among Mid Penn Bank, a Pennsylvania banking corporation (“Creditor”), YIC Acquisition Corporation, a Nevada corporation (the “Debtor”), and YIC Corporation, (f/k/a Yuengling’s Ice Cream Corporation) a Pennsylvania corporation (“Yuengling’s” or “Original Assignor”).

 

Recitals

 

WHEREAS, Debtor is the owner of certain ice cream-related assets (“Assets”) acquired through a UCC Article 9 sale by Mid Penn Bank on or about June 18, 2019. As consideration for the purchase of the Assets, Debtor agreed to assume the debt of Yuengling Ice Cream Corp, a Pennsylvania business corporation, now called YIC Corporation. A copy of the original outstanding Debt is attached hereto as Exhibit A.

 

WHEREAS, Debtor is indebted to Creditor, Debtor’s principal creditor, in the amount of approximately One Million One Hundred Ninety One Thousand Two Hundred Seven and 5/100 Dollars ($1,191,207.05) (the “Debt”).

 

WHEREAS, Debtor has offered to transfer and assign all of its ice cream-related assets to Creditor, if Creditor releases Debtor from all debt owed to Creditor.

 

WHEREAS, This Agreement shall not affect the guarantors of the Debt which will be subject to further negotiation between the Creditor and the Guarantors.

 

WHEREAS, Creditor deems it advisable to acquire all of Debtor’s ice cream-related assets and operate its business directly.

 

WHEREAS, YIC Corporation, the original owner and assignor of certain ice cream-related assets, agrees, for this purpose alone, to sign off on this transaction between Debtor and Creditor to ensure Creditor has the proper title/ownership of the ice cream-related assets.

 

It is therefore agreed:

 

1. Transfer of assets by Debtor to Creditor. Debtor shall transfer, convey, and assign to Creditor on the Closing Date as hereinafter defined, in cancellation of the Debt of approximately One Million One Hundred Ninety One Thousand Two Hundred Seven and 5/100 Dollars ($1,191,207.05) owing by it to Creditor, Debtor’s business AS IS, WHERE IS AND WITH ALL FAULTS, and all other of Debtor’s ice cream-related assets and property, of every kind, nature, and description, without limitation and wherever located, owned, or held by Debtor or to which Debtor is entitled on the Closing Date, except the following (the “Excluded Assets”):

 

(a) All cash in the Mid Penn Bank account on the Closing Date;

 

(b) Corporate seal, Certificate of Incorporation, minute books, stock books, and other records having to do with the corporate organization or capitalization of Debtor; and

 

(c) Rights which accrue or will accrue to Debtor under this agreement.

 

The ice cream-related assets which Debtor shall transfer and assign hereunder (the “Assets to be Acquired”) shall consist of those owned by Debtor on the Closing Date, without limitation, except for Excluded Assets.

 

 

2. Assumption of liabilities of Debtor. Subject to the conditions hereinafter set forth, Creditor shall assume, pay, perform, or discharge in accordance with the respective terms thereof the following liabilities and obligations of Debtor and no other:

 

(a) The Trademark License Agreements attached hereto as Exhibit B.

 

It being the intent that the following liabilities shall not be assumed by Creditor:

 

(a) All liabilities of Debtor; and

 

(b) All liabilities or indebtedness or obligations owing by Debtor to Guarantor.

 

3. Documents of transfer. The conveyance, transfer, assignments, and delivery of the Assets to be Acquired by Creditor shall be effected by bills of sale, endorsements, assignments, deeds, and other instruments of transfer and conveyance in such form as Creditor shall request. Debtor shall, at any time, and from time to time after the Closing Date, upon the request of Creditor execute, acknowledge, and deliver, or shall cause to be done, executed, acknowledged, and delivered, all such further acts, bills of sale, endorsements, assignments, deeds, transfers, conveyances, powers of attorney, and assurances as may be required for effectively selling, assigning, transferring, granting, conveying, assuring, and confirming to Creditor, or to its successors and assigns, or for aiding and assisting in collecting and reducing to possession any or all of the Assets to be Acquired. If Debtor is unwilling or, for any reason, unable to take any of the foregoing actions, Debtor hereby authorizes and empowers Creditor (or any duly authorized officer of Creditor) in its (or his) own name, or in the name of its (or his) nominee, or in the name of, and as attorney hereby irrevocably constituted for, Debtor, to take any and all such action.

 

4. Extinguishment of indebtedness. On the Closing Date, Creditor shall accept the Assets to be Acquired in full satisfaction of the Debt of Debtor to Creditor. Creditor acknowledges that it shall recognize the unpaid balance of the Debt as an uncollectible loss, subject to effectuation of the terms and conditions and consummation of the Closing as provided in this agreement. On and after the Closing Date, with respect to Debtor, the Debt shall be null, void and of no effect.

 

(a) To the extent that the assignment of any contract, license, lease, commitment, or receivable to be assigned to Creditor shall require the consent of any other party to such contract, license, lease, commitment, or receivable, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof. Debtor shall use its commercially reasonable efforts to obtain, on or before the Closing Date, the consent of the other party to such contract, license, lease, commitment, or receivable to the assignment thereof to Creditor. If such consent is not obtained on or before the Closing Date, Debtor shall cooperate with Creditor in any reasonable arrangement designed to provide for Creditor the benefits under any such contract, license, lease, commitment, or receivable, including enforcement, at the cost and for the benefit of Creditor, of any and all rights of Debtor against the other party thereto arising out of the breach or cancellation by such other party or otherwise.

 

5. Closing. The Closing under this agreement shall take place at 10:00 am eastern daylight time, at the Creditor’s offices located at 2407 Park Drive, Harrisburg, PA 17110, on January 9, 2024, or at such other time and place as shall be fixed by an agreement between counsel for the parties hereto (the “Closing Date”). From and after the Closing Date, Debtor shall not engage in any business or other activity, except as is required to complete its winding up, liquidation, and dissolution or as is contemplated or required by this agreement.

 

6. Debtor’s representations. Debtor represents and warrants to Creditor as follows:

 

(a) Organization and standing. Debtor is duly incorporated, validly existing, and in good standing under the laws of the State of Nevada, and is duly qualified, licensed, and in good standing as a foreign corporation in the State of Pennsylvania. Neither the business activities nor the ownership or leasing of property by Debtor require it to be qualified in any other jurisdiction.

 

 

(b) Financial statements. Annexed hereto as Exhibit C are the balance sheet of Debtor and the related statements of income, retained earnings, and related schedules for the period ending April 30, 2023 (the “Balance Sheet Date”). Such financial statements (1) present in all material respects the financial condition of Debtor, as at the dates indicated, and the results of their operations for the periods indicated, and (2) have been prepared in accordance with generally accepted accounting principles consistently applied. The respective amounts set up as provisions for taxes on the balance sheet are sufficient for the payment of all unpaid federal, state, county, and local taxes of Debtor for or applicable to the respective fiscal periods ended on such balance sheet dates and all fiscal periods prior thereto.

 

(c) Taxes. Debtor has duly filed all required federal, state, county, and local tax reports and returns, and such reports and returns are true and correct to the best of Debtor’s knowledge.

 

(d) Absence of certain changes. Since the Balance Sheet Date, there has been no material adverse change in Debtor’s condition, financial or otherwise, as reflected by the above balance sheet, other than changes occurring in the ordinary course of business and the continued operation of Debtor at a loss. Since the Balance Sheet Date, Debtor as not: (1) issued any securities of any kind whatsoever (2) incurred any liability (absolute or contingent), except current liabilities incurred and liabilities under instruments which are listed and described in the exhibits annexed hereto; (3) discharged or satisfied any lien or encumbrance, or paid any liability (absolute or contingent), other than current liabilities shown on the balance sheet of Debtor as of the Balance Sheet Date and current liabilities incurred since the Balance Sheet Date in the ordinary course of business; (4) declared, set aside, or paid any dividend or made other distribution in respect of its capital stock or made any direct or indirect redemption, purchase, or other acquisition of any of such stock; (5) subjected any of its assets to any lien or other encumbrance, except financing in the ordinary course of business; (6) sold or transferred any of its tangible assets or canceled any debts or claims, except in each case in the ordinary course of business; (7) suffered any extraordinary losses or waived any rights of substantial value; or (8) entered into any transaction other than in the ordinary course of business.

 

(e) Employment agreements. Debtor is not a party to any written or oral (1) agreement for the employment of any officer or employee, (2) pension, profit sharing, retirement, bonus, insurance, or similar obligation with respect to its employees or others, (3) contract with any labor union, (4) agency or advertising contract which is not terminable on 30 days’ (or less) notice, or (5) contract or agreement of any other nature with any person, firm, or corporation, whether or not such obligations are of a legally binding nature or in the nature of informal understandings, other than the contracts and agreements made in the ordinary course of business which terminate or are terminable without penalty by Debtor on or before the Closing Date.

 

(f) Contracts. Annexed hereto as Exhibit D is a complete and correct list and summary description of all material contracts and agreements, oral or written, to which Debtor is a party at the date hereof, other than those described in other exhibits and other than arrangements made in the ordinary course of business which terminate or are terminable by Debtor on or before the Closing Date. Creditor hereby abandons its interest in the Contracts set forth in Exhibit D.

 

(g) Loans, lines of credit. Except as set forth on Exhibit E, and the loans owed to Creditor, Debtor is not a party to any contract or arrangement relating to loans, lines of credit, or other extensions of credit to Debtor or agreements therefor of any kind other than the contracts or loans set forth in the annexed exhibits.

 

(h) Prior delivery. True copies of all agreements, contracts, and other instruments listed in the exhibits annexed hereto have been delivered to Creditor and its attorneys and agents prior to the date of this Agreement.

 

(i) Litigation. Except as set forth on Exhibit F, there are no actions, suits, or proceedings pending or, to the knowledge of Debtor, threatened against, by, or affecting Debtor in any court or before any governmental agency, domestic or foreign. Debtor is not subject to any order, writ, injunction, or decree of any court or agency which would prevent the sale of all or any part of Debtor’s assets, or has created or would create any lien thereon or would affect or interfere with Debtor’s use thereof or rights therein.

 

 

(j) Compliance with laws. Debtor, to the best of its knowledge, (1) has complied with all laws, regulations, and orders applicable to its business; and (2) the execution and carrying out of this agreement and compliance with the provisions hereof by Debtor will not violate any provision of law applicable to Debtor and will not conflict with, or result in a breach of, any term, condition, or provision of, or constitute a default under, Debtor’s corporate charter and bylaws, or any indenture, mortgage, security interest, agreement, or other instrument to which Debtor is a party or by which it may be bound, nor result in the creation of any lien, charge, or encumbrance upon any of Debtor’s properties or assets. Debtor YIC Acquisitions Corporation acknowledges that it has not filed annual reports with Nevada Department of State and thus its charter is currently revoked.

 

7. Creditor’s representations. Creditor represents and warrants to Debtor as follows:

 

(a) Organization and standing. Creditor is duly incorporated, validly existing, and in good standing under the laws of the State of Pennsylvania.

 

(b) Compliance with laws. Neither the execution and delivery of this agreement, nor the consummation of the transactions herein contemplated, nor the fulfillment of or compliance with the terms, provisions, and conditions hereof will conflict with, or result in a breach of any term, provision, or condition of Creditor’s Certificate of Incorporation or Bylaws or of any instrument to which Creditor is a party or by which it may be bound or constitute (with the giving of notice, or the passage of time, or both) a default under any such instrument.

 

8. Access to books, records, etc. For a period of six (6) months after the execution of this agreement, Debtor shall afford to the officers and accredited representatives of Creditor free access to the offices, books, and records of Debtor in order that Creditor may have full opportunity to make such investigation as it desires of the affairs of Debtor.

 

9. Conditions precedent to consummation of transaction by Creditor. The obligations of Creditor are, at its option, subject to the conditions that:

 

(a) Performance. All of the terms, covenants, and conditions of this agreement to be complied with by Debtor on or before the Closing Date shall have been complied with.

 

(b) Representations and warranties. The representations and warranties made by Debtor herein shall be correct, as of the Closing Date, with the same force and effect as though such representations and warranties had been made on the Closing Date and Debtor shall have delivered a certificate signed by an authorized officer of Creditor to such effect. Creditor shall be deemed to have relied on each and every such representation and warranty made hereunder by Debtor.

 

(c) No substantial change. The business and property of Debtor between the date hereof and the Closing Date shall not have been adversely affected in any substantial way by any cause whatsoever, including, but in no way limited to, acts of God, fire, explosion, earthquake, windstorm, accident, flood, drought, war, embargo, riot, condemnation, confiscation, seizure, activities of armed forces, and order of the United States of America, the states and their municipalities, and federal, state or local departments, agencies and commissions, unless such order has general application to the industry or any business in which Debtor is engaged.

 

10. Conditions precedent to consummation of transaction by Debtor. The obligations of Debtor are, at its option, subject to the conditions that:

 

(a) Representations and warranties. The representations and warranties made by Creditor herein shall be correct, as of the Closing Date, with the same force and effect as though such representations and warranties had been made on the Closing Date.

 

11. Deliveries to be made at the closing. There shall be no payments at the Closing:

 

 

12. Fees and expenses. Each party hereto shall pay its own expenses incident to this agreement and the transactions contemplated hereby, including all fees of its counsel and accountants, whether or not this agreement and such transactions shall be consummated.

 

13. Releases. Except for the covenants, agreements, representations, and warranties made herein by the parties, which shall survive the Closing Date as provided herein, and the assignments and documents to be delivered at the Closing, none of which are hereby released:

 

(a) Debtor hereby releases Creditor, its affiliates, and their respective officers, directors, and employees of and from all claims, demands, and liabilities of any kind or nature from the beginning of the world to the date hereof; and

 

(b) Creditor hereby releases Debtor, its affiliates, stockholders, officers, directors, successors and assigns, of and from any and all claims, demands, and liabilities to Creditor of any kind or nature, arising from direct transactions between Creditor and such parties from the beginning of the world to the date hereof.

 

14. Debtor’s indemnification to Creditor. Debtor shall be liable to Creditor for any damage or loss arising out of the breach of any representation or warranty or agreement made by it in or pursuant to this agreement, and shall indemnify Creditor against:

 

(a) Any liability for taxes arising out of the failure of Debtor to pay the correct amount of its taxes payable that arise prior to the Closing Date, except to the extent that such liability has been specifically assumed by Creditor pursuant to paragraph 2;

 

(b) Any other liability of Debtor that arises prior to the Closing Date, which has not been specifically assumed by Creditor pursuant to Paragraph 2; and

 

(c) Any loss sustained or any liability incurred by Creditor because a representation or warranty made by Debtor in this agreement or in the documents delivered pursuant hereto, or any information furnished to Creditor by any officer of Debtor shall prove to have been false or incorrect on the date on or as of which it was made, or Debtor shall fail to perform or observe any covenant made by it in this agreement.

 

15. Miscellaneous provisions.

 

(a) Survival of representations. All representations and warranties of the parties hereunder shall survive the Closing Date for six (6) months. All of the terms and provisions of this agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and assigns of Debtor and Creditor. It is contemplated that Creditor may assign its rights hereunder prior to the Closing Date to a subsidiary or subsidiaries to be formed for such purpose.

 

(b) Nonperformance of conditions—waiver and termination. If either party to this agreement shall be unable to perform on or before the Closing Date any of the agreements, covenants, or conditions which are of material significance required to be performed or fulfilled by such party, the other party, at its option, may either waive such conditions or terminate this agreement by notice given to the other party, and in the event of termination both parties shall be released from any further obligation or liability hereunder.

 

(c) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when actually received by hand delivered or by prepaid, international overnight courier:

 

	To Creditor:
			Mid Penn Bank
			2407 Park Drive
			Harrisburg, PA 17110
			Attention: James Ridd

 

 

	Debtor:
			YIC Acquisitions Corp
			One Glenlake Parkway, #650
			Atlanta, GA 30328
			Attn: Everett Dickson
	Original Assignor:
			YIC Corporation
			Attn: Robert C. Bohorad

 

(d) Entire agreement—alteration or amendment. This agreement embodies the entire agreement between the parties and may not be altered or amended except by a writing signed by the parties.

 

(e) Captions. The captions are for convenience only and shall not control or affect the meaning or construction of any provision of this agreement.

 

(f) Counterparts. This agreement may be executed in one or more counterparts, including by electronic means and by email in portable document format, each of which shall be an original, but all of which taken together shall constitute one and the same instrument.

 

(g) Non-waiver. No delay or failure by a party to exercise any right under this agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right, unless otherwise expressly provided herein.

 

(h) Governing law. This agreement shall be construed in accordance with and governed by the laws of the State of Pennsylvania.

 

(i) Binding effect. This agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors, and assigns.

 

(j) Waiver of Right to redeem. The Debtor acknowledges it is in default under the Security Agreement dated June 18, 2019, as Debtor and in favor of Creditor. The Debtor waives its right to redeem the collateral under the UCC as it now exists.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

Witness the due execution hereof as of the day and year first above-written. Concurred in insofar as this agreement applies to the undersigned:

 

	Creditor:
	Mid Penn Bank
	/s/ Bonnie Berkoski
	Bonnie Berkoski
	Debtor:
	YIC Acquisitions Corp
	/s/ Everett M. Dickson
	Everett M. Dickson, President
	Original Assignor:
	YIC Corporation
	/s/ Robert C. Bohorad
	Robert C. Bohorad, Officer

 

 

Exhibit 10.6

 

REACHOUT TECHNOLOGY CORP.

 

FINANCIAL STATEMENTS

 

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Consent of Independent Registered Public Accounting Firm		F-2
Report of Independent Registered Public Accounting Firm		F-3 - F-4
Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021		F-5
Consolidated Statements of Operations for the Years ended December 31, 2022 and December 31, 2021		F-6
Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2022 and December 31, 2021		F-7
Consolidated Statements of Cash Flows for the Years ended December 31, 2022 and December 31, 2021		F-8
Notes to Financial Statements		F-9

 

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the inclusion in this Amendment #1 to the Registration Statement on Form S-1/A (File No. 333-277212) of our audit report dated April 22, 2024, with respect to the consolidated balance sheets of ReachOut Technology, Inc. as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2022.

 

Our report relating to those financial statements includes an emphasis of matter paragraph regarding substantial doubt as to the Company’s ability to continue as a going concern.

 

We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

 

Fruci & Associates II, PLLC – PCAOB ID #05525

Spokane, Washington

May 29, 2024

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of ReachOut Technology Corp.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of ReachOut Technology Corp. and Subsidiary (“the Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not been profitable since inception, has sustained net losses, and has incurred negative cash flows from operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

 

Critical Audit Matters

 

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

 

Business Combination – Note 1 and Note 4 to the financial statements

 

Description of the Critical Audit Matter

 

As discussed in Note 4 to the financial statements, the Company entered into the business combination during the year. The valuation of the business combination involves significant complexity and judgment in applying the relevant accounting standards when auditing management’s estimates and conclusions with regard to initial purchase price allocations.

 

How the Critical Audit Matter Was Addressed in the Audit

 

Our principal audit procedures to evaluate management’s evaluation of business combinations – acquisitions included, among other procedures, the following:

 

●

We obtained and reviewed underlying agreements and performed analysis to determine appropriateness of acquisition date fair value and whether transactions were appropriately disclosed in the financial statements.

 

●

We tested the value of assets acquired and liabilities assumed and related purchase consideration as it relates to reverse merger transactions to determine the validity of management’s assumptions.

 

●

We evaluated the appropriateness of management’s assessment of control and the determination of the reporting entity, considering both quantitative and qualitative factors, and related disclosures.

 

 

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2023.

 

Spokane, Washington

April 22, 2024

 

 

REACHOUT TECHNOLOGY CORP.

CONSOLIDATED BALANCE SHEETS

 

		December 31, 2022				December 31, 2021
ASSETS
Current Assets:
Cash		$	571,578			$	136,990
Accounts receivable			55,665				-
Prepaid expenses			155,972				131,884
Deferred public offering costs			-				305,000
Total Current Assets			783,215				573,874
Other Assets:
Prepaid expenses, non-current portion			131,884				263,768
Goodwill			5,363,173				-
Right of use asset			109,456				-
Total non-current assets			5,604,513				263,768
Total Assets		$	6,387,728			$	837,642
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable		$	51,407			$	-
Accrued expense			352,376				101,564
Other current liabilities, customer payments			31,444				-
Loans payable, related parties			132,225				122,225
Notes payable, current portion related parties			289,398				-
Loans payable, related parties			619,399				-
Officer life insurance liability, current portion			382,500				-
Lease liability, current portion			46,756				-
Total Current Liabilities			1,905,505				223,789
Non-Current Liabilities:
Notes payable, non-current portion related parties			578,795				-
Term note payable, related parties			1,175,000				-
Officer life insurance premium, non-current portion			2,700,000				-
Lease liability, non-current portion			62,701				-
Total Non-Current Liabilities			4,516,496				-
Total Liabilities			6,422,001				223,789
Commitments and contingencies			-				-
Stockholders’ Deficit:
Common stock to be issued			660,000				-
Preferred stock, $0.0001 par value, 2,000,000 shares authorized, 1,000,000 shares issued and outstanding as of December 31, 2022 and 2021			100				100
Common stock, $0.0001 par value, 30,000,000 shares authorized, 12,377,832 and 12,039,166 shares issued and outstanding as of December 31, 2022 and 2021, respectively			1,239				1,205
Additional paid in capital			1,030,947				997,308
Accumulated deficit			(1,726,560	)			(384,760	)
Total Stockholders’ Deficit			(34,273	)			613,853
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT		$	6,387,728			$	837,642

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		For the Years Ended December 31,
		2022				2021
Revenue		$	1,140,574			$	-
Cost of goods sold			724,738				-
Gross margin			415,836				-
Operating Expenses:
General and administrative expenses			559,378				207,779
Compensation			652,216				20,006
Professional fees			454,296				137,143
Total operating expenses			1,665,890				364,928
Loss from operations			(1,250,054	)			(364,928	)
Other income (expense):
Interest expense			(91,746	)			-
Total other expense			(91,746	)			-
Loss before provision for income tax			(1,341,800	)			(364,928	)
Provision for income tax			-				-
Net loss		$	(1,341,800	)		$	(364,928	)
Basic loss per share		$	(0.11	)		$	(0.03	)
Diluted loss per share		$	(0.11	)		$	(0.03	)
Basic weighted average shares			12,170,199				11,529,432
Diluted weighted average shares			12,170,199				11,529,432

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORP.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

		Common Stock								Series A Preferred Stock								Additional Paid in				Shares to be issued				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Amount				Deficit				Deficit
Balance December 31, 2020			9,999,999			$	1,000				1,000,000			$	100			$	7				-			$	(19,832	)		$	(18,725	)
Shares issued for services			1,000,000				100				-				-				499,900				-				-				500,000
Shares issued for cash			972,500				98				-				-				497,401				-				-				497,499
Vesting of restricted stock units issued for service			66,667				7				-				-				-				-				-				7
Net Loss for the year ended December 31, 2021			-				-				-				-				-				-				(364,928	)			(364,928	)
Balance, December 31, 2021			12,039,166			$	1,205				1,000,000			$	100			$	997,308				-			$	(384,760	)		$	613,853
Shares issued for services			76,666				8				-				-				76,658				-				-				76,666
Shares issued for compensation			50,000				5				-				-				49,995				-				-				50,000
Shares issued for cash			212,000				21				-				-				211,979				-								212,000
Public offering costs			-				-				-				-				(305,000	)			-								(305,000	)
Vesting of restricted stock units issued for service			-				-				-				-				7				-				-				8
Common shares to be issued																							660,000
Net Loss for the year ended December 31, 2022			-				-				-				-				-				-				(1,341,800	)			(1,341,800	)
Balance, December 31, 2022			12,377,832			$	1,239				1,000,000			$	100			$	1,030,947			$	660,000			$	(1,726,560	)		$	(34,273	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Years Ended
		December 31,
		2022				2021
Cash flows from operating activities:
Net loss		$	(1,341,800	)		$	(364,928	)
Adjustments to reconcile net loss to net cash used in operating activities:
Shares issued for services			113,338				500,000
Shares issued and to be issued for compensation and services			186,672				-
Vesting of Restricted Stock Units			6				7
Bad debt expense			6,880				-
Related party advances funding operations			10,000				3,000
Changes in assets and liabilities:
Accounts receivable			(162,151	)			-
Prepaid expense			(95,090	)			(600,652	)
A/P & Accrued liabilities			89,757				101,563
Net cash used in operating activities			(1,192,388	)			(361,010	)
Cash flows from investing activities:
Cash paid for acquisition			(325,000	)
ULI payable			382,500
Cash acquired in acquisition			613,077				-
Net cash acquired in investing activities			670,577				-
Cash flows from financing activities:
Sale of common stock			212,000				497,500
Cash received for stock to be issued			125,000				-
Proceeds from convertible notes payable			-				-
Payments on notes payable			-				-
Proceeds – related party loans			762,836				-
Payments – related party loans			(143,437	)			-
Net cash provided by financing activities			956,399				497,500
Net change in cash			434,588				136,490
Cash, beginning of year			136,990				500
Cash, end of year		$	571,578			$	136,990
Cash paid during the period for:
Interest		$	-			$	-
Income taxes		$	-			$	-
Supplemental Disclosure of Non-Cash Activity:
Shares to be issued for IND purchase		$	500,000			$	-
Shares issued for services			76,666				500,000
Right-of-use asset and lease liability – ASC 842		$	592,970			$	174,098

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023 AND 2022

 

NOTE 1 - NATURE OF OPERATIONS

 

Reachout Technology, Corp. (the “Company”) is a corporation formed on February 13, 2020 under the laws of the State of Delaware. The Company provides cybersecurity and IT management solutions to businesses to protect their complete operating landscape and data secrets. The Company is headquartered in Chicago, Illinois.

