Form 1-A Issuer Information UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 1-A
REGULATION A OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933
OMB APPROVAL

FORM 1-A

OMB Number: 3235-0286


Estimated average burden hours per response: 608.0

1-A: Filer Information

Issuer CIK
0001624517
Issuer CCC
XXXXXXXX
DOS File Number
Offering File Number
024-11008
Is this a LIVE or TEST Filing? LIVE TEST
Would you like a Return Copy?
Notify via Filing Website only?
Since Last Filing?

Submission Contact Information

Name
Phone
E-Mail Address

1-A: Item 1. Issuer Information

Issuer Infomation

Exact name of issuer as specified in the issuer's charter
Aureus, Inc.
Jurisdiction of Incorporation / Organization
NEVADA
Year of Incorporation
2013
CIK
0001624517
Primary Standard Industrial Classification Code
DAIRY PRODUCTS
I.R.S. Employer Identification Number
47-1893698
Total number of full-time employees
2
Total number of part-time employees
0

Contact Infomation

Address of Principal Executive Offices

Address 1
1170 Peachtree Street
Address 2
#1200
City
Atlanta
State/Country
GEORGIA
Mailing Zip/ Postal Code
30309
Phone
404-885-6045

Provide the following information for the person the Securities and Exchange Commission's staff should call in connection with any pre-qualification review of the offering statement.

Name
John E. Lux, Esq.
Address 1
Address 2
City
State/Country
Mailing Zip/ Postal Code
Phone

Provide up to two e-mail addresses to which the Securities and Exchange Commission's staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active.

Financial Statements

Industry Group (select one) Banking Insurance Other

Use the financial statements for the most recent period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine "Total Revenues" for all companies selecting "Other" for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting "Insurance", refer to Article 7-04 of Regulation S-X for calculation of "Total Revenues" and paragraphs 5 and 7 of Article 7-04 for "Costs and Expenses Applicable to Revenues".

Balance Sheet Information

Cash and Cash Equivalents
$ 2290.00
Investment Securities
$ 0.00
Total Investments
$
Accounts and Notes Receivable
$ 43373.00
Loans
$
Property, Plant and Equipment (PP&E):
$ 41487.00
Property and Equipment
$
Total Assets
$ 93513.00
Accounts Payable and Accrued Liabilities
$ 526187.00
Policy Liabilities and Accruals
$
Deposits
$
Long Term Debt
$ 0.00
Total Liabilities
$ 526187.00
Total Stockholders' Equity
$ -516425.00
Total Liabilities and Equity
$ 93513.00

Statement of Comprehensive Income Information

Total Revenues
$ 0.00
Total Interest Income
$
Costs and Expenses Applicable to Revenues
$ 8183.00
Total Interest Expenses
$
Depreciation and Amortization
$ 5635.00
Net Income
$ 0.00
Earnings Per Share - Basic
$ 0.00
Earnings Per Share - Diluted
$ 0.00
Name of Auditor (if any)

Outstanding Securities

Common Equity

Name of Class (if any) Common Equity
Common Stock
Common Equity Units Outstanding
98250000
Common Equity CUSIP (if any):
86845R207
Common Equity Units Name of Trading Center or Quotation Medium (if any)
OTCMarkets, Pink Open Market

Preferred Equity

Preferred Equity Name of Class (if any)
Series A Convertible Preferred
Preferred Equity Units Outstanding
5000000
Preferred Equity CUSIP (if any)
00000none
Preferred Equity Name of Trading Center or Quotation Medium (if any)
none

Debt Securities

Debt Securities Name of Class (if any)
none
Debt Securities Units Outstanding
0
Debt Securities CUSIP (if any):
00000none
Debt Securities Name of Trading Center or Quotation Medium (if any)
none

1-A: Item 2. Issuer Eligibility

Issuer Eligibility

Check this box to certify that all of the following statements are true for the issuer(s)

1-A: Item 3. Application of Rule 262

Application Rule 262

Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.

Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.

1-A: Item 4. Summary Information Regarding the Offering and Other Current or Proposed Offerings

Summary Infomation

Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering Tier1 Tier2
Check the appropriate box to indicate whether the financial statements have been audited Unaudited Audited
Types of Securities Offered in this Offering Statement (select all that apply)
Equity (common or preferred stock)
Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? Yes No
Does the issuer intend this offering to last more than one year? Yes No
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? Yes No
Will the issuer be conducting a best efforts offering? Yes No
Has the issuer used solicitation of interest communications in connection with the proposed offering? Yes No
Does the proposed offering involve the resale of securities by affiliates of the issuer? Yes No
Number of securities offered
38000000
Number of securities of that class outstanding
98250000

The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of "aggregate offering price" or "aggregate sales" as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security
$ 0.0150
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer
$ 570000.00
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders
$ 0.00
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement
$ 0.00
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement
$ 0.00
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs)
$ 570000.00

Anticipated fees in connection with this offering and names of service providers

Underwriters - Name of Service Provider
Underwriters - Fees
$
Sales Commissions - Name of Service Provider
Sales Commissions - Fee
$
Finders' Fees - Name of Service Provider
Finders' Fees - Fees
$
Audit - Name of Service Provider
Accountant and Misc other
Audit - Fees
$ 42500.00
Legal - Name of Service Provider
John E. Lux, Esq.
Legal - Fees
$ 25000.00
Promoters - Name of Service Provider
Promoters - Fees
$
Blue Sky Compliance - Name of Service Provider
Various
Blue Sky Compliance - Fees
$ 2500.00
CRD Number of any broker or dealer listed:
Estimated net proceeds to the issuer
$ 500000.00
Clarification of responses (if necessary)

1-A: Item 5. Jurisdictions in Which Securities are to be Offered

Jurisdictions in Which Securities are to be Offered

Using the list below, select the jurisdictions in which the issuer intends to offer the securities

Selected States and Jurisdictions
NEW YORK

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box

None
Same as the jurisdictions in which the issuer intends to offer the securities
Selected States and Jurisdictions

NEW YORK

1-A: Item 6. Unregistered Securities Issued or Sold Within One Year

Unregistered Securities Issued or Sold Within One Year

None

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Aureus, Inc.
(b)(1) Title of securities issued
Convertible debt
(2) Total Amount of such securities issued
31050
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
31050
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Act

(e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption
Section 4(a)(1)

Table of Contents

 

Preliminary Offering Circular dated June __, 2019

 

An Offering Statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering Statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the Offering Statement in which such Final Offering Circular was filed may be obtained.

 

Aureus Inc.

 

$570,000

38,000,000 SHARES OF COMMON STOCK

OFFERED BY THE COMPANY AT $0.015 PER SHARE

 

 

This is the public offering of securities of Aureus Inc., a Nevada corporation. We are offering 38,000,000 shares of our common stock, par value $0.001 ("Common Stock"), at an offering price of $0.015 per share (the "Offered Shares") by the Company. The minimum purchase requirement per investor is 100,000 Offered Shares ($1,500); however, we can waive the minimum purchase requirement on a case-by-case basis in our sole discretion.

 

These securities are speculative securities. Investment in the Company’s stock involves significant risk. You should purchase these securities only if you can afford a complete loss of your investment. See the “Risk Factors” section on page 4 of this Offering Circular.

  

No Escrow

 

The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

 

Subscriptions are irrevocable and the purchase price is non-refundable as expressly stated in this Offering Circular. The Company, by determination of the Board of Directors, in its sole discretion, may issue the Securities under this Offering for cash, promissory notes, services, and/or other consideration without notice to subscribers. All proceeds received by the Company from subscribers for this Offering will be available for use by the Company upon acceptance of subscriptions for the Securities by the Company. 

 

Sale of these shares will commence within two calendar days of the qualification date and it will be a continuous Offering pursuant to Rule 251(d)(3)(i)(F).

 

 

 

     

 

 

This Offering will be conducted on a “best-efforts” basis, which means our Officers will use their commercially reasonable best efforts in an attempt to offer and sell the Shares. Our Officers will not receive any commission or any other remuneration for these sales. In offering the securities on our behalf, the Officers will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934, as amended.

 

This Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the laws of any such state.

 

Our Common Stock is traded in the OTCMarket under the symbol “ARSN.”

 

Investing in our Common Stock involves a high degree of risk. See “Risk Factors” beginning on page 4 for a discussion of certain risks that you should consider in connection with an investment in our Common Stock.

  

    Per
Share
    Total
Maximum
 
Public Offering Price (1)(2)   $ 0.015     $ 570,000.00  
Underwriting Discounts and Commissions (3)   $ 0.00     $ 0  
Proceeds to Company (4)   $ 0.015     $ 570,000.00  

  

(1) We are offering shares on a continuous basis. See “Distribution – Continuous Offering.”
(2) This is a “best efforts” offering. The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds. See “How to Subscribe.”
(3) We are offering these securities without an underwriter.
(4) Excludes estimated total offering expenses, including underwriting discount and commissions. Such expenses, will be approximately $70,000 assuming the maximum offering amount is sold.

 

Our Board of Directors used its business judgment in setting a value of $0.015 per share to the Company as consideration for the stock to be issued under the Offering. The sales price per share bears no relationship to our book value or any other measure of our current value or worth.

 

THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

 

The date of this Offering Circular is June __, 2019.

 

 

 

     

 

 

TABLE OF CONTENTS

 

   

Page

 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS     1  
SUMMARY     2  
THE OFFERING     3  
RISK FACTORS     4  
USE OF PROCEEDS     14  
DILUTION     16  
DISTRIBUTION     17  
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS     19  
BUSINESS     21  
MANAGEMENT     29  
EXECUTIVE COMPENSATION     31  
PRINCIPAL STOCKHOLDERS     32  
RELATED TRANSACTIONS     33  
DESCRIPTION OF SECURITIES     34  
DIVIDEND POLICY     39  
SECURITIES OFFERED     39  
SHARES ELIGIBLE FOR FUTURE SALE     40  
LEGAL MATTERS     40  
WHERE YOU CAN FIND MORE INFORMATION     41  
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS   F-1  

 

We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Offering Circular. The information contained in this Offering Circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this Offering Circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.

 

In this Offering Circular, unless the context indicates otherwise, references to "U. S. Highland", "we", the "Company", "our" and "us" refer to the activities of and the assets and liabilities of the business and operations of Aureus Inc.

 

 

 

  i  

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements under "Summary", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Our Business" and elsewhere in this Offering Circular constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will" and "would" or the negatives of these terms or other comparable terminology.

 

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Offering Circular, including in "Risk Factors" and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

 

· The speculative nature of the business we intend to develop;

 

· Our reliance on suppliers and customers;

 

· Our dependence upon external sources for the financing of our operations, particularly given that there are concerns about our ability to continue as a “going concern”;

 

· Our ability to effectively execute our business plan;

 

· Our ability to manage our expansion, growth and operating expenses;

 

· Our ability to finance our businesses;

 

· Our ability to promote our businesses;

 

· Our ability to compete and succeed in highly competitive and evolving businesses;

 

· Our ability to respond and adapt to changes in technology and customer behavior; and

 

· Our ability to protect our intellectual property and to develop, maintain and enhance strong brands.

 

Although the forward-looking statements in this Offering Circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to re-issue this Offering Circular or otherwise make public statements updating our forward-looking statements.

 

 

 

  1  

 

 

SUMMARY

 

This summary highlights selected information contained elsewhere in this Offering Circular. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in our Common Stock. You should carefully read the entire Offering Circular, including the risks associated with an investment in the company discussed in the “Risk Factors” section of this Offering Circular, before making an investment decision. Some of the statements in this Offering Circular are forward-looking statements. See the section entitled "Cautionary Statement Regarding Forward-Looking Statements."

 

Company Information

 

Aureus Inc. offices are located at 1170 Peachtree Street, Suite 1200, Atlanta, Georgia 30309. Our Website is http://www.aureusgnow.com. Our telephone number is 404-805-6044 and our Email address is info@aureusnow.com.

 

We do not incorporate the information on or accessible through our website into this Offering Circular, and you should not consider any information on, or that can be accessed through, our website a part of this Offering Circular.

 

Section 15(g) of the Securities Exchange Act of 1934

 

Our shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser’s written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

 

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one-page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as bid and offer quotes, a dealers spread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers’ duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers’ rights and remedies in cases of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

 

Dividends

 

The Company has not declared or paid a cash dividend to stockholders since it was organized and does not intend to pay dividends in the foreseeable future. The board of directors presently intends to retain any earnings to finance our operations and does not expect to authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon the Company's earnings, capital requirements and other factors.

 

Trading Market

 

Our Common Stock trades in the OTC Market Pink Open Market under the stock symbol “ARSN.”

 

 

 

  2  

 

 

THE OFFERING

______

 

Issuer:   Aureus Inc.
     
Securities offered:   A maximum of 3,000,000,000 shares of our common stock, par value $0.001 (“Common Stock”) at an offering price of $0.015 per share (the “Offered Shares”). (See “Distribution.”)
     
Number of shares of Common Stock outstanding before the offering   98,250,000 issued and outstanding as of May 15, 2019
     
Number of shares of Common Stock to be outstanding after the offering   136,250,000 if the maximum amount of Offered Shares are sold
     
Price per share:   $0.015
     
Maximum offering amount:   38,000,000 shares at $0.015 per share, or $570,000 (See “Distribution.”)
     
Trading Market:   Our Common Stock trading on the OTC Markets under the symbol ARSN.
     
Use of proceeds:   If we sell all of the shares being offered, our net proceeds (after our estimated offering expenses) will be 500,000. We will use these net proceeds for working capital and other general corporate purposes.
     
Risk factors:   Investing in our Common Stock involves a high degree of risk, including:
     
    Immediate and substantial dilution.
     
    Limited market for our stock.
     
    Limited operational history in an emerging industry.
     
    See “Risk Factors.”

 

 

 

 

 

 

 

  3  

 

 

RISK FACTORS

______

 

The following is only a brief summary of the risks involved in investing in our Company. Investment in our Securities involves risks. You should carefully consider the following risk factors in addition to other information contained in this Disclosure Document. The occurrence of any of the following risks might cause you to lose all or part of your investment. Some statements in this Document, including statements in the following risk factors, constitute “Forward-Looking Statements.”

 

The price of our common stock may be volatile.

 

If we are able to get a trading market for our stock, the trading price of our common stock is likely to remain highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control or unrelated to our operating performance. In addition to the factors discussed in this “Risk Factors” section and elsewhere, these factors include: the operating performance of similar companies; the overall performance of the equity markets; the announcements by us or our competitors of acquisitions, business plans, or commercial relationships; threatened or actual litigation; changes in laws or regulations relating to the provision of health care or the sale of health insurance; any major change in our board of directors or management; publication of research reports or news stories about us, our competitors, or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; large volumes of sales of our shares of common stock by existing stockholders; and general political and economic conditions.

 

In addition, the stock market in general, and the market for developing companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies’ securities This litigation, if instituted against us, could result in very substantial costs; divert our management’s attention and resources; and harm our business, operating results, and financial condition.

 

Doubts About Ability to Continue as a Going Concern

 

The Company is an early stage enterprise and has not commenced planned principal operations. The Company had no revenues to date and minimal capitalization. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources, such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations, or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.

 

The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support its business operations; however, the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. The Company’s ability to obtain additional funding will determine its ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of the Company’s common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights.

 

There are numerous material contingencies in our proposed acquisitions.

 

The Company intends to acquire other companies to expand its business. In connection with these acquisitions, including the current acquisition of Yuengling's, there are numerous material contingencies to consummation of these transactions, including, but not limited to, financing, satisfactory due diligence, and execution of a final purchase agreement. There is no assurance that any of these transactions will close, and if they close, that they will be successful.

 

 

 

  4  

 

 

Risks Related to the Food Business

 

Unfavorable publicity could harm our business.

 

Food businesses such as our proposed acquisitions can be adversely affected by publicity resulting from, among other things, complaints or litigation or general publicity regarding poor food quality, food-borne illness, personal injury, food tampering, team member relations, adverse health effects of consumption of various food products or high-calorie foods (including obesity), perceptions of corporate and social responsibility, or other concerns. Negative publicity from traditional or digital media, or from on-line social network postings may also result from actual or alleged incidents or events involving our products. Regardless of whether the allegations or complaints are valid, unfavorable publicity relating to our products could adversely affect public perception of the entire brand. Adverse publicity and its effect on overall consumer perceptions of food safety, or our failure to respond effectively to adverse publicity, could have a material adverse effect on our business.

 

Changes in consumer preferences or discretionary consumer spending could harm our performance.

 

The success of our proposed acquisitions depends, in part, upon the continued popularity of our concepts and shifts in these consumer preferences could negatively affect our future profitability. Negative publicity over the health aspects of certain food items may adversely affect consumer demand for our products and could result in a decrease in our revenues, which could materially harm our business. Additionally, our success depends, in part, on a consumer preference for eating our products and to an extent on numerous factors affecting discretionary consumer spending, including economic conditions, disposable consumer income and consumer confidence. A decline in consumer spending or in economic conditions could reduce guest traffic or impose practical limits on pricing, either of which could harm our business, financial condition, operating results or cash flow. We will be required to disclose calorie counts for our products, due to federal regulations, and this may have an effect on consumers’ eating habits. Shifts in consumer preferences could also be based on health concerns related to the cholesterol, carbohydrate, fat, calorie, sugar or salt content of certain food items, including items featured on our menu.

 

Litigation, including the defense and resolution of class and collective actions, could materially impact our business.

 

We could be subject to various lawsuits, administrative proceedings and claims that arise in the course of business. We could be party to class and collective actions, along with other complex legal disputes, that could materially impact our business by requiring, among other things, unanticipated management attention, significant attorney fee and settlement spend or operational adjustments implemented in response to a settlement, court order or in an effort to mitigate future exposure.

 

Increased wage and hour litigation, including claims relating to the Fair Labor Standards Act, analogous state laws, or other state wage and hour laws could result in significant attorney fee and settlement costs. Resolution of non-litigated alleged wage and hour violations could also negatively impact our performance. The potential settlement of, or awards of damages for, such claims also could materially impact our financial performance as could operational adjustments implemented in response to a settlement, court order or in an effort to mitigate future exposure. Additionally, an increased volume of alleged statutory violations or matters referred to an agency for potential resolution could result in significant attorney fee and settlement costs that could, in the aggregate, materially impact our financial performance.

 

We may have litigation in a variety of matters, some matters may be unpredictable or unanticipated, and the frequency and severity of litigation could increase. Our legal and regulatory environment includes matters such as food safety and food borne illness, premises liability, advertising and promotions, employment, franchise relations, shareholders, intellectual property, data privacy, and a variety of other matters. Because lawsuits are inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events. A judgment that is not covered by insurance or that is significantly in excess of our insurance coverage could materially adversely affect our financial condition or results of operations.

 

We may be unable to compete effectively in the food industry.

 

The food industry is intensely competitive and heavily saturated. We believe we compete primarily with ice cream products, and to a lesser extent to other desert products. In addition, independent owners of local or regional food companies establishments may enter our markets without significant barriers to entry and such establishments may provide price competition for our products. Competition in the relevant segments of the food industry is expected to remain intense with respect to price, quality, marketing and the type and quality of food. We also face intense competition for qualified management personnel.

 

 

 

  5  

 

 

We may not be able to attract and retain qualified team members and key executives to operate and manage our business.

 

Our success and the success of our business depends on our ability to attract, motivate, develop and retain a sufficient number of qualified key leaders and employees. The inability to recruit, develop and retain these individuals may delay the marketing of our products or result in high employee turnover, thus increasing our costs. This could inhibit our expansion plans and business performance and, to the extent that a labor shortage may force us to pay higher wages, harm our profitability. Volatility or a lack of positive performance in our stock price may adversely affect our ability to retain key employees, some of whom may be granted equity compensation. The loss of any of our key leaders could jeopardize our ability to meet our financial targets.

 

Changes in employment laws or regulation could harm our performance.

 

Various federal, state, regional and local labor laws govern our relationship with our employees and affect operating costs. These laws include minimum wage requirements, overtime pay, paid time off, work scheduling, unemployment tax rates, workers’ compensation rates, citizenship requirements, union membership, and sales taxes. As the regulatory landscape continues to change and become more complex, it can be difficult to know all of the regulations, understand them clearly, and comply timely and consistently. A number of factors could adversely affect our operating results, including additional government-imposed increases in minimum wages, scheduling laws, overtime pay, paid leaves of absence and mandated health benefits, mandated training for employees, increased tax reporting and tax payment requirements for employees who receive tips, a reduction in the number of states that allow tips to be credited toward minimum wage requirements, or changing regulations from the National Labor Relations Board, other agencies or an administration occupying the White House.

 

We may be subject to increased labor costs.

 

Our operations are subject to federal and state laws governing such matters as minimum wages, working conditions, overtime, and tip credits. As federal, state, and local minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees, but also the wages paid to employees already earning a wage rate above minimum wage. Labor shortages, increased employee turnover, and health care mandates also could increase our labor costs. This, in turn, could lead us to increase prices which could impact our sales. Competitive pressures beyond regulatory requirements may affect our cost to attract, reward and retain Team Members and managers. Conversely, if competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline.

 

Our strategic growth and innovation activities may not perform in accordance with our expectations.

 

Our ability to grow gross sales and increase profitability is dependent on designing and executing effective business strategies consistent with those described in our strategy. If we are delayed or unsuccessful in executing our strategies, or if our strategies do not yield the desired results, our business, financial condition, and results of operations may suffer.

 

Our brands may not be successful.

 

We will have a majority investment in our brands. If these brands do not succeed, we risk losing all or a substantial portion of our investment in that brand. In addition, our overall long-term growth may be affected by the level of success achieved by either of these products.

 

Shortages or interruptions in the availability and delivery of ingredients and other supplies may increase costs or reduce revenues.

 

Possible shortages or interruptions in the supply of ingredients and other supplies to us caused by inclement weather, terrorist attacks, natural disasters such as floods, drought and hurricanes, global warming, avian influenza, pandemics, the inability of our vendors to obtain credit in a tightened credit market, or other distribution dependencies, food safety warnings or advisories or the prospect of such pronouncements, or other conditions beyond our control, could adversely affect the availability, quality and cost of items we buy and our products. Our inability to effectively manage supply chain risk could increase our costs and limit the availability of products critical to our operations.