 

From formation on February 13, 2022 until the acquisition of Innovative Design Networks, LLC (“IND”) on September 2, 2022, the Company had no principal operations or revenue. The Company’s activities since inception have primarily consisted of formation activities, acquisition research and preparations to raise capital. Since the Company has commenced its planned principal operations, it will incur significant additional expenses. The Company is dependent upon additional capital resources for its planned principal operations and is subject to significant risks and uncertainties; including failing to secure funding to operationalize the Company’s planned operations or failing to profitably operate the business.

 

Having acquired IND as wholly owned subsidiary on September 2, 2022, planned operations have commenced. IND is New Jersey limited liability company and the Company acquired 100% of the member’s interest of IND in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the two principals and 500,000 restricted shares of the Company’s common stock. The transaction was deemed to be a business combination and applied acquisition accounting under ASC 805.

 

NOTE 2 - GOING CONCERN

 

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt and the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated profits since inception, has sustained net losses of $1,341,800, for the year ended December 31, 2022, and has incurred negative cash flows from operations for the period. As of December 31, 2022, the working capital deficit, stockholders’ deficit, and accumulated deficit was $1,122,290, $34,273 and $1,726,560, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern for the next twelve months is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on the business, financial condition and results of operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities as a result of this uncertainty.

 

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principles of Consolidation

 

The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the accounts of ReachOut Technology Corp. and its wholly-owned subsidiary, ReachOut IND. All significant intercompany accounts and transactions have been eliminated in consolidation. Since September 2, 2022 following the purchase of 100% of the membership interest in Innovative Network Designs LLC, (now ReachOut IND), its operations, assets and liabilities have been consolidated into the Company.

 

Use of Estimates

 

The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, inventory, revenue recognition and the valuations of common stock. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

 

Concentrations of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. At December 31, 2022 and 2021, all of the Company’s cash and cash equivalents were held at accredited financial institutions. As of December 31, 2022, the Company had $195,993 in excess of insured amounts at one financial institution.

 

The Company’s subsidiary, Innovative Design Networks, has two clients having outstanding unpaid account representing a total of 69% of the accounts receivable balance at December 31, 2022.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

 

Accounts Receivable

 

Trade receivables are recorded at net realizable value consisting of the carrying amount less the allowance for doubtful accounts, as needed. Factors used to establish an allowance include the credit quality of the customer and whether the balance is significant. The Company may also use the direct write-off method to account for uncollectible accounts that are not received. Using the direct write-off method, trade receivable balances are written off to bad debt expense when an account balance is deemed to be uncollectible.

 

 

Fair Value Measurements

 

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

 

Level 1—Quoted prices in active markets for identical assets or liabilities.

 

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

 

Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

 

The carrying values of the Company’s assets and liabilities approximate their fair values.

 

Revenue Recognition

 

The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, and its related amendments (collectively known as “ASC 606”), effective January 1, 2018. The Company determines revenue recognition through the following steps:

 

Identification of a contract with a customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations in the contract; and

Recognition of revenue when or as the performance obligations are satisfied.

 

Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.

 

It is management’s practice to only invoice for services and goods to be provided within the coming month. While services may not be fully transferred the client is in fact obligated to pay the invoiced amount unless the contract is terminated with prior notice.

 

Advertising Costs

 

Advertising costs are expensed as incurred and are included in General and Administrative expenses. Expenditures amounted to $385,550 and $132,497, for the years ended December 31, 2022 and 2021, respectively.

 

 

Deferred Offering Costs

 

The Company complies with the requirements of Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed. As of December 31, 2022 and 2021 the Company had recorded $0 and $305,000 in deferred offering costs, respectively. The costs were paid by a related party and recognized as a charge to additional paid in capital during the year ended December 31, 2022.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Stock-based compensation is recognized as expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services. In accordance with ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting share-based payment transactions for acquiring goods and services from nonemployees are included. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.

 

Income Taxes

 

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized. The Company assesses its income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company’s policy isl be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

 

Net Loss per Share

 

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2022 and 2021, diluted net loss per share is the same as basic net loss per share for each period presented. Potentially dilutive items outstanding as of December 31, 2022 and 2021, are as follows:

 

		Year Ended December 31,				Year Ended December 31,
		2022				2021
Series A preferred stock			1,000,000				1,000,000
Common shares to be issued			660,000				-
Total potentially dilutive shares			1,660,000				1,000,000

 

 

Convertible Notes with Fixed Rate Conversion Options

 

The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”.

 

Derivative Liabilities

 

The Company has certain financial instruments that are derivatives or contain embedded derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment.

 

Business Combinations

 

In accordance with ASC 805-10, “Business Combinations”, we account for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that we hold in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in our results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

 

Related Party Transactions

 

We follow FASB ASC subtopic 850-10, “Related Party Transactions”, for the identification of related parties and disclosure of related party transactions.

 

Pursuant to ASC 850-10-20, related parties include: a) our affiliates; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; d) our principal owners; e) our management; f) other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

 

Material related party transactions are required to be disclosed in the consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

Recently Adopted Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to report on their balance sheets a right-of-use asset and a lease liability in connection with most lease agreements classified as operating leases under the prior guidance (ASC Topic 840). Under the new guidance, codified as ASC Topic 842, the lease liability must be measured initially based on the present value of future lease payments, subject to certain conditions. The right-of-use asset must be measured initially based on the amount of the liability, plus certain initial direct costs. The new guidance further requires that leases be classified at inception as either (a) operating leases or (b) finance leases. For operating leases, periodic expense generally is flat (straight-line) throughout the life of the lease. For finance leases, periodic expense declines over the life of the lease. The new standard, as amended, provides an option for entities to use the cumulative-effect transition method. As permitted, the Company adopted ASC Topic 842 effective June 1, 2020. The adoption of ASC Topic 842 did not have a material impact on the Company’s consolidated financial statements.

 

The Company’s subsidiary recognized the Right of Use asset and related liability for its sublease for the office facility in Whippany, New Jersey in May 2021, and following the acquisition is accounted for under ASC 842. The corporate office is an informal arrangement which provides for office space in a shared office environment with a company controlled by the CEO and is exempt from ASC 842 treatment. During the year ended December 31, 2022 the Company recognized a lease liability of $109,457 and the related right-of-use asset for $109,456 and will amortize both over the life of the lease.

 

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 eliminates the separate accounting model for nonemployee share-based payment awards and generally requires companies to account for share-based payment transactions with nonemployees in the same way as share-based payment transactions with employees. The accounting remains different for attribution, which represents how the equity-based payment cost is recognized over the vesting period, and a contractual term election for valuing nonemployee equity share options. ASU 2018-07 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU 2018-07 on February 13, 2020 and the adoption did not have a material impact on its financial statements.

 

In May 2014, the FASB issued ASC 606, providing new revenue recognition guidance that superseded existing revenue recognition guidance. The update, as amended, requires the recognition of revenue related to the transfer of goods or services to customers reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as well as additional qualitative and quantitative disclosures about revenues. The Company adopted the new revenue recognition guidance as of February 13, 2020. The adoption of this standard had no material impact on its financial statements.

 

 

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470- 20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. The Company adopted ASU 2017-11 on February 13, 2020 and the adoption did not have a material impact on its financial statements.

 

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted ASU 2020-06 on February 13, 2020 and the adoption did not have any impact on its financial statements.

 

Management does not believe that any other recently issued accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 

NOTE 4 - GOODWILL

 

The Company acquired the operations, assets and liabilities of Innovative Network Designs, LLC during the year ended December 31, 2022. The Company recognized goodwill of $5,363,173. The Company follows ASC 350 20 – Goodwill. As such the goodwill asset is compared to its fair value at least annually.

 

 

Membership Interest Purchase Agreement

 

Innovative Network Designs, LLC

 

The Company entered into a Membership Interest Purchase Agreement on August 1, 2022 with Innovative Network Designs, LLC, a New Jersey limited liability company and acquired 100% of the member’s interest of Innovative Network Designs, LLC, in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the two principals and 500,000 restricted shares of the Company’s common stock. The transaction was deemed to be a business combination and applied acquisition accounting under ASC 805. Upon closing (September 2, 2022) the total value of the consideration given for the purchase was $6,018,193. Included in the purchase consideration: is the commitment to pay universal life insurance policies for a total cash value of $3,150,000 over seven years ($382,500 annually), which the Company anticipates will be financed by a third party; a term promissory note (24 months with a ballon payment at maturity); a promissory note secured by a second priority lien on all the Company’s membership interests and other defined assets (amortizable); and 500,000 shares of the Company’s common stock, valued at $1.00 per share (the offering price of the Company’s regulation A offering documents). The purchase price was allocated to net tangible assets of $655,020 with the balance of $5,363,173 allocated to goodwill, which is not amortized to expense (see note 5). The assets and liabilities (with the exception of the lease related items) are short term and therefore book value approximates the fair value. Management believes that there is significant value in the customer list and the trade name, but has not done separate valuation analysis. An impairment analysis will consider each potential sub component (customer list, workforce in place etc.) of the Goodwill recorded in accordance with the relevant accounting standards at least annually and more frequently should there be any financial or economic issues suggesting an impairment.

 

Assets Acquired and Liabilities Assumed

 

Assets Acquired		Fair Value
Cash		$	613,077
Accounts Receivable			217,816
Prepaid Expenses			62,706
Right of Use Asset			109,456
Total Assets		$	1,003,055
Liabilities Assumed
Accounts Payable		$	49,936
Accrued Expenses			118,521
Sales Tax Payable			70,122
Lease Liabilities			109,457
Total Liabilities		$	348,036
Consideration Value
Cash		$	325,000
Convertible Note			1,175,000
Universal Life Insurance Commitment			3,150,000
Promissory Note			868,193
Common Stock			500,000
Total Purchase Price			6,018,193
Less, net asset value			655,020
Value of intangible assets		$	5,363,173

 

 

NOTE 5 - TERM NOTE PAYABLE

 

On October 1, 2022 the Company issued a term promissory note to the sellers of the membership interest in Innovative Network Designs LLC. Under the option selected by the holder of the note, a ballon payment of principal is due on October 1, 2024. The note principal is $1,175,000 bears interest at 24%, matures on October 1, 2024. The accrued interest at December 31, 2022 is $70,500.

 

NOTE 6 - SECURED NOTE PAYABLE

 

On October 1, 2022 the Company issued a secured promissory note to the sellers of the membership interest in Innovative Network Designs LLC. The original note principal was $1,500,000 and has been reduced under the terms of the purchase price adjustment clause and is $868,193 at December 31, 2022. The note bears interest at 7%, matures on April 2, 2025. The note amortizes over the term with the first principal payment of $96,466 due on April 15, 2023, along with $37,463 of accrued interest. Subsequent quarterly payments of interest and principal begin on July 15, 2023 and continue through maturity. The note is secured by a second priority lien on the membership interest purchased by the Company and certain other assets related to the acquisition. The current portion due is $289,398 and the non-current portion due is $578,915, as of December 31, 2022. Accrued interest is $19,980 as of December 31, 2022.

 

Period		Principal				Interest				Total
April 15, through October 15, 2023		$	289,398			$	62,846			$	352,243
January 15, through October 15, 2024			385,864				30,470				416,334
January 15, through March 2, 2025			192,932				4,255				197,187
Totals		$	868,193			$	97,571			$	965,764

 

NOTE 7 - OFFICER LIFE INSURANCE PREMIUMS PAYABLE

 

On October 1, 2022, the Company committed to paying life insurance with the sellers of the membership interest in Innovative Network Designs LLC. The total amount of the liability was $3,150,000 to be paid in equal installments of $450,000 over seven years. The current portion due is $382,500 and the non-current portion due is $2,700,000, as of December 31, 2022.

 

Year Ended December 31:		Insurance Premiums Due
2023		$	382,500
2024			450,000
2025			450,000
2026			450,000
2027 - 2029			1,350,000
Total		$	3,082,500

 

 

NOTE 8 - STOCKHOLDERS’ DEFICIT

 

As of December 31, 2022 and 2021, the Company was authorized to issue a total of 2,000,000 shares of preferred stock and 30,000,000 shares of common stock, $0.0001 par value.

 

Preferred Stock

 

The preferred stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon any unissued series of preferred stock, and to fix the number of shares of any series of preferred stock and the designation of any such series of preferred stock. The preferred stock is convertible into shares of common stock into an equivalent number of shares.

 

Each holder of common stock is entitled to one vote for each share of common stock held. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event, assets of the Company available for distribution shall be distributed to common shareholders pro rata based on the number of shares held. No distributions have been made on shares of common stock to date.

 

During the period ended December 31, 2020, the Company issued 1,000,000 shares of Series A convertible preferred stock as founder stock. The Company recorded stock compensation expense of $100, or a $0.0001 per share, in connection with the issuance.

 

Common Stock

 

The Company has 12,377,832 and 12,039,166 shares of common stock par value of $0.0001, issued and outstanding as of December 31, 2022 and 2021, respectively. Additionally, the Company has recognized obligations to issue 660,000 common shares to investors and a former owner of Innovative Design Networks related to services rendered (35,000), cash sales (125,000) and the purchase of Innovative Design Networks (500,000). The shares to be issued were valued at the public offering price of $1.00 per share.

 

Regulation A Offering

 

On November 11, 2021, the Company submitted its registration statement filed on Form 1-A. The registration statement became effective on November 18, 2021. The offering provided for the issuance of up to 6,000,000 shares of common stock at a price of $1.00, under subscriptions. The Company will use the proceeds for working capital.

 

During the period ended December 31, 2020, the Company issued 10,000,000 shares of common stock as founder stock. The Company recorded stock compensation expense of $1,000, or a $0.0001 per share, fair value, in connection with the issuance.

 

During the year ended December 31, 2021, the Company issued 972,000 shares of common stock for proceeds of $497,500, in private placements and public offerings. At any time between the agreement dates and December 31, 2021, in the event the Company sells shares of its common stock to any investor other than an officer or director of the Company, the private placement investors shall have the right to participate in the investment, up to an aggregate of an additional $250,000, at a per share purchase price that is 20% less than the price in the qualifying investment. The right to participate in additional investments have the discount expired as of December 31, 2021.

 

 

During the year ended December 31, 2021, the Company issued 1,000,000 shares of common stock pursuant to consulting agreements for a total fair value of $500,000, which was recorded as prepaid consulting fees. The prepaid consulting fees will be expensed monthly through December 31, 2024, the expiration date of the consulting agreements. As of December 31, 2022 the Company has $263,768 of unamortized prepaid consulting expense associated with these issuances.

 

During the year ended December 31, 2022, the Company issued 212,000 shares of common stock for cash and services. Those shares were valued at the public offering price of $1.00.

 

During the year ended December 31, 2022, the Company issued 76,666 shares of common stock for services. the shares were valued at $1.00.

 

During the year ended December 31, 2022, the Company issued 50,000 shares of common stock for compensation. The shares were valued at $1.00.

 

During the year ended December 31, 2022, the Company issued 500,000 shares of common stock for its acquisition of Innovative Design Networks LLC. Those shares were valued at the public offering price of $1.00.

 

Restricted Stock Units

 

In May 2020, the Company authorized a total of 200,001 restricted stock units (“RSUs”) to be issued to its three board of directors as compensation. The RSUs vest annually in equal increments beginning on July 1, 2020. The Company has issued a total of 66,669 RSUs, as of December 31, 2022, with 133,332 RSUs expected to be issued during 2023. The Company utilized the grant- date fair value of the underlying common stock of par ($0.0001). The shares underlying the RSU are issued in the fiscal year following full vesting. The Company will recognize expense for these issuances over the vesting period. The Company recorded a total of approximately $20, in stock compensation expense as a result of the issuances and vesting from 2020 to December 31, 2022.

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

In February 2020, the Company recorded stock compensation expense of $110,000 for the accrual of the founder’s stock issuances with a corresponding entry to loan payable, related party. The loan payable, related party balance was reduced to $0 upon the issuance of the 1,000,000 shares of Series A convertible preferred stock and 10,000,000 shares of common stock issued to the founder. During 2020, 66,669 Restricted Stock Units (“RSUs”) were issued to the CEO (and Chairman of the Board) for compensation. The RSUs fully vest over one year of the issuance date and are fully vested as of December 31, 2022.

 

During the years ended December 31, 2022 and 2021, the Company’s CEO advanced the Company funds for operating expenses. At December 31, 2022 and 2021, the outstanding balances owed were $157,225 and $122,225, respectively. No interest is due on this informal arrangement.

 

During the year ended December 31, 2022, an entity controlled by the CEO advanced the Company $762,836, and was repaid $143,437. The Company used the funds to pay operating expenses:

 

Expense Category		Net Amount Advanced
Cash transfers		$	257,000
Payments to Board of Directors			24,000
Acquisition (see note 5)			392,500
Consulting fees			59,876
Marketing			29,460
Cash repayments			(143,437	)
Total		$	619,399

 

 

As a direct result of the acquisition discussed in footnote 5, the Company issued notes to former owners of the membership interest in Innovative Network Designs, LLC (now ReachOut IND) and committed to purchase universal life insurance for officers of ReachOut IND. The notes issued were a convertible promissory note for $1,175,000 and promissory note for $868,193, the commitment to purchase life insurance totaled $3,150,000, see footnotes 5, 6 and 7.

 

The Company and the former principle of ReachOut IND entered into an employment agreement. The former head of ReachOut IND is named as Regional Vice President of Northeast (the Executive) at an annual salary of $250,000, plus incentive compensation with a target bonus of 10% of salary and a equity incentive of up to $1,400,00 value of Restricted Stock Units vesting ratably over seven years. The Executive is also given an annual expense stipend of $5,000, eligibility for employee benefits and specified paid leave. The initial term of the agreement is 24 months. (see note 12)

 

NOTE 10 - INCOME TAXES

 

The Company recognizes deferred tax assets and liabilities for the tax effects of differences between the financial statement and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. The acquisition of Innovative Network Designs, LLC yielded no net operating losses as they reported taxes as a pass-through entity until the acquisition date.

 

As of December 31, 2022, the Company has net operating loss carryforwards of approximately $2,090,000 to reduce future taxable income. A valuation allowance for the entire amount of deferred tax assets has been established as of December 31, 2022 and 2021.

 

The provision for (benefit from) income taxes consist of the following:

 

			Year Ended December 31, 2022				Year Ended December 31, 2021
Current
Federal		$	-			$	-
State			-				-
			-				-
Deferred
Federal			-				-
State			-				-
			-				-
Total income tax provision (benefit)		$	-			$	-

 

A reconciliation of the provision for income taxes at the federal and state statutory rates of 21% and7.5% (Illinois) and 11.5% (New Jersey) respectively to the Company’s provision for income tax is as follows:

 

		Year Ended December 31, 2022				Year Ended December 31, 2021
U.S. Federal (tax benefit) provision at statutory rate		$	(289,339	)		$	(76,635	)
State (tax benefit) income taxes, net of federal benefit			(109,084	)			(27,370	)
Permanent differences			215				-
Temporary differences			-				-
Changes in valuation allowance			390,207				104,005
Total		$	-			$	-

 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented:

 

		December 31, 2022				December 31, 2021
Deferred Tax Assets
Net operating losses			549,300				159,100
Total deferred tax assets			549,300				159,100
Valuation allowance			(549,300	)			(159,100	)
Net deferred tax assets			-				-
Deferred Tax Liabilities
Total deferred tax liabilities			-				-
Net deferred tax		$	-			$	-

 

The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of the deferred tax assets in the U.S. can be realized as of December 31, 2022 and 2021, accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.

 

The Company is not currently under any international or any United States federal, state and local income tax examinations for any taxable years. All of the Company’s net operating losses are subject to tax authority adjustment upon examination.

 

NOTE 11 - COMMITMENTS AND CONTINGENCIES

 

Commitments

 

Lease Obligations

 

On May 1, 2021 the Company’s subsidiary IND (acquired September 2, 2022, see note 6) entered into a sublease for its office in Whippany, NJ for a term commencing on June 1, 2021 extending through February 28, 2025 at an initial monthly rent of approximately $4,847. The sublease is renewable under the condition that the sublandlord renews its lease, therefore no subsequent extension is considered in the lease Right of Use Asset or the related lease liability beyond the initial term

 

The offices for ReachOut Technology Corp. are shared with a related party ReachOut IL (an S corporation), under an arrangement that is not formalized.

 

The Company recognized a right-of-use asset of and a sublease liability of $174,098, which represents the fair value of the lease payments calculated as present value of the minimum lease payments using a discount rate of 12.9% on date of the lease execution in accordance with ASC 842. The asset and liability will be amortized as monthly payments are made and lease expense will be recognized on a straight-line basis over the term of the sublease.