 

 

 

  6  

 

 

We are dependent on information technology and any material failure of that technology could impair our ability to efficiently operate our business.

 

We rely on information systems across our operations, including, for example, sale processing, management of our supply chain, collection of cash and credit and debit card payments, payment of obligations, and various other processes and procedures. Our ability to efficiently manage our business depends significantly on the reliability and capacity of these sometimes-complex systems, including reliance upon third-party service and technology providers. The failure of these systems to operate effectively, disputes with our technology vendors, problems with maintenance, upgrading or transitioning to replacement systems, or a breach in security of these systems could cause delays in customer service, reduce efficiency in our operations, require significant investment to remediate, require significant legal expense, or cause negative publicity that could damage our brand. Significant capital investments might be required to remediate any problems.

 

Risks Relating to Our Financial Condition

 

Our management has a limited experience operating a public company and are subject to the risks commonly encountered by early-stage companies.

Although management of Aureus Inc. has experience in operating small companies, current management has not had to manage expansion while being a public company. Many investors may treat us as an early-stage company. In addition, management has not overseen a company with large growth. Because we have a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. These risks include:

 

· risks that we may not have sufficient capital to achieve our growth strategy;
· risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements;
· risks that our growth strategy may not be successful; and
· risks that fluctuations in our operating results will be significant relative to our revenues.

 

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this section. If we do not successfully address these risks, our business could be significantly harmed.

 

We have limited operational history in an emerging industry, making it difficult to accurately predict and forecast business operations.

 

As we have little or no operational history and have yet to generate revenue, it is extremely difficult to make accurate predictions and forecasts on our finances. This is compounded by the fact that we operate in transforming industries. There is no guarantee that our products or services will remain attractive to potential and current users as these industries undergo rapid change, or that potential customers will utilize our services.

 

As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.

 

We have not yet produced a net profit and may not in the near future, if at all. While we expect our revenue to grow, we have not achieved profitability and cannot be certain that we will be able to sustain our growth rate or realize sufficient revenue to achieve profitability. Our ability to continue as a going concern may be dependent upon raising capital from financing transactions, increasing revenue throughout the year and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.

 

We will require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

 

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to update our technology, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we will need to engage in continued equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business may be harmed.

 

 

 

  7  

 

 

We are highly dependent on the services of our key executives, the loss of whom could materially harm our business and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.

 

We are highly dependent on our management, specifically Mr. Everett Dickson. As of March 31, 2019, we have an employment agreement in place with Mr. Dickson. If we lose key employees, our business may suffer. Furthermore, our future success will also depend in part on the continued service of our management personnel and our ability to identify, hire, and retain additional key personnel. We do not carry “key-man” life insurance on the lives of any of our executives, employees or advisors. We experience intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development of our business. Because of this competition, our compensation costs may increase significantly.

 

We may be unable to manage growth, which may impact our potential profitability.

 

Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we will need to:

 

· Establish definitive business strategies, goals and objectives;
· Maintain a system of management controls; and
· Attract and retain qualified personnel, as well as develop, train, and manage management-level and other employees.

 

If we fail to manage our growth effectively, our business, financial condition, or operating results could be materially harmed, and our stock price may decline.

 

We operate in a highly competitive environment, and if we are unable to compete with our competitors, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.

 

We operate in a highly competitive environment. Our competition includes all other companies that are in the food business. A highly competitive environment could materially adversely affect our business, financial condition, results of operations, cash flows and prospects.

 

We may not be able to compete successfully with other established companies offering the same or similar services and, as a result, we may not achieve our projected revenue and user targets.

 

If we are unable to compete successfully with other businesses in our existing market, we may not achieve our projected revenue and/or customer targets. We compete with both start-up and established companies. Compared to our business, some of our competitors may have greater financial and other resources, have been in business longer, have greater name recognition and be better established in our markets.

 

We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.

 

We estimate that it will cost approximately $50,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.

 

 

 

  8  

 

 

Risks Relating to our Common Stock and Offering

 

If we are able to develop a market for our Common Stock, our Common Stock may be thinly traded, so you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

 

If we are able to develop a market for our Common Stock, it may be thinly traded on the OTC Pink Open Market, meaning that the number of persons interested in purchasing our shares at, or near ask prices at any given time, may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer, which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained.

 

The market price for the common stock may be particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history, and lack of revenue, which could lead to wide fluctuations in our share price. The price at which you purchase our shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you.

 

The market for our shares of common stock may be characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our shares may be sporadically traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our shares is sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative investment due to, among other matters, our limited operating history and lack of revenue or profit to date, and the uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-averse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the securities of a seasoned issuer. The following factors may add to the volatility in the price of our shares: actual or anticipated variations in our quarterly or annual operating results; government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures; our capital commitments and additions or departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our shares regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our shares will be at any time, including as to whether our shares will sustain their current market prices, or as to what effect the sale of shares or the availability of shares for sale at any time will have on the prevailing market price.

 

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The possible occurrence of these patterns or practices could increase the volatility of our share price.

 

 

 

  9  

 

 

The market price of our common stock may be volatile and adversely affected by several factors.

 

The market price of our common stock could fluctuate significantly in response to various factors and events, including, but not limited to:

 

· our ability to market our products and services;
· our ability to execute our business plan;
· operating results below expectations;
· our issuance of additional securities, including debt or equity or a combination thereof;
· announcements of technological innovations or new products by us or our competitors;
· loss of any strategic relationship;
· industry developments, including, without limitation, changes in healthcare policies or practices;
· economic and other external factors;
· period-to-period fluctuations in our financial results; and
· whether an active trading market in our common stock develops and is maintained.

 

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. Issuers using the Alternative Reporting standard for filing financial reports with OTC Markets are often subject to large volatility unrelated to the fundamentals of the company.

 

Natural disasters and geo-political events could adversely affect our business.

 

Natural disasters, including hurricanes, cyclones, typhoons, tropical storms, floods, earthquakes and tsunamis, weather conditions, including winter storms, droughts and tornadoes, whether as a result of climate change or otherwise, and geo-political events, including civil unrest or terrorist attacks, that affect us, or other service providers could adversely affect our business.

 

We do not expect to pay dividends in the future; any return on investment may be limited to the value of our common stock.

 

We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

 

Our issuance of additional shares of Common Stock, or options or warrants to purchase those shares, would dilute your proportionate ownership and voting rights.

 

We are entitled under our articles of incorporation to issue up to 500,000,000 shares of common stock. We have, as of the date of this Offering Circular, 98,250,000 issued and outstanding share of Common Stock. Our board may generally issue shares of common stock, preferred stock, options, or warrants, without further approval by our shareholders based upon such factors as our board of directors may deem relevant at that time. It is likely that we will be required to issue a large amount of additional securities to raise capital to further our development. It is also likely that we will issue a large amount of additional securities to directors, officers, employees and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock plans. We cannot give you any assurance that we will not issue additional shares of common stock, or options or warrants to purchase those shares, under circumstances we may deem appropriate at the time.

 

 

 

  10  

 

 

The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.

 

Our Articles of Incorporation contains provisions that eliminate the liability of our directors for monetary damages to our company and shareholders. Our bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees that we may be unable to recoup. These provisions and resulting costs may also discourage our company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit our company and shareholders.

 

We may become involved in securities class action litigation that could divert management’s attention and harm our business.

 

The stock market in general, and the shares of early stage companies in particular, have experienced extreme price and volume fluctuations. These fluctuations have often been unrelated or disproportionate to the operating performance of the companies involved. If these fluctuations occur in the future, the market price of our shares could fall regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. If the market price or volume of our shares suffers extreme fluctuations, then we may become involved in this type of litigation, which would be expensive and divert management’s attention and resources from managing our business.

 

As a public company, we may also from time to time make forward-looking statements about future operating results and provide some financial guidance to the public markets. Our management has limited experience as a management team in a public company and as a result, projections may not be made timely or set at expected performance levels and could materially affect the price of our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC.

 

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

 

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock if and when such shares are eligible for sale and may cause a decline in the market value of its stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

 

 

 

  11  

 

 

As an issuer of a “penny stock,” the protection provided by the federal securities laws relating to forward-looking statements does not apply to us.

 

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

 

Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the stock price.

 

At this time, no securities analysts provide research coverage of our common stock, and securities analysts may not elect to provide such coverage in the future. It may remain difficult for our company, with its small market capitalization, to attract independent financial analysts that will cover our common stock. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect the stock’s actual and potential market price. The trading market for our common stock may be affected in part by the research and reports that industry or financial analysts publish about our business. If one or more analysts elect to cover our company and then downgrade the stock, the stock price would likely decline rapidly. If one or more of these analysts cease coverage of our company, we could lose visibility in the market, which, in turn, could cause our stock price to decline. This could have a negative effect on the market price of our common stock.

 

A reverse stock split may decrease the liquidity of the shares of our common stock.

 

The liquidity of the shares of our common stock may be adversely affected by a reverse stock split given the reduced number of shares that will be outstanding following a reverse stock split, especially if the market price of our common stock does not increase as a result of the reverse stock split.

 

Following a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

 

Although we believe that a higher market price of our common stock may help generate greater or broader investor interest, we cannot assure you that a reverse stock split will result in a share price that will attract new investors.

 

We are classified as an “emerging growth company” as well as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. 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.

 

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

 

We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

 

 

 

  12  

 

 

Notwithstanding the above, we are also currently a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

 

Because directors and officers currently and for the foreseeable future will continue to control Aureus Inc., it is not likely that you will be able to elect directors or have any say in the policies of Aureus Inc.

 

Our shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring shareholder approval will be decided by majority vote. The directors, officers and affiliates of Aureus Inc. beneficially own a majority of our outstanding common stock voting rights. Due to such significant ownership position held by our insiders, new investors may not be able to affect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management.

 

In addition, sales of significant amounts of shares held by our directors, officers or affiliates, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

 

Current Management has Voting Control of the Company.

 

As along as at least one share of our Series A Preferred Stock is outstanding, such Preferred Stock shall represent 66 2/3% of all votes entitled to be voted at any annual or special meeting of shareholders. All outstanding shares of our Series A Preferred Stock are held by Everett Dickson, the Company's President. Thus, Mr. Dickson has and will continue to have, voting control of the Company. See “DESCRIPTION OF SECURITIES – Series A Convertible Preferred Stock” and ”PRINCIPAL SHAREHOLDERS – Series A Convertible Preferred Stock.”

 

Since we intend to retain any earnings for development of our business for the foreseeable future, you will likely not receive any dividends for the foreseeable future.

 

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

Risks Relating to Our Company and Industry

 

The following risks relate to our proposed business and the effects upon us assuming we obtain financing in a sufficient amount.

 

Intellectual property rights claims may adversely affect an investment in us.

 

We are not aware of any intellectual property claims that may prevent us from operating; however, third parties may assert intellectual property claims relating to our technology. Regardless of the merit of an intellectual property or other legal action, any legal expenses to defend or payments to settle such claims would be extremely expensive and be borne by us. Additionally, a meritorious intellectual property claim could prevent us from operating and force us to liquidate. As a result, an intellectual property claim against us could adversely affect an investment in us.

 

Statements Regarding Forward-looking Statements

______

 

This Disclosure Statement contains various "forward-looking statements." You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "would," "could," “should," "seeks," "approximately," "intends," "plans," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements may be impacted by a number of risks and uncertainties.

 

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our Securities. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled "Risk Factors."

 

 

 

  13  

 

 

USE OF PROCEEDS

_______

 

If we sell all of the shares being offered, our net proceeds (after our estimated offering expenses of $70,000) will be $500,000. We will use these net proceeds for the following.

 

Percentage of
Offering Sold

 

   

Offering
Proceeds

 

    Approximate
Offering
Expenses
    Total Net
Offering
Proceeds
    Principal Uses
of Net
Proceeds
                        Bank Debt $47,000
                        Production/Inventory $47,000
                        SG&A $14,500
                        Marketing/Promotions $7,000
                                New Product Development $7,000
  25.00%     $ 142,500     $ 20,000     $ 122,500   $ 122,500

 

If 50% of the Shares offered are sold:

 

Percentage of
Offering Sold

 

   

Offering
Proceeds

 

    Approximate
Offering
Expenses
    Total Net
Offering
Proceeds
    Principal Uses
of Net
Proceeds
                        Bank Debt $100,000
                        Production/Inventory $100,0000
                        SG&A $26,000
                        Marketing/Promotions $12,000
                                New Product Development $12,000
  50.00%     $ 285,000     $ 35,000     $ 250,000   $ 250,000

 

If 75% of the Shared offered are sold:

 

Percentage of
Offering Sold

 

   

Offering
Proceeds

 

    Approximate
Offering
Expenses
    Total Net
Offering
Proceeds
    Principal Uses
of Net
Proceeds
                        Bank Debt $145,000
                        Production/Inventory $145,000
                        SG&A $40,500
                        Marketing/Promotions $21,000
                                New Product Development $21,000
  75.00%     $ 427,500     $ 55,000     $ 372,500   $ 372,500

 

If 100% of the Shares offered are sold:

 

Percentage of
Offering Sold

   

Offering
Proceeds

    Approximate
Offering
Expenses
    Total Net
Offering
Proceeds
    Principal Uses
of Net
Proceeds
                        Bank Debt $200,000
                        Production/Inventory $200,000
                        SG&A $50,000
                        Marketing/Promotions $25,000
                                New Product Development $25,000
  100.00%     $ 570,000     $ 70,000     $ 500,000   $ 500,000

 

We will use a substantial portion of the proceeds to pay bank loans. YIC Acquisitions assumed three loans. The first loan was an SBA loan with a balance of $1,061,077.80 and annual interest of 7.5%. The loan has monthly payments and matures March 13, 2026.

 

The second loan is a line of credit with a balance of $816,831.51 and an annual interest rate of 6.5%. Payment on this line of credit are monthly.

 

The third loan is for a truck with a balance of $17,944.87 and annual interest of 4.95%. This loan has monthly payments and matures May 6, 2020.

 

  14  

 

 

As indicated in the table above, if we sell only 75%, or 50%, or 25% of the shares offered for sale in this offering, we would expect to use the resulting net proceeds for the same purposes as we would use the net proceeds from a sale of 100% of the shares, and in approximately the same proportions, until such time as such use of proceeds would leave us without working capital reserve. At that point we would expect to modify our use of proceeds by limiting our expansion, leaving us with the working capital reserve indicated.

 

The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors. The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.

 

In the event we do not sell all of the shares being offered, we may seek additional financing from other sources in order to support the intended use of proceeds indicated above. If we secure additional equity funding, investors in this offering would be diluted. In all events, there can be no assurance that additional financing would be available to us when wanted or needed and, if available, on terms acceptable to us.

 

 

 

 

 

 

 

 

 

 

 

 

 

  15  

 

 

DILUTION

______

 

If you purchase shares in this offering, your ownership interest in our Common Stock will be diluted immediately, to the extent of the difference between the price to the public charged for each share in this offering and the net tangible book value per share of our Common Stock after this offering.

 

Our historical net tangible book value as of March 31, 2019 was a deficit of $432,675 or $(0.004) per share based on the 98,250,000 shares of our Common Stock outstanding on May 15, 2019. Historical net tangible book value per share equals the amount of our total tangible assets less total liabilities, divided by the total number of shares of our Common Stock outstanding, all as of the date specified.

 

The following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the shares offered for sale in this offering (after deducting estimated offering expenses of $500,000, $375,000, $250,000 and $125,000, respectively):

 

 

Percentage of shares offered that are sold     100%       75%       50%       25%  
                                 
Price to the public charged for each share in this offering   $ 0.015     $ 0.015     $ 0.015     $ 0.00  
                                 
Historical net tangible book value per share as of March 31, 2019   $ (0.004 )   $ (0.004 )   $ (0.004 )   $ (0.004 )
                                 
Increase in net tangible book value per share attributable to new investors in this offering (2)   $ 0.005     $ 0.004     $ 0.003     $ 0.002  
                                 
Net tangible book value per share, after this offering   $ 0.001     $ 0.000     $ 0.000     $ (0.000 )
                                 
Dilution per share to new investors   $ 0.014     $ 0.016     $ 0.017     $ 0.018  

 

 

 

 

 

 

 

  16  

 

 

DISTRIBUTION

 

This Offering Circular is part of an Offering Statement that we filed with the SEC, using a continuous offering process. Periodically, as we have material developments, we will provide an Offering Circular supplement that may add, update or change information contained in this Offering Circular. Any statement that we make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular supplement. The Offering Statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the SEC and any Offering Circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC. See the section entitled “Additional Information” below for more details.

 

Pricing of the Offering

 

Prior to the Offering, there has been a limited public market for the Offered Shares. The initial public offering price was determined by the board of directors. The principal factors considered in determining the initial public offering price include:

 

· the information set forth in this Offering Circular and otherwise available;
· our history and prospects and the history of and prospects for the industry in which we compete;
· our past and present financial performance;
· our prospects for future earnings and the present state of our development;
· the general condition of the securities markets at the time of this Offering;
· the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and
· other factors deemed relevant by us.

 

Offering Period and Expiration Date

 

This Offering will start on or after the Qualification Date and will terminate if the Maximum Offering is reached or, if it is not reached, on the Termination Date.

 

Procedures for Subscribing

 

When you decide to subscribe for Offered Shares in this Offering, you should go to our website, click on the "Invest Now" button and follow the procedures as described.

 

1. Electronically receive, review, execute and deliver to us a subscription agreement; and

 

2. Deliver funds directly by wire or electronic funds transfer via ACH to the specified account maintained by us.

 

 

 

  17  

 

 

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. We shall only deliver such subscription agreement upon request after a potential investor has had ample opportunity to review this Offering Circular.

 

Right to Reject Subscriptions. After we receive your complete, executed subscription agreement and the funds required under the subscription agreement, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.

 

Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.

 

No Escrow

 

The proceeds of this offering will not be placed into an escrow account. We will offer our Common Stock on a best efforts basis. The Company will accept subscription agreements upon approval. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

 

Upon approval of a subscription agreement, subscriptions are irrevocable and the purchase price is non-refundable as expressly stated in this Offering Circular. The Company, by determination of the Board of Directors, in its sole discretion, may issue the Securities under this Offering for cash, promissory notes, services, and/or other consideration without notice to subscribers. All proceeds received by the Company from subscribers for this Offering will be available for use by the Company upon acceptance of subscriptions for the Securities by the Company.

 

Sale of these shares will commence within two calendar days of the qualification date and it will be a continuous Offering pursuant to Rule 251(d)(3)(i)(F).

 

 

 

 

 

 

 

 

 

 

 

  18  

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward Looking Statements

 

This Offering Circular contains forward-looking statements. For this purpose, any statements contained in this Offering Circular that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

 

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources”. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws. Unless stated otherwise, terms such as the “Company,” “US Highland,” “we,” “us,” “our,” and similar terms shall refer to US Highland, Inc., an Oklahoma corporation, and its subsidiaries.

 

Results of Operations

 

The three-months ended March 31, 2019 compared to the three-months ended March 31, 2018

 

Revenues

 

The Company had no revenues.

 

Operating Expenses

 

General and administrative expenses increased from $27,176 for the three months ended March 31, 2018 to $8,183 for the three months ended March 31, 2019.

 

Net Loss

 

For the three months ended March 31, 2019, we had net loss of $13,818 compared to a net loss of $32,307 for the three months ended March 31, 2018.

 

 

 

  19  

 

 

Liquidity and Capital Resources

 

The Company's cash position rose from $687 on March 31, 2018 to $2,290 on March 31, 2019.

 

Going Concern

 

The Company has no revenues and has incurred net losses. In addition, at March 31, 2019, there was an accumulated deficit of $516,425. These factors raise substantial doubt about the Company's ability to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or available from external sources such as debt or equity financings, or other potential sources. The inability to generate cash flow from operations or to raise capital from external sources will force the Company to substantially curtail and cease operations, therefore, having a material adverse effect on its business. Furthermore, there can be no assurance that any funds, if available, will possess attractive terms or not have a significant dilutive effect on the Company's existing stockholders.

 

Off Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements.

 

 

 

 

 

 

 

 

 

 

 

 

  20  

 

 

BUSINESS

________

 

Aureus Inc.

 

Aureus Inc. (“Aureus” “ARSN,” “we,” or the “Company”) was incorporated in Nevada on September 5, 2017. Our offices are located at 1170 Peachtree Street #1200, Atlanta, GA 30309. Our website is located at www.aureusgold.com. Our telephone number is (877) 448-6321 and our email address is info@aureusgold.com.

 

We do not incorporate the information on or accessible through our website into this Offering Circular, and you should not consider any information on, or that can be accessed through, our website a part of this Offering Circular.

 

We are a food brand development company that builds and represents popular food concepts throughout the United States as well as international markets. Management is highly experienced at business integration and re-branding potential. With little territory available for the older brands we intend to bring to our customers fresh innovative brands that have great potential. All of our brands will be unique in nature as we focus on niche markets that are still in need of developing.

 

History

 

Aureus Incorporated (the “Company”) was incorporated in the state of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties in the state of Nevada. The Company is currently in active status in the state of Nevada.

 

Aureus Inc. is a food brand development company focused on acquiring and growing well-established food brands. We will acquire operating businesses that produce revenue. These businesses will generally be in the food production and food service space. 

 

Our First Acquisition – Yuengling's Ice Cream

 

The Yuengling Family began making ice cream in 1920 when Frank D. Yuengling, President of D.G. Yuengling & Sons Brewery, started a separate company - Yuengling’s Ice Cream - to keep the Yuengling Brewery solvent despite the onset of Prohibition. In 1935, upon the repeal of Prohibition, Frank transferred ownership to son, Frederick G. Yuengling, and, from 1963 to 1985, Frederick’s eldest son, Frederick G. Yuengling, Jr., proudly produced ice cream, serving up generations of memories for folks in and around Pennsylvania.

 

In 2014, after a near 30 year absence from store shelves, Frederick G. Yuengling Jr.’s son, David Yuengling, and Rob Bohorad relaunched the Yuengling’s Super Premium Ice Cream brand through regionally focused Retail, Wholesale and Food Service channels in and around the Keystone State.

 

Looking ahead to 2019,Yuenglings Ice Cream agreed to be acquired by Aureus, Inc. The Aureus/Yuenglings union provides the capital needed to address our organic expansion plans, tactically reduce accounts payable and iii) dramatically reduce the Parent Co. debt. All of there activities managed and overseen by our team of C-level corporate finance, turn around, marketing, logistics & transport specialists to help guide this nationally recognized, award winning, high value, exceptional quality Super Premium artisan ice cream brand to profitability by 2020!

 

Our first acquisition, is the operating assets of Yuengling's Inc Cream Corp. Developed by American businessman Frank D. Yuengling as a dairy business to help support the Yuengling family brewery during the 1920s Prohibition period, Yuengling's Ice Cream has a strong tradition of making exceptional gourmet ice cream products in central Pennsylvania. This fan-favorite brand continues advancing its legacy and its renowned dairy quality, by using locally sourced dairy ingredients that contain no added hormones.

 

The Acquisition

 

The Company has acquired all of the assets of Yuengling's Ice Cream Corp. Yuengling's was in default on loans from Mid Penn Bank totaling $1,895,864.16. 

 

 

 

  21  

 

 

Under the terms of the security agreement between Mid Penn Bank and Yuengling's, Mid Penn Bank had the immediate right to take possession of and sell any and all collateral as a repossessing creditor. Yuengling's consented to have Mid Penn Bank sell the collateral to the Company by way of a private sale under Pennsylvania's Article 9 of the UCC, 13 Pa.CS.A. § 9610. Yuengling's and Mid Penn Bank agreed to permit Mid Penn Bank to take control of the collateral and to sell the collateral to the Company so long as the Company assumed all secured debt of Yuengling's.

 

The Company consummated this transaction through its wholly-owned subsidiary. YIC Acquisitions Corp. YIC Acquisitions has fully and unconditionally assumed all of the obligations, liabilities, covenants, representations, and warranties of Yuengling's and fully and unconditionally assumed and agreed to pay the unpaid balance of the indebtedness. The Company has entered into a security agreement with Mid-Penn Bank covering all of the purchased assets and the debt assumed by the Company in the amount of $1,895,864.16.

 

Prior to this closing, Yuengling's Ice Cream Online Distributors, LLC had marketing agreement to sell Yuengling's products online. This agreement was extinguished by the asset sale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  22  

 

 

Yuenglings Ice Cream Corporation

Balance Sheets

As of December 31, 2018 and 2017

(unaudited)


    December 31, 2018     December 31, 2017  
ASSETS            
Current Assets                
Cash   $ 89,062     $ 87,180  
Accounts receivable     (436,779 )     (404,984 )
Inventory     344,809       378,864  
Other Current Assets     430       300  
Total Current Assets     (2,478 )     61,309  
Total Fixed Assets     240,169       240,169  
TOTAL ASSETS   $ 237,691     $ 301,478  
                 
LIABILITIES AND EQUITY                
Liabilities                
Total current liabilities     4,567,047       4,029,368  
Total Long Term Liabilities     1,027,998       1,129,531  
Total Liabilities     5,595,045       5,158,899  
                 
Equity                
Treasury stock     (59,200 )     (59,200 )
Retained earnings     (5,883,640 )     (5,095,547 )
Paid in capital     1,335,419       1,085,419  
Net income     (749,934 )     (1,788,093 )
Total Equity     (5,537,354 )     (4,857,421 )
TOTAL LIABILITIES AND EQUITY   $ 237,691     $ 301,475  

 

 

 

  23  

 

 

Yuenglings Ice Cream Corporation

Income Statements

(unaudited)

 

    For the
year ended
December 31, 2018
    For the
year ended
December 31, 2017
 
INCOME            
Total Sales   $ 786,496     $ 1,952,361  
                 
Total Income     687,371       691,999  
Total Cost of Goods Sold     476,276       102,666  
                 
Gross Profit     211,094       (330,607 )
Total Expense     678,331       1,245,752  
                 
Net Ordinary Income     (437,237 )     (1,576,360 )
                 
Other Income/Expense                
Total Other Income     256       848  
Total Other Expense     282,953       212,581  
                 
Net Other Income     (282,697 )     (211,733 )
                 
Net Income   $ (749,934 )   $ (1,788,093 )

 

 

 

 

 

 

 

 

  24  

 

 

Yuengling Mission Statement

 

Our mission is to provide the highest quality ice cream and dairy-related products to our consumers, offer an enjoyable work environment for our employees, establish lasting relationships with our customers and vendors that are centered on trust, strive to surpass our customers’ expectations, always act ethically, and give back to the communities that support us.

 

Brand Strengths

 

Yuengling’s is an American and family owned company with high brand recognition & loyalty. Its products are considered in the super premium category and are all natural. Yuengling exceeds whole foods market® ingredient quality standards. The product is Kosher with no added growth hormones, steroids or antibiotics.

 

Yuengling is a strong, recognized brand with a long, positive family history, an experienced management team and Board of Directors. We are smaller and more responsive than larger competitors.

 

At a time when national brands continue to reduce the quality of their offerings and downsize their products, Yuengling’s products compare favorably, providing good “value” to our customers, and regularly out-perform competitors in samplings. We offer innovative new products and flavors.

 

Operating Strategy

 

The Yuengling operating strategy is three-phased centering on development and acceptance in a defined core area; expanding once specific volume and metrics are attained. The company has accomplished Phase One and Two and since mid-2015, has been executing Phase Three.

 

Marketing

 

The core marketing area is defined as the area from Scranton, Pennsylvania in the North, central Virginia in the South, Pittsburgh, Pennsylvania to the West, and the New Jersey shore to the East. We offer higher than average overall margins for retailers.

 

We originally focused on forming an on-going relationship with a strong local super premium ice cream manufacturer and utilization of certain industry contacts that allowed initial platform development and flavor testing. Then we established critical mass distribution as well as specific consumer acceptance levels in the defined core marketing area. This was accomplished through brand promotion at store level and top of mind focused marketing programs, including large scale and small scale direct consumer product sampling. We are now expanding and establishing the brand outside the core marketing area. Our first expansion was in New England, Western Pennsylvania/Ohio, and North Carolina, South Carolina and Georgia.

 

Development Strategy

 

Our development strategy began with market entry in February, 2014. The target was to establish distribution in retail grocery stores within the core marketing area with six quart flavors of ice cream per store.

 

The brand is a slight bargain compared to super premium brands such as Ben & Jerry’s and Haagen-Dazs and on par with other brands such as Gifford’s. The promotional pricing strategy depends upon the retailer with the brand positioned as a super premium offering. We sometimes engage in short-term Every Day Low Price (“EDLP”) program pricing in an effort to undermine the existing premium and super premium players.

Distribution is warehouse based.

 

 

 

  25  

 

 

Production

 

Production currently is being done at Hunter Farms in High Point, NC and the Galliker Dairy Company in Johnstown, PA. Hunter Farms and Galliker Dairy produce ice cream for several other national and regional brands. These locations are advantageous for delivery to our current retailers and for further expansion. They have high quality, modern facilities that allows us to produce at cost effective rates.

 

Product Specifications

 

Our packaging consists of six quarts to a case and eight pints to a case. We offer super premium butterfat (14%) basis with super premium flavorings and super premium ingredients. Our products have high solids and mid-range weight (50% over-run/air) for a super premium mouth feel.

 

Product History

 

In February, 2014 Yuengling’s brand was launched in quart containers in ten flavors. Quarts were the best way to gain access to shelf space without displacing an existing 48oz or 16oz products. In October, 2014 we launched two seasonal flavors and we added four new flavors in February, 2015. In July, 2015 we launched six pint flavors in 800 Ahold stores and began 3 gallon tub food service sales. In May, 2016 we were granted trademark for “Black & Tan” for ice cream category, and in September, 2016 we were granted trademark for “Butterbeer” for ice cream category.

 

Primary Retail Competitors

 

At the national level, the primary retail competitors are Ben & Jerry’s and Haagen Dazs. At the regional level the primary retail competitors are Giffords (Maine), Graeter’s (Ohio), and Turkey Hill (Pennsylvania).

 

Primary Advantages

 

We have a higher quality than most national brands, comparable to Ben & Jerry’s and Haagen Dazs. We have better value to consumers in terms of cost per ounce. We have new and different flavors, strong brand loyalty, and close relationships with retailers.

 

The Aureus / YIC - Online + Yuengling’s Super Premium Ice Cream Brand & Product Specifications

 

American Sourced

 

Yuengling’s Ice Cream uses a high Super Premium butterfat (14%) base that is then paired with America’s finest artisan flavorings and inclusions (12%).

Yuengling’s Ice Cream contains no added Growth Hormones, Steroids or Antibiotics.

Yuengling’s Ice Cream is rBST / rBGH free, KOSHER and 15 of our 17 flavors are GLUTEN FREE.

 

American Made

 

Yuengling’s Ice Cream is produced at high quality, modern FDA compliant facilities in Johnstown, PA and High Point, NC. The Yuengling’s recipe contains high solids and mid-range weight (50% over-run / air) for a gourmet mouth feel. Yuengling’s Ice Cream is a PA Preferred brand and exceeds the Whole Foods Market® Ingredient Quality Standards.

 

 

 

  26  

 

 

American Served

 

Yuengling’s Ice Cream is offered at select Universities, Restaurants, Professional Stadiums, local Grocers and upscale Convenience Stores. We offer packaging for a range of consumers including 3 Gallon Tubs (Food Service), 6 Quarts per case (Food Service + Retail + Online) and 8 Pints per case (Universities, Stadiums + Retail + Online). Yuengling’s Ice Cream is American and Family owned since 1920.

 

THE BRAND LINE UP: Current Flavors - PINTS & TUBS

 

Yuengling’s Super Premium Ice Cream uses a super premium butterfat (14%) basis combined with American sourced ingredients and inclusions (12%) that include no added growth hormones, steroids or antibiotics and mid range weight (50% overrun / air) to produce a super premium palette taste and feel. All of our Super Premium Ice Cream flavors are Kosher and Yuengling’s Super Premium Ice Cream is Amercian made in High Point, NC and in Johnstown, PA. Proudly American served, Yuengling’s Super Premium Ice Cream is now expanding its distribution across the USA.

 

Black and Tan - A Swirl of Rich Belgian Chocolate Ice Cream & Salty Caramel Ice Cream.

Butterbeer – Butter Cream Ice Cream and Butterscotch Ice Cream with a Butterscotch Swirl.

Vanilla Fudge Chunk with Pretzels - Madagascar Vanilla Ice Cream, Fudge Swirl, Chocolate Chips & Chocolate Covered Pretzels.

Vanilla - Creamy and Sweet Madagascar Vanilla.

Original Sea Salt Caramel Swirl - Sea Salt Caramel Ice Cream with rich Caramel Swirls.

Peanut Butter Cup - Rich Belgian Chocolate + Peanut Butter Ice Creams with Peanut Butter Swirls & Peanut Butter Cup pieces.

Root Beer Float - Traditional Old Fashioned Root Beer Float.

Espresso Chocolate Chip - Dark Coffee Ice Cream with Rich Espresso Chocolate Chips.

Cherry Vanilla Chunk - Cherry Vanilla Ice Cream with Cherry Chunks and Large Dark Chocolate Chips.

Cookies & Cream - Vanilla Ice Cream with Old Fashioned Dark Chocolate Cookie pieces.

Cinnamon Churro - Madagascar Vanilla Ice Cream with Baked Churro Pieces and a Cinnamon Swirl.

Teaberry – A Mountainous Teaberry Plant yields bright Pink, Sweet, Tart and Minty old fashioned Ice Cream.

Strawberry – Strawberry Ice Cream with fresh Strawberry pieces.

 

THE BRAND LINE UP: Specialty Flavors - PINTS & TUBS

 

Yuengling’s Super Premium Ice Cream uses a super premium butterfat (14%) basis combined with American sourced ingredients and inclusions (12%) that include no added growth hormones, steroids or antibiotics and mid range weight (50% overrun / air) to produce a super premium palette taste and feel. All of our Super Premium Ice Cream flavors are Kosher and Yuengling’s Super Premium Ice Cream is American made in High Point, NC and in Johnstown, PA. Proudly American served, Yuengling’s Super Premium Ice Cream is now expanding its distribution across the USA.

 

Teaberry (PINTS) - A Mountainous Teaberry Plant yields bright Pink, Sweet, Tart and Minty old fashioned Ice Cream. *

Chocolate (TUBS) - Rich Belgian Chocolate Ice Cream. *

Mint Chocolate Chip (TUBS) - Mint Ice Cream with Rich Chocolate Chips. *

Vanilla Chocolate Chip (TUBS) - Madagascar Vanilla Ice Cream with Rich Chocolate Chips. *

Chocolate Marshmallow (TUBS) - Rich Belgian Chocolate Ice Cream with Creamy Marshmallow Swirl. *

 

* Denotes Product is Gluten Free

 

 

 

  27  

 

 

Brand & Flavor Awards

 

Yuengling’s Madagascar Vanilla Super Premium Ice Cream received the 2016 Gold Medal at the L.A. International Dairy Competition in the "Premium Vanilla Ice Cream" category.

 

Yuengling’s Cinnamon Churro Super Premium Ice Cream was selected by the Supermarket Guru - one of America’s most trusted food critics and influencers - a Hit Product Seal™ and was appointed “Pick of the Week” with a score of 94/100.

 

Yuengling’s Cherry Vanilla Chunk Super Premium Ice Cream received the Wisconsin Dairy Products Association - 1st Place Award at the World Dairy Expo Championship in the ”Dairy Products - Open Class: Flavored Fruit and or Nut Ice Cream" category and earned a near-perfect score of 99.8.

 

In 2018, Yuengling’s Ice Cream had 9 of its 14 flavors selected as part of a distribution partnership with Goldbelly, the largest online purveyor of artisan, gourmet and specialty foods in the US.

 


Seasonality

 

We may experience seasonality in our business.

 

Legal Proceedings

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

Facilities

 

As of March 31, 2019, the Company currently has no ownership or leases of property. The Company’s business mailing address is 1170 Peachtree Street, Suite 1200, Atlanta, Georgia 30309. The Company’s primary phone number is (877) 448-6321.

 

Employees

 

As of March 31, 2019, we had two employees, including officers and directors. We believe that we have been successful in attracting experienced and capable personnel. All our employees have entered agreements with us requiring them not to compete or disclose our proprietary information. Our employees are not represented by any labor union. We believe that relations with our employees are excellent.

 

 

 

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MANAGEMENT

______

 

The following table sets forth information regarding our executive officers, directors and significant employees, including their ages as of March 31, 2019:

 

Name and Principal Position   Age     Term of Office     Approximate
per week for
Part-Time Employees
 
Everett Dickson – President, Chairman     55       Since December 2018       40  

 

Everett Dickson – President, Chairman

 

Mr. Dickson serves as our Chairman and President. Since 2017, Mr. Dickson has served as CEO and CFO at Cruzani, Inc., a publicly traded Food Service Company. 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 start up companies in the alternative fuels industry.

 

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.

 

A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board of Directors individually or collectively consent in writing to the action.

 

Executive officers are appointed by, and serve at the pleasure of, the Board of Directors of the Company, subject to any contractual arrangements.

 

The Aureus / Yuenglings Proposed Executive Team

 

Everett Dickson - Chairman & CEO: Mr. Dickson serves as our Chairman and CEO. Since 2017, Mr. Dickson has served as CEO and CFO at Cruzani, Inc., a publicly traded Food Service Company. 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 start up companies in the alternative fuels industry.

 

David Yuengling - Vice Chairman: David will hold the position of Vice Chairman and is the founder of Yuengling’s Ice Cream. Prior to relaunching the Family’s ice cream brand in 2014, David enjoyed a 30 year career in computer consulting specializing in computer programming, business analysis and software design services for companies in the Manufacturing, Distribution, Banking, Insurance and Federal / State Government sectors. The former President of Yuengling Dairy Products, where he worked summers in high school and college, David is a proud graduate of Dickinson College (BS - Computer Science) and Philadelphia, PA based St. Joseph's University, where he earned his MBA.

 

Robert C. Bohorad - Controller: Rob will serve as our Controller and is the co-founder of Yuengling’s Ice Cream. Rob has 20+ years of experience working for companies in various stages of their life cycles. Rob previously ran his own logistics, tracking and security solutions consulting practice aside mentoring several start-up and early-stage companies. Throughout his career, Rob has worked in numerous capacities, including business + strategic development, marketing, finance, accounting, operations and HR. Rob brings broad industry experience, with particular focus in medical devices and software.  Rob is a graduate of the University of Pennsylvania Wharton School and received his MBA from Fordham University.

 

 

 

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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.”

 

Family Relationships

 

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

 

Involvement in Certain Legal Proceedings

 

None of our directors or executive officers has been involved in any of the following events during the past ten years: 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 or her involvement in any type of business, securities or banking activities; or 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.

 

Audit Committee

 

We currently do not have a separately standing Audit Committee due to our limited size and our Board performs the functions that would otherwise be performed by an Audit Committee.

 

Compensation Committee

 

The Company does not have a Compensation Committee due to our limited size and our Board performs the functions that would otherwise be performed by a Compensation Committee. Our Board intends to form a Compensation Committee when needed.

 

Other Committees

 

We do not currently have a separately-designated standing nominating committee. Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security holders have made any such recommendations. 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.

 

Potential Conflicts of Interest

 

Because we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have a financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company has only five directors, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors.

 

Significant Employees

 

We do not have any significant employees other than our current executive officer and director named in herein.

 

 

 

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EXECUTIVE COMPENSATION

______

 

Employment Agreements

 

Mr. Dickson has entered into an employment agreement with the Company for a term of five years. Pursuant to their employment agreements, he has agreed to devote a substantial portion of his business and professional time and efforts to our business. The employment agreement provides that he shall receive a salary determined by the Board of Directors commensurate with the development of the Company. He may be entitled to receive, at the sole discretion of our Board of Directors or a committee thereof, bonuses based on the achievement (in whole or in part) by the Company of our business plan and achievement by him of fixed personal performance objectives.

 

The following table represents information regarding the total compensation our officers and directors of the Company as of March 31, 2019:

 

Name and Principal Position   Cash Compensation     Other Compensation     Total Compensation  
Everett Dickson – President, Director (1)   $ 0.00     $ 0.00     $ 0.00  
Total   $ 0.00     $ 0.00     $ 0.00  

 

(1) Consists of shares awarded at par value for compensation.

 

Disclosure of Conflicts of Interest

 

There are no conflicts of interest between the Company and any of its officers or directors

 

Disclosure of Conflicts of Interest

 

There are no conflicts of interest between the Company and any of its officers or directors.

 

Board Composition

 

Our board of directors currently consists of one member. Each director of the Company serves until the next annual meeting of stockholders and until his successor is elected and duly qualified, or until his earlier death, resignation or removal. Our board is authorized to appoint persons to the offices of Chairman of the Board of Directors, President, Chief Executive Officer, one or more vice presidents, a Treasurer or Chief Financial Officer and a Secretary and such other offices as may be determined by the board.

 

We have no formal policy regarding board diversity. In selecting board candidates, we seek individuals who will further the interests of our stockholders through an established record of professional accomplishment, the ability to contribute positively to our collaborative culture, knowledge of our business and understanding of our prospective markets.

 

Board Leadership Structure and Risk Oversight

 

The board of directors oversees our business and considers the risks associated with our business strategy and decisions. The board currently implements its risk oversight function as a whole. Each of the board committees when established will also provide risk oversight in respect of its areas of concentration and reports material risks to the board for further consideration.

 

Code of Business Conduct and Ethics

 

Prior to one year from the date of this Offering's qualification, we will be adopting a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. We will post on our website a current copy of the code and all disclosures that are required by law or market rules in regard to any amendments to, or waivers from, any provision of the code.

 

 

 

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PRINCIPAL STOCKHOLDERS

______

 

The following sets forth information with respect to the beneficial ownership of each class of our voting securities as of March 31, 2019, by (i) each of our directors and executive officers, (iii) all of our directors and executive officers as a group and (iii) each stockholder known by us to be the beneficial owner of more than 5% of our outstanding voting capital stock. To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our capital stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.

 

Common Stock

 

Name and Address   Shares Held     Percentage of Common
Stock
    Percentage of Common Stock Assuming All Shares
are Sold
 

Cede & Co. Fast Balance

570 Washington Blvd

5th Floor

Jersey City, NJ 07310

    71,400,000       87.0%       59.5%  

Green Coast Capital
International Sa

Plz 2000 10th Fl 50th St
Panama City

Rep Of Panama

    8,000,000       9.8%       6.7%  

Common Sense Holdings Limited Manex 9 Castle Court

2 Castle Gate Way Dudley, Wm DY14RD

    4,275,000       5.2%       3.6%  
Total     83,675,000                  

 

 

Series A Convertible Preferred Stock

 

Name and Address   Shares Held   Percentage of Preferred Stock  

Everett Dickson

1170 Peachtree Street #1200

Atlanta, GA 30309

  5,000,000   100.0%  

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We have not adopted any equity compensation plans.

 

 

 

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RELATED TRANSACTIONS

 

Other than as given below, since the beginning of December 31, 2016, there have been no transactions and there are no currently proposed transaction, in which the Company was or is to be a participant and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets as of the end of last two completed fiscal years. A related person is any executive officer, director, nominee for director, or holder of 5% or more of the Company’s Common Stock, or an immediate family member of any of those persons.

 

On December 21, 2018, pursuant to a Stock Purchase Agreement, dated December 20, 2018, by and among the Company Everett M. Dickson (the “Buyer”) and Hohme Holdings International, Inc. (the “Seller”), the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for a total of $15,000. Sadiq Shaikh has voting and dispositive control over the Seller. Simultaneously with the consummation of the Stock Purchase Agreement on December 21, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from the Board of Directors of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson was appointed as the President, Chief Executive Officer, Treasurer, Secretary and as a director to the Board of directors of the Company.

 

Mr. Dickson subsequently exchanged his Common Stock for 5,000,000 shares of the Company's Series A Convertible Preferred Stock.

 

 

 

 

 

 

 

 

 

 

 

 

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DESCRIPTION OF SECURITIES

______

 

The Common Stock

 

We are authorized to issue 500,000,000 shares of Common Stock, $0.001 par value. The holders of Common Stock are entitled to equal dividends and distributions, with respect to the Common Stock when, as, and if declared by the Board of Directors from funds legally available for such dividends. No holder of Common Stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption. Upon our liquidation, dissolution or winding up, and after payment of creditors and any amounts payable to senior securities, the assets will be divided pro rata on a share-for-share basis among the holders of the shares of Common Stock. All shares of Common Stock now outstanding upon completion of this Offering and conversion of any Preferred Stock, are, and will be, fully paid, validly issued and non-assessable.