 

 

Right of use asset (ROU) is summarized below:

 

		December 31, 2022				September 30, 2021
Operating lease at inception - June 1, 2021		$	174,098			$	-
Less accumulated reduction			(64,642	)			-
Balance ROU asset		$	109,456			$	-

 

Operating lease liability related to the ROU asset is summarized below:

 

Operating lease liabilities at inception - June 1, 2021		$	174,098			$	-
Reduction of lease liabilities			(64,641	)			-
Total lease liabilities		$	109,457			$	-
Less: current portion			46,756				-
Lease liabilities, non-current		$	62,701			$	-

 

Non-cancellable operating lease total future payments are summarized below:

 

Total minimum operating lease payments		$	126,048			$	-
Less discount to fair value			(16,592	)			-
Total lease liability		$	109,457			$	-

 

Future minimum lease payments under non-cancellable operating leases at December 31, 2022 are as follows:

 

Years ending December 31,		Amount
2023			58,171
2024			58,171
2025			9,706
Total minimum non-cancelable operating lease payments		$	126,048

 

For the period (from acquisition date) September 2, through December 31, 2022, rent expense for all leases amounted to $14,569.

 

Contingencies

 

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.

 

 

NOTE 12 - SUBSEQUENT EVENTS

 

The Company evaluated events through April 22, 2024 and has identified the events below and no other material events needing disclosure during the period of December 31, 2022 through April 22, 2024.

 

Acquisition - Red Gear LLC

 

The Company entered into a Membership Interest Purchase Agreement on September 29, 2023 with RedGear, LLC, a Texas limited liability company and acquired 100% of the member’s interest of RedGear, LLC, in exchange for cash, a note payable and the assumption of certain liabilities of RedGear, LLC. The transaction was deemed to be a business combination and applied acquisition accounting under ASC 805. Upon closing (September 29, 2023) the total value of the consideration given for the purchase was $2,564,035 The purchase price was allocated to net tangible assets of $54,006 with the balance of $2,510,029 allocated to goodwill, which is not amortized to expense. The Company hired an independent accounting firm to validate the Adjusted EBITDA (as defined in the closing documents). The results of the validation may result in a purchase price adjustment. The fair value of certain assets and liabilities may result in an adjustment to the carrying value of the investment in RedGear, LLC. Management believes that there is significant value in the customer list and the trade name, but has not done separate valuation analysis.

 

Assets Acquired and Liabilities Assumed

 

Assets Acquired		Fair Value
Cash		$	58,455
Accounts Receivable			108,318
Receivable, Related Party			126,643
Fixed Assets,			548,552
Right of Use Asset			485,874
Total Assets		$	1,327,842
Liabilities Assumed
Accounts payable		$	46,278
Accrued Expenses			57,856
Bank line of credit			50,000
Vehicle Loans Payable			469,539
SBA Loan			423,000
Lease Liabilities			485,874
Total Liabilities		$	1,532,547
Consideration Value
Cash		$	1,249,248
Promissory Note			1,314,787
Total Purchase Price			2,564,035
Net Assets			54,006
Value of intangible assets		$	2,510,029

 

 

Reverse Merger/Acquisition of ReachOut Technology Corp.

 

On November 9,2023, the Company closed the Share Exchange and Control Block Transfer Agreements with Yuenglings Cream Corporation (“YCRMt”) whereby 100% of the membership interests of the Company were exchanged for YRCM’s Series C Preferred Stock which are convertible into 87.5% of the total issued and outstanding shares of common stock of the YCRM (fully diluted basis, protected for 24 months) as determined at the consummation of the acquisition

 

The Share Exchange is intended to constitute a reorganization with the meaning of Section 368 of the Internal Revenue Code of 1986 (as amended).

 

As a result of the transaction, the Company became a subsidiary of the YCRM.

 

The Company evaluated the substance of the merger transaction and found it met the criteria for the accounting and reporting treatment of a reverse acquisition under ASC 805 (Business Combinations)-40-45 (Reverse Acquisition and Other Presentation Matters) and accordingly the operations of the Company will be consolidated into YCRMas well as the financial condition from the closing date of the transaction. The historic results of operations will reflect those of the Companyt. As such, the Company is treated as the acquirer while the YCRM is treated as the acquired entity for accounting and financial reporting purposes.

 

Under reverse merger accounting, the comparative historical financial statements of the YCRM, as the legal acquirer, are those of the accounting acquirer, (the Company), the Company’s financial statements prior to the closing of the reverse acquisition; reflect only the business of ReachOut and its subsidiaries.

 

Under the terms of the Control Block Transfer Agreement, Everett Dickson (former Director of YCRM) is to sell all his remaining Series A Preferred Stock to Richard Jordan (new CEO) for $140,000.

 

Following the closing of the agreements, Robert Bohorad and Everett Dickson resigned their positions as YCRM’s CEO and Chairman of the Board of Directors, respectively and Richard Jordan was appointed to those positions.

 

The YCRM has authorized 8,750,000 Series C Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $3.00 per share, earns a 2% dividend on the stated value, which cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 87.5% of the outstanding common stock for a period of twenty-four months from the date of issuance.

 

YCRM is obligated under the terms of the Share Exchange Agreement to issue 8,750,000 shares of Series C Preferred Stock to the owners of the Company. in exchange for 100% of the shares of the Company upon closing the acquisition.

 

YCRM also has authorized 1,250,000 Series D Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $1.00 per share, earns a 2% dividend on the stated value, which cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 12.5% of the outstanding common stock of YCRM for a period of twenty-four months from the date of issuance.

 

YCRM is obligated under the terms of the Security Pruchase Agreement to issue 1,000,000 shares of Series D Preferred Stock along with warrants having an exercise price of $0.0003 and a term of seven years for the issuance of 142,424,186 shares of common stock as inducement to lend an aggregate principal amount of $470,000 upon closing the acquisition. The proceeds of the note issuance will be used to cover operations of the Company.

 

 

Asset Purchase

 

On April 8, 2024, the Company acquired the assets of Singer Networks LLC (Singer), an Illinois limited liability. Singer is a service provider that manages the technology needs for its clients. Under the terms of the agreement the Company has acquired all the tangible and intangible assets of Singer with the exception of cash and bank accounts, accounts receivable (as of closing date) the Singer benefit plan. The purchase price is comprised of $121,413 in cash and 750,000 preferred shares of Yuengling’s Ice Cream Corporation (“YCRM”). The preferred shares have a stated value of $1.00 and are convertible in YCRM common shares under the terms of the Certificate of Designation.

 

Common Stock and Preferred Stock Transactions

 

The Company issued 125,000 shares of common stock to investors for cash. The shares were priced at $1.00 under the Reg A Offering statement.

 

The Company issued 500,000 shares of common stock to the former owner of Innovative Design Networks as agreed under the purchase documents. The shares were valued at $1.00 (Reg A Offering price used for fair value).

 

The Company issued 675,000 shares of common stock to employees as compensation. The shares were valued at $1.00 (Reg A Offering price used for fair value).

 

The Company issued 194,444 shares of common stock to a board member as compensation. The shares were valued at $1.00 (Reg A Offering price used for fair value).

 

The Company issued 35,000 shares of common stock to third party service providers as compensation. The shares were valued at $1.00 (Reg A Offering price used for fair value).

 

The CEO of the Company exchanged all the outstanding preferred shares for 11,000,000 common shares of stock. The preferred shares were subsequently cancelled.

 

Change to Employment Agreement

 

On May 3, 2024, the employment agreement with the former principle of ReachOut IND has been amended in accordance with the terms of the employment agreement. The amendment takes effect on May 16, 2023, and reduces annual compensation to $125,000, and alters the responsibilities of his management role.

 

 

Exhibit 10.7

 

REACHOUT TECHNOLOGY CORP.

 

FINANCIAL STATEMENTS

 

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Unaudited

 

Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022		F-2
Consolidated Statements of Operations for the Years ended December 31, 2023 and December 31, 2022		F-3
Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2023 and December 31, 2022		F-4
Consolidated Statements of Cash Flows for the Years ended December 31, 2023 and December 31, 2022		F-5
Notes to Financial Statements		F-6

 

 

REACHOUT TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

Unaudited

 

		December 31, 2023				December 31, 2022
ASSETS
Current Assets:
Cash		$	312,658			$	571,578
Accounts receivable			239,825				55,655
Prepaid expenses			143,329				155,972
Loans to related parties			126,738				-
Inventory			552,886				-
Total Current Assets			1,375,436				783,215
Other Assets:
Prepaid expenses, non-current portion			-				131,884
Deposits			8,618				-
Furniture and fixed assets, net			540,763				-
Goodwill			7,873,202				5,363,173
Right of use asset			518,968				109,456
Total non-current assets			8,941,551				5,604,513
Total Assets		$	10,316,987			$	6,387,728
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable		$	699,741			$	51,407
Accrued expense			578,972				352,376
Other current liabilities, customer pre-payments			-				31,444
Due to officers			309,725				132,225
Due to affiliated companies			1,864,540				619,399
Due to financial institutions			996,243				-
Seller notes and loans payable related parties, current portion			1,782,217				289,398
Vehicle and equipment loans			436,799				-
SBA loan payable			423,300				-
Term note payable, related parties			1,175,000
Officer life insurance liability, current portion			450,000				382,500
Lease liability, current portion			171,315				46,756
Total Current Liabilities			8,887,852				1,905,505
Non-Current Liabilities:
Notes payable, non-current portion related parties			192,932				578,795
Term notes payable, related parties			-				1,175,000
Officer life insurance premium, non-current portion			2,250,000				2,700,000
Lease liability, non-current portion			347,605				62,701
Total Non-Current Liabilities			2,790,537				4,516,496
Total Liabilities			11,678,389				6,422,001
Commitments and contingencies			-				-
Stockholders’ Deficit:
Common stock to be issued			496,214				660,000
Preferred stock, $0.0001 par value, 2,000,000 shares authorized, 0 and 1,000,000 shares issued and outstanding as of December 31, 2023 and 2022, respectively			-				100
Common stock, $0.0001 par value, 30,000,000 shares authorized, 24,907,279 and 12,377,835 shares issued and outstanding as of December 31, 2023 and 2022, respectively			2,491				1,239
Additional paid in capital			1,428,453				1,030,947
Accumulated deficit			(3,288,560	)			(1,726,560	)
Total Stockholders’ Deficit			(1,361,402	)			(34,273	)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT		$	10,316,987			$	6,387,728

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

 

		For the Years Ended December 31,
		2023				2022
Revenue		$	4,240,477			$	1,140,574
Cost of goods sold			1,985,969				724,738
Gross margin			2,245,508				415,836
Operating Expenses:
General and administrative expenses			983,418				559,378
Compensation			2,096,548				652,216
Professional fees			406,883				454,296
Total operating expenses			3,486,849				1,665,890
Loss from operations			(1,232,341	)			(1,250,054	)
Other income (expense):
Interest expense			(512,473	)			(91,746	)
Total other expense			(512,473	)			(91,746	)
Loss before provision for income tax			(1,744,814	)			(1,341,800	)
Provision for income tax			-				-
Net loss		$	(1,744,814	)		$	(1,341,800	)
Basic loss per share		$	(0.11	)		$	(0.11	)
Diluted loss per share		$	(0.11	)		$	(0.11	)
Basic weighted average shares			15,283,590				12,170,199
Diluted weighted average shares			15,283,590				12,170,199

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Unaudited

 

		Common Stock								Series A Preferred Stock								Additional Paid in				Shares to be issued				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Amount				Deficit				Deficit
Balance, December 31, 2021			12,039,166			$	1,205				1,000,000			$	100			$	997,308				-			$	(384,760	)		$	613,853
Shares issued for services			76,666				8				-				-				76,658				-				-				76,666
Shares issued for compensation			50,000				5				-				-				49,995				-				-				50,000
Shares issued for cash			212,000				21				-				-				211,979				-				-				212,000
Public offering costs			-				-				-				-				(305,000	)			-				-				(305,000	)
Vesting of restricted stock units issued for service			-				-				-				-				7				-				-				8
Common shares to be issued			-				-				-				-				-				660,000				-				660,000
Net Loss for the year ended December 31, 2022			-				-				-				-				-				-				(1,341,800	)			(1,341,800	)
Balance, December 31, 2022			12,377,832				1,239				1,000,000				100				1,030,947				660,000				(1,726,560	)			(34,273	)
Shares issued for IND purchase			500,000				50				-				-				499,950				(500,000	)			-				-
Shares issued as compensation, employees and directors			11,869,444				1,187				-				-				879,730				-				-				880,917
Shares issued for cash			125,000				13				-				-				124,988				(125,000	)
Shares issued for service			35,000				4				-				-				34,997				-				-				35,000
Surrender and cancellation of preferred shares			-				-				(1,000,000	)			(100	)			100				-				-				-
Shares to be issued, acquisition of RedGear, LLC			-				-				-				-				-				461,214				-				461,214
Capital adjustment acquisitions			-				-				-				-				(1,142,258	)			-				425,783				(959,444	)
Net Loss for the year ended December 31, 2023			-				-				-				-				-				-				(1,744,814	)			(1,744,814	)
Balance, December 31, 2023			24,907,279			$	2,492				-			$	-			$	1,428,453			$	496,214			$	(3,288,560	)		$	(1,361,402	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

 

		For the Years Ended December 31,
		2023				2022
Cash flows from operating activities:
Net loss		$	(1,744,814	)		$	(1,341,800	)
Adjustments to reconcile net loss to net cash used in operating activities:
Shares issued for services			35				113,388
Shares issued and to be issued for compensation and services			277,050				186,672
Depreciation			65,361				-
Vesting of Restricted Stock Units			-				6
Bad debt expense			-				6,880
Related party advances funding operations			(4,924	)			10,000
Changes in assets and liabilities:
Accounts receivable			(52,884	)			(162,151	)
Prepaid expense			12,693				(95,090	)
Right of use asset net of liabillity			(50	)			-
A/P & Accrued liabilities			920,908				89,757
Customer deposits			31,444				-
Net cash used in operating activities			(789,191	)			(1,192,388	)
Cash flows from investing activities:
Cash acquired in acquisition			58,455				613,077
Cash paid in acquisition			(1,249,248	)			(325,000	)
ULI payable			-				382,500
Fixed assets acquired			(99,065	)			-
Net cash used in investing activities			(1,289,858	)			670,577
Cash flows from financing activities:
Loan proceeds – Fora			1,225,000				-
Loan repayments – Fora			(399,750	)			-
Sale of common stock			-				212,000
Cash received for stock to be issued			-				125,000
Repayment of seller notes			(207,831	)			-
Other loan repayments			(32,740	)			-
Proceeds from affiliate advances			809,141				-
Proceeds – related party loans			436,000				762,836
Payments – related party loans			(68,437	)			(143,437	)
Net cash provided by financing activities			1,829,820				956,399
Net change in cash			(249,229	)			434,588
Cash, beginning of year			571,578				136,990
Cash, end of year		$	312,658			$	571,578
Cash paid during the period for:
Interest		$	-			$	-
Income taxes		$	-			$	-
Supplemental Disclosure of Non-Cash Activity:
Shares to be issued for acquisition		$	461,214			$	500,000
Shares issued for services			35,067				7
Right-of-use asset and lease liability – ASC 842		$	767,068				174,098

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

REACHOUT TECHNOLOGY, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Unaudited

 

NOTE 1 - NATURE OF OPERATIONS

 

Reachout Technology, Corp. (the “Company”) is a corporation formed on February 13, 2020 under the laws of the State of Delaware. The Company provides cybersecurity and IT management solutions to businesses to protect their complete operating landscape and data secrets. The Company is headquartered in Chicago, Illinois.

 

From formation on February 13, 2022 until the acquisition of Innovative Design Networks, LLC (“IND”) on September 2, 2022, the Company had no principal operations or revenue. The Company’s activities from inception to the aforementioned acquisition primarily consisted of formation activities, acquisition research and preparations to raise capital. Since the Company has commenced its planned principal operations, it will incur significant additional expenses. The Company is dependent upon additional capital resources for its planned principal operations and is subject to significant risks and uncertainties.

 

Having acquired IND as a wholly owned subsidiary on September 2, 2022, planned operations have commenced. IND is a New Jersey limited liability company and the Company acquired 100% of the member’s interest of IND in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the two principals and 500,000 restricted shares of the Company’s common stock. The transaction was deemed to be a business combination and the Company has applied acquisition accounting under ASC 805. IND provides cybersecurity and IT management solutions to businesses to protect their complete operating landscape and data secrets.

 

The Company entered into a Membership Interest Purchase Agreement on September 29, 2023 with RedGear, LLC, a Texas limited liability company and acquired 100% of the member’s interest of RedGear, LLC, in exchange for cash, a note payable and the assumption of certain liabilities of RedGear, LLC. The transaction was deemed to be a business combination and the Company has applied acquisition accounting under ASC 805. RedGear provides cybersecurity and IT management solutions to businesses to protect their complete operating landscape and data secrets.

 

Reverse Merger/Acquisition of ReachOut Technology Corp.

 

On November 9,2023, the Company closed the Share Exchange and Control Block Transfer Agreements with Yuenglings Cream Corporation (“YCRM”) whereby 100% of the membership interests of the Company were exchanged for YRCM’s Series C Preferred Stock which are convertible into 87.5% of the total issued and outstanding shares of common stock of the YCRM.

 

The Share Exchange is intended to constitute a reorganization with the meaning of Section 368 of the Internal Revenue Code of 1986 (as amended).

 

As a result of the transaction, the Company became a subsidiary of the YCRM.

 

The Company evaluated the substance of the merger transaction and found it met the criteria for the accounting and reporting treatment of a reverse acquisition under ASC 805 (Business Combinations)-40-45 (Reverse Acquisition and Other Presentation Matters) and accordingly the operations of the Company will be consolidated into YCRM as well as the financial condition from the closing date of the transaction. The historic results of operations will reflect those of the Company. As such, the Company is treated as the acquirer while the YCRM is treated as the acquired entity for accounting and financial reporting purposes.

 

Under reverse merger accounting, the comparative historical financial statements of YCRM, as the legal acquirer, are those of the accounting acquirer, (the Company), the Company’s financial statements prior to the closing of the reverse acquisition; reflect only the business of ReachOut and its subsidiaries.

 

 

NOTE 2 - GOING CONCERN

 

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt and the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated profits since inception, has sustained net losses of $1,744,814 for the year ended December 31, 2023, and has incurred negative cash flows from operations for the period. As of December 31, 2023, the working capital deficit, stockholders’ deficit, and accumulated deficit was $7,512,416 $1,361,402 and $3,288,560, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern for the next twelve months is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company would be unable to execute upon the business plan or pay costs and expenses as they are incurred, which would have a material, adverse effect on the business, financial condition and results of operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities as a result of this uncertainty.

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principles of Consolidation

 

The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the accounts of ReachOut Technology Corp. and its wholly-owned subsidiaries, ReachOut IND and RedGear. All significant intercompany accounts and transactions have been eliminated in consolidation. Since September 2, 2022 following the purchase of 100% of the membership interests in Innovative Network Designs LLC, (now ReachOut IND) and RedGear, LLC on September 29, 2023, the operations, assets and liabilities have been consolidated into the Company.

 

Use of Estimates

 

The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, inventory, revenue recognition and the valuations of common stock. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

 

Concentrations of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. At December 31, 2023 and 2022, all of the Company’s cash and cash equivalents were held at accredited financial institutions. As of December 31, 2023, the Company had $84,785 in excess of insured amounts at one financial institution.

 

The Company’s subsidiary, Innovative Design Networks, has two clients having outstanding unpaid account representing a total of 79% of the accounts receivable balance at December 31, 2023. The RedGear subsidiary has three clients having outstanding unpaid accounts receivable representing a total of 66% of its total receivables as of December 31, 2023.

 

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

 

Fair Value Measurements

 

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

 

Level 1—Quoted prices in active markets for identical assets or liabilities.

 

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

 

Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

 

The carrying values of the Company’s assets and liabilities approximate their fair values.

 

Revenue Recognition

 

The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, and its related amendments (collectively known as “ASC 606”), effective January 1, 2018. The Company determines revenue recognition through the following steps:

 

Identification of a contract with a customer;

Identification of the performance obligations in the contract;

Determination of the transaction price;

Allocation of the transaction price to the performance obligations in the contract; and

Recognition of revenue when or as the performance obligations are satisfied.

 

Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.

 

It is management’s practice to only invoice for services and goods to be provided within the coming month. While services may not be fully transferred the client is in fact obligated to pay the invoiced amount unless the contract is terminated with prior notice.

 

Advertising Costs

 

Advertising costs are expensed as incurred and are included in General and Administrative expenses. Expenditures amounted to $172,795 and $385,550, for the years ended December 31, 2023 and 2022, respectively.

 

 

Deferred Offering Costs

 

The Company complies with the requirements of Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed. As of December 31, 2023 and 2022 the Company had recorded $0 and $0 in deferred offering costs, respectively. The costs of $305,000 recognized during the year ended December 31, 2021, were recognized as a charge to additional paid in capital during the year ended December 31, 2022.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation costs under the provisions of ASC 718, Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported. Stock-based compensation is recognized as expense over the employee’s requisite vesting period and over the nonemployee’s period of providing goods or services. In accordance with ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting share-based payment transactions for acquiring goods and services from nonemployees are included. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.

 

Income Taxes

 

The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized. The Company assesses its income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances, and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company’s policy is be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

 

Net Loss per Share

 

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti- dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2023 and 2022, diluted net loss per share is the same as basic net loss per share for each period presented. Potentially dilutive items outstanding as of December 31, 2023 and 2022, are as follows:

 

		Year Ended December 31,				Year Ended December 31,
		2023				2022
Series A preferred stock			-				1,000,000
Common shares to be issued			496,214				660,000
Total potentially dilutive shares			496,214				1,660,000

 

 

Convertible Notes with Fixed Rate Conversion Options

 

The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”.

 

Derivative Liabilities

 

The Company may enter into convertible notes, some of which contain embedded derivatives. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment.

 

Business Combinations

 

In accordance with ASC 805-10, “Business Combinations”, we account for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that we hold in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in our results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

 

Related Party Transactions

 

We follow FASB ASC subtopic 850-10, “Related Party Transactions”, for the identification of related parties and disclosure of related party transactions.

 

Pursuant to ASC 850-10-20, related parties include: a) our affiliates; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; d) our principal owners; e) our management; f) other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

 

Material related party transactions are required to be disclosed in the consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

Recently Adopted Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to report on their balance sheets a right-of-use asset and a lease liability in connection with most lease agreements classified as operating leases under the prior guidance (ASC Topic 840). Under the new guidance, codified as ASC Topic 842, the lease liability must be measured initially based on the present value of future lease payments, subject to certain conditions. The right-of-use asset must be measured initially based on the amount of the liability, plus certain initial direct costs. The new guidance further requires that leases be classified at inception as either (a) operating leases or (b) finance leases. For operating leases, periodic expense generally is flat (straight-line) throughout the life of the lease. For finance leases, periodic expense declines over the life of the lease. The new standard, as amended, provides an option for entities to use the cumulative-effect transition method. As permitted, the Company adopted ASC Topic 842 effective June 1, 2020. The adoption of ASC Topic 842 did not have a material impact on the Company’s consolidated financial statements.

 

The Company’s subsidiaries have recognized the Right of Use assets and related liabilities for leases and sublease for the office facilities in New Jersey, Texas and Arizona during the years ended December 31, 2023 and 2022, and following the acquisitions are accounted for under ASC 842. The corporate office is an informal arrangement which provides for office space in a shared office environment with a company controlled by the CEO and is exempt from ASC 842 treatment. During the year ended December 31, 2023 and 2022 the Company recognized a lease liabilities of $767,068 (2023) and $174,098 (2022) and the related right-of-use asset for the same amounts, and will amortize both over the life of the lease.