 

Holders of our Common Stock do not have cumulative voting rights, so that the holders of more than 50% of the shares voting for the election of directors will be able to elect 100% of the directors if they choose to do so, and in that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors. No holder of shares of capital stock possessing voting power shall have the right to cumulate his or her voting power in the election of directors.

 

At each meeting of holders of shares of capital stock for the election of directors at which a quorum is present, a nominee for election as a director in an uncontested election shall be elected to the board of directors if the number of votes cast for such nominee's election exceeds the number of votes cast against such nominee's election. Abstentions will not be considered votes cast for or against a nominee at the meeting. Notwithstanding the foregoing, if the number of candidates exceeds the number of directors to be elected, then, in that election, the nominees receiving the greatest number of votes shall be elected.

 

An "uncontested election" means any meeting of holders of shares of capital stock at which the number of nominees does not exceed the number of directors to be elected and with respect to which no holder of capital stock has submitted notice of an intent to nominate a candidate for election at such meeting in accordance with the by-laws, as they may be amended from time to time, or, if such a notice has been submitted with respect to such meeting, on or before the tenth day prior to the date that the corporation files its definitive proxy statement relating to such meeting with the Securities and Exchange Commission (regardless of whether or not it is thereafter revised or supplemented), each such notice with respect to such meeting has been (a) withdrawn by its respective submitting stockholder in writing to the secretary of the corporation, (b) determined not to be a valid and effective notice of nomination (such determination to he made by the Board of Directors (or a designated committee thereof) pursuant' to the by-laws, or, if challenged in court, by final court order) or (c) determined not to create a bona fide election contest by the Board of Directors (or a designated committee thereof).

 

No holder of shares of stock of the corporation shall be entitled as of right to purchase or subscribe for any part of any unissued stock of this corporation or of any new or additional authorized stock of the corporation of any class whatsoever, or of any issue of securities of the corporation convertible into stock, whether such stock or securities be issued for money or for a consideration other than money or by way of dividend, but any such unissued stock or such new or additional authorized stock or such securities convertible into stock may be issued and disposed of to such persons, firms, corporations and associations, and upon such terms as may be deemed advisable by the board of directors without offering to stockholders then of record or any class of stockholders any thereof upon the same terms or upon any terms.

 

The Company has never paid any dividends to shareholders of our Common Stock. The declaration in the future of any cash or stock dividends will depend upon our capital requirements and financial position, general economic conditions, and other pertinent factors. We presently intend not to pay any cash or stock dividends in the foreseeable future. Management intends to reinvest earnings, if any, in the development and expansion of our business. No dividend may be paid on the Common Stock until all Preferred Stock dividends are paid in full.

 

 

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Preferred Stock

 

We are authorized to issue Preferred Stock: Total shares authorized: 10,000,000 as of March 31, 2018 of which 5,000,000 shares have been issued.

 

The powers, preferences, rights, qualifications, limitations and restrictions pertaining to the Preferred Stock, or any series thereof, shall be such as may be fixed, from time to time, by the Board in its sole discretion. Authority to do so being hereby expressly vested in the Board. The authority of the Board with respect to each such series of Preferred Stock will include, without limiting the generality of the foregoing, the determination of any or all of the following:

 

The number of shares of any series and the designation to distinguish the shares of such series from the shares of all other series: (1) the voting powers, if any, of the shares of such series and whether such voting powers are full or limited: (2) the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid; (3) whether dividends, if any, will be cumulative or noncumulative, the dividend rate or rates of such series and the dates and preferences of dividends on such series: (4) the rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of. the Corporation: (5) the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any other class or classes of any other series of the same other any other class or classes of stock or any other security, of the Corporation or any other corporation or entity, and the rates or other determinants of conversion or exchange applicable thereto; (6) the right, if any, to subscribe for or to purchase any securities of the Corporation or any other corporation or other entity; (7) the provisions, if any. of a sinking fund applicable to such series: and (8) any other relative, participating, optional or other powers, preferences or rights, and any qualifications, limitations or restrictions thereof. of such series. 

 

Series A Convertible Preferred Stock

 

We have designated Five Million (5,000,000) shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $0.001 per share.

 

The holders of the Series A Convertible Preferred Stock are not be entitled to receive any dividends.

 

In the event of any voluntary or involuntary liquidation. dissolution, or winding up of the Corporation. the holders of shares of the Series A Non Convertible Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders. whether from capital. surplus or earnings. an amount equal to Two Thirds (2/3) of the assets so distributed.

 

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 Corporation will not, by amendment of the Articles of Incorporation or through any reorganization, transfer of assets, consolidation. merger, dissolution. issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms lo be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Articles of Incorporation and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of the Series A Non Convertible Preferred Stock against impairment.

 

The Series A Convertible Preferred Stock shall, with respect to distribution rights on liquidation, winding up and dissolution, (i) rank senior to any of the shares of Common Stock of the Corporation. and any other class or series of stock of the Corporation which by its terns shall rank junior to the Series A Convertible Preferred Stock, and (ii) rank junior to any other series or class of preferred stock of the Corporation and any other class or series of stock of the Corporation which by its term shall rank senior to the Series A Convertible Preferred Stock.

 

 

 

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So long as any shares of Series A Convertible Preferred Stock are outstanding, the Corporation shall not (i) alter or change any of the powers, preferences, privileges or rights of the Series A Convertible Preferred Stock, or (ii) amend the provisions of this section; in each case, without first obtaining the approval by vote or written consent. in the manner provided by law, of the holders of at least a majority of the outstanding shares of Series A Convertible Preferred Stock, as to changes affecting the Series A Convertible Preferred Stock.

 

The shares of the Series A Convertible Preferred Stock are not redeemable.

 

So long as any shares of Series A Non..Convertible Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent as provided by the Nevada Business Corporation Act) of the Holders of at least a majority of the then outstanding shares of Series A Convertible Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series A Convertible Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Corporation so as to affect adversely the Series A Convertible Preferred Stock; (c) create any new class or series of capital stock having a preference over the Series A Convertible Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Corporation (as previously defined, '"Senior Securities; (d) create any new class, or series of capital stock ranking pari passu with the Series A Convertible Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Corporation {as previously defined ''Pari Passu Securities"); (e) increase the authorized number of shares of Series A Convertible Preferred Stock; (f) issue any shares of Series A Convertible Preferred Stock other than pursuant to the Securities .Purchase Agreement with the original parties thereto; (g) issue any additional shares of Senior Securities; or (h) or declare or pay any cash dividend or distribution on. any Junior Securities.

 

If holders of at least a majority of tho then outstanding shares of Series A Convertible Preferred Stock agree to allow the Corporation to alter or change die rights. preferences or privileges of the shares of Series A Convertible Preferred Stock, then the Corporation shall deliver notice of such approved change to the Holders of the Series A Convertible Preferred Stock that did not agree to such alteration or change (the “Dissenting Shareholders").

 

If at any time or from time to time there shall be (i) a merger, or consolidation of the Corporation with or into another corporation. (ii) the sale of all or substantially all of the Corporation's capital stock or assets to any other person, (iii) any other form of business combination or reorganization in which the Corporation shall not be the continuing or surviving entity of such business combination or reorganization, or (iv) any transaction or series of transactions by the Corporation in which in excess of 50 percent of the Corporation's voting power is transferred (each a "Reorganization" then as a part of such Reorganization, provision shall be made so that the holders of the Series A Convertible Preferred Stock shalt thereafter be entitled to receive the same kind and amount of stock or other securities or property (including cash) of the Corporation, or of the successor corporation resulting from such Reorganization.

 

The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization. recapitalization. transfer of assets. consolidation. merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation. but will at all times in good faith assist in the carrying out of all the provisions of this Certificate of Designation and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Series A Convertible Preferred Stock against impairment.

 

The holders of the Series A Convertible Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

 

Right to Convert

 

Conversion Ratio. 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, shall be subject to adjustment as provided in herein.

 

Termination of Conversion Rights. In the event of a liquidation, dissolution or winding up of the Corporation the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Convertible Preferred Stock.

 

 

 

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Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Convertible Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the fractional amount will be rounded to the next whole number.

 

Notice of Conversion. In order for a holder of Series A Convertible Preferred Stock to voluntarily convert shares of Series A Convertible Preferred Stock into shares of Common Stock, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series A Convertible Preferred Stock(or at the principal office of the Corporation if the Corporation serves as its own transfer agent for the Series A Convertible Preferred Stock) that such holder elects to convert all or any number of such holder’s shares of Series A Convertible Preferred Stock and, if applicable, any event on which such conversion is contingent and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Series A Convertible Preferred Stock(or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series A Convertible Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent for the Series A Convertible Preferred Stock). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent for the Series A Convertible Preferred Stock) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series A Convertible Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series A Convertible Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, and (ii) pay all declared but unpaid dividends on the shares of Series A Convertible Preferred Stock converted.

 

Reservation of Shares. At all times when the Series A Convertible Preferred Stock shall be outstanding, the Corporation shall take such corporate action as may be necessary to reserve and keep such number of shares available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series A Convertible Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Convertible Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Articles of Incorporation. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Convertible Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non- assessable shares of Common Stock at such adjusted Conversion Price.

 

Effect of Conversion. All shares of Series A Convertible Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, and to receive payment of any dividends declared but unpaid thereon. Any shares of Series A Convertible Preferred Stock so converted shall be retired and canceled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Convertible Preferred Stock accordingly.

 

 

 

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Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:

 

(1)   the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
(2)   the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (b) that no such adjustment shall be made if the holders of Series A Convertible Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Convertible Preferred Stock had been converted into Common Stock on the date of such event.

 

Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property, then and in each such event the holders of Series A Convertible Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Series A Convertible Preferred Stock had been converted into Common Stock on the date of such event.

 

Adjustment for Merger or Reorganization, etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Series A Convertible Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Subsections 6.5 or 6.6), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Series A Convertible Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series A Convertible Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions in this Section with respect to the rights and interests thereafter of the holders of the Series A Convertible Preferred Stock, to the end that the provisions set forth in this Section (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Convertible Preferred Stock. For the avoidance of doubt, nothing in this Subsection shall be construed as preventing the holders of Series A Convertible Preferred Stock from seeking any appraisal rights to which they are otherwise entitled under the Nevada Revised Statutes in connection with a merger triggering an adjustment hereunder, nor shall this Subsection be deemed conclusive evidence of the fair value of the shares of Series A Convertible Preferred Stock in any such appraisal proceeding.

 

 

 

 

 

 

 

  38  

 

 

DIVIDEND POLICY

______

 

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future. Any further determination to pay dividends on our capital stock will be at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our Board of Directors considers relevant.

 

SECURITIES OFFERED

______

 

Current Offering

 

Aureus Inc. (“Aureus Inc.,” “We,” or the “Company”) is offering up to $570,000 total of Securities, consisting of Class A Common Stock, $0.001 par value (the “Common Stock” or collectively the “Securities”).

 

The Common Stock

 

We are authorized to issue 500,000,000 shares of Common Stock, $0.001 par value. The holders of Common Stock are entitled to equal dividends and distributions, with respect to the Common Stock when, as, and if declared by the Board of Directors from funds legally available for such dividends. No holder of Common Stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption. Upon our liquidation, dissolution or winding up, and after payment of creditors and senior securities, the assets will be divided pro rata on a share-for-share basis among the holders of the shares of Common Stock. All shares of Common Stock now outstanding upon completion of this Offering are, and will be, fully paid, validly issued and non-assessable.

 

Holders of our Common Stock do not have cumulative voting rights, so that the holders of more than 50% of the shares voting for the election of directors will be able to elect 100% of the directors if they choose to do so. In that event, the holders of the remaining shares will not be able to elect any members to the Board of Directors.

 

Transfer Agent

 

Our transfer agent is Action Stock Transfer Corporation 2469 E. Fort Union Blvd., Suite 214 Salt Lake City, UT 84121. Our telephone is (801) 274-1088 Fax: (801) 274-1099, website www.columbiastock.com. The transfer agent is registered under the Exchange Act and operates under the regulatory authority of the SEC and FINRA.

 

 

 

  39  

 

 

SHARES ELIGIBLE FOR FUTURE SALE

_____

 

Prior to this Offering, there has been a limited market for our Common Stock. Future sales of substantial amounts of our Common Stock, or securities or instruments convertible into our Common Stock, in the public market, or the perception that such sales may occur, could adversely affect the market price of our Common Stock prevailing from time to time. Furthermore, because there will be limits on the number of shares available for resale shortly after this Offering due to contractual and legal restrictions described below, there may be resales of substantial amounts of our Common Stock in the public market after those restrictions lapse. This could adversely affect the market price of our Common Stock prevailing at that time.

 

Rule 144

 

In general, a person who has beneficially owned restricted shares of our Common Stock for at least twelve months, in the event we are a reporting company under Regulation A, or at least six months, in the event we have been a reporting company under the Exchange Act for at least 90 days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the 90 days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:

 

· 1% of the number of shares of our Common Stock then outstanding; or
· the average weekly trading volume of our Common Stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale;

 

provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.

 

LEGAL MATTERS

_____

 

Certain legal matters with respect to the shares of common stock offered hereby will be passed upon by John E. Lux, Esq. of Washington, D.C.

 

 

  40  

 

 

WHERE YOU CAN FIND MORE INFORMATION

______

 

We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act with respect to the shares of common stock offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this Offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the SEC's Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov.

 

 

 

 

 

 

  41  

 

 

INDEX TO FINANCIAL STATEMENTS

 

 

Financial Statements for the Three-Months Ended January 31, 2019 and January 31, 2018 (Unaudited)  
Condensed Balance Sheets for the three-month period ended January 31, 2019 and January 31, 2018 F-2
Condensed Statements of Operations for the three-month period ended January 31, 2019 and January 31, 2018 F-3
Statements of Changes in Shareholders’ Equity F-4
Condensed Statement of Cash Flows for the three-month period ended January 31, 2019 and January 31, 2018 F-5
Notes to Condensed Unaudited Financial Statements for the three months ended January 31, 2019 F-6
   
SUPPLEMENTAL INFORMATION TO FINANCIAL STATEMENTS F-15
Consolidated Proforma Balance Sheet as of January 31, 2019 F-16
Consolidated Proforma Statements of Operations (Unaudited) for the three months ended January 31, 2019  
   
Financial Statements for the Year Ended October 31, 2018 and 2017 F-17
Condensed Balance Sheets for the year ended October 31, 2018 and October 31, 2017 F-18
Condensed Statements of Operations for the three-month periods ended October 31, 2018 and 2017 and for the year ended October 31, 2018 and 2017 F-19
Statements of Changes in Shareholders’ Equity F-20
Condensed Statements of Cash Flows for the year ended October 31, 2018 and 2017 F-21
Notes to Condensed Unaudited Financial Statements for the year ended October 31, 2018 F-22
   
Financial Statements for the Year Ended October 31, 2017 and 2016 F-32
Condensed Balance Sheets for the year ended October 31, 2017 and October 31, 2016 F-33
Condensed Statements of Operations for the three-month periods ended October 31, 2017 and 2016 and for the year ended October 31, 2017 and 2016 F-34
Statements of Changes in Shareholders’ Equity F-35
Condensed Statements of Cash Flows for the year ended October 31, 2017 and 2016 F-36
Notes to Condensed Unaudited Financial Statements for the year ended October 31, 2017 F-37
   
   
   

 

 

 

 

 

  F-1  
 

 

AUREUS INCORPORATED

CONDENSED BALANCE SHEETS

 

    January 31, 2019     January 31, 2018  
ASSETS   (Unaudited)     (Unaudited)  
Current Assets:                
Cash   $ 2,290     $ 687  
Prepaid Professional Fee's     6,363       6,363  
Total Current Assets     8,653       7,050  
                 
Accounts Receivables                
Notes Receivable     43,373        
Total Receivables     43,373        
                 

Fixed Assets:

               
Plant and Equipment     41,487       17,079  
Total Fixed Assets     41,487       17,079  
                 
TOTAL ASSETS   $ 93,513     $ 24,130  
                 

LIABILITIES AND STOCKHOLDERS' DEFICIT

               
Current Liabilities:                
Accounts Payable   $ 171,047     $ 169,645  
Accrued Liabilities     25,000        
Accrued interest     40,469       19,608  
Due to related party     550       50  
Loans from Related Party           24,656  
Notes Payable     289,121       264,121  
Total Liabilities     526,187       453,424  
                 

Stockholders' Deficit:

               
Common Stock: authorized 150,000,000; 148,050,000 and 126,450,000 shares @ $0.001 par value Issued and Outstanding at January 31, 2019 and October 31, 2018, respectively     148,050       126,450  
Preferred Stock: 10,000,000 shares authorized, par value $0.001 per share, no shares issued and outstanding            
Additional Paid in Capital     (64,300 )     (95,700 )
Accumulated Deficit     (516,425 )     (460,044 )
Total Stockholders' Deficit     (432,675 )     (429,294 )
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT   $ 93,513     $ 24,130  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-2  
 

 

AUREUS INCORPORATED

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

    For the Three Month Period Ended     For the Three Month Period Ended  
    January 31, 2019     January 31, 2018  
OPERATING EXPENSES                
General and Administrative   $ 1,383     $ 803  
Professional Fees     6,800       6,373  
Total Operating Expenses     8,183       27,176  

 

Other Expenses / (income)

               
Interest Expense     5,635       5,131  
Net loss for the Period   $ (13,818 )   $ (32,307 )

 

Net loss per share:

               
Basic and Diluted   $ (0.00 )   $ (0.00 )

 

Weighted average number of shares outstanding:

               
Basic and Diluted     148,050,000       126,450,000  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-3  
 

 

AUREUS INCORPORATED

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

 

    Common Stock     Preferred Stock     Additional
Paid In
    Stock Subscriptions     Accumulated     Total Shareholder’s  
    Shares     Par Value     Shares     Par Value     Capital     Received     Deficit     Equity  
Balance October 31, 2013         $     $     $     $     $     $ (855 )   $ (855 )
Shares subscribed at $0.001                                   6,000             6,000  
Shares subscribed at $0.001                                   24,300             24,300  
Net loss                                         (4,575 )     (4,575 )
Balance October 31, 2014         $     $     $     $     $ 30,300     $ (5,430 )   $ 24,870  
                                                                 
Capital Contribution                             450                   450  
Receipt of payment for subscription receivable     126,450,000       126,450                   (96,150 )     (30,300 )            
Net Loss                                         (76,094 )     (76,094 )
Balance October 31, 2015     126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (81,524 )   $ (50,774 )
                                                                 
Net Loss                                         (140,063 )     (140,063 )

Balance October 31, 2016

    126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (221,587 )   $ (190,837 )
                                                                 

Net Loss

                                        (206,151 )     (206,151 )

Balance October 31, 2017

    126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (427,738 )   $ (396,988 )
                                                                 

Net Loss

                                        (74,869 )     (74,869 )

Balance October 31, 2018

    126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (502,607 )   $ (471,857 )
                                                                 
Receipt of payment for subscription receivable     21,600,000       21,600                   31,400                   53,000  
Net Loss                                         (13,818 )     (13,818 )
Balance Three-Month Period Ending January 31, 2019     148,050,000     $ 148,050     $     $     $ (64,300 )   $     $ (516,425 )   $ (432,675 )

 

 

 

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-4  
 

 

AUREUS INCORPORATED

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

    For the Three-Month Period Ended     For the Three-Month Period Ended  
    January 31, 2019     January 31, 2018  
Cash flow from Operating activities:                
Net Loss   $ (13,818 )   $ (32,307 )
Increase in Note Receivables     (43,373 )      
Increase in prepaid expenses            
Increase in accounts payable     300       25,373  
Increase in accrued expenses     5,635       5,131  
Net Cash used in Operating activities     (51,256 )     (1,803 )
                 

Cash flow from Investing activities:

               
Mining properties           112,000  
Plant and Equipment            
Accumulated Depreciation - Plant and Equipment           593  
Net Cash used in Investing activities           112,593  
                 

Cash flow from Financing activities:

               
Proceeds from Notes Payable     53,000       24,656  
Due to Related Party     500       (112,000 )
Loan from Related Party           (24,656 )
Additional Paid in Capital            
Common Stock            
Net cash provided by financing activities     53,500       (112,000 )
                 

Increase (Decrease) in cash during the period

    (2,244 )     (1,210 )

Cash at beginning of period

    46       1,897  

Cash at end of period

$ 2,290     $ 687  
               

Supplemental disclosure of cash flow information:

               
Cash paid during the period                
Taxes   $     $  
Interest   $     $  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-5  
 

 

 

AUREUS INCORPORATED

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

January 31, 2019

 

 

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

 

Aureus Incorporated (the “Company”) was incorporated in the State of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties in the State of Nevada. On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. (“Gold Exploration”) pursuant to which the Company purchased 100% of Gold’s Exploration’s interest in one claim block of 11 claims or 220 acres, in Elko County, Nevada (the “Gold Creek Property”) for $15,000. The claims were registered in the name of Gold Exploration. On August 31, 2015, Gold Exploration’s title to the mining claims on the Gold Creek Property expired but has been re-staked by the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage-grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property. On July 21, 2016, the Company entered into that certain Purchase Agreement (the “MMLH Purchase Agreement”) with Montana Mine Land Holdings LLC, a Montana limited liability company wholly-owned by Tracy Fortner (“MMLH”) pursuant to which the Company acquired a 100% undivided interest on MMLH’s patented mining’s claims and the property located in Broadwater County, Montana (the “Mining Interests”) in consideration for $112,000 payable in 45,000,000 shares of common stock valued at $0.00248889 per share for a total of $112,000 (the “Property Shares”). The Company had not issued the Property Shares due to the fact there was not a sufficient amount of authorized common stock available at the time. The $112,000 debt was included to the existing balance of a non-interest-bearing Loan from Related Party.