 

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 eliminates the separate accounting model for nonemployee share-based payment awards and generally requires companies to account for share-based payment transactions with nonemployees in the same way as share-based payment transactions with employees. The accounting remains different for attribution, which represents how the equity-based payment cost is recognized over the vesting period, and a contractual term election for valuing nonemployee equity share options. ASU 2018-07 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU 2018-07 on February 13, 2020 and the adoption did not have a material impact on its financial statements.

 

In May 2014, the FASB issued ASC 606, providing new revenue recognition guidance that superseded existing revenue recognition guidance. The update, as amended, requires the recognition of revenue related to the transfer of goods or services to customers reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as well as additional qualitative and quantitative disclosures about revenues. The Company adopted the new revenue recognition guidance as of February 13, 2020. The adoption of this standard had no material impact on its financial statements.

 

 

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470- 20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. The Company adopted ASU 2017-11 on February 13, 2020 and the adoption did not have a material impact on its financial statements.

 

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company adopted ASU 2020-06 on February 13, 2020 and the adoption did not have any impact on its financial statements.

 

Management does not believe that any other recently issued accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 

NOTE 4 - GOODWILL

 

The Company acquired the operations, assets and liabilities of Innovative Network Designs, LLC during the year ended December 31, 2022. The Company recognized goodwill of $5,363,173. During the year ended December 31, 2023 the Company acquired the operations, assets and liabilities or RedGear, LLC and recognized goodwill of $2,510,029. The goodwill asset is compared to its fair value at least annually. The Company follows ASC 350 20 – Goodwill.

 

 

Membership Interest Purchase Agreement

 

Innovative Network Designs, LLC

 

The Company entered into a Membership Interest Purchase Agreement on August 1, 2022 with Innovative Network Designs, LLC, a New Jersey limited liability company and acquired 100% of the member’s interest of Innovative Network Designs, LLC, in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the two principals and 500,000 restricted shares of the Company’s common stock. The transaction was deemed to be a business combination and the Company applied acquisition accounting under ASC 805. Upon closing (September 2, 2022) the total value of the consideration given for the purchase was $6,018,193. Included in the purchase consideration: is the commitment to pay universal life insurance policies for a total cash value of $3,150,000 over seven years ($382,500 annually), which the Company anticipates will be financed by a third party; a term promissory note (24 months with a ballon payment at maturity); a promissory note secured by a second priority lien on all the Company’s membership interests and other defined assets (amortizable); and 500,000 shares of the Company’s common stock, valued at $1.00 per share (the offering price of the Company’s regulation A offering documents). The purchase price was allocated to net tangible assets of $655,020 with the balance of $5,363,173 allocated to goodwill, which is not amortized to expense (see note 5). The assets and liabilities (with the exception of the lease related items) are short term and therefore book value approximates the fair value. Management believes that there is significant value in the customer list and the trade name, but has not done separate valuation analysis. An impairment analysis will consider each potential sub component (customer list, workforce in place etc.) of the Goodwill recorded in accordance with the relevant accounting standards at least annually and more frequently should there be any financial or economic issues suggesting an impairment.

 

Assets Acquired and Liabilities Assumed

 

Assets Acquired		Fair Value
Cash		$	613,077
Accounts Receivable			217,816
Prepaid Expenses			62,706
Right of Use Asset			109,456
Total Assets		$	1,003,055
Liabilities Assumed
Accounts Payable		$	49,936
Accrued Expenses			118,521
Sales Tax Payable			70,122
Lease Liabilities			109,457
Total Liabilities		$	348,036
Consideration Value
Cash		$	325,000
Convertible Note			1,175,000
Universal Life Insurance Commitment			3,150,000
Promissory Note			868,193
Common Stock			500,000
Total Purchase Price			6,018,193
Less, net asset value			655,020
Value of intangible assets		$	5,363,173

 

 

Acquisition - Red Gear LLC

 

The Company entered into a Membership Interest Purchase Agreement on September 29, 2023 with RedGear, LLC, a Texas limited liability company and acquired 100% of the member’s interest of RedGear, LLC, in exchange for cash, a note payable and the assumption of certain liabilities of RedGear, LLC. The transaction was deemed to be a business combination and the Company applied acquisition accounting under ASC 805. Upon closing (September 29, 2023) the total value of the consideration given for the purchase was $2,564,035 The purchase price was allocated to net tangible assets of $54,006 with the balance of $2,510,029 allocated to goodwill, which is not amortized to expense. The Company hired an independent accounting firm to validate the Adjusted EBITDA (as defined in the closing documents). The results of the validation may result in a purchase price adjustments. The fair value of certain assets and liabilities may result in an adjustment to the carrying value of the investment in RedGear, LLC. Management believes that there is significant value in the customer list and the trade name, but has not done separate valuation analysis. An impairment analysis will consider each potential sub component (customer list, workforce in place etc.) of the Goodwill recorded in accordance with the relevant accounting standards at least annually and more frequently should there be any financial or economic issues suggesting an impairment.

 

Assets Acquired and Liabilities Assumed

 

Assets Acquired		Fair Value
Cash		$	58,455
Accounts Receivable			108,318
Receivable, Related Party			126,643
Inventory			259,011
Fixed Assets,			548,552
Right of Use Asset			485,874
Total Assets		$	1,693,949
Liabilities Assumed
Accounts payable		$	46,278
Accrued Expenses			57,856
Bank line of credit			50,000
Vehicle and equipment loans payable			469,539
SBA Loan			423,000
Lease Liabilities			592,970
Total Liabilities		$	1,639,942
Consideration Value
Cash		$	1,249,248
Promissory Note			1,314,787
Total Purchase Price			2,564,035
Tangible Net Assets			54,006
Value of intangible assets		$	2,510,029

 

NOTE 5 - TERM NOTE PAYABLE

 

On October 1, 2022 the Company issued a term promissory note to the sellers of the membership interest in Innovative Network Designs LLC. Under the option selected by the holder of the note, a ballon payment of principal is due on October 1, 2024. The note principal is $1,175,000 bears interest at 24%, matures on October 1, 2024. The principal $1,175,000 and accrued interest at December 31, 2023 is $351,534.

 

 

NOTE 6 - NOTES PAYABLE

 

On October 1, 2022 the Company issued a secured promissory note to the sellers of the membership interest in Innovative Network Designs LLC. The note principal is $868,193 bears interest at 7%, matures on April 2, 2025. The note amortizes over the term with the first principal payment of $96,466 due on April 15, 2023, along with $37,463 of accrued interest. Subsequent quarterly payments of interest and principal begin on July 15, 2026 and continue through maturity. The note is secured by a second priority lien on the membership interest purchased by the Company and certain other assets related to the acquisition. The current portion due is $467,430 and the non-current portion due is $192,932, as of December 31, 2023. Accrued interest is $72,869 as of December 31, 2023.

 

On September 29, 2023, the Company issued a promissory note to the former members of RedGear, LCC as partial payment for the RedGear acquisition. The note principal is $1,314,787, bears interest at 8% and matures on September 28, 2024. Principal is subject to adjustment based on the findings of a third-party accounting firm related to EBITDA reported compared to actual. The examination is not complete and therefore no adjustment is warranted at December 31, 2023. Accrued interest is $26,800 as of December 31, 2023.

 

Period		Principal				Interest				Total
January 15, through October 15, 2024			1,782,217				198,699				560,746
January 15, through March 2, 2025			192,932				4,255				197,187
Totals		$	1,975,149			$	202,954			$	2,183,870

 

NOTE 7 - OFFICER LIFE INSURANCE PREMIUMS PAYABLE

 

On October 1, 2022, the Company committed to paying life insurance with the sellers of the membership interest in Innovative Network Designs LLC. The total amount of the liability was $3,150,000 to be paid in equal installments of $450,000 over seven years. The current portion due is $450,000 and the non-current portion due is $2,250,000, as of December 31, 2023.

 

Year Ended December 31:		Insurance Premiums Due
2024			450,000
2025			450,000
2026			450,000
2027 - 2029			1,350,000
Total		$	2,700,000

 

NOTE 8 - STOCKHOLDERS’ DEFICIT

 

As of December 31, 2023 and 2022, the Company was authorized to issue a total of 2,000,000 shares of preferred stock and 30,000,000 shares of common stock, $0.0001 par value.

 

Preferred Stock

 

The preferred stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon any unissued series of preferred stock, and to fix the number of shares of any series of preferred stock and the designation of any such series of preferred stock. The preferred stock is convertible into shares of common stock into an equivalent number of shares.

 

During the period ended December 31, 2020, the Company issued 1,000,000 shares of Series A convertible preferred stock as founder stock. The Company recorded stock compensation expense of $100, or a $0.0001 per share, fair value, in connection with the issuance.

 

In December 2023, the CEO surrendered all issued and outstanding shares of Series A convertible preferred stock which were then cancelled by the Company.

 

Common Stock

 

The Company has 24,757,279 and 12,377,835 shares of common stock, issued and outstanding as of December 31, 2023 and 2022, respectively.

 

Each holder of common stock is entitled to one vote for each share of common stock held. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event, assets of the Company available for distribution shall be distributed to common shareholders pro rata based on the number of shares held. No distributions have been made on shares of common stock to date. On November 9, 2023, the Company became a subsidiary of Yuengling’s Ice Cream Corporation (“YCRM”) in a reverse merger transaction. The common stock holders received Series C Preferred Stock convertible into 87.5% of the YCRM common stock. The shares of YCRM Series C Preferred Stock will be distributed to the common stockholders of the Company on a pro rata basis.

 

 

Regulation A Offering

 

On November 11, 2021, the Company submitted its registration statement filed on Form 1-A. The registration statement became effective on November 18, 2021. The offering provided for the issuance of up to 6,000,000 shares of common stock at a price of $1.00, under subscriptions. The Company will use the proceeds for working capital.

 

Common Stock Issuances

 

During the year ended December 31, 2023 the Company issued 150,000 shares of common stock to a key employee of Innovative Design Networks LLC, as compensation. The shares were valued at the public offering price of $1.00.

 

During the year ended December 31, 2023, the Company issued 35,000 shares of common stock for services. The shares were valued at $1.00.

 

During the year ended December 31, 2023, the Company issued 194,444 shares of common stock for to a Board member as compensation. The shares were valued at $1.00.

 

During the year ended December 31, 2023, the Company issued 11,000,000 shares of common stock to the Company’s founder. The shares were valued at $0.001

 

During the year ended December 31, 2023, the Company issued 525,000 shares of common stock to employees for compensation. The shares were valued at $1.00.

 

During the year ended December 31, 2023, the Company committed to issue 461,214 shares of common stock to key employees of RedGear, LLC. The shares will be valued at $1.00.

 

During the year ended December 31, 2023, the Company issued, 625,000 shares of common stock that were classified as shares to be issued at December 31, 2022.

 

During the year ended December 31, 2022, the Company issued 212,000 shares of common stock for cash. Those shares were valued at the public offering price of $1.00.

 

During the year ended December 31, 2022, the Company issued 76,666 shares of common stock for services. The shares were valued at $1.00.

 

During the year ended December 31, 2022, the Company issued 50,000 shares of common stock for compensation. The shares were valued at $1.00.

 

During the year ended December 31, 2022, the Company committed to issue 660,000 shares of common stock:

 

Ø

500,000 of the above shares for the acquisition of Innovative Design Networks LLC;

 

Ø

125,000 of the above shares for cash; and

 

Ø

35,000 were committed under the terms of a private placement investment.

 

Those shares were valued at the public offering price of $1.00.

 

The shares to be issued for the acquisition and cash were issued during the year ended December 31, 2023.

 

Restricted Stock Units

 

In May 2020, the Company authorized a total of 200,001 restricted stock units (“RSUs”) to be issued to its three board of directors as compensation. The RSUs vest annually in equal increments beginning on July 1, 2020. The Company has issued a total of 66,669 RSUs, as of December 31, 2022, with 133,332 RSUs expected to be issued during 2023. The Company utilized the grant- date fair value of the underlying common stock of par ($0.0001). The shares underlying the RSU are issued in the fiscal year following full vesting. The Company will recognize expense for these issuances over the vesting period. The Company recorded a total of approximately $20, in stock compensation expense as a result of the issuances and vesting from 2020 to December 31, 2022.

 

As of December 31, 2023, there were 200,001 vested RSUs and unrecognized compensation cost of $0.

 

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

In February 2020, the Company recorded stock compensation expense of $110,000 for the accrual of the founder’s stock issuances with a corresponding entry to loan payable, related party. The loan payable, related party balance was reduced to $0 upon the issuance of the 1,000,000 shares of Series A convertible preferred stock and 10,000,000 shares of common stock issued to the founder. During 2020, 66,669 Restricted Stock Units (“RSUs”) were issued to the CEO (and Chairman of the Board) for compensation. The RSUs fully vest over one year of the issuance date and are fully vested as of December 31, 2022.

 

During the years ended December 31, 2022 and 2021, the Company’s CEO advanced the Company funds for operating expenses. At December 31, 2023 and 2022, the outstanding balances owed were $132,225 and $132,225, respectively. No interest is due on this informal arrangement. No such advances were issued during the year ended December 31, 2023.

 

During the years ended December 31, 2023 and 2022, an entity controlled by the CEO advanced (net of repayments) the Company $809,141 and $619,399, respectively. The Company used the funds to pay various operating expenses. The balance due is $1,428,540 at December 31, 2023 and is included in due to affiliated companies as presented on the balance sheet.

 

YCRM advanced $436,000 to the Company during the year ended December 31, 2023, which is currently outstanding and is included in due to affiliated companies as presented on the balance sheet.

 

During the year ended December 31, 2022, the Company issued notes to former owners of the membership interest in Innovative Network Designs, LLC (now ReachOut IND) and committed to purchase universal life insurance for officers of ReachOut IND. The notes issued were a convertible promissory note for $1,175,000 and promissory note for $868,193, the commitment to purchase life insurance totaled $3,150,000, see footnotes 5, 6 and 7.

 

During the year ended December 31, 2023, the Company issued 11,000,000 shares of the Company’s common stock to the CEO as founder shares.

 

During the year ended December 31, 2023, the Company issued notes totaling $1,314,787 to the former owners of the membership interest in RedGear, LLC and paid cash of $1,249,248, see footnotes 5, and 7.

 

The Company’s subsidiary RedGear LLC has $40,000 outstanding for bank line of credit at December 31, 2023. The line of credit account is held under the name of a former member of RedGear, LLC.

 

Compensation due to a current officer of RedGear amounts to $137,500 at December 31, 2023.

 

RedGear is obligated under office leases to a company controlled by the former owners of the RedGear membership interests. The office space is in two locations in the city of El Paso, Texas and covers approximately 10,000 square feet in total. The liability as calculated for the right to use asset (under ASC 842) is $406,015, which is included in the lease amounts for the year ended December 31, 2023 in note 11.

 

The Company and the former principle of ReachOut IND entered into an employment agreement. The former head of ReachOut IND is named as Regional Vice President of Northeast (the Executive) at an annual salary of $250,000, plus incentive compensation with a target bonus of 10% of salary and a equity incentive of up to $1,400,00 value of Restricted Stock Units vesting ratably over seven years. The Executive is also given an annual expense stipend of $5,000, eligibility for employee benefits and specified paid leave. The initial term of the agreement is 24 months. (see note 12)

 

NOTE 10 - INCOME TAXES

 

The Company recognizes deferred tax assets and liabilities for the tax effects of differences between the financial statement and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. The acquisition of Innovative Network Designs, LLC yielded no net operating losses as they reported taxes as a pass-through entity until the acquisition date.

 

 

As of December 31, 2023, the Company has net operating loss carryforwards of approximately $2,090,000 to reduce future taxable income. A valuation allowance for the entire amount of deferred tax assets has been established as of December 31, 2023 and 2022.

 

The provision for (benefit from) income taxes consist of the following:

 

			Year Ended December 31, 2023				Year Ended December 31, 2022
Current
Federal		$	-			$	-
State			-				-
			-				-
Deferred
Federal			-				-
State			-				-
			-				-
Total income tax provision (benefit)		$	-			$	-

 

A reconciliation of the provision for income taxes at the federal and state statutory rates of 21% and 7.5% (Illinois), 11.5% (New Jersey) and 2% of gross sales (Texas) respectively to the Company’s provision for income tax is as follows:

 

		Year Ended December 31, 2023				Year Ended December 31, 2022
U.S. Federal (tax benefit) provision at statutory rate		$	(366,411	)		$	(289,339	)
State (tax benefit) income taxes, net of federal benefit			(162,361	)			(109,084	)
Permanent differences			-				215
Temporary differences			-				-
Changes in valuation allowance			528,772				390,207
Total		$	-			$	-

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented:

 

		December 31, 2023				December 31, 2022
Deferred Tax Assets
Net operating losses			1,078,100				549,300
Total deferred tax assets			1,078,100				549,300
Valuation allowance			(1,078,100	)			(549,300	)
Net deferred tax assets			-				-
Deferred Tax Liabilities
Total deferred tax liabilities			-				-
Net deferred tax		$	-			$	-

 

 

The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of the deferred tax assets in the U.S. can be realized as of December 31, 2023 and 2022, accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.

 

The Company is not currently under any international or any United States federal, state and local income tax examinations for any taxable years. All of the Company’s net operating losses are subject to tax authority adjustment upon examination.

 

NOTE 11 - COMMITMENTS AND CONTINGENCIES

 

Commitments

 

Lease Obligations

 

Effective October 2020, the Company’s subsidiary (RedGear, LLC) renewed the lease for the principle offices at 123 West Mills Avenue, El Paso, Texas. The lease extends through September 30, 2025, for $1,350.20 per month with annual escalation of 2%. The liability and Right of Use Asset was recognized for $61,590. No subsequent renewal is certain at December 31, 2023.

 

Effective October 29, 2021, the Company’s subsidiary (RedGear, LLC) entered into a lease for office facilities at 3636 North Central Avenue, Phoenix, Arizona. The lease extends through October 31, 2025, for $3,224.83 per month with annual escalation of 3%. The liability and Right of Use Asset was recognized for $125,364. No subsequent renewal is certain at December 31, 2023.

 

Effective September 29, 2023, the Company’s subsidiary (RedGear, LLC) entered into a lease for office facilities at 10033 Carnegie Avenue, El Paso, Texas. The lease extends through September 28, 2028, for $5,018.00 per month with annual escalation of 3%. The liability and Right of Use Asset was recognized for $232,940. No subsequent renewal is certain at December 31, 2023. The lessor is considered a related party (see note 9).

 

Effective September 29, 2023, the Company’s subsidiary (RedGear, LLC) entered into a lease for office facilities at 6713 Viscount Blvd. El Paso, Texas. The lease extends through September 28, 2028, for $3,600.00 per month with annual escalation of 5%. The liability and Right of Use Asset was recognized for $173,076. No subsequent renewal is certain at December 31, 2023. The lessor is considered a related party (see note 9).

 

On May 1, 2021 the Company’s subsidiary IND (acquired September 2, 2022, see note 6) entered into a sublease for its office in Whippany, NJ for a term commencing on June 1, 2021 extending through February 28, 2025 at an initial monthly rent of approximately $4,847. The liability and Right of Use Asset was recognized for $174,076. The sublease is renewable under the condition that the sublandlord renews its lease, therefore no subsequent extension is considered in the lease Right of Use Asset or the related lease liability beyond the initial term.

 

The Company recognized a right-of-use assets of and a related lease liabilities of $767,068, which represents the fair value of the lease payments calculated as present value of the minimum lease payments using a discount rate of 12.9% on date of the lease execution in accordance with ASC 842. The asset and liability will be amortized as monthly payments are made and lease expense will be recognized on a straight-line basis over the term of the sublease.

 

The offices for ReachOut Corp. is shared with a related party ReachOut IL (an S corporation), under an arrangement that is not formalized.

 

 

Right of use asset (ROU) is summarized below:

 

		December 31, 2023				September 30, 2022
Operating lease at inception		$	767,068			$	174,098
Less accumulated reduction			(248,100	)			(64,642	)
Balance ROU asset		$	518,969			$	109,456

 

Operating lease liability related to the ROU asset is summarized below:

 

Operating lease liabilities at inception		$	767,068			$	174,098
Reduction of lease liabilities			(248,147	)			(64,641	)
Total lease liabilities		$	518,920			$	109,457
Less: current portion			(171,316	)			46,756
Lease liabilities, non-current		$	347,605			$	62,701

 

Non-cancellable operating lease total future payments are summarized below:

 

Total minimum operating lease payments		$	707,347			$	126,048
Less discount to fair value			(188,426	)			(16,592	)
Total lease liability		$	518,920			$	109,457

 

Future minimum lease payments under non-cancellable operating leases at December 31, 2023 are as follows:

 

Years ending December 31,		Amount
2024			221,119
2025			166,502
2026			110,289
2027			116,928
2028			90,510
Total minimum non-cancelable operating lease payments		$	707,347

 

For the period (from acquisition date) September 29, through December 31, 2023, rent expense for RedGear, LLC was $43,355 and for ReachOut IND it was $58,171, for the year ending December 31, 2023. The total for all leases amounted to $101,526.

 

Contingencies

 

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.

 

 

NOTE 12 - SUBSEQUENT EVENTS

 

Asset Purchase

 

On April 8, 2024, the Company acquired the assets of Singer Networks LLC (Singer), an Illinois limited liability. Singer is a service provider that manages the technology needs for its clients. Under the terms of the agreement the Company has acquired all the tangible and intangible assets of Singer with the exception of cash and bank accounts, accounts receivable (as of closing date) and the Singer benefit plan. The purchase price is comprised of $121,413 in cash and 750,000 preferred shares of Yuengling’s Ice Cream Corporation (“YCRM”). The preferred shares have a stated value of $1.00 and are convertible in YCRM common shares under the terms of the Certificate of Designation.

 

Change to Employment Agreement

 

On May 3, 2024, the employment agreement with the former principle of ReachOut IND has been amended in accordance with the terms of the employment agreement. The amendment takes effect on May 16, 2023, and reduces annual compensation to $125,000, and alters the responsibilities of his management role.