 

Pursuant that certain Cancelation of Acquisition and Stock Purchase Agreement, dated November 7, 2017, by and among the Company, MMLH, Tracy Fortner (the “Seller”), and Hohme Holdings International Inc. (the “Buyer”), the Company return the Mining Interests to MMLH, MMLH relinquished its claim to the undelivered Property Shares owed MMLH under the MMLH Purchase Agreement and the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for $0.0001111 per share, for a total of $10,000. Sadiq Shaikh has voting and dispositive control over the Buyer. Simultaneously with the consummation of the Stock Purchase Agreement, Tracy Fortner resigned as the President and Chief Executive Officer and as a Board member of the Company, Sadiq Shaikh was appointed as the President, Chief Executive Officer and as a member of the Board of Directors of the Company and Deborah Engles was appointed as the Secretary and Treasurer of the Company.

 

On December 21, 2018, pursuant to a Stock Purchase Agreement, dated December 20, 2018, by and among the Company Everett M. Dickson (the “Buyer”) and Hohme Holdings International, Inc. (the “Seller”), the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for a total of $15,000. Sadiq Shaikh has voting and dispositive control over the Seller. Simultaneously with the consummation of the Stock Purchase Agreement on December 21, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from the Board of Directors of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson was appointed as the President, Chief Executive Officer, Treasurer, Secretary and as a director to the Board of directors of the Company.

 

 

 

  F-6  
 

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. It is management’s opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement’s presentation. These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollars and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017. The accompanying unaudited financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Cash and Cash Equivalents

 

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. As of January 31, 2019, and October 31, 2018, there were no cash equivalents.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ from those estimates.

 

Impairment of Long-Lived Assets

 

The Company tests its assets for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable, which includes comparing the carrying amount of a long-lived asset to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss would be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. For the Company’s mining claims, this test includes examining the discounted and undiscounted cash flows associated with value beyond proven and probable reserves, in determining whether the mining claim is impaired.

 

Start-up Expenses

 

The Company expenses costs associated with start-up activities as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s general and administrative expenses.

 

 

 

  F-7  
 

 

Income Taxes

 

The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing

authorities widely understood administrative practices and precedents.

 

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

 

We have implemented certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertain tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 and have analyzed filing positions in United States jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the United States as our “major” tax jurisdiction. Generally, we remain subject to United States examination of our income tax returns.

 

Fair Value of Financial Instruments

 

The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.

 

 

 

  F-8  
 

 

FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

 

Level 1: Quoted prices in active markets for identical assets or liabilities

 

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

 

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Basic and Diluted Loss Per Share

 

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. ASC 260 requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the three months ended January 31, 2019 and 2018, there were no potentially dilutive securities.

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its condensed consolidated financial statements.

 

In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements.

 

 

 

  F-9  
 

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205- 40),” which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the fiscal year ending December 31, 2014.

 

In April 2015, the FASB issued ASU 2015-3, “Interest - Imputation of Interest (Subtopic 835-30),” related to the presentation of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements.

 

NOTE 3 – GOING CONCERN

 

The Company has sustained operating losses since inception. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

Management is endeavoring to begin exploration activities however, may not be able to do so within the next fiscal year. Management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity securities, which may not be available on commercially reasonable terms, if at all.

 

If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the holders of our common stock. For the quarters ending January 31, 2019 and January 31, 2018 the Company had losses of $13,818 and $32,307 respectively and the accumulated deficit is $516,425.

 

 

 

  F-10  
 

 

NOTE 4 – LOAN FROM RELATED PARTY

 

During the period from April 19, 2013 to October 31, 2015, the Company received advances totaling $24,656 from Dong Gu Kang and Min Jung Kang, the Company’s former executive officers and directors (the “Selling Stockholders”). The advance was unsecured, non-interest bearing and due upon demand giving 30 days written notice to the borrower. In connection with the Stock Purchase Agreement, dated September 30, 2015, among the Company, the Selling Stockholders and Maverick, LLC, a Nevis limited liability company (“Maverick”), pursuant to which Maverick purchased 90,000,000 shares of common stock of the Company from the Selling Stockholders, Maverick assumed $24,656 in outstanding debt owed the Selling Stockholders by the Company; constituting 100% of the debt owed the Selling Stockholders of the Company, pursuant to a Debt Assumption Agreement, dated September 30, 2015, between the Company, the Selling Stockholders and Maverick. Maverick beneficially owns 71.7% of the common stock of the Company.

 

On July 21, 2016 the Company entered into an agreement with Montana Mine Land Holdings LLC to acquire a 100% undivided interest of its Patented Mining Claims or the Property named: Keene Placer, M.S. located in Broadwater County, Montana. The terms of this agreement are for the Company to issue 45,000,000 shares of its common stock to Montana Mine Land Holdings LLC. The parties to have agreed the value of this purchase shall be $112,000 or $0.00248889 per share. As of November 7, 2017, the Company has not issued the shares and $112,000 is included to the existing balance of Loan from Related Party.

 

On November 7, 2017, the Company entered into a certain Cancelation of Acquisition and Stock Purchase Agreement with Montana Mine Land Holdings LLC, ("MMLH"), Tracy Fortner (the Seller), Hohme Holdings International Inc. "(Buyer"), to which the Buyer purchased 90,000,000 shares of common stock of the Corporation (the Stock Purchase") from the Seller for $0.0001111 per share, for a total of $10,000.00, Tracy Fortner is the Managing Member of Montana Mine Land Holdings, LLC resulting the debt no longer being considered a loan from a related party.

 

The balance of loan as of January 31, 2019 and January 31, 2018 are $24,656 respectively.

 

NOTE 5 – NOTES PAYABLE

 

On September 9, 2015, issued 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018 accrued interest amounted to $5,649 and $3,649, respectively.

 

On November 6, 2015, we issued Craigstone Ltd. 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $ 5,238 and $3,238 respectively.

 

On March 22, 2016, we issued Craigstone Ltd. 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $4,619 and $2,619 respectively.

 

On August 31, 2016, we issued Success Zone Tech Ltd. a promissory note in the principal amount of $100,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $ 19,397.26 and $11,397, respectively.

 

 

 

 

 

  F-11  
 

 

On February 23, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 17,500, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $ 2,965 and $1,564, respectively.

 

On March 27, 2017, we issued Craigstone Ltd. a promissory note in the principal amount of $ 12,465, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $1,844 and $864, respectively.

 

On May 16, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 4,500, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $616 and $256, respectively.

 

On May 19, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 25,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $3408 and $1,408, respectively.

  

On July 28, 2017, we issued Backenald Trading Ltd. a promissory note in the principal amount of $ 20,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, and 2018, accrued interest amounted to $2,420 and $819, respectively.

 

On August 13, 2018, the company issued Travel Data Solutions a promissory note in the principal amount of $ 25,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of January 31, 2019, accrued interest amounted to $937, respectively.

 

NOTE 6 – DEPOSIT ON MINERAL PROPERTY ACQUISITION

 

On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. to purchase 11 claims in Mineral County Nevada known as the Gold Creek Property (the “Gold Creek Property”). The Company paid a total of $15,000 for the purchase of the Gold Creek Property, and was reflected in the financial statements as a deposit, until such time as the ownership transferred to the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage- grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property. On October 31, 2015 the Company recorded an impairment of $15,000 due the Land Freeze.

 

 

 

 

 

 

  F-12  
 

 

On July 21, 2016 the Company entered into an agreement with Montana Mine Land Holdings LLC to acquire a 100% undivided interest of its Patented Mining Claims or the Property named: Keene Placer, M.S. located in Broadwater County, Montana. The purchase price is 45,000,000 shares of common stock of the Company and the agreed upon value is $112,000 or $0.00248889 per share. As of January 31, 2018, the shares had not been issued therefore a current liability is recorded to a related party in the amount of $112,000.

 

On November 7, 2017, the Company entered into a certain Cancelation of Acquisition and Stock Purchase Agreement with Montana Mine Land Holdings LLC, ("MMLH") and Tracy Fortner (the Seller). Hohme Holdings International Inc. "(Buyer"), to which the Buyer purchased 90,000,000 shares of common stock of the Corporation (the Stock Purchase") from the Seller for $0.0001111 per share, for a total of $10,000.00.

 

NOTE 7 – COMMON STOCK

 

On November 17, 2015 the Company, authorized a fifteen-for-one (15:1) forward stock split of the Company’s common stock, par value $0.001 per share without changing the authorized number or par value of the Common Stock and with fractional shares resulting from the Forward Split being rounded up to the nearest whole number. The Forward Split became effective on November 25, 2015. As a result of the Forward Split, the number of the Company’s issued and outstanding shares of Common Stock were increased from 8,430,000 to 126,450,000. The amounts are being presented retroactive in the financial statements at October 31, 2015.

 

On December 5, 2017, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a 1-for-8 reverse stock split of its outstanding common stock with fractional shares being rounded up to the nearest whole number. However, on January 12, 2018, the Financial Industry Regulatory Authority (“FINRA”) informed the Company that the Company’s corporate action submission notice with FINRA concerning the reverse split was deemed to be deficient under FINRA Rule 6490(d)(3)(2) due to the fact that the Company had failed to file its quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2016 and annual report on Form 10-K for the fiscal year ended October 231, 2016 prior to deregistering the Company’s common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC on March 7, 2017. As a result, the reverse split was not implemented in the OTC marketplace.

 

The Company amended the Articles of Incorporation of the Corporation to authorize the issuance of 10 million (10,000,000) shares of "blank check" preferred stock, par value $0.001 per share.

 

On December 20, 2018, the Company entered into a certain Stock Purchase Agreement with Everett M. Dickson. To which the Buyer purchased 90,000,000 shares of common stock of the Corporation (the “Stock Purchase Agreement”) from the Seller for a total of $15,000. The Company accepted the resignation of Sadiq Shaikh as President and Chief Executive Officer and Deborah Engles as Secretary and Treasurer. Immediately following the resignation and removal of the officer(s) the Company accepted Sadiq Shikh’s successor Everett Dickson, as President, Chief Executive Officer, Treasurer, Secretary and Board Member.

 

 

 

 

 

 

  F-13  
 

 

NOTE 8– SUBSEQUENT EVENTS

 

On February 11, 2019, the Company amended its Articles of Incorporation to increase its authorized capital stock to be 510 million (510,000,000) shares, consisting of 500 million (500,000,000) shares of common stock, par value $0.001 per share, and 10 million (10,000,000) shares of “blank check” preferred stock, par value of $0.001 per share.

 

On March 26, 2019 the Company entered into a LOI with Yuengling’s Ice Cream Corporation for a certain asset purchase agreement. This LOI supersedes any previous discussions. The Supplement Proforma Financial Statement is presented for purposes of additional analysis and is not a required part of the financial statements. This information is to give a review of the proposed financial situation after the closing of the acquisition. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the proforma financial statements.

 

In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report.

 

 

 

 

 

 

 

 

 

 

 

 

 

  F-14  
 

 

SUPPLEMENTAL INFORMATION TO FINANCIAL STATEMENTS

 

AUREUS INCORPORATED
CONSOLIDATED PROFORMA BALANCE SHEET

(UNAUDITED)

 

    January 31, 2019  
ASSETS   (Unaudited)  
Current Assets:        
Cash   $ 5,203  
CD’s     102,375  
Inventory     344,809  
Prepaid Professional Fee's     6,363  
Total Current Assets     458,750  
         
Accounts Receivables        
Notes Receivable     43,373  
Total Receivables     43,373  
         
Fixed Assets:        
Plant, Equipment & Fixtures     76,123  
Total Fixed Assets     76,123  
         
Goodwill     1,880,437  
TOTAL ASSETS   $ 2,458,682  
         

LIABILITIES AND STOCKHOLDERS' DEFICIT

       
Current Liabilities:        
Accounts Payable   $ 171,047  
Accrued Liabilities     25,000  
Accrued interest     40,469  
Due to related party     550  
Total Current Liabilities     237,066  
         
Notes Payable        
Backenald     40,000  
Craigstone     52,465  
Maverick     24,856  
SuccessZone     100,000  
Travel Data     72,000  
Freezer Truck Loan     18,787  
SBA Loan     1,066,938  
Line of Credit     802,423  
On Deck Loan     64,634  
J Cunha     8,159  
Additional Promissory Notes     166,964  
Total Notes Payable     2,417,225  
         
Total Liabilities     2,891,357  
         
Stockholders' Deficit:        
Common Stock: authorized 150,000,000; 148,050,000 and 126,450,000 shares @ $0.001 par value Issued and Outstanding at January 31, 2019 and October 31, 2018 respectively     148,050  
Preferred Stock: 10,000,000 shares authorized, par value $0.001 per share, no shares issued and outstanding      
Additional Paid in Capital     (64,300 )
Accumulated Deficit     (516,425 )
Total Stockholders' Deficit     (432,675 )
         
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT   $ 2,458,682  

 

The accompanying notes are an integral part of these financial statements

 

 

 

 

 

  F-15  
 

 

SUPPLEMENTAL INFORMATION TO FINANCIAL STATEMENTS

 

AUREUS INCORPORATED

CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS (UNAUDITED)

 

    For the three-months ended
January 31, 2019
 
INCOME   $ 687,371  
Cost of Goods Sold     476,276  
Total Income     211,095  
         
OPERATING EXPENSES        
General and Administrative        
Advertising     431  
Bank Charges     3,280  
Dues & Subscriptions     2,000  
Equipment Repair     500  
Equipment Rental     300  
Insurance     14,000  
Payroll     50,000  
Licenses & Permits     3,528  
Marketing     10,000  
Office Expenses     500  
Shipping     7,213  
Technology Expense     2,000  
Utilities     2,000  
Total General & Administrative Expenses     95,751  
Professional Fee’s        
Accounting     18,000  
Legal     5,000  
Pubco Expenses     3,975  
Total Professional Fee’s     26,975  
         
Total Operating Expenses     122,726  
         

Other Expenses / (income)

       
Interest Expense     296,779  
Total Other Expenses     296,779  
         
Net loss for the Period   $ (208,411 )

 

 

The accompanying notes are an integral part of these financial statements

 

 

 

 

  F-16  
 

 

 

 

AUREUS INCORPORATED

Symbol: ARSN

 

 

 

 

FINANCIAL STATEMENTS

For the

Year Ended October 31, 2018

 

Fiscal Year:

10/31

 

Address:

1170 Peachtree Street, Suite 1200

Atlanta, GA 30309

 

 

 

 

 

 

 

  F-17  
 

 

AUREUS INCORPORATED

CONDENSED BALANCE SHEETS

 

    October 31, 2018     October 31, 2017  
ASSETS   (Unaudited)     (Unaudited)  
Current Assets:                
Cash   $ 46     $ 1,897  
Prepaid Professional Fee's     6,363       6,363  
Total Current Assets     6,409       8,260  

 

Fixed Assets:

               
Mining Properties           112,000  
Plant and Equipment     16,487       17,672  
Total Fixed Assets     16,487       129,672  
TOTAL ASSETS   $ 22,896     $ 137,932  
                 

LIABILITIES AND STOCKHOLDERS' DEFICIT

               
Current Liabilities:                
Accounts Payable   $ 170,747     $ 144,272  
Accrued interest     34,834       14,477  
Due to related party     50       112,050  
Loans from Related Party           24,656  
Notes Payable     289,121       239,465  
Total Liabilities     494,752       534,920  
                 

Stockholders' Deficit:

               
Common Stock: authorized 150,000,000; 126,450,000 shares @ $0.001 par value Issued and Outstanding at October 31, 2018 and October 31, 2017 respectively     126,450       126,450  
Preferred Stock: 10,000,000 shares authorized, par value $0.001 per share, no shares issued and outstanding            
Additional Paid in Capital     (95,700 )     (95,700 )
Accumulated Deficit     (502,606 )     (427,737 )
Total Stockholders' Deficit     (471,856 )     (396,987 )
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT   $ 22,896     $ 137,933  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-18  
 

 

AUREUS INCORPORATED

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

    For the Three Month Period Ended     For the Three Month Period Ended     For the Twelve Month Period Ended     For the Twelve Month Period Ended  
    October 31, 2018     October 31, 2017     October 31, 2018     October 31, 2017  
OPERATING EXPENSES                                
General and Administrative   $ 10,993     $ 53,735     $ 54,512     $ 197,148  
Total Operating Expenses     10,993       53,735       54,512       197,148  

 

Other Expenses / (income)

                               
Interest Expense     5,187       264       20,357       9,003  
Net loss for the Period   $ (16,180 )   $ (53,999 )   $ (74,869 )   $ (206,151 )

 

Net loss per share:

                               
Basic and Diluted   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )

 

Weighted average number of shares outstanding:

                               
Basic and Diluted     126,450,000       126,450,000       126,450,000       126,450,000  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-19  
 

 

AUREUS INCORPORATED

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

 

    Common Stock     Preferred Stock     Additional
Paid In
    Stock Subscriptions     Accumulated     Total Shareholder’s  
    Shares     Par Value     Shares     Par Value     Capital     Received     Deficit     Equity  
Balance October 31, 2013         $     $     $     $     $     $ (855 )   $ (855 )
Shares subscribed at $0.001                                   6,000             6,000  
Shares subscribed at $0.001                                   24,300             24,300  
Net loss                                         (4,575 )     (4,575 )
Balance October 31, 2014         $     $     $     $     $ 30,300     $ (5,430 )   $ 24,870  
                                                                 
Capital Contribution                             450                   450  
Receipt of payment for subscription receivable     126,450,000       126,450                   (96,150 )     (30,300 )            
Net Loss                                         (76,094 )     (76,094 )
Balance October 31, 2015     126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (81,524 )   $ (50,774 )
                                                                 
Net Loss                                         (140,063 )     (140,063 )

Balance October 31, 2016

    126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (221,587 )   $ (190,837 )
                                                                 

Net Loss

                                        (206,151 )     (206,151 )

Balance October 31, 2017

    126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (427,738 )   $ (396,988 )
                                                                 

Net Loss

        $                               (74,869 )     (74,869 )

Balance October 31, 2018

    126,450,000     $ 126,450     $     $     $ (95,700 )   $     $ (502,607 )   $ (471,857 )

 

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-20  
 

 

AUREUS INCORPORATED

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

    For the Twelve Month Period Ended     For the Twelve Month Period Ended  
    October 31, 2018     October 31, 2017  
Cash flow from Operating activities:                
Net Loss   $ (74,869 )   $ (206,151 )
Increase in prepaid expenses             (1,500 )
Increase in accounts payable     26,475       113,378  
Increase in accrued expenses     20,357       9,003  
Net Cash used in Operating activities     (28,037 )     (85,270 )
                 

Cash flow from Investing activities:

               
Mining properties     112,000          
Plant and Equipment             (3,050 )
Accumulated Depreciation - Plant and Equipment     1,186       2,441  
Net Cash used in Investing activities     113,186       (609 )
                 

Cash flow from Financing activities:

               
Proceeds from Notes Payable     49,656       79,465  
Due to Related Party     (112,000 )      
Loan from Related Party     (24,656 )      
Additional Paid in Capital            
Common Stock            
Net cash provided by financing activities     (87,000 )     79,465  
                 

Increase (Decrease) in cash during the period

    (1,851 )     (6,414 )

Cash at beginning of period

    1,897       8,311  

Cash at end of period

$ 46     $ 1,897  
               

Supplemental disclosure of cash flow information:

               
Cash paid during the period                
Taxes   $     $  
Interest   $     $  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-21  
 

 

 

AUREUS INCORPORATED

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

October 31, 2018

 

 

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

 

Aureus Incorporated (the “Company”) was incorporated in the State of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties in the State of Nevada. On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. (“Gold Exploration”) pursuant to which the Company purchased 100% of Gold’s Exploration’s interest in one claim block of 11 claims or 220 acres, in Elko County, Nevada (the “Gold Creek Property”) for $15,000. The claims were registered in the name of Gold Exploration. On August 31, 2015, Gold Exploration’s title to the mining claims on the Gold Creek Property expired but has been re-staked by the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage-grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property. On July 21, 2016, the Company entered into that certain Purchase Agreement (the “MMLH Purchase Agreement”) with Montana Mine Land Holdings LLC, a Montana limited liability company wholly-owned by Tracy Fortner (“MMLH”) pursuant to which the Company acquired a 100% undivided interest on MMLH’s patented mining’s claims and the property located in Broadwater County, Montana (the “Mining Interests”) in consideration for $112,000 payable in 45,000,000 shares of common stock valued at $0.00248889 per share for a total of $112,000 (the “Property Shares”). The Company had not issued the Property Shares due to the fact there was not a sufficient amount of authorized common stock available at the time. The $112,000 debt was included to the existing balance of a non-interest-bearing Loan from Related Party.

 

Pursuant that certain Cancelation of Acquisition and Stock Purchase Agreement, dated November 7, 2017, by and among the Company, MMLH, Tracy Fortner (the “Seller”), and Hohme Holdings International Inc. (the “Buyer”), the Company return the Mining Interests to MMLH, MMLH relinquished its claim to the undelivered Property Shares owed MMLH under the MMLH Purchase Agreement and the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for $0.0001111 per share, for a total of $10,000. Sadiq Shaikh has voting and dispositive control over the Buyer. Simultaneously with the consummation of the Stock Purchase Agreement, Tracy Fortner resigned as the President and Chief Executive Officer and as a Board member of the Company, Sadiq Shaikh was appointed as the President, Chief Executive Officer and as a member of the Board of Directors of the Company and Deborah Engles was appointed as the Secretary and Treasurer of the Company.

 

On March 7, 2017 the Company filed at Form 15-12g for certification and notice of termination of registration under section 12(g) of the Securities Exchange Act of 1934 or suspension of duty to file reports under sections 13 and 15(d) of the securities exchange act of 1934.

 

 

 

  F-22  
 

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. It is management’s opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement’s presentation. These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollars and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017. The accompanying unaudited financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Cash and Cash Equivalents

 

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. As of October 31, 2018, and October 31, 2017, there were no cash equivalents.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ from those estimates.

 

Impairment of Long-Lived Assets

 

The Company tests its assets for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable, which includes comparing the carrying amount of a long-lived asset to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss would be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. For the Company’s mining claims, this test includes examining the discounted and undiscounted cash flows associated with value beyond proven and probable reserves, in determining whether the mining claim is impaired.

 

Start-up Expenses

 

The Company expenses costs associated with start-up activities as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s general and administrative expenses.

 

 

 

  F-23  
 

 

Mining Interests and Exploration Expenditures

 

Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mineral properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.

 

Income Taxes

 

The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing

authorities widely understood administrative practices and precedents.