 

 

Exhibit 10.8

 

Yuengling’s Ice Cream Corporation, ReachOut Technology Corp. and RedGear LLC

PRO FORMA FINANCIAL STATEMENTS

(Unaudited)

 

		Page
Combined Pro-forma Balance Sheets at October 31 and December 31, 2023		F-2
Combined Statements of Operations for the years ended October 31, and December 31, 2023		F-3
Notes to Combined Pro-forma Financial Statements		F-4

 

 

Yuengling’s Ice Cream Corporation, ReachOut Technology Corp. and RedGear LLC

PRO FORMA FINANCIAL STATEMENTS

 

Pro-forma Combined Balance Sheets

 

		10/31/23				December 31, 2023
		YCRM				ReachOut Technology Corp.				RedGear				Combined
Assets
Current assets
Cash		$	-			$	-			$	336,524			$	336,524
Accounts receivable			20				16,081				223,747				239,848
Loan to related party			-				-				126,738				126,738
Due from RedGear LLC (see note 1)			-				14,924				-				-
Inventory			-				-				552,886				552,886
Prepaid expenses and other assets			-				143,329				-				143,329
Total current assets			20				174,334				1,239,895				1,399,325
Non-Current Assets
Property, plant and equipment, net of depreciation			-				99,065				441,698				540,763
Deposits			-				-				8,618				8,618
Investment, RedGear (see note 1)							3,025,249				-				-
Goodwill			-				5,363,173				2,510,029				7,873,202
Right of use asset			-				54,188				464,780				518,968
Total non-current Assets							8,541,675				3,425,125				8,941,551
Total Assets		$	20			$	8,716,009			$	4,665,020			$	10,340,876
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable		$	217,192			$	122,617			$	577,124			$	781,014
Accrued expenses			144,759				547,411				61,478				348,609
Due to ReachOut Technology, Corp. (see note 1)			-				-				14,924				-
Compensation payable			-				137,500				-				137,500
Due to related parties (see note 2)			32,410				1,996,765				40,000				2,069,175
Notes and loans payable			184,296				-				-				184,296
Due to financial institutions – loans and lines of credit (see note 3)			489,439				1,020,109				-				1,509,548
Vehicle and equipment loans			-				-				436,799				436,799
Lease liabilities, current			-				46,453				124,862				171,315
Universal life insurance, sellers			-				450,000				-				450,000
Seller notes and loans payable, related parties (see note 4)			-				1,782,217				-				1,782,217
Term note payable related party, net of premiums (see note 4)			-				1,175,000				-				1,175,000
SBA loans payable			589,092				-				423,300				1,012,392
			1,657,188				7,278,072				1,678,487				10,598,823
Non-current liabilities:
Lease liabilities, non-current			-				7,737				339,868				347,605
Universal life insurance, non-current			-				2,250,000				-				2,250,000
Seller notes and loans payable, related parties, non-current (see note 4)			-				192,932				-				192,932
Total non-current liabilities			-				2,450,669				339,868				2,7990,537
Total Liabilities			1,657,188				9,728,741				2,018,355				13,389,360
Temporary Equity, preferred stock payable			357,022				-				-				357,022
Stockholders’ deficit:
Common stock to be issued			-				496,214				-				496,214
Preferred Series A Shares, $0.001 par value			48				-				-				48
Preferred Series B Shares			-				-				-				-
Common stock, par value			332,489				2,492				-				332,489
Additional paid in capital			2,109,429				2,564,027				2,333,438				3,389,360
Accumulated deficit			(4,456,156	)			(4,075,465	)			313,227				(8,218,394	)
Total stockholders’ equity / (deficit)			(2,014,190	)			(1,012,732	)			2,646,665				(3,048,484	)
Total Liabilities and Stockholders’ equity / (deficit)		$	20			$	8,716,009			$	6,665,020			$	10,340,876

 

The accompanying notes are an integral part of these combined financial statements

 

 

Yuengling’s Ice Cream Corporation, ReachOut Technology Corp. and RedGear LLC

PRO FORMA FINANCIAL STATEMENTS

 

Pro-forma combined statements of operations

 

Twelve Month Period

 

		YCRM				ReachOut Technology Corp.				RedGear LLC				Combined
		Fiscal Year Ended October 31, 2023				Fiscal Year Ended December 31, 2023				Fiscal Year Ended December 31, 2023
Revenues		$	20			$	2,750,642			$	4,634,085				7,384,747
Cost of revenues			56,211				1,581,653				1,576,664				3,214,528
Gross profit			(56,191	)			1,168,989				3,057,421				4,170,219
Operating expenses:
Compensation and consultants			7,000				935,123				1,680,770				2,622,893
Professional expenses			79,522				406,883				53,425				539,830
General and administrative			23,200				658,267				1,087,702				1,769,169
Total expenses			109,722				2,000,273				2,821,897				4,931,892
Income (loss) from operations			(165,913	)			(831,284	)			235,524				(761,673	)
Other income (expenses):
Gain on debt extinguishment			78,683				-				-				78,683
Derivative Expense and change in fair market value			60,833				-				-				60,833
Loss on issuance of convertible debt			(38,477	)			-				-				(38,477	)
Gain on debt conversion			7,608				-				-				7,608
Impairment loss			(30,300	)			-				-				(30,300	)
Interest expense			(336,465	)			(144,444	)			(45,270	)			(526,179	)
			(258,118	)			(144,444	)			(45,270	)			(447,832	)
Income (loss) before federal income taxes			(424,031	)			(975,728	)			190,254				(1,209,505	)
Federal income tax provision			-				-				-				-
Net income (loss)		$	(424,031	)		$	(975,728	)		$	190,254				(1,209,505	)
Loss per share, basic and diluted		$	(.00	)		$	(.06	)		$	N/A				(.00	)
Weighted average shares outstanding			359,537,890				15,283,590				N/A				359,537,890

 

The accompanying notes are an integral part of these combined financial statements

 

 

YUENGLING’S ICE CREAM CORPORATION, REACHOUT TECHNOLOGY CORP. AND REDGEAR LLC

Notes to Unaudited Pro Forma Combined Balance Sheets and Statements of Operations

 

ORGANIZATION AND BUSINESS

 

Yuengling’s Ice Cream Corporation

 

Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” or the “Company”) was incorporated in Nevada on April 19, 2013, under the name “Aureus Incorporated.” The Company was initially organized to develop and explore mineral properties in the state of Nevada. Effective December 15, 2017, the name was changed to “Hohme, Inc.,” and, effective February 7, 2019, the name was changed to “Aureus, Inc.” and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation. The Company is currently active in the state of Nevada.

 

The Company has been a food brand development company with the intention to build and represent popular food concepts throughout the United States and international markets. Management is highly experienced at business integration and re-branding.

 

The Company formerly operated as two lines of business. Through its wholly owned subsidiary, YIC Acquisitions Corp. (“YICA”), the Company acquired the assets of Yuengling’s Ice Cream in June 2019. YICA produces and sells high-quality ice cream without artificial colors, flavoring, or preservatives and no added hormones. In September 2020, the Company entered into the micro market segment and launched the second business line, Aureus Micro Markets (“AMM”). Closely tied to the vending machine industry, Micro Markets look and feel like modern convenience stores while functioning with the ease and efficiency of vending foodservice and refreshment services.

 

During the year ended October 31, 2022, the Company developed a reorganization plan to explore taking the ice cream business private to better allow the brand to advance. The Company has agreed to assign the ice cream assets to Mid Penn Bank in return for the cancellation of the bank debt. The agreement with Mid Penn Bank was executed in January 2024. The AMM business has also been shuttered.

 

Reverse Merger/Acquisition of ReachOut Technology Corp.

 

On November 9, 2023, the Yuengling’s Ice Cream Corporation closed the Share Exchange and Control Block Transfer Agreements with ReachOut Technology Corp. (“ReachOut”) whereby 100% of the membership interests of ReachOut were exchanged for Series C Preferred Stock which is convertible into 87.5% of the total issued and outstanding shares of common stock of the Company (fully diluted basis) as determined at the consummation of the acquisition.

 

The Share Exchange is intended to constitute a reorganization with the meaning of Section 368 of the Internal Revenue Code of 1986 (as amended).

 

As a result of the transaction, ReachOut became a subsidiary of the Company.

 

The Company evaluated the substance of the merger transaction and found it met the criteria for the accounting and reporting treatment of a reverse acquisition under ASC 805 (Business Combinations)-40-45 (Reverse Acquisition and Other Presentation Matters) and accordingly will consolidate the operations of ReachOut and the Company and the financial condition from the closing date of the transaction. The historic results of operations will reflect those of ReachOut. As such, ReachOut is treated as the acquirer while the Company is treated as the acquired entity for accounting and financial reporting purposes.

 

 

Under reverse merger accounting, the comparative historical financial statements of the Company, as the legal acquirer, are those of the accounting acquirer, ReachOut, the Company’s financial statements prior to the closing of the reverse acquisition; reflect only the business of ReachOut and its subsidiaries.

 

Under the terms of the Control Block Transfer Agreement, Everett Dickson (former CEO) is to sell all his remaining Series A Preferred Stock to Richard Jordan (new CEO) for $140,000.

 

Following the closing of the agreements, Robert Bohorad and Everett Dickson resigned their positions as CEO and Chairman of the Board of Directors, respectively and Richard Jordan was appointed to those positions.

 

The Company has authorized 8,750,000 Series C Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $3.00 per share, earns a 2% dividend on the stated value, which is cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 87.5% of the outstanding common stock for a period of twenty-four months from the date of issuance of the Series C Preferred Stock.

 

The Company is obligated under the terms of the Share Exchange Agreement to issue 8,750,000 shares of Series C Preferred Stock to the owners of ReachOut. in exchange for 100% of the shares of ReachOut upon closing the aforementioned acquisition.

 

The Company has authorized 1,250,000 Series D Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $1.00 per share, earns a 2% dividend on the stated value, which is cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 12.5% of the outstanding common stock for a period of twenty-four months from the date of issuance of the Series D Preferred Stock.

 

The Company is obligated under the terms of the Security Purchase Agreement to issue 1,000,000 shares of Series D Preferred Stock along with warrants having an exercise price of $0.0003 and a term of seven years for the issuance of 142,424,186 shares of common stock as inducement to lend an aggregate principal amount of $470,000 upon closing the acquisition.

 

The Company is obligated under the terms of the Security Purchase Agreement to issue 250,000 shares of Series D Preferred Stock to Everett Dickson as consideration for surrendering 4,525,000, shares of Series A Preferred Stock.

 

The Company’s wholly owned subsidiary (ReachOut) acquired the operations, assets and liabilities of Innovative Network Designs, LLC during the year ended December 31, 2022. ReachOut recognized goodwill of $5,363,173. During the year ended December 31, 2023, ReachOut acquired the membership interest in RedGear LLC for cash of $1,249,248 and a promissory note for $1,314,787. The RedGear acquisition included recognition of $2,510,029 of goodwill. ReachOut follows ASC 350 20 – Goodwill. As such the goodwill asset is compared to its fair value at least annually.

 

ReachOut Technology Corp.

 

Reachout Technology, Corp. (“ReachOut”) is a corporation formed on February 13, 2020 under the laws of the State of Delaware. ReachOut provides cybersecurity and IT management solutions to businesses to protect their complete operating landscape and data secrets. ReachOut is headquartered in Chicago, Illinois.

 

From formation until the acquisition of Innovative Design Networks, LLC (“IND”) on September 2, 2022, ReachOut had no principal operations or revenue. ReachOut’s activities during this period primarily consisted of formation activities, acquisition research and preparations to raise capital.

 

Having acquired IND as wholly owned subsidiary on September 2, 2022, planned operations have commenced. IND is a New Jersey limited liability company and ReachOut acquired 100% of the member’s interest of IND in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the principals and 500,000 restricted shares of ReachOut’s common stock. The transactions were deemed to be a business combinations and applied acquisition accounting under ASC 805.

 

 

Innovative Network Designs LLC - New Jersey

 

IND Corporation (“IND”) provides information technology services. IND offers cybersecurity, risk assessment, network security, cloud performance, remote management, migration support, and monitoring solutions for businesses, as well as provides consulting and maintenance services. IND serves clients in the States of New York, New Jersey, and Pennsylvania. IND can either manage and support a client’s entire technology infrastructure, or compliment to the existing internal IT personnel. IND’s unique service model is designed to reduce client costs, increase client profits and mitigate client’s business risks.

 

ReachOut Corp. Acquisition - Red Gear LLC

 

The ReachOut entered into a Membership Interest Purchase Agreement on September 29, 2023 with RedGear, LLC, a Texas limited liability company and acquired 100% of the members’ interest of RedGear, LLC, in exchange for cash, a note payable and the assumption of certain liabilities of RedGear, LLC. The transaction was deemed to be a business combination and applied acquisition accounting under ASC 805. Upon closing (September 29, 2023) the total value of the consideration given for the purchase was $3,025,249 The purchase price was allocated to net tangible assets of $54,006 with the balance of $2,510,0291 allocated to goodwill, which is not amortized to expense. ReachOut hired an independent accounting firm to validate the Adjusted EBITDA (as defined in the closing documents). The results of the validation may result in a purchase price adjustment.

 

RedGear LLC - Texas

 

RedGear LLC (“RedGear”) provides professional technology services, structured cabling, equipment, and consulting in the Southwest US region. RedGear’s entire culture is built around supporting business infrastructures, while building relationships and delivering an exceptional customer service experience and always keeping customers’ best interest a top priority. RedGear has built its success by reputation, quality of work, professionalism, and always being there for clients every step of the way whenever needed. RedGear’s services, certifications, experience, and expertise cover the entire spectrum of Information Technology that no other regional technology service provider can match.

 

These are pre-acquisition descriptions. Post-acquisition, ReachOut Technology Corp. will re-brand its subsidiaries to ReachOut, add any unique revenue streams to ReachOut’s portfolio and standardize program offerrings.

 

Basis of Presentation

 

The preceding unaudited pro forma combined financial statements of Yuengling’s Ice Cream Corporation, (“YCRM or the Company”) and ReachOut Technology Corp. and its wholly owned subsidiaries ReachOut IND and RedGear LLC are provided to assist in the analysis of the financial aspects of the Consolidated Entities prepared on a non-generally accepted accounting principles basis.

 

The unaudited pro forma combined condensed balance sheets are based on YCRM financial statements filed with the SEC for the year ended October 31, 2023 and the unaudited financial statements balance sheet of ReachOut and its subsidiaries is based on the financial statements used in developing the December 31, 2023 consolidated financial statements.

 

Intercompany transactions between the combined entities are eliminated with the exception of a loan for $436,000 from YRCM to ReachOut that occurred after the fiscal year end of YCRM (October 31, 2023), but before the fiscal year end of ReachOut (December 31, 2023).

 

The unaudited pro forma combined condensed statements of operations are based on YCRM financial statements as filed with the SEC for the year ended October 31, 2023 and the unaudited financial statements of ReachOut and its subsidiary (IND) is based on the financial statements used in developing the December 31, 2023 consolidated financial statements. The RedGear LLC’s pro forma statement of operations is based on its full year or operations, whereas the consolidated financial statements of ReachOut will only include the results from the date of acquisition, September 29, to December 31, 2023. RedGear LLC earned $190,254 for the year ended December 31, 2023, whereas it earned approximately $95,000 during the period September 29, to December 31, 2023.

 

 

Key Line Items

 

Note 1 – In combination investment in RedGear on the books of ReachOut. is eliminated against the additional paid in capital and retained earnings on the books of RedGear as would be done in a consolidation. Additionally, $14,924 (Due from RedGear) on the books of ReachOut is eliminated against Due to ReachOut. on the books of RedGear LLC as would be done in consolidation.

 

Note 2 – Amounts due to related parties are largely informal sources of funding for each of the companies. Amounts due to Related Parties of $2,069,175, include $436,000 on the books of ReachOut as Due to YCRM which is not eliminated because the timing of the respective fiscal year ends as presented on the balance sheets. The advance to ReachOut by YCRM occurred after he closing of YCRM’s year end. Also included are: $32,410 in two notes on the books of YCRM to former officers, on the books of ReachOut are $132,225 due to the current CEO, $1,428,540 due to a company controlled by the current CEO and $40,000 due to a former owner of RedGear. The table below presents the respective amounts due as described herein:

 

Liability Description		YCRM				ReachOut IT Corp.				RedGear LLC				Total
Officer Compensation			15,000												15,000
Promissory Note			17,410												17,410
Due to Officer							132,225								132,225
Due to Related Party (entity controlled by CEO)							1,428,540								1,428,540
Due to YCRM							436,000								436,000
Line of Credit (officer of RedGear)											40,000				40,000
Total			32,410				1,996,765				40,000				2,069,175

 

Note 3 – $1,509,548, due to financial institutions include advances under a line of credit on the books of YCRM ($489,439) funded by Mid Penn Bank; and on the books of ReachOut are: a loan from FORA with a current balance of $906,500, a second line of credit $89,743 and a bank overdraft of $23,866.

 

Note 4 – On the books of ReachOut there are obligations which arose from purchasing IND and RedGear, universal life insurance for the sellers of IND totaling $2,700,000 of which $450,000 is current, a promissory note with a current balance of $660,362, of which $192,932 is current a note payable of $1,175,000. Also, on books of ReachOut. is a promissory note payable to the former owners of RedGear, for $1,314,787.

 

Membership Interest Purchase Agreements ReachOut Technology Corp.

 

Acquisition - Innovative Network Designs, LLC

 

ReachOut entered into a Membership Interest Purchase Agreement on August 1, 2022 with Innovative Network Designs, LLC, a New Jersey limited liability company and acquired 100% of the member’s interest of Innovative Network Designs, LLC, in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the two principals and 500,000 restricted shares of ReachOut’s common stock. The transaction was deemed to be a business combination and applied acquisition accounting under ASC 805. Upon closing (September 2, 2022) the total value of the consideration given for the purchase was $6,018,193. Included in the purchase consideration: is the commitment to pay universal life insurance policies for a total cash value of $3,150,000 over seven years ($382,500 annually), which ReachOut anticipates will be financed by a third party; a term promissory note (24 months with a ballon payment at maturity); a promissory note secured by a second priority lien on all ReachOut’s membership interests and other defined assets (amortizable); and 500,000 shares of ReachOut’s common stock, valued at $1.00 per share (the offering price of ReachOut’s regulation A offering documents). The purchase price was allocated to net tangible assets of $655,020 with the balance of $5,363,173 allocated to goodwill, which is not amortized to expense (see note 5). The assets and liabilities (with the exception of the lease related items) are short term and therefore book value approximates the fair value. Management believes that there is significant value in the customer list and the trade name, but has not done separate valuation analysis. An impairment analysis will consider each potential sub component (customer list, workforce in place etc.) of the Goodwill recorded in accordance with the relevant accounting standards at least annually and more frequently should there be any financial or economic issues suggesting an impairment.

 

 

Assets Acquired and Liabilities Assumed

 

Assets Acquired		Fair Value
Cash		$	613,077
Accounts Receivable			217,816
Prepaid Expenses			62,706
Right of Use Asset			109,456
Total Assets		$	1,003,055
Liabilities Assumed
Accounts Payable		$	49,936
Accrued Expenses			118,521
Sales Tax Payable			70,122
Lease Liabilities			109,457
Total Liabilities		$	348,036
Consideration Value
Cash		$	325,000
Convertible Note			1,175,000
Universal Life Insurance Commitment			3,150,000
Promissory Note			868,193
Common Stock			500,000
Total Purchase Price			6,018,193
Less, net asset value			655,020
Value of intangible assets		$	5,363,173

 

Acquisition - Red Gear LLC

 

ReachOut entered into a Membership Interest Purchase Agreement on September 29, 2023 with RedGear, LLC, a Texas limited liability company and acquired 100% of the member’s interest of RedGear, LLC, in exchange for cash, a note payable and the assumption of certain liabilities of RedGear, LLC. The transaction was deemed to be a business combination and ReachOut applied acquisition accounting under ASC 805. Upon closing (September 29, 2023) the total value of the consideration given for the purchase was $2,564,035 The purchase price was allocated to net tangible assets of $54,006 with the balance of $2,510,029 allocated to goodwill, which is not amortized to expense. ReachOut hired an independent accounting firm to validate the Adjusted EBITDA (as defined in the closing documents). The results of the validation may result in a purchase price adjustment. The fair value of certain assets and liabilities may result in an adjustment to the carrying value of the investment in RedGear, LLC. Management believes that there is significant value in the customer list and the trade name, but has not done separate valuation analysis. An impairment analysis will consider each potential sub component (customer list, workforce in place etc.) of the Goodwill recorded in accordance with the relevant accounting standards at least annually and more frequently should there be any financial or economic issues suggesting an impairment.

 

 

Assets Acquired and Liabilities Assumed

 

Assets Acquired		Fair Value
Cash		$	58,455
Accounts Receivable			108,318
Receivable, Related Party			126,643
Fixed Assets,			548,552
Right of Use Asset			485,874
Total Assets		$	1,327,842
Liabilities Assumed
Accounts payable		$	46,278
Accrued Expenses			57,856
Bank line of credit			50,000
Vehicle Loans Payable			469,539
SBA Loan			423,000
Lease Liabilities			485,874
Total Liabilities		$	1,532,547
Consideration Value
Cash		$	1,249,248
Promissory Note			1,314,787
Total Purchase Price			2,564,035
Net Assets			54,006
Value of intangible assets		$	2,510,029

 

 

Exhibit 23.1

 

 

CONSENT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

 

We consent to the inclusion in this Amendment #1 to the Registration Statement on Form S-1/A (File No. 333-277212) of our audit report dated February 15, 2024, with respect to the consolidated balance sheets of Yuengling’s Ice Cream Corporation as of October 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended October 31, 2023.

 

Our report relating to those financial statements includes an emphasis of matter paragraph regarding substantial doubt as to the Company’s ability to continue as a going concern.

 

We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

 

Spokane, Washington

May 29, 2024

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

S-1

…………..

(Form Type)

 

YUENGLING’S ICE CREAM CORPORATION

……………………………………………………..

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered and Carry Forward Securities

 

		Security Type		Security Class Title		Fee Calculation or Carry Forward Rule		Amount Registered				Proposed Maximum Offering Price Per Unit				Maximum Aggregate Offering Price(1)(2)				Fee Rate				Amount of Registration Fee(3)(4)
Fees to Be Paid		Equity		Common Stock		Rule 457(c)			600,000,000			$	0.005			$	3,000,000				0.00014760			$	442.80
		Total Offering Amounts														$	3,000,000							$	442.80
		Total Fees Previously Paid																							-
		Total Fee Offsets																							-
		Net Fee Due																						$	442.80

 

(1)	Represents the number of shares of common stock of the Registrant that we will initially put (“Put Shares”) to Trillium Partners, LP (“Trillium”), pursuant to an Equity Financing Agreement (the “Equity Financing Agreement”) between Trillium and the Registrant, effective on January 8, 2024. The Equity Financing Agreement permits the Registrant to “put” up to $3,000,000 in common stock to Trillium. In the event that the provisions of the Equity Financing Agreement require the Company to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act, the Company will file a new registration statement to register those additional shares.
(2)	This offering price has been estimated solely for the purpose of computing the dollar value of the Purchase Shares and the registration fee of the Purchase Shares in accordance with Rule 457(c) of the Securities Act on the basis of the closing price of the common stock of the Company as reported on OTCMarkets on February 20, 2024.
(3)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act.
(4)	A registration fee in the aggregate amount of $442.80.

 

v3.24.1.1.u2

Cover	12 Months Ended
	Oct. 31, 2023
Entity Addresses [Line Items]
Document Type	S-1/A
Amendment Flag	true
Amendment Description	Amendment No. 2
Entity Registrant Name	Yuengling’s Ice Cream Corporation
Entity Central Index Key	0001624517
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	8910 West 192nd Street
Entity Address, Address Line Two	Suite N
Entity Address, City or Town	Mokena
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60448
City Area Code	312
Local Phone Number	288-8000
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Business Contact [Member]
Entity Addresses [Line Items]
Entity Address, Address Line One	50 West Liberty Street
Entity Address, Address Line Two	Suite 880
Entity Address, City or Town	Reno
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89501
City Area Code	775
Local Phone Number	322 0626
Contact Personnel Name	Nevada Agency and Transfer Company

v3.24.1.1.u2

CONSOLIDATED BALANCE SHEETS - USD ($)	Oct. 31, 2023	Oct. 31, 2022
Current Assets:
Cash		$ 4,747
Accounts receivable	20
Inventory		56,212
Other receivable – related party		5,500
Total Current Assets	20	66,459
Other Assets:
Property and equipment, net		30,300
Total Assets	20	96,759
Current Liabilities:
Accounts payable	217,192	214,365
Accrued interest	144,759	49,447
Accrued compensation	15,000	41,000
Notes payable, related parties	17,410
Notes payable	184,296	119,121
Loans payable	589,092	595,092
Convertible note payable, net of $0 and $123,813 discount, respectively		14,255
Derivative liability		247,034
Line of credit	489,439	693,798
Total Current Liabilities	1,657,188	1,974,112
Total Liabilities	1,657,188	1,974,112
Commitments and contingencies
Temporary Equity:
Preferred stock to be issued	357,022	392,022
Total temporary equity	357,022	392,022
Stockholders’ Deficit:
Preferred stock, Series A; par value $0.0001; 10,000,000 shares authorized, 475,000 and 5,000,000 shares issued and outstanding, respectively	48	500
Common stock: $0.001 par value; 2,500,000,000 shares authorized; 332,488,710 and 14,828,595 shares issued and outstanding, respectively	332,489	14,827
Additional paid in capital	2,109,429	1,747,423
Accumulated deficit	(4,456,156)	(4,032,125)
Total Stockholders’ Deficit	(2,014,190)	(2,269,375)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT	$ 20	$ 96,759

v3.24.1.1.u2

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Oct. 31, 2023	Oct. 31, 2022
Statement of Financial Position [Abstract]
Net of discount	$ 0	$ 123,813
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	475,000	5,000,000
Preferred stock, shares outstanding	475,000	5,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	2,500,000,000	2,500,000,000
Common stock, shares issued	332,488,710	14,828,595
Common stock, shares outstanding	332,488,710	14,828,595

v3.24.1.1.u2

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Income Statement [Abstract]
Revenue	$ 20
Cost of goods sold	56,211
Gross margin	(56,191)
Operating Expenses:
General and administrative expenses	23,200	89,687
Bad debt expense		80,000
Officer compensation	7,000	63,000
Professional fees	79,522	107,583
Total operating expenses	109,722	340,270
Loss from operations	(165,913)	(340,270)
Other income (expense):
Interest expense	(336,465)	(108,677)
Interest income		174
Change in fair value of derivative	60,833	73,670
Loss on issuance of convertible notes	(38,477)	(186,886)
Loss on impairment of fixed asset	(30,300)
Gain on debt conversion	7,608
Gain on extinguishment of debt	78,683	80,637
Total other expense	(258,118)	(141,082)
Loss before provision for income tax	(424,031)	(481,352)
Provision for income tax
Net loss	$ (424,031)	$ (481,352)
Basic loss per share	$ (0.00)	$ (0.04)
Diluted loss per share	$ (0.00)	$ (0.04)
Basic weighted average shares	161,178,454	12,827,048
Diluted weighted average shares	161,178,454	12,827,048

v3.24.1.1.u2

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($)	Common Stock [Member]	Preferred Stock [Member]	Series A Preferred Stocks [Member]	Additional Paid-in Capital [Member]	Common Stock To Be Issued [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Oct. 31, 2021	$ 10,235	$ 500		$ 1,392,994	$ 165,000	$ (3,550,773)	$ (1,982,044)
Beginning balance, shares at Oct. 31, 2021	10,235,262	5,000,000
Stock issued for cash	$ 3,292			349,229	(165,000)		187,521
Stock issued for cash, shares	3,293,333
Stock issued for conversion of preferred	$ 1,300			5,200			6,500
Stock issued for conversion of preferred, shares	1,300,000
Net Loss						(481,352)	(481,352)
Ending balance, value at Oct. 31, 2022	$ 14,827	$ 500	$ 500	1,747,423		(4,032,125)	(2,269,375)
Ending balance, shares at Oct. 31, 2022	14,828,595	5,000,000	5,000,000
Surrender and cancellation of Series A Preferred Stock			$ (452)	452
Surrender and cancellation of Series A Preferred Stock, Shares			(4,525,000)
Stock issued for conversion of debt	$ 264,662			142,194			406,856
Stock issued for conversion of debt, shares	264,660,115
Stock issued for conversion of temporary equity	$ 50,000			(15,000)			35,000
Stock issued for conversion of temporary equity, shares	50,000,000
Stock to be issued for services	$ 3,000			30,000			$ 33,000
Stock to be issued for services, shares	3,000,000						3,000,000
Capital deemed as contributed				204,360			$ 204,360
Net Loss						(424,031)	(424,031)
Ending balance, value at Oct. 31, 2023	$ 332,489		$ 48	$ 2,109,430		$ (4,456,156)	$ (2,014,190)
Ending balance, shares at Oct. 31, 2023	332,488,710		475,000

v3.24.1.1.u2

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Cash flows from operating activities:
Net loss	$ (424,031)	$ (481,352)
Adjustments to reconcile net loss to net cash used in operating activities:
Default penalty	17,100
Debt discount amortization	188,619	27,978
Gain on extinguishment of debt	(78,683)	(80,637)
Gain on debt conversion	(7,608)
Loss on fixed asset impairment	30,300
Loss on inventory impairment	56,190
Loss on issuance of convertible debt	38,496	186,886
Change in fair value of derivative	(60,833)	(73,670)
Bad debt expense		80,000
Changes in assets and liabilities:
Accounts receivable	(20)
Inventory	21	(5,500)
Accounts payable	2,867	18,543
Accrued compensation	44,616	41,000
Accrued liabilities	72,134	18,514
Net cash used in operating activities	(120,832)	(268,238)
Cash flows from investing activities:
Issuance of note receivable		(80,000)
Net cash used in investing activities		(80,000)
Cash flows from financing activities:
Net (payments) proceeds from the sale of preferred stock		(39,328)
Sale of common stock		187,520
Payment on LOC		(106,201)
Proceeds from notes payable	85,175
Proceeds from convertible notes payable	55,000	113,500
Repayment of convertible debt	(35,500)
Payments on notes payable	(6,000)	(153,411)
Proceeds – related party loans	17,410
Payments – related party loans
Net cash provided by financing activities	116,085	2,080
Net change in cash	(4,747)	(346,158)
Cash, beginning of year	4,747	350,905
Cash, end of year		4,747
Cash paid during the period for:
Interest		62,823
Income taxes
Supplemental Disclosure of Non-Cash Activity:
Conversion of principal and interest into common stock	330,830
Issuance of common stock for conversion of temporary equity	35,000
Deemed capital contribution to extinguish debt	$ 204,360

v3.24.1.1.u2

ORGANIZATION AND BUSINESS	12 Months Ended
	Oct. 31, 2023
Accounting Policies [Abstract]
ORGANIZATION AND BUSINESS	NOTE 1 – ORGANIZATION AND BUSINESS   Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” “we,” “us,” or the “Company”) was incorporated in Nevada on April 19, 2013, under the name “Aureus Incorporated.” We were initially organized to develop and explore mineral properties in the state of Nevada. Effective December 15, 2017, we changed our name to “Hohme, Inc.,” and, effective February 7, 2019, we changed our name to “Aureus, Inc. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. We are currently active in the state of Nevada.   In November, 2023, after the close of the 2023 fiscal year, YCRM completed its acquisition of ReachOut Technology Corp. (“ReachOut”). ReachOut is a Managed Service Provider (MSP) that provides cybersecurity and IT services to Small to Medium Sized Businesses (SMBs). Management is highly experiences with business operation as well as acquisition and integration. After the closing of the ReachOut transaction, the Company agreed to assign the ice cream assets to Mid Penn Bank in return for the cancellation of the bank debt. The Company also ceased its Aureus Micro Markets operations at the time the ReachOut agreement was signed.   ReachOut is on a relentless pursuit to revolutionize the Cybersecurity & IT Service Provider landscape for SMBs, with the goal of creating the first nationwide brand in its sector. The company is leveling the playing field, ensuring that businesses, regardless of size or location, have access to top-tier security solutions.   Founded in 2010 by Rick Jordan to fill a critical gap in the IT services market, ReachOut is evolving into a formidable nationwide cybersecurity entity. The Company’s innovative approach and resolute commitment to superior solutions have established ReachOut as industry trailblazers, redefining standards and crafting extraordinary client experiences. ReachOut’s, clients are more than just clients; they are integral members of a movement that is reshaping the future of cybersecurity.

v3.24.1.1.u2

SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Oct. 31, 2023
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES   Basis of presentation   The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).   Use of Estimates   The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for bad debt on accounts receivable, reserves on inventory, valuation of intangible assets for impairment analysis, valuation of the lease liability and related right-of-use asset, valuation of stock-based compensation, valuation of redeemable preferred stock and the valuation allowance on deferred tax assets.   Principles of Consolidation   The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary YIC Acquisitions Corp. All material intercompany transactions and balances have been eliminated on consolidation.   Concentrations of Credit Risk   The Company maintains cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors the banking relationships and consequently have not experienced any losses in our accounts. The Company believes it is not exposed to any significant credit risk on cash. Cash Equivalents   The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended October 31, 2023 or 2022.   Restricted Cash   The Company no longer has an obligation to transfer $50,000 to Mid Penn Bank as security pursuant to the Agreement of Sale and Security Agreement between Mid Penn Bank and Yuengling’s Ice Cream Corp., last amended July 31, 2023. On January 9, 2024, the Company signed an agreement with Mid Penn Bank assigning the ice cream-related assets to Mid Penn Bank in return for Mid Penn Bank cancelling the two bank loans with Yuengling’s Ice Cream Corporation.   Reclassifications   Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the year ended October 31, 2023.   Deferred Financing Costs   All unamortized deferred financing costs related to the Company’s borrowings are presented in the consolidated balance sheets as a direct deduction from the related debt. Amortization of these costs is reported as interest and financing costs included in the consolidated statement of operations.   Inventory   Inventory is stated at the lower of cost and net realizable value on a first-in, first-out basis. Cost is principally determined using the last-in, first-out (LIFO) method. The Company periodically assesses if any of the inventory has expired or if the value has fallen below cost. When this occurs, the Company recognizes an expense for inventory write down. Total inventories at October 31, 2023 and 2022 were $0 and $56,212, respectively. Inventory consists of lids for pint size containers. During the year ended October 31, 2023, $56,190 of expired inventory was written off.   Property and Equipment   Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. During the year ended October 31, 2023, $30,300 of property related to an abandoned business venture were written off.     Net Loss Per Share   Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings (loss) of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution. As of October 31, 2023, there are obligations to issued Series A Preferred Stock which are convertible into 1,020,062,029 shares of common stock. The total potentially dilutive shares calculated is 1,020,062,029. It should be noted that contractually the limitations on obligation to issue Series A Preferred Stock that limit the number of shares converted to either 9.99% of the then outstanding shares. The Company’s Chairman of the Board of Directors holds a control block of Series A Preferred Stock which confers upon him a majority vote in all Company matters including authorization of additional common shares or to reverse split the stock. As of October 31, 2023, and 2022, potentially dilutive securities consisted of the following:   Schedule of anti-dilutive shares                     October 31, 2023     October 31, 2022   Series A Preferred Stock Payable     1,020,062,029       89,095,509   Third party convertible debt     -       17,607,000   Total     1,020,062,029       106,702,909     Stock-based Compensation   In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. We adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on our consolidated financial statements.   Convertible Notes with Fixed Rate Conversion Options   The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”.   Derivative Financial Instruments   The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.   Fair Value Measurements   The Company follows the FASB Fair Value Measurements standard, as they apply to its financial instruments. This standard defines fair value, outlines a framework for measuring fair value, and details the required disclosures about fair value measurements.   Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy in determining the fair value of an asset or liability. The fair value hierarchy has three levels of inputs, both observable and unobservable. Level 1 inputs include quoted market prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data. The standard requires the utilization of the lowest possible level of input to determine fair value and carrying amounts of current liabilities approximate fair value due to their short-term nature.   The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.   The Company’s non-financial assets, such as property and equipment, are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs.   Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.   Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.   Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates.   Level 3: Level 3 inputs are unobservable inputs.   The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.   The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable. The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values.   The carrying amounts of Notes Payable approximate the fair value as the notes bear interest rates that are consistent with current market rates.   The table below classify the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022.   2022:   Schedule of liabilities measured at fair value                                 Description   Level 1     Level 2     Level 3     Total Gains   Derivative   $ -     $ -     $ 247,034     $ 73,670   Total   $ -     $ -     $ 247,034     $ 73,670     Income Taxes   Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term.   Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of October 31, 2023, and 2022, no liability for unrecognized tax benefits was required to be reported.   Revenue recognition   Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.   The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. YIC Acquisitions Corp (Yuengling’s Ice Cream) generates its revenue through the sale of pints to retailers, through the online sales of pints directly to consumers, and through the sale of 3gallon tubs to food service establishments, such as restaurants, stadiums, and universities. Revenue is recognized at the time of delivery or, for online sales, at the time of the transaction. Retailers and food service customers’ terms are generally 15 or 30 days. Online sales are paid via credit card and funds are generally received within 30 days.   Recent Accounting Pronouncements   The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

v3.24.1.1.u2

GOING CONCERN	12 Months Ended
	Oct. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	NOTE 3 – GOING CONCERN   The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $4,456,156, had a net loss of $424,031, and net cash used in operating activities of $120,832 for the year ended October 31, 2023. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

v3.24.1.1.u2

PROPERTY & EQUIPMENT	12 Months Ended
	Oct. 31, 2023
Property, Plant and Equipment [Abstract]
PROPERTY & EQUIPMENT	NOTE 4 – PROPERTY & EQUIPMENT   Property and Equipment are first recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows between three and five years.   Long lived assets, including property and equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.   Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.   Property and equipment stated at cost, less accumulated depreciation consisted of the following:   Schedule of property and equipment                     October 31, 2023     October 31, 2022   Property and equipment   $ -     $ 30,300   Less: accumulated depreciation     -       -   Property and equipment, net   $ -     $ 30,300     Property and equipment consisted of shelving and racks purchased for the Aureus Micro Markets business, which has been put on hold. Since the Company has yet to place the fixed assets into service management determined that they should be fully impaired. The Company recognized impairment expense of $30,300 for the year ended October 31, 2023.

v3.24.1.1.u2

LOAN RECEIVABLE	12 Months Ended
	Oct. 31, 2023
Loan Receivable
LOAN RECEIVABLE	NOTE 5 – LOAN RECEIVABLE   On May 17, 2022, the Company and Revolution Desserts, LLC (“Revolution”) terminated the Definitive Agreement entered into on April 30, 2022. The primary reason for the termination is the regulatory delays in qualifying the Company’s Reg 1-A. Per the terms of the original agreement, the Company has advanced Revolution $80,000, which has been accounted for as a note receivable. No loan terms have been established as of October 31, 2022. Due to the uncertainty of the collection of this receivable the Company has written the receivable off and recognized $80,000 of bad debt expense, during the year ended October 31, 2022.

v3.24.1.1.u2

NOTES PAYABLE	12 Months Ended
	Oct. 31, 2023
Debt Disclosure [Abstract]
NOTES PAYABLE	NOTE 6 – NOTES PAYABLE   Schedule of notes payable                 October 31, 2023     October 31, 2022   Note principal   $ 184,296     $ 119,121     On September 9, 2015, the Company issued to Backenald Corp. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing on the first anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. As of October 31, 2023, accrued interest amounted to $15,151.   On February 23, 2017, the Company issued Travel Data Solutions a promissory note in the principal amount of $17,500, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $12,180.   On March 27, 2017, the Company issued Craigstone Ltd. A promissory note in the principal amount of $12,465, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $8,265.   On May 16, 2017, the Company issued Travel Data Solutions a promissory note in the principal amount of $4,500, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $2,905.   On July 28, 2017, the Company issued Backenald Trading Ltd. A promissory note in the principal amount of $20,000, bearing interest at the rate of 8% per annum, compounded annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2023, accrued interest amounted to $12,405.   On January 24, 2020, the Company issued a third party a promissory note in the principal amount of $15,000, bearing interest at the rate of 10% per annum, and maturing on April 30, 2020. As of October 31, 2023, there is $0 and $1,155, principal and interest, respectively, due on this note.   On March 24, 2020, the Company issued a third party a promissory note in the principal amount of $20,000, bearing interest at the rate of 10% per annum, and maturing on May 30, 2020. As of October 31, 2023, following forgiveness of $5,000 and $6,131 of principal and interest respectively the balance due on this note for principal and interest is $0 and $0, respectively.   On June 1, 2023, the Company issued a third party a promissory note in the principal amount of $40,675, bearing interest at the rate of 5% per annum, and maturing on June 1, 2024. During the three months ending October 31, 2023, an additional $15,000 was advanced to the Company bringing the total principal due to $55,675, ss of October 31, 2023.   The Company was also indebted to a third party for a total of $24,656, for a non-interest-bearing note. This note was in default since December 30, 2015.

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LOANS PAYABLE	12 Months Ended
	Oct. 31, 2023
Debt Disclosure [Abstract]
LOANS PAYABLE	NOTE 7 – LOANS PAYABLE   The Company has an SBA loan with monthly payments that matures on March 13, 2026. The balance due on this loan as of October 31, 2023 and 2022, is $589,092 and $595,092, respectively. As of July 31, 2023, the interest rate on this loan has increased to 10.25% from its original 5.25%. (see note 15)   The Company has a line of credit requiring monthly payments. On December 24, 2021, $106,201 from a CD was applied to the Line of Credit balance. On April 5, 2023, a property pledged as collateral by David Yuengling was taken over by Mid Penn Bank. The property’s appraised value of $204,360 was applied to the principal of the Line of Credit and recognized as gain on extinguishment of debt. The balance due on this loan as of October 31, 2023 and October 31, 2022, is $489,439 and $693,799, respectively. As of October 31, 2023, the interest rate on this loan has increased to 9.5% from its original 4.25%. (see note 15)

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CONVERTIBLE NOTE PAYABLE	12 Months Ended
	Oct. 31, 2023
Debt Disclosure [Abstract]
CONVERTIBLE NOTE PAYABLE	NOTE 8 – CONVERTIBLE NOTE PAYABLE   On March 2, 2022, the Company issued a convertible promissory note to Quick Capital, LLC in the amount of $87,222. The company received $73,500, after a 10% OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $13,722 was recorded as a debt discount. The note is convertible into shares of common stock at $0.0005 per share. On October 21, 2022, the total principal and accrued interest of $93,818, was exchanged for a new convertible note. The new note bears interest at 12% and matures on March 21, 2023. The note is convertible into shares of common stock at 65% of the lowest trade price during the ten days prior to the date of conversion. During the year ended October 31, 2023, Quick Capital converted $93,818 and $5,457 of principal and interest, respectively, into 84,358,767 shares of common stock.   On September 7, 2022, the Company issued a convertible promissory note to 1800 Diagonal Lending LLC in the amount of $44,250. The company received $40,000, after $4,250 of OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $4,250 was recorded as a debt discount. The note is convertible into shares of common stock at 63% of the average of the two lowest trades during the fifteen days prior to the date of conversion. During the year ended October 31, 2023, 1800 Diagonal converted $44,250 and $2,655 of principal and interest, respectively, into 43,165,536 shares of common stock.   On December 8, 2022, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC in the amount of $39,250. The Company received $35,000 with $4,250 retained for fees. The difference of $4,250 was recorded as a debt discount. The Note bears interest at 12% and matures in one year. The note is convertible into shares of common stock at 63% of the average of the two lowest trades during the fifteen days prior to the date of conversion. During the year ended October 31, 2023, 1800 Diagonal Lending LLC converted $42,850 of principal (including default penalty) into 100,691,857 shares of common stock.   On September 1, 2023, 1800 Diagonal Lending LLC accepted a payment of $13,500, settling the December 13, 2022, Convertible Promissory Note in full, including a $10,640 default penalty. The funds for the payment to 1800 Diagonal were advanced to the Company by Mr. Dickson.   On February 3, 2023, the Company issued a convertible promissory note to Quick Capital, LLC in the amount of $25,556. The company received $20,000, after $5,556 of OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $5,556 was recorded as a debt discount. The note is convertible into shares of common stock at 65% of the lowest trade price during the ten days prior to the date of conversion. During the year ended October 31, 2023, Quick Capital LLC, converted $9,565 and $1,700 of principal and interest, respectively, into 36,443,955 shares of common stock.   On September 1, 2023, Quick Capital LLC accepted a payment of $22,000 settling the February 3, 2023, Convertible Promissory Note in full. The funds for the payment to Quick Capital were advanced to the Company by Pickle Jar Holdings Inc.   The following table summarizes the convertible notes outstanding as of October 31, 2023:   Schedule of convertible notes and related activity                                               Note Holder   Date   Maturity Date   Interest     Balance October 31, 2022     Additions     Conversions/ Repayments     Balance October 31, 2023   Quick Capital, LLC   10/21/2022   3/21/2023   12%     $ 93,818     $ -     $ (93,818 )   $ -   1800 Diagonal Lending LLC   9/7/2022   9/7/2023   12%       44,250       -       (44,250 )     -   1800 Diagonal Lending LLC   12/8/2022   12/8/2023   12%       -       56,350       (56,350 )     -   Quick Capital, LLC   2/3/2023   2/3/2024   12%       -       25,556       (25,556 )     -   Total                 $ 138,068     $ 81,906     $ (219,974 )   $ -   Less Debt Discount                   (123,813 )             -       -                     $ 14,255             $ -     $ -     A summary of the activity of the derivative liability for the notes above is as follows:   Schedule of derivative liability         Balance at October 31, 2021     -   Increase to derivative due to new issuances     320,704   Decrease to derivative due to repayments     -   Derivative loss due to mark to market adjustment     (73,670 ) Balance at October 31, 2022   $ 247,034   Increase to derivative due to new issuances     93,496   Decrease to derivative due to conversions     (230,871 ) Decrease to derivative due to repayments     (35,095 ) Derivative gain due to mark to market adjustment     (74,564 ) Balance at October 31, 2023   $ -       A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy for the year ended October 31, 2023 is as follows:   Schedule of derivative liabilities at fair value                 Inputs   October 31, 2023     Initial Valuation   Stock price     $0.0012       $0.01 - 0.038   Conversion price     $0.0006 - 0.0007       $0.0025 - 0.0069   Volatility (annual)     230.13% - 240.8 %     222.7% - 326.6%   Risk-free rate     5.3 %     3.6% - 4.8%   Dividend rate     -       -   Years to maturity     0 - 0.85       0.41 - 1