 

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

 

We have implemented certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertain tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 and have analyzed filing positions in United States jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the United States as our “major” tax jurisdiction. Generally, we remain subject to United States examination of our income tax returns.

 

Fair Value of Financial Instruments

 

The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.

 

 

 

  F-24  
 

 

FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

 

Level 1: Quoted prices in active markets for identical assets or liabilities

 

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

 

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Basic and Diluted Loss Per Share

 

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. ASC 260 requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the three and six months ended October 31, 2017 and 2016, there were no potentially dilutive securities.

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its condensed consolidated financial statements.

 

In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements.

 

 

 

  F-25  
 

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205- 40),” which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the fiscal year ending December 31, 2014.

 

In April 2015, the FASB issued ASU 2015-3, “Interest - Imputation of Interest (Subtopic 835-30),” related to the presentation of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements.

 

NOTE 3 – GOING CONCERN

 

The Company has sustained operating losses since inception. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. For the years ending October 31, 2018 and October 31, 2017 the Company had losses of $74,869 and $206,151 respectively and the accumulated deficit is $502,607.

 

Management is continuing exploration efforts and endeavoring to begin production activities however, may not be able to do so within the next fiscal year. Management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity securities, which may not be available on commercially reasonable terms, if at all.

 

If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the holders of our common stock.

 

 

 

  F-26  
 

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

As of October 31, 2018, and 2017 the Company’s mine plant equipment consisted of the following:

 

    October 31, 2018     October 31, 2017  
Mine Plant Equipment   $ 21,907     $ 21,907  
Accumulated Depreciation     (5,420 )     (4,234 )
Net   $ 16,486     $ 17,672  

 

NOTE 5 – LOAN FROM RELATED PARTY

 

During the period from April 19, 2013 to October 31, 2015, the Company received advances totaling $24,656 from Dong Gu Kang and Min Jung Kang, the Company’s former executive officers and directors (the “Selling Stockholders”). The advance was unsecured, non-interest bearing and due upon demand giving 30 days written notice to the borrower. In connection with the Stock Purchase Agreement, dated September 30, 2015, among the Company, the Selling Stockholders and Maverick, LLC, a Nevis limited liability company (“Maverick”), pursuant to which Maverick purchased 90,000,000 shares of common stock of the Company from the Selling Stockholders, Maverick assumed $24,656 in outstanding debt owed the Selling Stockholders by the Company; constituting 100% of the debt owed the Selling Stockholders of the Company, pursuant to a Debt Assumption Agreement, dated September 30, 2015, between the Company, the Selling Stockholders and Maverick. Maverick beneficially owns 71.7% of the common stock of the Company.

 

On July 21, 2016 the Company entered into an agreement with Montana Mine Land Holdings LLC to acquire a 100% undivided interest of its Patented Mining Claims or the Property named: Keene Placer, M.S. located in Broadwater County, Montana. The terms of this agreement are for the Company to issue 45,000,000 shares of its common stock to Montana Mine Land Holdings LLC. The parties to have agreed the value of this purchase shall be $112,000 or $0.00248889 per share. As of July 31, 2017, the Company has not issued the shares and $112,000 is included to the existing balance of Loan from Related Party.

 

On November 7, 2017, the Company entered into a certain Cancelation of Acquisition and Stock Purchase Agreement with Montana Mine Land Holdings LLC, ("MMLH"), Tracy Fortner (the Seller), Hohme Holdings International Inc. "(Buyer"), to which the Buyer purchased 90,000,000 shares of common stock of the Corporation (the Stock Purchase") from the Seller for $0.0001111 per share, for a total of $10,000.00, Tracy Fortner is the Managing Member of Montana Mine Land Holdings, LLC resulting the debt no longer being considered a loan from a related party.

 

The balance of loan as of October 31, 2018 and 2017 respectively is $24,656.

 

NOTE 6 – NOTES PAYABLE

 

On September 9, 2015, issued 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018, and 2017 accrued interest amounted to $5,145 and $3,145, respectively.

 

 

 

  F-27  
 

 

On November 6, 2015, we issued Craigstone Ltd. 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018, and 2017 accrued interest amounted to $4,734 and $1,986, respectively.

 

On March 22, 2016, we issued Craigstone Ltd. 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018, and 2017 accrued interest amounted to $4,115 and $2,115, respectively.

 

On August 31, 2016, we issued Success Zone Tech Ltd. a promissory note in the principal amount of $100,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018, and 2017 accrued interest amounted to $17,380 and $9,380, respectively.

 

On February 23, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 17,500, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018, and 2017, accrued interest amounted to $2,612 and $958, respectively.

 

On March 27, 2017, we issued Craigstone Ltd. a promissory note in the principal amount of $ 12,465, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018 and 2017 accrued interest amounted to $ 1,593 and $595, respectively.

 

On May 16, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 4,500, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018 and 2017, accrued interest amounted to $525 and $165, respectively.

 

On May 19, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 25,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018 and 2017, accrued interest amounted to $2,904 and $904, respectively.

 

 

 

  F-28  
 

 

On July 28, 2017, we issued Backenald Trading Ltd. a promissory note in the principal amount of $ 20,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018 and 2017 accrued interest amounted to $2016 and $416, respectively.

 

On August 13, 2018, we issued Travel Data Solutions a promissory note in the principal amount of $ 25,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2018 accrued interest amounted to $433, respectively.

 

NOTE 7 – DEPOSIT ON MINERAL PROPERTY ACQUISITION

 

On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. to purchase 11 claims in Mineral County Nevada known as the Gold Creek Property (the “Gold Creek Property”). The Company paid a total of $15,000 for the purchase of the Gold Creek Property, and was reflected in the financial statements as a deposit, until such time as the ownership transferred to the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage- grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property. On October 31, 2015 the Company recorded an impairment of $15,000 due the Land Freeze.

 

On July 21, 2016, the Company entered into that certain Purchase Agreement (the “MMLH Purchase Agreement”) with Montana Mine Land Holdings LLC, a Montana limited liability company wholly-owned by Tracy Fortner (“MMLH”) pursuant to which the Company acquired a 100% undivided interest on MMLH’s patented mining’s claims and the property located in Broadwater County, Montana (the “Mining Interests”) in consideration for $112,000 payable in 45,000,000 shares of common stock valued at $0.00248889 per share for a total of $112,000 (the “Property Shares”). The Company had not issued the Property Shares due to the fact there was not a sufficient amount of authorized common stock available at the time. The $112,000 debt was included to the existing balance of a non-interest-bearing Loan from Related Party.

 

Pursuant that certain Cancelation of Acquisition and Stock Purchase Agreement, dated November 7, 2017, by and among the Company, MMLH, Tracy Fortner (the “Seller”), and Hohme Holdings International Inc. (the “Buyer”), the Company return the Mining Interests to MMLH, MMLH relinquished its claim to the undelivered Property Shares owed MMLH under the MMLH Purchase Agreement and the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for $0.0001111 per share, for a total of $10,000. Sadiq Shaikh has voting and dispositive control over the Buyer. Simultaneously with the consummation of the Stock Purchase Agreement on November 7, 2017, Tracy Fortner resigned as the President and Chief Executive Officer and as a Board member of the Company, Sadiq Shaikh was appointed as the President, Chief Executive Officer and as a member of the Board of Directors of the Company and Deborah Engles was appointed as the Secretary and Treasurer of the Company.

 

 

 

  F-29  
 

 

On December 21, 2018, pursuant to a Stock Purchase Agreement, dated December 20, 2018, by and among the Company Everett M. Dickson (the “Buyer”) and Hohme Holdings International, Inc. (the “Seller”), the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for a total of $15,000. Sadiq Shaikh has voting and dispositive control over the Seller. Simultaneously with the consummation of the Stock Purchase Agreement on December 21, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from the Board of Directors of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson was appointed as the President, Chief Executive Officer, Treasurer, Secretary and as a director to the Board of directors of the Company. See “Note 10 – Subsequent Events”.

 

NOTE 8 – COMMON STOCK

 

On November 17, 2015, the Company, authorized a fifteen-for-one (15:1) forward stock split of the Company’s common stock, par value $0.001 per share, without changing the authorized number or par value of the Common Stock and with fractional shares resulting from the Forward Split being rounded up to the nearest whole number. The Forward Split became effective on November 25, 2015. As a result of the Forward Split, the number of the Company’s issued and outstanding shares of Common Stock were increased from 8,430,000 to 126,450,000. The amounts are being presented retroactive in the financial statements at October 31, 2015.

 

On December 5, 2017, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a 1-for-8 reverse stock split of its outstanding common stock with fractional shares being rounded up to the nearest whole number. However, on January 12, 2018, the Financial Industry Regulatory Authority (“FINRA”) informed the Company that the Company’s corporate action submission notice with FINRA concerning the reverse split was deemed to be deficient under FINRA Rule 6490(d)(3)(2) due to the fact that the Company had failed to file its quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2016 and annual report on Form 10-K for the fiscal year ended October 231, 2016 prior to deregistering the Company’s common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC on March 7, 2017. As a result, the reverse split was not implemented in the OTC marketplace.

 

The Company amended the Articles of Incorporation of the Corporation to authorize the issuance of 10 million (10,000,000) shares of "blank check" preferred stock, par value $0.001 per share.

 

NOTE 9 – INCOME TAXES

 

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

 

 

 

  F-30  
 

 

ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. Net deferred tax assets consist of the following components as of October 31, 2018 and 2017:

 

    October 31, 2018     October 31, 2017  
Book Income (loss) from Operations (at 34% Federal Rate)   $ (170,886 )   $ (145,431 )
Change in Derivative Liability            
Change in Valuation Allowance     170,886       145,431  
Total provision for Income Taxes   $     $  

 

NOTE 10– SUBSEQUENT EVENTS

 

On December 21, 2018, pursuant to a Stock Purchase Agreement, dated December 20, 2018, by and among the Company Everett M. Dickson (the “Buyer”) and Hohme Holdings International, Inc. (the “Seller”), the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for a total of $15,000. Sadiq Shaikh has voting and dispositive control over the Seller. Simultaneously with the consummation of the Stock Purchase Agreement on December 21, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from the Board of Directors of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson was appointed as the President, Chief Executive Officer, Treasurer, Secretary and as a director to the Board of directors of the Company.

 

In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report.

 

 

 

 

 

 

  F-31  
 

 

 

 

AUREUS INCORPORATED

Symbol: ARSN

 

 

 

 

FINANCIAL STATEMENTS

For the

Year Ended October 31, 2017

 

Fiscal Year:

10/31

 

Address:

1170 Peachtree Street, Suite 1200

Atlanta, GA 30309

 

 

 

 

 

  F-32  
 

AUREUS INCORPORATED
CONDENSED BALANCE SHEETS

 

    October 31, 2017     October 31, 2016  
    (Unaudited)     (Unaudited)  
ASSETS            
Current assets:            
Cash   $ 1,897     $ 8,311  
Prepaid Professional Fees     6,363       4,863  
Total Current assets     8,260       13,174  
Fixed Assets: Mining Properties     112,000       112,000  
Plant and equipment     17,672       17,063  
Total Fixed Assets     129,672       129,063  
Total Assets   $ 137,933     $ 142,237  
             
LIABILITIES AND STOCKHOLDERS’ DEFICIT            
Current Liabilities:            
Accounts payable   $ 144,272     $ 30,894  
Accrued expenses     14,477       5,474  
Due to Related Party     112,050       112,050  
Notes payable     239,465       160,000  
Loan from Related Party     24,656       24,656  
      534,920       333,074  
Stockholders’ deficit:                
Common stock; authorized 150,000,000; 126,450,000 shares at $0.001 par issued and outstanding at October 31, 2017 and October 31, 2016, respectively     126,450       126,450  
Additional Paid in Capital     (95,700 )     (95,700 )
Accumulated deficit     (427,737 )     (221,587 )
Total stockholders’ deficit     (396,987 )     (190,837 )
Total liabilities and stockholders’ deficit   $ 137,933     $ 142,237  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-33  
 

 

AUREUS INCORPORATED
CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

    For the Three
Month Period
Ended
    For the Three
Month Period
Ended
    For the Twelve
Month Period
Ended
    For the Twelve
Month Period
Ended
 
      October 31, 2017       October 31, 2016       October 31, 2017       October 31, 2016  
OPERATING EXPENSES                                
General and Administrative   $ 53,735     $ 76,834     $ 197,148     $ 154,765  
Total Operating Expenses     53,735       76,834       197,148       154,765  

 

 

Other Expenses / (income)

                               
Gain on Settlement of Accounts Payable                           (20,000 )
Interest Expense     264       2,392       9,003       5,299  
Net loss for the Period   $ (53,999 )   $ (79,226 )   $ (206,151 )   $ 140,064  

 

 

Net loss per share:

                               
Basic and Diluted   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )

 

Weighted average number of shares outstanding:

                               
Basic and Diluted     126,450,000       126,450,000       126,450,000       126,450,000  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-34  
 

 

AUREUS INCORPORATED

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

 

    Common Stock     Additional Paid-In-     Stock
Subscriptions
    Accumulated     Total
Shareholder’s
 
    Shares     Par Value     Capital     Received     Deficit     Equity  
Balance October 31, 2013         $     $     $     $ (855 )   $ (855 )
Shares subscribed at $0.001                             6,000               6,000  
Shares subscribed at $0.001                             24,300               24,300  
Net loss                                   (4,575 )     (4,575 )
Balance October 31, 2014         $     $     $ 30,300     $ (5,430 )   $ 24,870  
                                                 
Capital Contribution                     450                     450  
Receipt of payment for subscription receivable     126,450,000       126,450       (96,150 )     (30,300 )            
Net Loss                                   (76,094 )     (76,094 )
Balance October 31, 2015     126,450,000     $ 126,450     $ (95,700 )   $     $ (81,524 )   $ (50,774 )
                                                      
Net Loss                                   (140,063 )     (140,063 )
Balance October 31, 2016     126,450,000     $ 126,450     $ (95,700 )   $     $ (221,587 )   $ (190,837 )

 

Net Loss

                                  (206,151 )     (206,151 )
Balance October 31, 2017     126,450,000     $ 126,450     $ (95,700 )   $     $ (427,738 )   $ (396,988 )

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-35  
 

 

AUREUS INCORPORATED

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

    For the Twelve-Month
Period Ended
    For the
Twelve- Month Period Ended
 
    October 31, 2017     October 31, 2016  
Cash flow from Operating activities:                
Net Loss   $ (206,151 )   $ (40,063.00 )
Increase in prepaid expenses     (1,500 )     (3,615 )
Increase in accounts payable     113,378       22,779  
Increase in accrued expenses     9,003       5,299  
Net Cash used in Operating activities     (85,270 )     (115,600 )
                 

Cash flow from Investing activities:

               
Mining properties           (112,000 )
Plant and Equipment     (3,050 )     (18,446 )
Accumulated Depreciation - Plant and Equipment     2,441       1,383  
Net Cash used in Investing activities     (609 )     (129,063 )
                 

Cash flow from Financing activities:

               
Proceeds from Notes Payable     79,465       140,000  
Loan from Related Party           112,050  
Additional Paid in Capital           (118,020 )
Common Stock           118,020  
Net cash provided by financing activities     79,465       252,050  
                 

Increase (Decrease) in cash during the period

    (6,414 )     7,387  

Cash at beginning of period

    8,311       924  

Cash at end of period

  $ 1,897     $ 8,311  
                 

Supplemental disclosure of cash flow information:

               
Cash paid during the period                
Taxes   $     $  
Interest   $     $  

 

The accompanying notes are an integral part of these financial statements

 

 

 

  F-36  
 

 

 

AUREUS INCORPORATED

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

October 31, 2017

 

 

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

 

Aureus Incorporated (the “Company”) was incorporated in the State of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties in the State of Nevada. On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. (“Gold Exploration”) pursuant to which the Company purchased 100% of Gold’s Exploration’s interest in one claim block of 11 claims or 220 acres, in Elko County, Nevada (the “Gold Creek Property”) for $15,000. The claims were registered in the name of Gold Exploration. On August 31, 2015, Gold Exploration’s title to the mining claims on the Gold Creek Property expired but has been re-staked by the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage-grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property. On July 21, 2016 the Company entered into an agreement with Montana Mine Land Holdings LLC to acquire a 100% undivided interest of its Patented Mining Claims or the Property named: Keene Placer, M.S. located in Broadwater County, Montana.

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. It is management’s opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement’s presentation. These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollars and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017. The accompanying unaudited financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Cash and Cash Equivalents

 

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. As of October 31, 2017, and October 31, 2016, there were no cash equivalents.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ from those estimates.

 

 

 

  F-37  
 

 

Impairment of Long-Lived Assets

 

The Company tests its assets for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable, which includes comparing the carrying amount of a long-lived asset to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss would be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. For the Company’s mining claims, this test includes examining the discounted and undiscounted cash flows associated with value beyond proven and probable reserves, in determining whether the mining claim is impaired.

 

Start-up Expenses

 

The Company expenses costs associated with start-up activities as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s general and administrative expenses.

 

Mining Interests and Exploration Expenditures

 

Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mineral properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.

 

Income Taxes

 

The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authorities widely understood administrative practices and precedents.

 

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

 

 

 

  F-38  
 

 

We have implemented certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertain tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 and have analyzed filing positions in United States jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the United States as our “major” tax jurisdiction. Generally, we remain subject to United States examination of our income tax returns.

 

Fair Value of Financial Instruments

 

The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.

 

FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

 

Level 1: Quoted prices in active markets for identical assets or liabilities

 

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

 

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Basic and Diluted Loss Per Share

 

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. ASC 260 requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) are similarly calculated. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the three and six months ended October 31, 2017 and 2016, there were no potentially dilutive securities.

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its condensed consolidated financial statements.

 

 

 

  F-39  
 

 

In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements.

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205- 40),” which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the fiscal year ending December 31, 2014.

 

In April 2015, the FASB issued ASU 2015-3, “Interest - Imputation of Interest (Subtopic 835-30),” related to the presentation of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements.

 

NOTE 3 – GOING CONCERN

 

The Company has sustained operating losses since inception. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management is endeavoring to begin exploration activities however, may not be able to do so within the next fiscal year. Management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity securities, which may not be available on commercially reasonable terms, if at all.

 

If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the holders of our common stock. For the years ending October 31, 2017 and October 31, 2016 the Company had losses of $206,151 and $140,063 respectively and the accumulated deficit is $427,737.

 

 

 

  F-40  
 

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

As of October 31, 2017, and 2016 the Company’s mine plant equipment consisted of the following:

 

   

October 31, 2017

   

October 31, 2016

 
Mine plant equipment   $ 21,907     $ 18,446  
Accumulated depreciation     (4,234 )     (1,383 )
Net   $ 17,672     $ 17,063  

 

NOTE 5 – LOAN FROM RELATED PARTY

 

During the period from April 19, 2013 to October 31, 2015, the Company received advances totaling $24,656 from Dong Gu Kang and Min Jung Kang, the Company’s former executive officers and directors (the “Selling Stockholders”). The advance was unsecured, non-interest bearing and due upon demand giving 30 days written notice to the borrower. In connection with the Stock Purchase Agreement, dated September 30, 2015, among the Company, the Selling Stockholders and Maverick, LLC, a Nevis limited liability company (“Maverick”), pursuant to which Maverick purchased 90,000,000 shares of common stock of the Company from the Selling Stockholders, Maverick assumed $24,656 in outstanding debt owed the Selling Stockholders by the Company; constituting 100% of the debt owed the Selling Stockholders of the Company, pursuant to a Debt Assumption Agreement, dated September 30, 2015, between the Company, the Selling Stockholders and Maverick. Maverick beneficially owns 71.7% of the common stock of the Company.

 

The balance of loan from related party as of October 31, 2017 and October 31, 2016 are $24,656 respectively.

 

NOTE 6 – NOTES PAYABLE

 

On September 9, 2015, issued 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, and October 31, 2016 accrued interest amounted to $3,145 and $1,222, respectively.

 

On November 6, 2015, we issued Craigstone Ltd. 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, and October 31, 2016 accrued interest amounted to $1,986 and $978, respectively.

 

 

 

  F-41  
 

 

On March 22, 2016, we issued Craigstone Ltd. 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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, and October 31, 2016 accrued interest amounted to $2,115 and $420, respectively.

 

On August 31, 2016, we issued Success Zone Tech Ltd. a promissory note in the principal amount of $100,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, and October 31, 2016 accrued interest amounted to $9,380 and $420, respectively.

 

On February 23, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 17,500, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, accrued interest amounted to $958, respectively.

 

On March 27, 2017, we issued Craigstone Ltd. a promissory note in the principal amount of $ 12,465, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, accrued interest amounted to $595, respectively.

 

On May 16, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 4,500, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, accrued interest amounted to $165, respectively.

 

On May 19, 2017, we issued Travel Data Solutions a promissory note in the principal amount of $ 25,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, accrued interest

amounted to $904, respectively.

 

On July 28, 2017, we issued Backenald Trading Ltd. a promissory note in the principal amount of $ 20,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale. As of October 31, 2017, accrued interest amounted to $416, respectively.

 

 

 

  F-42  
 

 

NOTE 7 – DEPOSIT ON MINERAL PROPERTY ACQUISITION

 

On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. to purchase 11 claims in Mineral County Nevada known as the Gold Creek Property (the “Gold Creek Property”). The Company paid a total of $15,000 for the purchase of the Gold Creek Property, and was reflected in the financial statements as a deposit, until such time as the ownership transferred to the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage- grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property. On October 31, 2015 the Company recorded an impairment of $15,000 due the Land Freeze.

 

On July 21, 2016 the Company entered into an agreement with Montana Mine Land Holdings LLC to acquire a 100% undivided interest of its Patented Mining Claims or the Property named: Keene Placer, M.S. located in Broadwater County, Montana. The purchase price is 45,000,000 shares of common stock of the Company and the agreed upon value is $112,000 or $0.00248889 per share. As of October 31, 2017, the shares had not been issued therefore a current liability is recorded to a related party in the amount of $112,000.