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RELATED PARTY TRANSACTIONS	12 Months Ended
	Oct. 31, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9 – RELATED PARTY TRANSACTIONS   In June 2022, Everett Dickson advanced the Company $6,000 for a general operating expense. The $6,000 was repaid the following month.   During the year ended October 31, 2022, a $5,500 payment was mistakenly made to a company controlled by Everett Dickson. The amount is to be repaid. This amount was applied to the note payable during the year ended October 31, 2023.Pickle Jar the company benefiting from this error, advanced the Company $22,000, on September 1, 2023. The amount due to the Company from Pickle Jar was offset against this new advance leaving a note payable to Pickle Jar of $16,500. The funds advanced were used by the Company to repay the balance due on a convertible note held by Quick Capital, LLC. (see note 8)   On August 17, 2023, Everett Dickson paid $1,910, to a consultant of the Company’s. The transaction is considered a loan advance and is evidenced by a note payable (below) issued to Everett Dickson.   On September 1, 2023, Everett Dickson directly paid $13,500 to Diagonal Lending LLC on behalf of the Company paying the amount of the agreed settlement extinguishing the balance due on the convertible note due. The transaction is considered a loan advance and is evidenced by a note payable (below) issued to Everett Dickson.   On September 1, 2023, Everett Dickson deposited $2,000, into the Company’s bank accounts to fund payments. The transaction is considered a loan advance and is evidenced by a note payable issued to Everett Dickson. As of October 31, 2023 the note balance due to Everett Dickson is $17,410, is due upon demand and does not bear interest.   On January 14, 2023, the Company granted 30 million restricted common shares to Robert C. Bohorad. The Company signed a letter of intent with Mr. Charles Green and Mr. Bohorad on October 26, 2022, where Mr. Bohorad will become Chief Operating Officer and Chief Financial Officer. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $0.006, the closing stock price on the date of grant, for total non-cash compensation of $180,000. The amount was to be recognized over a one-year period. On September 15, 2023, Robert C. Bohorad returned the 30 million restricted common shares to the Company.   During the year ended October 31, 2023 and 2022, the Company paid Robert C. Bohorad, President and CEO, $7,000 and $22,000 for compensation, respectively. During the year ended October 31, 2023, Mr. Bohorad forgave $53,000 of accrued compensation. The Company and Mr. Bohorad have agreed that the balance due of $30,000, will be paid by March 31, 2024. See Note 15.   On October 30, 2023, the Company awarded Mr. Bohorad 3,000,000 shares of restricted common stock to facilitate the preparation of financial statements and in the transition of the Company to new ownership. (see note 15)

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TEMPORARY EQUITY	12 Months Ended
	Oct. 31, 2023
Temporary Equity
TEMPORARY EQUITY	NOTE 10 – TEMPORARY EQUITY   Commitment to Purchase Series A Convertible Preferred Stock   On January 18, 2019, The Company entered into a Series A Preferred Stock Purchase Agreement with Device Corp. (“the Agreement”), of up to $250,000. On May 1, 2023, a second stock purchase agreement was executed by Device Corp. for $250,000. Under the terms of the Agreement the Series A Preferred Stock is Convertible into shares of common stock at a 50% discount to the lowest close price of the common stock for the prior thirty trading days. Under the Agreement Device Corp. has advanced the Company approximately $562,000, of which approximately $170,000 had been repaid by October 31, 2022, leaving a balance due of $392,000.   As of October 31, 2023, the Company has preferred stock to be issued in the amount of $357,022, following conversions to 50,000,000 common shares. Based on the terms of the Agreement as of October 31, 2023, the preferred Series A can be converted at $0.00035 per share, into 1,020,062,029 shares of common stock. As of the balance sheet date and the date of this report, these shares have not been issued to the Purchaser. S99-3A(2) ASR 268 requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the control of the issuer. Given that there is an unknown number of preferred shares to be issued and the preferred shares are convertible at the option of the holder, the Company determined that the shares to be issued shall be treated as temporary equity.   Series B Preferred Stock   On August 25, 2023, the Company Amended its Articles of Incorporation, to designate 5,000,000 of the Authorized preferred stock, par value $0.0001, as Series B Preferred Stock (“Series B”). The Series B is convertible into shares of common stock at the average price of the previous five trading days. The Series B shares are not entitled to dividends and have no voting rights.   Following the amendment above the Series B preferred stock is convertible into shares of common stock at the option of the holder at a 50% discount to the average price for the five trading days prior to conversion. As of the balance sheet date and the date of this report, these shares have not been issued to the Purchaser. S99-3A(2) ASR 268 requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the control of the issuer. Given that there is an unknown number of preferred shares to be issued and the preferred shares are convertible at the option of the holder, the Company determined that the shares to be issued shall be treated as temporary equity.   On August 25, 2023, the Company and Device Corp amended the January 18, 2019, and the May 1, 2023 Series A Preferred Stock Purchase Agreements, so that any purchased Series A preferred stock is now Series B preferred stock.

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COMMON STOCK	12 Months Ended
	Oct. 31, 2023
Equity [Abstract]
COMMON STOCK	NOTE 11 – COMMON STOCK   On October 31, 2023 and 2022, the Company had 2,500,000,000 shares of common stock authorized. There were 332,488,710 and 14,828,595 common shares of stock outstanding on October 31, 2023 and 2022, respectively.   During the year ended October 31, 2023, Quick Capital LLC converted $102,087 and $7,157 of principal and interest, respectively, into 120,802,722 shares of common stock.   During the year ended October 31 2023, 1800 Diagonal Lending LLC, converted $87,100 and $2,655 of principal and interest, respectively, into 143,857,393 shares of common stock.   On January 14, 2023, the Company granted 30 million restricted common shares each to Charles Green and Robert C. Bohorad The Company signed a letter of intent with Mr. Green and Mr. Bohorad on October 26, 2022, where Mr. Green will join the company as President and CEO. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $0.006, the closing stock price on the date of grant, for total non-cash compensation of $180,000. On September 15, 2023, Robert C. Bohorad and Charles Green returned a combined 60 million restricted common shares to the Company. These original issuance charges were reversed leaving no expense, or prepaid expense the common stock and additional paid in capital were charged as the offset.   During the year ended October 31, 2023, Device Corp converted $35,000 of the amount due in Series A preferred stock to 50,000,000 shares of common stock.   On October 30, 2023, the Company issued 3,000,000 shares of restricted common stock for services. (see note 9)   On August 5, 2022, the Company effectuated a reverse stock split at a ratio of 1-for-150 common shares. All shares throughout these financial statements have been retroactively restated to reflect the reverse split.   On March 1, 2022, the Company increased its authorized common stock from 2,000,000,000 (2 billion) to 2,500,000,000 (2.5 billion) shares.   On January 21, 2022, the Company increased its authorized common stock from 1,750,000,000 (1.75 billion) to 2,000,000,000 (2 billion) shares.   During the year ended October 31, 2022, the Company sold 2,560,000 shares of common stock, for total cash proceeds of $187,520.   During the year ended October 31, 2022, Device Corp converted $6,500 of the amount due in Series A preferred stock to 1,300,000 shares of common stock.

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PREFERRED STOCK	12 Months Ended
	Oct. 31, 2023
Equity [Abstract]
PREFERRED STOCK	NOTE 12 – PREFERRED STOCK   Series A Preferred Stock   The Company has designated Ten Million (10,000,000) shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $0.0001 per share. The holders of the Series A Convertible Preferred Stock are not entitled to receive any dividends.   Except as otherwise required by law or by the Articles of Incorporation and except as set forth below, the outstanding shares of Series A Convertible Preferred Stock shall vote together with the shares of Common Stock and other voting securities of the Corporation as a single class and, regardless of the number of shares of Series A Convertible Preferred Stock outstanding and as long as at least one of such shares of Series A Convertible Preferred Stock is outstanding shall represent Sixty Six and Two Thirds Percent (66 2/3%) of all votes entitled to be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders. Each outstanding share of the Series A Convertible Preferred Stock shall represent its proportionate share of the 66 2/3% which is allocated to the outstanding shares of Series A Convertible Preferred Stock. The Certificate of Designation was amended on September 12, 2023, among other changes the Series A Convertible Preferred Stock must be held for one year following issuance or reissuance prior to conversion.   The entirety of the shares of Series A Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into two thirds of the after conversion outstanding fully paid and non-assessable shares of Common Stock. Each individual share of Series A Convertible Preferred Stock shall be convertible into Common Stock at a ratio determined by dividing the number of shares of Series A Convertible Stock to be converted by the number of shares of outstanding pre-conversion Series A Convertible Preferred Stock. Such initial Conversion Ratio, and the rate at which shares of Series A Convertible Preferred Stock may be converted into shares of Common Stock. On August 25, 2023, Everett Dickson, Chairman of the Board, agreed to return 4,525,000 shares of Series A preferred Stock to the Company. The shares will be retired by the Company. His remaining 475,000 shares are to be sold to Mr. Richard Jordan (see note 15).

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COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Oct. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 13 – COMMITMENTS AND CONTINGENCIES   On January 20, 2022, the Company entered into a Service Agreement with Desmond Partners, LLC for consulting services to be provided. The agreement is effective on February 1, 2022 for a term of three months. Per the terms of the agreement the consultant will receive a fee of $10,000 per month and 5% equity in the Company. The initial term has expired with no issuance of equity to date. The Company needs to file a written termination to satisfy the agreement terms. (see note 15).   An individual has asserted that the Company owes approximately $500,000, for a promissory note issued by a company that was never owned by the public company nor its subsidiary. Legal counsel has reviewed the claim and found no relationship to this debt nor any assumptions of the debt by the Company. While there is risk that there may be litigation over this claim, the Company believes that it is more unlikely that the claim would prevail.

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INCOME TAX	12 Months Ended
	Oct. 31, 2023
Income Tax Disclosure [Abstract]
INCOME TAX	NOTE 14 – INCOME TAX   The Company recognizes deferred tax assets and liabilities for the tax effects of differences between the financial statement and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.   As of October 31, 2023, the Company has net operating loss carryforwards of approximately $1,263,000 to reduce future taxable income. A valuation allowance for the entire amount of deferred tax assets has been established as of October 31, 2023 and 2022. Additionally, due to the expected change in control of the Company, the net operating loss carryforwards will be fully impaired. See note 15   A reconciliation of the provision for income taxes at the federal and state statutory rates of 21% and 5.75% respectively to the Company’s provision for income tax is as follows:   Schedule of provision for income tax                     Year Ended October 31, 2023     Year Ended October 31, 2022   U.S. Federal (tax benefit) provision at statutory rate   $ (16,295 )   $ (101,100 ) State (tax benefit) income taxes, net of federal benefit     (4,462 )     (24,100 ) Permanent differences     (66,028 )     (11,900 ) Temporary differences     -       (10,700 ) Changes in valuation allowance     86,785       147,800   Total   $ -     $ -     Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities for the periods presented:   Schedule of deferred tax amount net                     October 31, 2023     October 31, 2022   Deferred Tax Assets                 Net operating losses     337,900       244,100   Total deferred tax assets     337,900       10,700   Valuation allowance     (337,900 )     (233,400 ) Net deferred tax assets     -       -                     Deferred Tax Liabilities                 Total deferred tax liabilities     -       -   Net deferred tax   $ -     $ -       The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of the deferred tax assets in the U.S. can be realized as of October 31, 2023 and 2022, accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.   The Company is not currently under any international or any United States federal, state and local income tax examinations for any taxable years. All of the Company’s net operating losses are subject to tax authority adjustment upon examination.

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SUBSEQUENT EVENTS	12 Months Ended
	Oct. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 15 – SUBSEQUENT EVENTS   In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the following.   Termination of Agreements to Acquire Pickle Jar Holdings Inc.   On August 23, 2023, the Company entered into a binding Letter of Intent (LOI) with Pickle Jar Holdings Inc. The initial term of the LOI runs through September 30, 2023, allowing for the parties to complete their due diligence requirement, with the intent of entering into a definitive agreement prior to September 30, 2023. On November 6, 2023, the parties to the agreement have mutually agreed to terminate the MOU and LOI and to fully release all parties to the agreement.   Reverse Merger/Acquisition of ReachOut Technology Corp.   On November 9,2023, the Company closed the Share Exchange and Control Block Transfer Agreements with ReachOut Technology Corp. (“ReachOut”) whereby 100% of the membership interests of ReachOut were exchanged for a Series C Preferred Stock which are convertible into 87.5% of the total issued and outstanding shares of common stock of the Company (fully diluted basis) as determined at the consummation of the acquisition.   The Share Exchange is intended to constitute a reorganization with the meaning of Section 368 of the Internal Revenue Code of 1986 (as amended), as such existing tax benefits will be fully impaired.   As a result of the transaction, ReachOut became a subsidiary of the Company.   The Company evaluated the substance of the merger transaction and found it met the criteria for the accounting and reporting treatment of a reverse acquisition under ASC 805 (Business Combinations)-40-45 (Reverse Acquisition and Other Presentation Matters) and accordingly will consolidate the operations of ReachOut and the Company and the financial condition from the closing date of the transaction. The historic results of operations will reflect those of ReachOut. As such, ReachOut is treated as the acquirer while the Company is treated as the acquired entity for accounting and financial reporting purposes. The final accounting for the acquisition is still underway with the audit of the acquired company expected to be completed by mid-February.   Under reverse merger accounting, the comparative historical financial statements of the Company, as the legal acquirer, are those of the accounting acquirer, ReachOut, the Company’s financial statements prior to the closing of the reverse acquisition; reflect only the business of ReachOut and its subsidiaries.   Under the terms of the Control Block Transfer Agreement, Everett Dickson (former CEO) is to sell all his remaining Series A Preferred Stock to Richard Jordan (new CEO) for $140,000.   Following the closing of the agreements, Robert Bohorad and Everett Dickson resigned their positions as CEO and Chairman of the Board of Directors, respectively and Richard Jordan was appointed to those positions. The Company has authorized 8,750,000 Series C Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $3.00 per share, earns a 2% dividend on the stated value, which cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 87.5% of the outstanding common stock for a period of twenty-four months from the date of issuance.   The Company is obligated under the terms of the Share Exchange Agreement to issue 8,750,000 shares of Series C Preferred Stock to the owners of ReachOut. in exchange for 100% of the shares of ReachOut upon closing the aforementioned acquisition.   The Company has authorized 1,250,000 Series D Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $1.00 per share, earns a 2% dividend on the stated value, which cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 12.5% of the outstanding common stock for a period of twenty-four months from the date of issuance.   The Company is obligated under the terms of the Security Purchase Agreement to issue 1,000,000 shares of Series D Preferred Stock along with warrants having an exercise price of $0.0003 and a term of seven years for the issuance of 142,424,186 shares of common stock as inducement to lend an aggregate principal amount of $470,000 upon closing the aforementioned acquisition.   The Company is obligated under the terms of the Security Purchase Agreement to issue 250,000 shares of Series D Preferred Stock to Everett Dickson as consideration for surrendering 4,525,000, shares of Series A Preferred Stock (see note 12).   Securities Issued   In November 2023, YCRM issued a convertible note payable, warrants to purchase to the Company’s common stock and Series D Preferred Shares to Trillium Partners, L.P. The convertible note has principal of $470,000, bears interest at 12%, matures on May 31, 2025 and may be converted to common shares at the lower of $0.0003 or 50% of the lowest traded price during the thirty days prior to conversion. The warrants allow the holder to purchase 142,424,186 shares of common stock for $0.0003 (subject to certain specified adjustments) for a period of seven years from the date of issuance. The issuance of 1,000,000 Series D Preferred shares of stock, is entitled to 2% cumulative dividend based on the stated value ($1.00), has voting rights (based upon common stock equivalent shares) and are convertible into common stock at a percentage (10%) of the issued and outstanding.   On January 11, 2024, YCRM issued a convertible note payable and warrants to purchase to the Company’s common stock to Trillium Partners, L.P. The convertible note has principal of $539,000, bears interest at 12%, matures on May 31, 2025 and may be converted to common shares at the lower of $0.0003 or 50% of the lowest traded price during the thirty days prior to conversion. The warrants allow the holder to purchase 163,333,333 shares of common stock for $0.0003 (subject to certain specified adjustments) for a period of seven years from the date of issuance.   Service Agreement   On December 1, 2023, the Company entered into a service agreement with Frondeur Partners LLC (“Frondeur”). Frondeur will provide accounting, reporting and consulting services on monthly basis. On December 1, 2023, the Company executed a corporate services agreement with Frondeur Partners LLC a Nevada limited liability company. Under the terms of the agreement the Company will receive accounting and reporting services. As compensation Frondeur will receive monthly payments of $10,000 in cash and a convertible promissory note for $15000 The notes are convertible into the Company’s common stock at a 50% discount to the market price (defined in the notes). As of the date of issuance of this report the Company has issued three such notes (December 1, 2023, January 1, and February 1, 2024), which are to be accounted for as stock settled debt under ASC 480.   Debt Cancellation   On January 9, 2024, Mid Penn Bank and the Company executed an Assignment of Assets and Cancellation of Debt agreement. The assets assigned include all rights to trademarks and other property related to the Yuengling ice cream business. The debt cancelled consists of an SBA loan have principal of $589,092 and a line of credit having an outstanding principal balance of $489,439, together with unpaid accrued interest pf approximately $113,000.   The Company is analyzing the potential tax impact of the debt cancellation. Since the debt was assumed in acquisition the basis of the liability to the Company may negate the potential tax on debt forgiveness.   Settlement of Obligations from Service Agreement   On January 23, 2024, Desmond Partners, LLC and the Company entered into a Settlement Agreement and Mutual Release relating to the Professional Services Agreement (‘initial agreement”) entered into by the parties on January 20, 2022. Under the terms of the settlement the Company will issue 500,000 common shares to Desmond Partners, LLC thereby settling all claims for service and fees related thereto and releasing both parties from the terms of the initial agreement.   On January 26, 2024, Everett Dickson acquired the preferred series A shares formerly held by Device Corp. The shares are convertible into common shares and are fully described at footnote 10.

v3.24.1.1.u2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Oct. 31, 2023
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation   The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of Estimates	Use of Estimates   The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the allowance for bad debt on accounts receivable, reserves on inventory, valuation of intangible assets for impairment analysis, valuation of the lease liability and related right-of-use asset, valuation of stock-based compensation, valuation of redeemable preferred stock and the valuation allowance on deferred tax assets.
Principles of Consolidation	Principles of Consolidation   The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary YIC Acquisitions Corp. All material intercompany transactions and balances have been eliminated on consolidation.
Concentrations of Credit Risk	Concentrations of Credit Risk   The Company maintains cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors the banking relationships and consequently have not experienced any losses in our accounts. The Company believes it is not exposed to any significant credit risk on cash.
Cash Equivalents	Cash Equivalents   The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended October 31, 2023 or 2022.
Restricted Cash	Restricted Cash   The Company no longer has an obligation to transfer $50,000 to Mid Penn Bank as security pursuant to the Agreement of Sale and Security Agreement between Mid Penn Bank and Yuengling’s Ice Cream Corp., last amended July 31, 2023. On January 9, 2024, the Company signed an agreement with Mid Penn Bank assigning the ice cream-related assets to Mid Penn Bank in return for Mid Penn Bank cancelling the two bank loans with Yuengling’s Ice Cream Corporation.
Reclassifications	Reclassifications   Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the year ended October 31, 2023.
Deferred Financing Costs	Deferred Financing Costs   All unamortized deferred financing costs related to the Company’s borrowings are presented in the consolidated balance sheets as a direct deduction from the related debt. Amortization of these costs is reported as interest and financing costs included in the consolidated statement of operations.
Inventory	Inventory   Inventory is stated at the lower of cost and net realizable value on a first-in, first-out basis. Cost is principally determined using the last-in, first-out (LIFO) method. The Company periodically assesses if any of the inventory has expired or if the value has fallen below cost. When this occurs, the Company recognizes an expense for inventory write down. Total inventories at October 31, 2023 and 2022 were $0 and $56,212, respectively. Inventory consists of lids for pint size containers. During the year ended October 31, 2023, $56,190 of expired inventory was written off.
Property and Equipment	Property and Equipment   Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. During the year ended October 31, 2023, $30,300 of property related to an abandoned business venture were written off.
Net Loss Per Share	Net Loss Per Share   Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings (loss) of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution. As of October 31, 2023, there are obligations to issued Series A Preferred Stock which are convertible into 1,020,062,029 shares of common stock. The total potentially dilutive shares calculated is 1,020,062,029. It should be noted that contractually the limitations on obligation to issue Series A Preferred Stock that limit the number of shares converted to either 9.99% of the then outstanding shares. The Company’s Chairman of the Board of Directors holds a control block of Series A Preferred Stock which confers upon him a majority vote in all Company matters including authorization of additional common shares or to reverse split the stock. As of October 31, 2023, and 2022, potentially dilutive securities consisted of the following:   Schedule of anti-dilutive shares                     October 31, 2023     October 31, 2022   Series A Preferred Stock Payable     1,020,062,029       89,095,509   Third party convertible debt     -       17,607,000   Total     1,020,062,029       106,702,909
Stock-based Compensation	Stock-based Compensation   In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. We adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on our consolidated financial statements.
Convertible Notes with Fixed Rate Conversion Options	Convertible Notes with Fixed Rate Conversion Options   The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”.
Derivative Financial Instruments	Derivative Financial Instruments   The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Fair Value Measurements	Fair Value Measurements   The Company follows the FASB Fair Value Measurements standard, as they apply to its financial instruments. This standard defines fair value, outlines a framework for measuring fair value, and details the required disclosures about fair value measurements.   Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy in determining the fair value of an asset or liability. The fair value hierarchy has three levels of inputs, both observable and unobservable. Level 1 inputs include quoted market prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date. Level 2 inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. Level 3 inputs are unobservable and corroborated by little or no market data. The standard requires the utilization of the lowest possible level of input to determine fair value and carrying amounts of current liabilities approximate fair value due to their short-term nature.   The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.   The Company’s non-financial assets, such as property and equipment, are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominantly on Level 3 inputs.   Level 1: Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.   Level 2: Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.   Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates.   Level 3: Level 3 inputs are unobservable inputs.   The following required disclosure of the estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.   The methods and assumptions used to estimate the fair values of each class of financial instruments are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable. The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations of their fair values.   The carrying amounts of Notes Payable approximate the fair value as the notes bear interest rates that are consistent with current market rates.   The table below classify the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022.   2022:   Schedule of liabilities measured at fair value                                 Description   Level 1     Level 2     Level 3     Total Gains   Derivative   $ -     $ -     $ 247,034     $ 73,670   Total   $ -     $ -     $ 247,034     $ 73,670
Income Taxes	Income Taxes   Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term.   Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. As of October 31, 2023, and 2022, no liability for unrecognized tax benefits was required to be reported.
Revenue recognition	Revenue recognition   Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.   The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. YIC Acquisitions Corp (Yuengling’s Ice Cream) generates its revenue through the sale of pints to retailers, through the online sales of pints directly to consumers, and through the sale of 3gallon tubs to food service establishments, such as restaurants, stadiums, and universities. Revenue is recognized at the time of delivery or, for online sales, at the time of the transaction. Retailers and food service customers’ terms are generally 15 or 30 days. Online sales are paid via credit card and funds are generally received within 30 days.
Recent Accounting Pronouncements	Recent Accounting Pronouncements   The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

v3.24.1.1.u2

SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Oct. 31, 2023
Accounting Policies [Abstract]
Schedule of anti-dilutive shares	Schedule of anti-dilutive shares                     October 31, 2023     October 31, 2022   Series A Preferred Stock Payable     1,020,062,029       89,095,509   Third party convertible debt     -       17,607,000   Total     1,020,062,029       106,702,909
Schedule of liabilities measured at fair value	Schedule of liabilities measured at fair value                                 Description   Level 1     Level 2     Level 3     Total Gains   Derivative   $ -     $ -     $ 247,034     $ 73,670   Total   $ -     $ -     $ 247,034     $ 73,670

v3.24.1.1.u2

PROPERTY & EQUIPMENT (Tables)	12 Months Ended
	Oct. 31, 2023
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Schedule of property and equipment                     October 31, 2023     October 31, 2022   Property and equipment   $ -     $ 30,300   Less: accumulated depreciation     -       -   Property and equipment, net   $ -     $ 30,300

v3.24.1.1.u2

NOTES PAYABLE (Tables)	12 Months Ended
	Oct. 31, 2023
Debt Disclosure [Abstract]
Schedule of notes payable	Schedule of notes payable                 October 31, 2023     October 31, 2022   Note principal   $ 184,296     $ 119,121

v3.24.1.1.u2

CONVERTIBLE NOTE PAYABLE (Tables)	12 Months Ended
	Oct. 31, 2023
Debt Disclosure [Abstract]
Schedule of convertible notes and related activity	Schedule of convertible notes and related activity                                               Note Holder   Date   Maturity Date   Interest     Balance October 31, 2022     Additions     Conversions/ Repayments     Balance October 31, 2023   Quick Capital, LLC   10/21/2022   3/21/2023   12%     $ 93,818     $ -     $ (93,818 )   $ -   1800 Diagonal Lending LLC   9/7/2022   9/7/2023   12%       44,250       -       (44,250 )     -   1800 Diagonal Lending LLC   12/8/2022   12/8/2023   12%       -       56,350       (56,350 )     -   Quick Capital, LLC   2/3/2023   2/3/2024   12%       -       25,556       (25,556 )     -   Total                 $ 138,068     $ 81,906     $ (219,974 )   $ -   Less Debt Discount                   (123,813 )             -       -                     $ 14,255             $ -     $ -
Schedule of derivative liability	Schedule of derivative liability         Balance at October 31, 2021     -   Increase to derivative due to new issuances     320,704   Decrease to derivative due to repayments     -   Derivative loss due to mark to market adjustment     (73,670 ) Balance at October 31, 2022   $ 247,034   Increase to derivative due to new issuances     93,496   Decrease to derivative due to conversions     (230,871 ) Decrease to derivative due to repayments     (35,095 ) Derivative gain due to mark to market adjustment     (74,564 ) Balance at October 31, 2023   $ -
Schedule of derivative liabilities at fair value	Schedule of derivative liabilities at fair value                 Inputs   October 31, 2023     Initial Valuation   Stock price     $0.0012       $0.01 - 0.038   Conversion price     $0.0006 - 0.0007       $0.0025 - 0.0069   Volatility (annual)     230.13% - 240.8 %     222.7% - 326.6%   Risk-free rate     5.3 %     3.6% - 4.8%   Dividend rate     -       -   Years to maturity     0 - 0.85       0.41 - 1

v3.24.1.1.u2

INCOME TAX (Tables)	12 Months Ended
	Oct. 31, 2023
Income Tax Disclosure [Abstract]
Schedule of provision for income tax	Schedule of provision for income tax                     Year Ended October 31, 2023     Year Ended October 31, 2022   U.S. Federal (tax benefit) provision at statutory rate   $ (16,295 )   $ (101,100 ) State (tax benefit) income taxes, net of federal benefit     (4,462 )     (24,100 ) Permanent differences     (66,028 )     (11,900 ) Temporary differences     -       (10,700 ) Changes in valuation allowance     86,785       147,800   Total   $ -     $ -
Schedule of deferred tax amount net	Schedule of deferred tax amount net                     October 31, 2023     October 31, 2022   Deferred Tax Assets                 Net operating losses     337,900       244,100   Total deferred tax assets     337,900       10,700   Valuation allowance     (337,900 )     (233,400 ) Net deferred tax assets     -       -                     Deferred Tax Liabilities                 Total deferred tax liabilities     -       -   Net deferred tax   $ -     $ -

v3.24.1.1.u2

SIGNIFICANT ACCOUNTING POLICIES (Details) - shares	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,020,062,029	106,702,909
Series A Preferred Stock Payable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,020,062,029	89,095,509
Third Party Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total		17,607,000

v3.24.1.1.u2

SIGNIFICANT ACCOUNTING POLICIES (Details 1)	Oct. 31, 2022 USD ($)
Platform Operator, Crypto-Asset [Line Items]
Derivative	$ 73,670
Total	73,670
Fair Value, Inputs, Level 1 [Member]
Platform Operator, Crypto-Asset [Line Items]
Derivative
Total
Fair Value, Inputs, Level 2 [Member]
Platform Operator, Crypto-Asset [Line Items]
Derivative
Total
Fair Value, Inputs, Level 3 [Member]
Platform Operator, Crypto-Asset [Line Items]
Derivative	247,034
Total	$ 247,034

v3.24.1.1.u2

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Cash equivalents	$ 0	$ 0
Restricted cash	50,000
Inventories	0	$ 56,212
Inventory write off	56,190
Property and equipment write off	$ 30,300
Anti-dilutive shares	1,020,062,029	106,702,909
Unrecognized tax benefits	$ 0	$ 0
Series A Preferred Stock Payable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	1,020,062,029	89,095,509

v3.24.1.1.u2

GOING CONCERN (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 4,456,156	$ 4,032,125
Net loss	424,031
Net cash used in operating activities	$ 120,832	$ 268,238

v3.24.1.1.u2

PROPERTY & EQUIPMENT (Details) - USD ($)	Oct. 31, 2023	Oct. 31, 2022
Property, Plant and Equipment [Abstract]
Property and equipment		$ 30,300
Less: accumulated depreciation
Property and equipment, net		$ 30,300

v3.24.1.1.u2

PROPERTY & EQUIPMENT (Details Narrative)	12 Months Ended
	Oct. 31, 2023 USD ($)
Property, Plant and Equipment [Abstract]
Impairment expense	$ 30,300

v3.24.1.1.u2

LOAN RECEIVABLE (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022	Apr. 30, 2022
Loan Receivable
Loan receivable			$ 80,000
Bad debt expense		$ 80,000

v3.24.1.1.u2

NOTES PAYABLE (Details) - USD ($)	Oct. 31, 2023	Oct. 31, 2022
Debt Disclosure [Abstract]
Note principal	$ 184,296	$ 119,121

v3.24.1.1.u2

NOTES PAYABLE (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Debt Instrument [Line Items]
Note payable balance	$ 184,296	$ 119,121
Note Payable 1 [Member]
Debt Instrument [Line Items]
Debt issuance date	Sep. 09, 2015
Debt face amount	$ 20,000
Debt stated interest rate	10.00%
Accrued interest	$ 15,151
Note Payable 2 [Member]
Debt Instrument [Line Items]
Debt issuance date	Feb. 23, 2017
Debt face amount	$ 17,500
Debt stated interest rate	8.00%
Accrued interest	$ 12,180
Note Payable 3 [Member]
Debt Instrument [Line Items]
Debt issuance date	Mar. 27, 2017
Debt face amount	$ 12,465
Debt stated interest rate	8.00%
Accrued interest	$ 8,265
Note Payable 4 [Member]
Debt Instrument [Line Items]
Debt issuance date	May 16, 2017
Debt face amount	$ 4,500
Debt stated interest rate	8.00%
Accrued interest	$ 2,905
Note Payable 5 [Member]
Debt Instrument [Line Items]
Debt issuance date	Jul. 28, 2017
Debt face amount	$ 20,000
Debt stated interest rate	8.00%
Accrued interest	$ 12,405
Note Payable 6 [Member]
Debt Instrument [Line Items]
Debt issuance date	Jan. 24, 2020
Debt face amount	$ 15,000
Debt stated interest rate	10.00%
Accrued interest	$ 1,155
Note payable balance	$ 0
Note Payable 7 [Member]
Debt Instrument [Line Items]
Debt issuance date	Mar. 24, 2020
Debt face amount	$ 20,000
Debt stated interest rate	10.00%
Accrued interest	$ 0
Note payable balance	$ 0
Note Payable 8 [Member]
Debt Instrument [Line Items]
Debt issuance date	Jun. 01, 2023
Debt face amount	$ 40,675
Debt stated interest rate	5.00%
Due from related party	$ 15,000
Debt converted, shares issued	55,675
Note Payable 9 [Member]
Debt Instrument [Line Items]
Note payable balance	$ 24,656

v3.24.1.1.u2

LOANS PAYABLE (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2023	Apr. 05, 2023	Oct. 31, 2022	Dec. 24, 2021
Line of Credit [Member]
Debt Instrument [Line Items]
Line of credit	$ 489,439	$ 204,360	$ 693,799	$ 106,201
Maximum [Member] | Line of Credit [Member]
Debt Instrument [Line Items]
Line of credit interest rate	9.50%
Minimum [Member] | Line of Credit [Member]
Debt Instrument [Line Items]
Line of credit interest rate	4.25%
SBA Loan [Member]
Debt Instrument [Line Items]
Debt maturity date	Mar. 13, 2026
Loans payable	$ 589,092		$ 595,092
SBA Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt stated interest rate	10.25%
SBA Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt stated interest rate	5.25%

v3.24.1.1.u2

CONVERTIBLE NOTE PAYABLE (Details) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Debt Instrument [Line Items]
Additions	$ 55,000	$ 113,500
Convertible Debt, Current		14,255
Quick Capital LLC [Member]
Debt Instrument [Line Items]
Date	Oct. 21, 2022
Maturity Date	Mar. 21, 2023
Interest	12.00%
Convertible Debt	$ 93,818
Additions
Conversions/ Repayments	(93,818)
Convertible Debt		93,818
1800 Diagonal Lending LLC [Member]
Debt Instrument [Line Items]
Date	Sep. 07, 2022
Maturity Date	Sep. 07, 2023
Interest	12.00%
Convertible Debt	$ 44,250
Additions
Conversions/ Repayments	(44,250)
Convertible Debt		44,250
Quick Capitall LLC [Member]
Debt Instrument [Line Items]
Date	Dec. 08, 2022
Maturity Date	Dec. 08, 2023
Interest	12.00%
Convertible Debt
Additions	56,350
Conversions/ Repayments	(56,350)
Convertible Debt
1800 Diagonall Lending LLC [Member]
Debt Instrument [Line Items]
Date	Feb. 03, 2023
Maturity Date	Feb. 03, 2024
Interest		12.00%
Convertible Debt
Additions	25,556
Conversions/ Repayments	(25,556)
Convertible Debt
Convertible Debt 2023 [Member]
Debt Instrument [Line Items]
Convertible Debt	138,068
Additions	81,906
Conversions/ Repayments	(219,974)
Convertible Debt		138,068
Less Debt Discount		(123,813)
Convertible Debt, Current		$ 14,255

v3.24.1.1.u2

CONVERTIBLE NOTE PAYABLE (Details 1) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Debt Disclosure [Abstract]
Beginning balance	$ 247,034
Increase to derivative due to new issuances	93,496	320,704
Decrease to derivative due to repayments	(35,095)
Derivative loss due to mark to market adjustment	(74,564)	(73,670)
Decrease to derivative due to conversions	(230,871)
Ending balance		$ 247,034

v3.24.1.1.u2

CONVERTIBLE NOTE PAYABLE (Details 2)	12 Months Ended
	Oct. 31, 2023
Measurement Input, Share Price [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	0.0012
Measurement Input, Share Price [Member] | Initial Valuation [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	0.01 - 0.038
Measurement Input, Conversion Price [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	0.0006 - 0.0007
Measurement Input, Conversion Price [Member] | Initial Valuation [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	0.0025 - 0.0069
Measurement Input, Price Volatility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	230.13% - 240.8
Measurement Input, Price Volatility [Member] | Initial Valuation [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	222.7% - 326.6%
Measurement Input, Risk Free Interest Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	5.3
Measurement Input, Risk Free Interest Rate [Member] | Initial Valuation [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	3.6% - 4.8%
Measurement Input, Expected Dividend Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value
Measurement Input, Expected Dividend Rate [Member] | Initial Valuation [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value
Measurement Input, Expected Term [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	0 - 0.85
Measurement Input, Expected Term [Member] | Initial Valuation [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivatives, Determination of Fair Value	0.41 - 1

v3.24.1.1.u2

CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($)						12 Months Ended
	Sep. 02, 2023	Feb. 03, 2023	Dec. 08, 2022	Sep. 07, 2022	Mar. 02, 2022	Oct. 31, 2023	Oct. 31, 2022
Debt Instrument [Line Items]
Proceeds from convertible notes payable						$ 55,000	$ 113,500
Quick Capital [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 25,556			$ 87,222
Proceeds from convertible notes payable		20,000			$ 73,500
Interest rate					12.00%
Debt discount		5,556			$ 13,722
Debt converted, shares issued						84,358,767
Payments of Stock Issuance Costs		$ 5,556
Quick Capital [Member] | Principal Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 93,818
Quick Capital [Member] | Interest Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 5,457
1800 Diagonall Lending [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount				$ 44,250
Proceeds from convertible notes payable				40,000
Debt discount				4,250
Debt converted, shares issued						43,165,536
Payments of Stock Issuance Costs				$ 4,250
1800 Diagonall Lending [Member] | Principal Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 44,250
1800 Diagonall Lending [Member] | Interest Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 2,655
1800 Diiagonal Lending LLC [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount			$ 39,250
Proceeds from convertible notes payable			$ 35,000
Interest rate			12.00%
Debt discount			$ 4,250
Debt converted, shares issued						100,691,857
Payments of Stock Issuance Costs			$ 4,250
1800 Diiagonal Lending LLC [Member] | Principal Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 42,850
1800 Diagonal Lending LLC [Member]
Debt Instrument [Line Items]
Proceeds from convertible notes payable
Debt converted, shares issued						143,857,393
Description of convertible promissory note	1800 Diagonal Lending LLC accepted a payment of $13,500, settling the December 13, 2022, Convertible Promissory Note in full, including a $10,640 default penalty. The funds for the payment to 1800 Diagonal were advanced to the Company by Mr. Dickson.
1800 Diagonal Lending LLC [Member] | Principal Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 87,100
1800 Diagonal Lending LLC [Member] | Interest Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						2,655
Quick Capital LLC [Member]
Debt Instrument [Line Items]
Proceeds from convertible notes payable
Interest rate		12.00%
Debt converted, shares issued						120,802,722
Description of convertible promissory note	Quick Capital LLC accepted a payment of $22,000 settling the February 3, 2023, Convertible Promissory Note in full. The funds for the payment to Quick Capital were advanced to the Company by Pickle Jar Holdings Inc.
Quick Capital LLC [Member] | Principal Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 102,087
Quick Capital LLC [Member] | Interest Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						7,157
Quick Capitall LLC [Member]
Debt Instrument [Line Items]
Proceeds from convertible notes payable						$ 56,350
Debt converted, shares issued						36,443,955
Quick Capitall LLC [Member] | Principal Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 9,565
Quick Capitall LLC [Member] | Interest Amount [Member]
Debt Instrument [Line Items]
Debt converted, amount converted						$ 1,700

v3.24.1.1.u2

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)		1 Months Ended		12 Months Ended
	Jan. 14, 2023	Sep. 15, 2023	Jun. 30, 2022	Oct. 31, 2023	Oct. 31, 2022	Mar. 31, 2024	Sep. 02, 2023	Aug. 17, 2023
Related Party Transaction [Line Items]
Repayment of general operating expenses
Officer compensation				7,000	63,000
Notes payable				184,296	119,121
Everett Dickson [Member]
Related Party Transaction [Line Items]
General operating expenses			$ 6,000
Repayment of general operating expenses			$ 6,000
Officer compensation					5,500
Payment to related party								$ 1,910
Deposit by related party							$ 2,000
Due to related party							17,410
Pickle Jar [Member]
Related Party Transaction [Line Items]
Due from related party					22,000
Notes payable					$ 16,500
1800 Diagonal Lending [Member]
Related Party Transaction [Line Items]
Payment to related party							$ 13,500
Robert C. Bohorad [Member]
Related Party Transaction [Line Items]
Shares granted	30,000,000
Share price	$ 0.006
Non-cash compensation	$ 180,000
Shares returned		30,000,000
Accrued compensation				$ 53,000
Robert C. Bohorad [Member] | Subsequent Event [Member]
Related Party Transaction [Line Items]
Due to related party						$ 30,000

v3.24.1.1.u2

TEMPORARY EQUITY (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022	Aug. 25, 2023	May 01, 2023	Jan. 18, 2019
Preferred stock to be issued amount	$ 357,022
Conversion price	$ 0.00035
Shares converted	1,020,062,029
Preferred stock par value	$ 0.0001	$ 0.0001
Device Corp [Member]
Due from related party		$ 562,000
Repaid to related party		170,000
Due to related party		$ 392,000
Series A Preferred Stock [Member]
Shares converted		1,300,000
Preferred stock shares designate	10,000,000
Preferred stock par value	$ 0.0001
Series A Preferred Stock [Member] | Stock Purchase Agreement [Member]
Agreement amount					$ 250,000
Series A Preferred Stock [Member] | Second Stock Purchase Agreement [Member]
Agreement amount				$ 250,000
Series B Preferred Stock [Member]
Preferred stock shares designate			5,000,000
Preferred stock par value			$ 0.0001

v3.24.1.1.u2

COMMON STOCK (Details Narrative) - USD ($)			1 Months Ended		12 Months Ended
	Jan. 14, 2023	Aug. 05, 2022	Sep. 15, 2023	Aug. 25, 2023	Oct. 31, 2023	Oct. 31, 2022	Mar. 02, 2022	Feb. 28, 2022	Jan. 21, 2022	Jan. 20, 2022
Class of Stock [Line Items]
Common stock, shares authorized					2,500,000,000	2,500,000,000	2,500,000,000	2,000,000,000	2,000,000,000	1,750,000,000
Common stock, shares outstanding					332,488,710	14,828,595
Shares issued for services					3,000,000
Reverse stock split		1-for-150
Proceeds from sale of stock						$ 187,520
Conversion of stock, shares					1,020,062,029
Stock Sold For Cash [Member]
Class of Stock [Line Items]
Stock issued new, shares						2,560,000
Proceeds from sale of stock						$ 187,520
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Debt converted, amount converted					$ 35,000
Debt converted, shares issued					50,000,000
Shares returned				4,525,000
Conversion of stock, value						$ 6,500
Conversion of stock, shares						1,300,000
Robert C Bohorad [Member]
Class of Stock [Line Items]
Shares granted	30,000,000
Share price	$ 0.006
Non-cash compensation	$ 180,000
Shares returned			60,000,000
Quick Capital LLC [Member]
Class of Stock [Line Items]
Debt converted, shares issued					120,802,722
Quick Capital LLC [Member] | Principal Amount [Member]
Class of Stock [Line Items]
Debt converted, amount converted					$ 102,087
Quick Capital LLC [Member] | Interest Amount [Member]
Class of Stock [Line Items]
Debt converted, amount converted					$ 7,157
1800 Diagonal Lending LLC [Member]
Class of Stock [Line Items]
Debt converted, shares issued					143,857,393
1800 Diagonal Lending LLC [Member] | Principal Amount [Member]
Class of Stock [Line Items]
Debt converted, amount converted					$ 87,100
1800 Diagonal Lending LLC [Member] | Interest Amount [Member]
Class of Stock [Line Items]
Debt converted, amount converted					$ 2,655

v3.24.1.1.u2

PREFERRED STOCK (Details Narrative) - $ / shares	1 Months Ended
	Aug. 25, 2023	Oct. 31, 2023	Oct. 31, 2022
Class of Stock [Line Items]
Preferred stock par and stated value		$ 0.0001	$ 0.0001
Mr. Richard Jordan [Member]
Class of Stock [Line Items]
Shares to be sold	475,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares designated		10,000,000
Preferred stock par and stated value		$ 0.0001
Shares returned	4,525,000

v3.24.1.1.u2

COMMITMENTS AND CONTINGENCIES (Details Narrative)	12 Months Ended
	Oct. 31, 2023 USD ($)
Consultant fees	$ 10,000
Balance owed	$ 500,000
Desmond Partners LLC [Member]
Equity percenatge	5.00%

v3.24.1.1.u2

INCOME TAX (Details) - USD ($)	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Income Tax Disclosure [Abstract]
U.S. Federal (tax benefit) provision at statutory rate	$ (16,295)	$ (101,100)
State (tax benefit) income taxes, net of federal benefit	(4,462)	(24,100)
Permanent differences	(66,028)	(11,900)
Temporary differences		(10,700)
Changes in valuation allowance	86,785	147,800
Total

v3.24.1.1.u2

INCOME TAX (Details 1) - USD ($)	Oct. 31, 2023	Oct. 31, 2022
Deferred Tax Assets
Net operating losses	$ 337,900	$ 244,100
Total deferred tax assets	337,900	10,700
Valuation allowance	(337,900)	(233,400)
Net deferred tax assets
Deferred Tax Liabilities
Total deferred tax liabilities
Net deferred tax

v3.24.1.1.u2

INCOME TAX (Details Narrative)	12 Months Ended
	Oct. 31, 2023 USD ($)
Income Tax Disclosure [Abstract]
Net operating loss carry forwards	$ 1,263,000
Federal statutory rates	21.00%
State tax statutory rates	5.75%

v3.24.1.1.u2

SUBSEQUENT EVENTS (Details Narrative) - USD ($)					1 Months Ended
	Jan. 11, 2024	Jan. 09, 2024	Dec. 13, 2023	Nov. 09, 2023	Nov. 30, 2023	Aug. 25, 2023	Jan. 23, 2024	Dec. 02, 2023	Oct. 31, 2023	Oct. 31, 2022
Subsequent Event [Line Items]
Preferred stock, shares authorized									10,000,000	10,000,000
Preferred stock, par value									$ 0.0001	$ 0.0001
Preferred stock shares issued									475,000	5,000,000
Common stock par value									$ 0.001	$ 0.001
Mr. Richard Jordan [Member]
Subsequent Event [Line Items]
Shares to be sold						475,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Principal amount	$ 539,000	$ 589,092
Interest rate	12.00%				12.00%
Maturity date					May 31, 2025
Common stock par value	$ 0.0003				$ 0.0003
Number of common stock purchased	163,333,333				142,424,186
Monthly payment								$ 10,000
Line of credit outstanding principal amount		489,439
Accrued interest		$ 113,000
Subsequent Event [Member] | Convertible Debt [Member]
Subsequent Event [Line Items]
Monthly payment								$ 15,000
Subsequent Event [Member] | Series C Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized			8,750,000
Preferred stock, par value			$ 3.00
Dividend rate			2.00%
Conversion percentage			87.50%
Subsequent Event [Member] | Series C Preferred Stock [Member] | Share Exchange Agreement [Member]
Subsequent Event [Line Items]
Preferred stock shares issued			8,750,000
Subsequent Event [Member] | Series D Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized			1,250,000
Preferred stock, par value			$ 1.00
Dividend rate			2.00%		2.00%
Conversion percentage			12.50%
Shares Issued					1,000,000
Principal amount					$ 470,000
Subsequent Event [Member] | Series D Preferred Stock [Member] | Share Exchange Agreement [Member]
Subsequent Event [Line Items]
Preferred stock shares issued			1,000,000
Warrant exercise price			$ 0.0003
Shares Issued			142,424,186
Principal amount			$ 470,000
Subsequent Event [Member] | Mr. Richard Jordan [Member]
Subsequent Event [Line Items]
Shares to be sold				140,000
Subsequent Event [Member] | Everett Dickson [Member] | Series D Preferred Stock [Member] | Share Exchange Agreement [Member]
Subsequent Event [Line Items]
Preferred stock shares issued			250,000
Shares surrendering			4,525,000
Subsequent Event [Member] | Desmond Partners LLC [Member]
Subsequent Event [Line Items]
Shares Issued							500,000

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