 

NOTE 8 – COMMON STOCK

 

On November 17, 2015 the Company, authorized a fifteen-for-one (15:1) forward stock split of the Company’s common stock, par value $0.001 per share without changing the authorized number or par value of the Common Stock and with fractional shares resulting from the Forward Split being rounded up to the nearest whole number. The Forward Split became effective on November 25, 2015. As a result of the Forward Split, the number of the Company’s issued and outstanding shares of Common Stock were increased from 8,430,000 to 126,450,000. The amounts are being presented retroactive in the financial statements at October 31, 2015.

 

NOTE 8 – INCOME TAXES

 

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

 

ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. Net deferred tax assets consist of the following components as of October 31, 2017 and 2016:

 

    October 31, 2017     October 31, 2016  
Book Income (loss) from Operations (at 34% Federal Rate)   $ (145,431 )   $ (75,340 )
Change in Derivative Liability            
Change in Valuation Allowance     145,431       75,340  
Total provision for Income Taxes   $     $  

 

 

 

  F-43  
 

 

NOTE 9– SUBSEQUENT EVENTS

 

On November 7, 2017, the Company entered into a certain Cancelation of Acquisition and Stock Purchase Agreement with Montana Mine Land Holdings LLC, ("MMLH"), Tracy Fortner (the “Seller”) , Hohme Holdings International Inc. (“Buyer"), to which the Buyer purchased 90,000,000 shares of common stock of the Corporation (the “Stock Purchase") from the Seller for $0.0001111 per share, for a total of $10,000.

 

The Company accepted the resignation of Tracy Fortner as President, Secretary, Treasurer and Chief Executive Officer.

 

Immediately following the resignation and removal of the officer(s) the Company accepted Tracy Fortner’s successor Sadiq Shaikh, as President, Chief Executive Officer and Board Member. Deborah Engles was appointed as Treasurer and Secretary.

 

On December 5, 2017, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a 1-for-8 reverse stock split of its outstanding common stock with fractional shares being rounded up to the nearest whole number. However, on January 12, 2018, the Financial Industry Regulatory Authority (“FINRA”) informed the Company that the Company’s corporate action submission notice with FINRA concerning the reverse split was deemed to be deficient under FINRA Rule 6490(d)(3)(2) due to the fact that the Company had failed to file its quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2016 and annual report on Form 10-K for the fiscal year ended October 231, 2016 prior to deregistering the Company’s common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC on March 7, 2017. As a result, the reverse split was not implemented in the OTC marketplace.

 

The Company determined to change the name of the Corporation to Hohme Inc.

 

The Company determined to authorize the issuance of 10 million (10,000,000) shares of "blank check" preferred stock, par value $0.001 per share.

 

On August 13, 2018, the company issued Travel Data Solutions a promissory note in the principal amount of $ 25,000, bearing interest at the rate of 8% per annum and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.

 

On December 20, 2018, the Company entered into a certain Stock Purchase Agreement with Everett M. Dickson. To which the Buyer purchased 90,000,000 shares of common stock of the Corporation (the “Stock Purchase Agreement”) from the Seller for a total of $15,000. The Company accepted the resignation of Sadiq Shaikh as President and Chief Executive Officer and Deborah Engles as Secretary and Treasurer. Immediately following the resignation and removal of the officer(s) the Company accepted Sadiq Shikh’s successor Everett Dickson, as President, Chief Executive Officer, Treasurer, Secretary and Board Member

 

In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report.

 

 

 

 

  F-44  
 

 

 

PART III—EXHIBITS

 

Index to Exhibits

 

Exhibit   
Number Exhibit Description
   
2.1* Articles of Incorporation and Amendments Thereto
2.2 Certificate of Designation of Series A Convertible referred Stock
2.3* Bylaws
3.1* Specimen Stock Certificate
6.4* Employment Agreement of Everett Dickson
6.5* Indemnification Agreement – Everett Dickson
6.6* Incentive Stock Plan
6.7* Management Stock Bonus Plan
6.8* Annual Bonus Performance Plan for Executive Officers
6.9* Asset Acquisition Agreement – Yuengling's
7.1* Secured Creditor Asset Sale and Purchase Agreement
11.1 Consent of Lux Law, P.A. (included in Exhibit 12.1)
12.1 Opinion of Lux Law, P.A.

 

* Incorporated by reference to the Company’s Offering Statement Form 1-A filed with the Commission on May 29, 2019

 

 

 

 

  III-1  

 

 

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on June __, 2019.

 

(Exact name of issuer as specified in its charter): Aureus Inc.

    

This Offering Statement has been signed by the following persons in the capacities and on the dates indicated.

 

By (Signature and Title): /s/ Everett Dickson
  Everett Dickson, Chief Executive Officer (Principal Executive Officer).

 

Date: June __, 2019

 

/s/ Everett Dickson                                                                

Everett Dickson, Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer).

 

Date: June __, 2019

 

 

SIGNATURES OF DIRECTORS:

 

/s/ Everett Dickson   June __, 2019
Everett Dickson, Director   Date

 

 

 

  III-2  

 



Exhibit

 

Aureus, Inc.
Certificate of Designation
of
Series A Convertible Preferred Stock

 

Pursuant to Section 79.1955 of Chapter 78 of the Nevada Revised Statutes, Aureus, Inc., a corporation organized and existing under the State of Nevada (the “Corporation”), in accordance with the provisions thereof, does hereby submit the following:

 

WHEREAS, the Articles of Incorporation of the Corporation (the "Articles of Incorporation") authorizes the issuance of up to 100 Million (100.000.000) shares of preferred stock. par value $0.001 per share, ("Preferred Stock") in one or more series, and expressly authorizes the Board of Directors of the Corporation (the "Board"); subject to limitations prescribed by law to provide, out of the unissued shares of Preferred Stock. for series of Preferred Stock, and. with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such series; and

 

WHEREAS, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights. preferences and limitations of the shares of such new series.

 

NOW, THEREFORE, BE IT HERBY RESOLVED, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designation (the "Certificate of Designation") establish and f'ix and herein state and express the designation. rights. preferences. powers, restrictions and limitations of such series of Preferred Stock as follows:

 

There is hereby designated Fifty Million (50,000,000) shares of Preferred Stock as the Series A Convertible Preferred Stock with the following rights and preferences:

 

Dividends

 

The holders of the Series A Convertible Preferred Stock are not be entitled to receive any dividends.

 

Liquidation, Winding Up or Dissolution

 

In the event of any voluntary or invo1untary liquidation. dissolution, or winding up of the Corporation. the holders of shares of the Series A Non Convertible Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders. whether from capital. surplus or earnings. an amount equal to Two Thirds (2/3) of the assets so distributed.

 

Voting

 

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.

 

Amendments

 

The Corporation will not, by amendment of the Articles of Incorporation or through any reorganization, transfer of assets, consolidation. merger, dissolution. issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms lo be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Articles of Incorporation and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of the Series A Non Convertible Preferred Stock against impairment.

 

 

 

  1  

 

 

Seniority

 

The Series A Convertible Preferred Stock shall, with respect to distribution rights on liquidation, winding up and dissolution, (i) rank senior to any of the shares of Common Stock of the Corporation. and any other class or series of stock of the Corporation which by its terns shall rank junior to the Series A Convertible Preferred Stock, and (ii) rank junior to any other series or class of preferred stock of the Corporation and any other class or series of stock of the Corporation which by its term shall rank senior to the Series A Convertible Preferred Stock.

 

So long as any shares of Series A Convertible Preferred Stock are outstanding, the Corporation shall not (i) alter or change any of the powers, preferences, privileges or rights of the Series A Convertible Preferred Stock, or (ii) amend the provisions of this section; in each case, without first obtaining the approval by vote or written consent. in the manner provided by law, of the holders of at least a majority of the outstanding shares of Series A Convertible Preferred Stock, as to changes affecting the Series A Convertible Preferred Stock.

 

Redemption

 

The shares of the Series A Convertible Preferred Stock are not redeemable.

 

Alterations

 

So long as any shares of Series A Non..Convertible Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent as provided by the Nevada Business Corporation Act) of the Holders of at least a majority of the then outstanding shares of Series A Convertible Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series A Convertible Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Corporation so as to affect adversely the Series A Convertible Preferred Stock; (c) create any new class or series of capital stock having a preference over the Series A Convertible Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Corporation (as previously defined, '"Senior Securities; (d) create any new class, or series of capital stock ranking pari passu with the Series A Convertible Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Corporation {as previously defined "Pari Passu Securities"); (e) increase the authorized number of shares of Series A Convertible Preferred Stock; (f) issue any shares of Series A Convertible Preferred Stock other than pursuant to the Securities .Purchase Agreement with the original parties thereto; (g) issue any additional shares of Senior Securities; or (h) or declare or pay any cash dividend or distribution on. any Junior Securities.

 

If holders of at least a majority of the then outstanding shares of Series A Convertible Preferred Stock agree to allow the Corporation to alter or change die rights. preferences or privileges of the shares of Series A Convertible Preferred Stock, then the Corporation shall deliver notice of such approved change to the Holders of the Series A Convertible Preferred Stock that did not agree to such alteration or change (the “Dissenting Shareholders").

 

Mergers, Sale of Assets

 

If at any time or from time to time there shall be (i) a merger, or consolidation of the Corporation with or into another corporation. (ii) the sale of all or substantially all of the Corporation's capital stock or assets to any other person, (iii) any other form of business combination or reorganization in which the Corporation shall not be the continuing or surviving entity of such business combination or reorganization, or (iv) any transaction or series of transactions by the Corporation in which in excess of 50 percent of the Corporation's voting power is transferred (each a "Reorganization" then as a part of such Reorganization, provision shall be made so that the holders of the Series A Convertible Preferred Stock shalt thereafter be entitled to receive the same kind and amount of stock or other securities or property (including cash) of the Corporation, or of the successor corporation resulting from such Reorganization.

 

The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization. recapitalization. transfer of assets. consolidation. merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation. but will at all times in good faith assist in the carrying out of all the provisions of this Certificate of Designation and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Series A Convertible Preferred Stock against impairment.

 

 

 

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Optional Conversion

 

The holders of the Series A Convertible Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

 

Conversion Ratio. 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 pro rata 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 to determine the number of shares of Common Stock to be issued upon conversion of such 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, shall be subject to adjustment as provided in herein.

 

Termination of Conversion Rights. In the event of a liquidation, dissolution or winding up of the Corporation the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Convertible Preferred Stock.

 

Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Convertible Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the fractional amount will be rounded to the next whole number.

 

Notice of Conversion. In order for a holder of Series A Convertible Preferred Stock to voluntarily convert shares of Series A Convertible Preferred Stock into shares of Common Stock, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series A Convertible Preferred Stock(or at the principal office of the Corporation if the Corporation serves as its own transfer agent for the Series A Convertible Preferred Stock) that such holder elects to convert all or any number of such holder’s shares of Series A Convertible Preferred Stock and, if applicable, any event on which such conversion is contingent and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Series A Convertible Preferred Stock(or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series A Convertible Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent for the Series A Convertible Preferred Stock). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent for the Series A Convertible Preferred Stock) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series A Convertible Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series A Convertible Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, and (ii) pay all declared but unpaid dividends on the shares of Series A Convertible Preferred Stock converted.

 

Reservation of Shares. At all times when the Series A Convertible Preferred Stock shall be outstanding, the Corporation shall take such corporate action as may be necessary to reserve and keep such number of shares available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series A Convertible Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Convertible Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Articles of Incorporation. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Convertible Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non- assessable shares of Common Stock at such adjusted Conversion Price.

 

 

 

  3  

 

 

Effect of Conversion. All shares of Series A Convertible Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, and to receive payment of any dividends declared but unpaid thereon. Any shares of Series A Convertible Preferred Stock so converted shall be retired and canceled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Convertible Preferred Stock accordingly

 

Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Series A Convertible Preferred Stock pursuant to this Section. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series A Convertible Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

 

Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Original Issue Date effect a subdivision of the outstanding Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:

 

(1)        the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

 

(2)         the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (b) that no such adjustment shall be made if the holders of Series A Convertible Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Convertible Preferred Stock had been converted into Common Stock on the date of such event.

 

Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property, then and in each such event the holders of Series A Convertible Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Series A Convertible Preferred Stock had been converted into Common Stock on the date of such event.

 

 

 

  4  

 

 

Adjustment for Merger or Reorganization, etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Series A Convertible Preferred Stock) is converted into or exchanged for securities, cash or other property, then following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Series A Convertible Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series A Convertible Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions in this Section with respect to the rights and interests thereafter of the holders of the Series A Convertible Preferred Stock, to the end that the provisions set forth in this Section (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Convertible Preferred Stock. For the avoidance of doubt, nothing in this Subsection shall be construed as preventing the holders of Series A Convertible Preferred Stock from seeking any appraisal rights to which they are otherwise entitled under the Nevada Revised Statutes in connection with a merger triggering an adjustment hereunder, nor shall this Subsection be deemed conclusive evidence of the fair value of the shares of Series A Convertible Preferred Stock in any such appraisal proceeding.

 

Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Convertible Preferred Stock certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the Series A Convertible Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series A Convertible Preferred Stock(but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Series A Convertible Preferred Stock.

 

Notice of Record Date. In the event:

 

(a)        the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Series A Convertible Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(b)        of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation; or

 

(c)        of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

 

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Series A Convertible Preferred Stock notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Series A Convertible Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Series A Convertible Preferred Stock and the Common Stock. Such notice shall be sent at least ten (10) days prior to the record date or effective date for the event specified in such notice.

 

Amendments and Waiver. No provision of this Designation of Series A Convertible Preferred Stock may be amended, modified or waived except by an instrument in writing executed by the Corporation and the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A Convertible Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect. Any such written amendment, modification or waiver will be binding upon the Corporation and each holder of Series A Convertible Preferred Stock; provided, that no amendment, modification or waiver of the terms or relative priorities of the Series A Convertible Preferred Stock may be accomplished by the merger, consolidation or other transaction of the Corporation with another corporation or entity unless the Corporation has obtained the prior written consent of the holders in accordance with this Section.

 

 

 

  5  

 

 

No Redemption at the Option of the Company. Notwithstanding any other provision hereof to the contrary, the Company shall have no right to redeem all or any portion of the then outstanding Convertible Preferred Stock then outstanding in cash

 

Notices. Any notice required or permitted by the provisions of this Certificate of Designation to be given to a holder of shares of Series A Convertible Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the Nevada Revised Statutes, and shall be deemed sent upon such mailing or electronic transmission.

 

Lost or Mutilated Preferred Stock Certificate. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing shares of Series A Convertible Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the holder is a financial institution or other institutional investor its own agreement shall be satisfactory) or in the case of any such mutilation upon surrender of such certificate, the Corporation shall, at its expense, execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

 

Each certificate for Series A Convertible Preferred Stock shares initially issued and each certificate for Series A Convertible Preferred Stock shares issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.”

 

BE IT FURTHER RESOLVED:

 

That the Directors of the Corporation are hereby authorized and directed for and on behalf of the Corporation to do all such acts and things and to prepare, execute and deliver all documentation determined necessary or desirable to give effect to the foregoing resolutions, and

 

That these resolutions may be executed by fax or email and said copies will be deemed to be originals for all purposes including filing in the Corporation's minute book.

 

IN WITNESS WHEREOF, the undersigned has executed this written consent as of the date hereof.

 

DATED this the 20th day of May 2019.

 

/s/ Everett Dickson

Everett Dickson

 

Exhibit 4.1

 

Aureus, Inc. Corp.

 

FORM OF SUBSCRIPTION AGREEMENT

 

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES, AND NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOLLOWING THIS OFFERING.

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO SUBSCRIBER IN CONNECTION WITH THIS OFFERING THROUGH THE WEBSITE MAINTAINED BY THE COMPANY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

PROSPECTIVE INVESTORS MAY NOT TREAT THE CONTENTS OF THE SUBSCRIPTION AGREEMENT, THE OFFERING CIRCULAR OR ANY OF THE OTHER MATERIALS RELATING TO THE OFFERING AND PRESENTED TO INVESTORS ON THE COMPANY’S WEBSITE OR PROVIDED BY THE BROKER (COLLECTIVELY, THE “OFFERING MATERIALS”) OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS OFFICERS, EMPLOYEES OR AGENTS (INCLUDING “TESTING THE WATERS” MATERIALS) AS INVESTMENT, LEGAL OR TAX ADVICE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. EACH PROSPECTIVE INVESTOR SHOULD CONSULT THE INVESTOR’S OWN COUNSEL, ACCOUNTANT AND OTHER PROFESSIONAL ADVISOR AS TO INVESTMENT, LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING THE INVESTOR’S PROPOSED INVESTMENT.

 

THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

 

 

 

  1  

 

 

THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED.

 

THE INFORMATION PRESENTED IN THE OFFERING MATERIALS WAS PREPARED BY THE COMPANY SOLELY FOR THE USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THIS OFFERING.

 

THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT IN WHOLE OR IN PART ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.

 

Ladies and Gentlemen:

 

1. Subscription.

 

(a) The undersigned (“Subscriber”) hereby irrevocably subscribes for and agrees to purchase Common Stock (the “Securities”), of Aureus, Inc. Corp., a Nevada corporation (the “Company”), at a purchase price of $0.015 per share of Common Stock (the “Per Security Price”), upon the terms and conditions set forth herein.

 

(b) Subscriber understands that the Securities are being offered pursuant to an offering circular (the “Offering Circular”) filed with the SEC as part of the Offering Statement. By executing this Subscription Agreement, Subscriber acknowledges that Subscriber has received this Subscription Agreement, copies of the Offering Circular and Offering Statement, including exhibits thereto, and any other information required by the Subscriber to make an investment decision.

 

(c) The Subscriber’s subscription may be accepted or rejected in whole or in part, at any time prior to a Closing Date (as hereinafter defined), by the Company at its sole discretion. In addition, the Company, at its sole discretion, may allocate to Subscriber only a portion of the number of Securities Subscriber has subscribed for. The Company will notify Subscriber whether this subscription is accepted (whether in whole or in part) or rejected. If Subscriber’s subscription is rejected, Subscriber’s payment (or portion thereof if partially rejected) will be returned to Subscriber without interest and all of Subscriber’s obligations hereunder shall terminate.

 

(d) The aggregate number of Securities sold for the Company shall not exceed 38,000,000 shares (the “Maximum Offering”). The Company may accept subscriptions until the termination date given in the Offering Circular, unless otherwise extended by the Company in its sole discretion in accordance with applicable SEC regulations for such other period required to sell the Maximum Offering (the “Termination Date”). The Company may elect at any time to close all or any portion of this offering, on various dates at or prior to the Termination Date (each a “Closing Date”).

 

(e) In the event of rejection of this subscription in its entirety, or in the event the sale of the Securities (or any portion thereof) is not consummated for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in force and effect.

 

2. Purchase Procedure.

 

(a) Payment. The purchase price for the Securities shall be paid simultaneously with the execution and delivery to the Company of the signature page of this Subscription Agreement. Subscriber shall deliver a signed copy of this Subscription Agreement (which may be executed and delivered electronically), along with payment for the aggregate purchase price of the Securities by ACH electronic transfer or wire transfer to an account designated by the Company, or by any combination of such methods.

 

 

 

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(b) No Escrow. The proceeds of this offering will not be placed into an escrow account. As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

 

3. Representations and Warranties of the Company.

 

The Company represents and warrants to Subscriber that the following representations and warranties are true and complete in all material respects as of the date of each Closing Date, except as otherwise indicated. For purposes of this Agreement, an individual shall be deemed to have “knowledge” of a particular fact or other matter if such individual is actually aware of such fact. The Company will be deemed to have “knowledge” of a particular fact or other matter if one of the Company’s current officers has, or at any time had, actual knowledge of such fact or other matter.

 

(a) Organization and Standing. The Company is a corporation duly formed, validly existing and in good standing under the laws of the State of Nevada. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.

 

(b) Issuance of the Securities. The issuance, sale and delivery of the Securities in accordance with this Subscription Agreement have been duly authorized by all necessary corporate action on the part of the Company. The Securities, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and non-assessable.

 

(c) Authority for Agreement. The execution and delivery by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby (including the issuance, sale and delivery of the Securities) are within the Company’s powers and have been duly authorized by all necessary corporate action on the part of the Company. Upon full execution hereof, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy and by federal or state securities laws.

 

(d) No filings. Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 4 hereof, no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official is required by or with respect to the Company in connection with the execution, delivery and performance by the Company of this Subscription Agreement except (i) for such filings as may be required under Regulation A or under any applicable state securities laws, (ii) for such other filings and approvals as have been made or obtained, or (iii) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not have a material adverse effect on the ability of the Company to perform its obligations hereunder.

 

(e) Capitalization. The authorized and outstanding securities of the Company immediately prior to the initial investment in the Securities is as set forth in “Securities Being Offered” in the Offering Circular. Except as set forth in the Offering Circular, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements of any kind (oral or written) for the purchase or acquisition from the Company of any of its securities.

 

(f) Financial statements. Complete copies of the Company’s financial statements consisting of the balance sheets of the Company given in the Offering Circular and the related statements of income, stockholders’ equity and cash flows for the two-year period then ended (the “Financial Statements”) have been made available to the Subscriber and appear in the Offering Circular. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations and cash flows of the Company for the periods indicated.

 

 

 

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(g) Proceeds. The Company shall use the proceeds from the issuance and sale of the Securities as set forth in “Use of Proceeds to issuer” in the Offering Circular.

 

(h) Litigation. There is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body, or to the Company’s knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, manager, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company.

 

4. Representations and Warranties of Subscriber. By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities subscribed for hereby in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of such Subscriber’s respective Closing Date(s):

 

(a) Requisite Power and Authority. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement and other agreements required hereunder and to carry out their provisions. All action on Subscriber’s part required for the lawful execution and delivery of this Subscription Agreement and other agreements required hereunder have been or will be effectively taken prior to the Closing Date. Upon their execution and delivery, this Subscription Agreement and other agreements required hereunder will be valid and binding obligations of Subscriber, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (b) as limited by general principles of equity that restrict the availability of equitable remedies.

 

(b) Investment Representations. Subscriber understands that the Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber’s representations contained in this Subscription Agreement.

 

(c) Illiquidity and Continued Economic Risk. Subscriber acknowledges and agrees that there is a limited public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber’s entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Securities.

 

(d) Company Information. Subscriber understands that the Company is subject to all the risks that apply to early-stage companies, whether or not those risks are explicitly set out in the Offering Circular. Subscriber has had such opportunity as it deems necessary (which opportunity may have presented through online chat or commentary functions) to discuss the Company’s business, management and financial affairs with managers, officers and management of the Company and has had the opportunity to review the Company’s operations and facilities. Subscriber has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment. Subscriber acknowledges that except as set forth herein, no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.

 

(e) Valuation. The Subscriber acknowledges that the price of the Securities was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. The Subscriber further acknowledges that future offerings of Securities may be made at lower valuations, with the result that the Subscriber’s investment will bear a lower valuation.

 

(f) Domicile. Subscriber maintains Subscriber’s domicile (and is not a transient or temporary resident) at the address shown on the signature page.

 

 

 

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(g) No Brokerage Fees. There are no claims for brokerage commission, finders’ fees or similar compensation in connection with the transactions contemplated by this Subscription Agreement or related documents based on any arrangement or agreement binding upon Subscriber.

 

(h) Issuer-Directed Offering; No Underwriter. Subscriber understands that the offering is being conducted by the Company directly (issuer-directed) and the Company has not engaged a selling agent such as an underwriter or placement agent.

 

(i) Foreign Investors. If Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.

 

5. Survival of Representations. The representations, warranties and covenants made by the Subscriber herein shall survive the Termination Date of this Agreement.

 

6. Governing Law; Jurisdiction. This Subscription Agreement shall be governed and construed in accordance with the laws of the State of Nevada.

 

7. Notices. Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, in the third day after the posting thereof; or (c) emailed, telecopied or cabled, on the date of such delivery to the address of the respective parties as follows:

 

If to the
Company, to:
 
   

AUREUS, INC.

1170 Peachtree Street #1200

Atlanta, GA 30309

 

 

 

If to a Subscriber, to Subscriber’s address as shown on the signature page hereto or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by telecopy or cable shall be confirmed by letter given in accordance with (a) or (b) above.

 

8. Miscellaneous.

 

(a) All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require.

 

(b) This Subscription Agreement is not transferable or assignable by Subscriber.

 

(c) The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Subscriber and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns.

 

(d) None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Subscriber.

 

 

 

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(e) In the event any part of this Subscription Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement.

 

(f) The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

(g) This Subscription Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

 

(h) The terms and provisions of this Subscription Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.

 

(i) The headings used in this Subscription Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

 

(j) This Subscription Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

(k) If any recapitalization or other transaction affecting the stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Subscription Agreement, to the same extent that the Securities, immediately prior thereto, shall have been covered by this Subscription Agreement.

 

(l) No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

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Aureus, Inc. Corp.

 

SUBSCRIPTION AGREEMENT SIGNATURE PAGE

 

The undersigned, desiring to purchase Common Stock of Aureus, Inc. Corp. by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.

 

(a)       The number of shares of Common Stock the undersigned hereby irrevocably subscribes for is:     ____________ (print number of Shares)
     
(b)       The aggregate purchase price (based on a purchase price of $0.015 per Share) for the Common Stock the undersigned hereby irrevocably subscribes for is:     $_____________ (print aggregate purchase price)
     
(c)       The Securities being subscribed for will be owned by, and should be recorded on the Company’s books as held in the name of:
     
 _________________________________________________________________________    
(print name of owner or joint owners)    

 

 

 

 

 

 

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If the Securities are to be purchased in joint names, both Subscribers must sign:    
     
_____________________________________________________   ____________________________________________________
Signature   Signature
     
     
_____________________________________________________   ____________________________________________________
Name (Please Print)   Name (Please Print)
     
     
_____________________________________________________   ____________________________________________________
Entity Name (if applicable)   Entity Name (if applicable)
     
     
_____________________________________________________   ____________________________________________________
Signatory title (if applicable)   Signatory title (if applicable)
     
     
_____________________________________________________   _____________________________________________________
Email address   Email address
     
     
_____________________________________________________   _____________________________________________________
Address   Address
     
     
_____________________________________________________   _____________________________________________________
Telephone Number   Telephone Number
     
     
_____________________________________________________   _____________________________________________________
Social Security Number/EIN   Social Security Number/EIN
     
     
_____________________________________________________   _____________________________________________________
Date   Date
     
* * * * *    
    Aureus, Inc. Corp.
     
This Subscription is accepted on _____________, 2019   By:     _______________________________________________
     
    Name
    Title:

 

 

 

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Exhibit

 

SECURED CREDITOR ASSET SALE AND PURCHASE AGREEMENT

 

This SECURED CREDITOR ASSET SALE AND PUCHASE AGREEMENT, (the "Agreement") is entered into as of June 18 , 2019, by and between Mid Penn Bank a Pennsylvania banking corporation ("Lender"), Yuengling's Ice cream Corporation, a Pennsylvania business corporation ("Debtor"), and YIC Acquisitions Corp., a Nevada business corporation ("Buyer").

 

WHEREAS, Lender, Debtor and Guarantors have previously entered into three Notes and Security Agreements, as set forth on Exhibit "A" (collectively "Note" and "Security Agreement"), hereafter capitalized terms in this Agreement shall have the same meaning as given to them in the Note and Security Agreement, including the term "Collateral";

 

WHEREAS, pursuant to the Note and Security Agreement, the Debtors agreed to strictly comply with all terms of the Note and Security Agreement;

 

WHEREAS, the Debtors have again defaulted under the Note and Security Agreement for, inter alia, failure to make timely payments;

 

WHEREAS, Lender has given written notice of the defaults;

 

WHEREAS, pursuant to the terms of and the Security Agreement, Lender has the immediate right to take possession of and sell any and all Collateral as a repossessing creditor, and proceed against the Debtor and Guarantors for any deficiency;

 

WHEREAS, the Debtors have consented to the Lender so that Lender can exercise its rights and remedies by having Debtor assemble the Collateral and to have Lender sell the Collateral to Buyer by way of a private sale under Pennsylvania's version of Article 9 of the UCC, 13 Pa.C.S.A. § 9610;

 

WHEREAS, based on these undertakings, Lender and Debtor have agreed to permit Lender to take control of the Collateral and to sell the Collateral to Buyer so long as Buyer assumes all secured debt of Debtor and that Guarantors continue to guaranty the debt as set forth on Exhibit A, on the terms stated below;

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Lender hereby agree as follows:

 

1.          Recitals. The foregoing Recital paragraphs are incorporated herein by reference.

 

2.          Purchase and Sale of Transferred Assets; Excluded Assets.

 

a.       Upon the terms and conditions of this Agreement in consideration of and in exchange for the purchase price set forth in Exhibit "A", ("Assumed Debt") Lender agrees that on the closing date, which shall be 11 days from the date of notice to the Secured Parties, (unless waived by all secured parties) it shall sell to Buyer, and Buyer agrees to purchase from Lender through a private sale under 13 Pa. C.S.A. §9-610 of the Pennsylvania Uniform Commercial Code, all of Debtors right, title and interest in and to the assets described on Exhibit "B" attached hereto ("Collateral"), concurrently with the execution of this Agreement, Lender shall execute and deliver to Buyer the bill of sale, in the form attached hereto as Exhibit "C" (the "Bill of Sale") and Buyer shall pay the Lender, as contemplated by Section 4 of this Agreement, and deliver the assignment and assumption agreement ("Assignment and Assumption") as contemplated by Section 2 of this Agreement.

 

b.       Excluded Assets. The following assets are excluded from the private sale transaction (collectively the "Excluded Assets"):

 

i.        Ali assets set forth on Exhibit "D".

 

 

 

 

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3.          Purchase Price. Buyer agrees to pay Lender an amount equal to the Assumed Debt as set forth on Exhibit "A" by the assumption of the existing debt as set forth in Exhibit "A" ("Purchase Price") for all of the Transferred Assets.

 

4.          Obligations Assumed.

 

a.       Liabilities. Buyer agrees to assume all debt owed to the Lender as set forth in Exhibit "A" and deliver to Lender the Assignment and Assumption Agreement in the form attached hereto as Exhibit "E" (the "Assignment and Assumption Agreement") to assume those (and only those) liabilities of debtor expressly listed on Exhibit "A" attached hereto (collectively the "Assumed Liabilities").

 

b.       Liabilities and Obligations Not Assumed. Except as expressly set forth in Section 4a. above, Buyer shall not assume or become obligated in any way to pay any liabilities, debts or obligations of Lender or of Debtor whatsoever. All liabilities, debts and obligations of Lender and of Debtor not expressly assume by Buyer hereunder are hereinafter referred to as the "Excluded Liabilities". The Excluded Liabilities include any liabilities or obligations now or hereinafter arising from Debtor's business activities prior to closing or any liabilities arising out of or connected to the liquidation and winding down of Debtor's business and the following whether incurred or accrued before, at or after closing:

 

  i. all taxes of the debtor, including any and all federal, state, local, foreign, or other tax (including any income tax, franchise tax, capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad velorium tax, transfer tax, sales tax, use tax, property tax, business tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including any customs duty), deficiency or fee in any related charge or amount (including any fine, penalty, or interest), imposed, assessed, or collected by or under the authority of any governmental body and/or agency;

 

 

ii. All liabilities with respect to current and former employees of the Debtor, except for liabilities with respect to any such employees retained by Purchaser that accrue after the Closing Date;

 

iii. All liabilities relating to Excluded Assets;

 

iv. All accounts payable (or other amounts payable) or claims;

 

v. Any other liabilities that are not expressly included among the assumed liabilities; and

 

vi. Those specific liabilities listed on Exhibit "F" attached hereto.

 

c.       No Obligations to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon any person or entity other than the parties hereto, or make any person or entity a third party beneficiary of this Agreement, or to obligate either party to any person or entity other than the parties to this Agreement. Assumption by Buyer of any liabilities or obligations of Lender or of Debtor under Section 4a. above shall in no way expand the rights or remedies of third parties against Buyer as compared to the rights and remedies that the parties would have against the Lender or Debtor if the closing were not consummated.

 

d.       Books and Records. Buyer shall comply with all applicable federal, state and local laws and regulations with respect to the books and records of Debtor delivered to Buyer pursuant to this Agreement (the "Books and Records") and any and all confidential employee and customer information.

 

5.       Closing. Subject to satisfaction of the conditions preceded and set forth in Sections 6 and 7 below, the closing of the sale (the "Closing") will be held on the date 11 days after the date hereof, or such date mutually agreed upon by the Lender and the Buyer. The date on which Closing is consummated is referred to herein as the "Closing Date".

 

 

 

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6.        Lender's Conditions Precedent. Lender's obligations to consummate the closing shall be conditioned upon the satisfaction or waiver of the following:

 

a.       The representations, warranties, and covenants of Purchaser made herein shall have been true as of the Closing Date.

 

b.       As of the Closing Date, the sale of the Transferred Assets by Lender or any of the transactions contemplated hereby are not prohibited by any stay or injunction in any litigation, governmental action, or other proceeding, including the "automatic stay" under 11 U.S.C. §362 in any pending case under Title 11 of the United States Code by or against Debtor.

 

c.       Buyer shall have paid and delivered the Purchase Price.

 

d.       Buyer shall have executed and delivered to Lender Buyer's counterparts of (1) the Bill of Sale (2) the Assignment and Assumption Agreement and (3) the Patent Assignment and Trademark Assignment substantially in the forms attached hereto as Exhibits "G" and Exhibit "H", respectively, with respect to the Transferred Assets and Assumed Liabilities (collectively, the "Related Documents").

 

e.       On the Closing Date, the Private Sale Transaction shall not be stayed or subject to another injunction.

 

7.        Buyer's Conditions Precedent. Buyer's obligations to consummate the Closing shall be conditioned upon the satisfaction or waiver of the following:

 

a.       The representations, warranties, and covenants of Lender made herein shall have been true as of Closing Date.

 

b.       As of the Closing Date, the sale of the Transferred Assets by Lender or any of the transactions contemplated hereby are not prohibited by any stay or injunction in any litigation, governmental action, or other proceeding, including the "automatic stay" under 11 U.S.C. §362 in any pending case under Title 11 of the United States Code by or against Debtor. No litigation shall have been filed that would prevent closing or subject Buyer to a claim for damages as a result of the transactions.

 

c.       Lender shall have executed and delivered to Buyer Lender's counterparts of the Related Documents.

 

d.       On the Closing Date, the Private Sale Transaction shall not be stayed or subject to another injunction.

 

8.        Closing Obligations. At Closing, Buyer will deliver to Lender (a) the Purchase Price (if any) and (b) Buyer's executed counterparts of the documents set forth in Section 6.d of this Agreement. Lender will deliver to Buyer Lender's executed counterparts of the documents set forth in Section 7c. of this Agreement and Lender shall cause Debtor, to deliver control or possession of the Transferred Assets to Buyer on the Closing Date or at any time or times thereafter as requested by Buyer. The parties hereto further agree to execute and deliver to the other party any other documentation reasonably required or requested by the other party to effectuate the intent of the parties to this Agreement, including documentation required by the United States or foreign patent offices (and otherwise consistent with Article 9 of the Uniform Commercial Code) necessary to implement a proper chain of title in their assignment and ownership records. Following the Closing, Buyer will have the right to immediate possession of the Transferred Assets.

 

9.       Representation and Warranties of Lender. Except as expressly set forth in writing in this Agreement, the Transferred Assets are being sold "AS IS" and "WHERE IS" with no representations or warranties of any kind, express or implied, oral or written, with respect to the physical condition, faults or value of the Transferred Assets, There is no warranty relating to title, possession, quiet enjoyment or the like in this disposition. Lender hereby expressly disclaims any and all warranties, express or implied, relating to the Transferred Assets, including the warranty of merchantability and fitness for a particular purpose or any other fact or matter not expressly set forth herein. Upon the Closing, Buyer shall assume all responsibility, shipping costs, storage costs, liability and obligations for the physical condition and status of the Transferred Assets. Prior to Closing, the foregoing costs shall be the sole responsibility of the Debtor. Lender makes no express or implied warranties, representations or endorsements whatsoever, including warranties of merchantability, non-infringement or fitness for a particular purpose with regard to the Transferred Assets, and Lender hereby expressly disclaims any such warranties to the maximum extent permitted by applicable law. Lender makes no representation or warranty and shall have no liability whatsoever on behalf of Lender or any third parties with regard to the operation, performance, nonperformance, quality, availability, completeness, accuracy or security of any of the Transferred Assets or the delay, error, or interruption of the flow of information in connection with use of any of the foregoing. Lender has not undertaken any independent investigation (nor does Lender intend to do so) and Lender disclaims any liability as a result of or obligation to do so, to determine if there is any pending, threatened or potential inquiry, claim, investigation, litigation, proceeding or decree by any federal, state or local authority, or administrative agency, or any private party against or relating to the Transferred Assets, or if the Transferred Assets infringe any third party's intellectual property rights. Notwithstanding the foregoing, Lender represents and warrants to Buyer, as follows:

 

 

 

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a.       Lender (i) is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation; (ii) has all requisite corporate power and authority to execute, deliver, and perform the transactions contemplated hereby; and (iii) is duly qualified or authorized to conduct business and is in good standing.

 

b.       The execution, delivery, and performance by Lender of this Agreement and the Related Documents and the consummation of the transaction contemplated hereby are within the power of Lender and have been duly authorized by all necessary actions on the part of Lender. The execution of this Agreement by Lender constitutes, or will constitute, a legal valid and binding obligation of Lender, enforceable against Lender in accordance with its terms, except as limited by bankruptcy, insolvency, or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

 

c.       No consent, approval authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Lender (or any of its properties) is required for (i) Lender's execution and delivery of this Agreement (and each agreement executed and delivered by it in connection herewith) or (ii) the consummation by Lender of the transactions contemplated by this Agreement (and each agreement executed and delivered by it in connection herewith) or, to the extent so required, such consent, approval, authorization, order, registration, filing or notice has been obtained, made or given (as applicable) and is still in full force and effect.

 

d.       Debtor is in default of its obligations under the Loan Documents and other obligations owing to Lender and Lender has validly exercised its rights under the Loan Documents and applicable law in foreclosing on the Collateral and Transferred Assets. Lender has a valid and perfected first priority lien upon and security interest in the Collateral and Transferred Assets, Lender has not amended or modified the Loan Agreement so as to limits its right to enter into this Agreement with Buyer to sell and convey the Debtor's rights and interest in the Transferred Assets.

 

e.       Lender has provided Notice of Private Sale Under Uniform Commercial Cost to the only other secured creditor, On Deck which has agreed to waive the 10 day notice and has agreed that the sale is commercially reasonable.

 

f.       Lender has complied with the all applicable provisions of the Uniform Commercial Code and the Loan Documents.

 

g.       The Consent is and remains fully in effect and enforceable.

 

h.       The sale of the Transferred Assets by the Lender or any of the transactions contemplated hereby are not prohibited by any stay or injunction in any litigation, governmental action, or other proceeding, including the "automatic stay" under 11 U.S.C. §362 in any pending case under Title 11 of the United States Code by or against Debtor.

 

11.       Representations and Warranties of Buyer. Buyer represents and warrants to Lender, as follows:

 

a.       Buyer (i) is a duly organized corporation, validly existing, and in good standing under the laws of the State of Nevada; and (ii) has all requisite power and authority to execute, deliver, and perform the transactions contemplated hereby.

 

b.       The execution, deliver, and performance by Buyer of this Agreement and the consummation of the transaction contemplated hereby are within the power of Buyer and have been duly authorized by all necessary actions on the part of Buyer. The execution of this Agreement by Buyer constitutes, or will constitute, a legal valid and binding obligation or Buyer, enforceable against Buyer in accordance with its terms, except as limited by bankruptcy, insolvency, or other laws of general application relating to or affecting the enforcement of creditors' right generally and general principles of equity.

 

c.       No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Buyer (or any of its properties) is required for (i) Buyer's execution and delivery of this Agreement (and each agreement executed and delivered by it in connection herewith) or (ii) the consummation by Buyer of the transactions contemplated by this Agreement (and each agreement executed and delivered by it in connection herewith) or, to the extent so required, such consent, approval, authorization, order, registration, filing or notice has been obtained, made or given (as applicable) and is still in full force and effect.

 

 

 

  4  

 

 

d.       No person or entity acting on behalf of Buyer or any of its affiliates or under the authority of any of them is or will be entitled to any brokers or "finders" fee or any other commission or similar fee, directly or indirectly, from Buyer or any of its affiliates in connection with any of the transactions contemplated hereby.

 

12.       Expenses. Except as provided in the next sentence or as otherwise provided in this Agreement, Buyer shall bear their own expenses incurred in connection with the transactions contemplated by this Agreement and Reimburse Lender for all of its attorney fees and costs of this transaction. Notwithstanding the foregoing, if either party breaches this Agreement, the breaching party shall be responsible for the costs and expenses, including reasonable attorneys' fees, incurred by the other party in enforcing this Agreement against such breaching party by the non-breaching party.

 

13.       Transfer Taxes. Buyer shall pay all sales, use, excise, stamp, documentary, filing, recording, transfer or similar fees or taxes or governmental charges, as levied by any taxing authority or governmental agency in connection with the transfer of Transferred Assets contemplated by this Agreement (collectively, the "Taxes").

 

14.        Lease; Employees; Continuing Access to Books and Records.

 

a.       Buyer is solely responsible for negotiating an assignment of the existing lease or negotiating a new lease for any premises leased by Debtor where any of the Transferred Assets are located, if so desired by Buyer, and the Closing under this Agreement is not contingent on such lease.

 

b.       Buyer is solely responsible for employing former Debtor employees as Buyer desires to employ and the Closing under this Agreement is not contingent on any such employment.

 

c.       Buyer shall permit Lender and Debtor reasonable access to and use of the Books and Records for wind down and similar corporate purposes. Such access and use shall be permitted during normal business hours and shall be conducted to minimize disruption to Buyer's post-closing operations.

 

15.        Survival; Indemnity. The representations and warranties and indemnification obligations of Lender and Buyer herein shall survive Closing. Buyer hereby agrees to indemnify, defend and hold Lender and Debtor harmless from and against, any and all liabilities, obligations, losses, damages, penalties, action, judgments, suits, proceedings, costs expenses and disbursements of any kind or nature whatsoever (including all reasonable costs and expenses of attorneys) which may be imposed on, incurred by, or asserted against Lender or Debtor, as the case may be, in any way relating to or arising out of, or alleged to relate or arise out of, any misrepresentation by Buyer of any representation or warranty made by Buyer in this Agreement or other breach of this Agreement or under the Related Documents or misrepresentation of Buyer contained herein or Buyer's failure to timely discharge and pay the Assumed Liabilities in accordance with the terms of this Agreement. Lender hereby agrees to indemnify, defend and hold harmless Buyer from and against, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, costs expenses and disbursements of any kind or nature whatsoever (including all reasonable costs and expenses of attorneys) which: (a) may be imposes on, incurred by, or asserted against Buyer in any way relating to or arising out of, or alleged to related or arise out of, any misrepresentation by Lender of any representation or warranty made by Lender in this Agreement or other breach by Lender of any term of this Agreement or (b) arises directly or indirectly from or as a direct or indirect result of, or are directly or indirectly connected with any Excluded Liability.

 

16.        Notices. Any notice or other communication provided for herein or given hereunder to a party hereto shall be in writing, and shall be deemed given when personally delivered to a party set forth below or when sent by telecopy providing a transmission confirmation (provided that such notices is immediately sent by a recognized overnight delivery service), or three (3) days after mailed by first class mail, registered, or certified, return receipt requested, postage prepaid, or when delivered by nationally-recognized overnight delivery service, with proof of delivery, delivery charges prepaid, in any case address as follows:

 

(a) If intended for Debtor or Guarantors:

 

Yuengling's Ice Cream Corporation

1058 Centre Turnpike
Orwigsburg, PA 17961

 

 

 

  5  

 

 

(b) If intended for Lender:

 

Mid Penn Bank

2407 Park Drive

Harrisburg, PA 17110

Attn: Bonnie Berkoski, Assistant Vice President

 

(c) If intended for Buyer:

 

YIC Acquisitions Corp

123 W. Nye Lane, Suite 129

Carson City, Nevada 89706

 

17.       Miscellaneous.

 

a.       Entire Agreement. This Agreement, together with the schedules and exhibits attached hereto, constitutes the entire agreement of the parties hereto regarding the purchase and sale of the Transferred Assets, and all prior agreements, understandings, representations and statements, oral or written, are superseded hereby.

 

b.       Captions. Section captions used in this Agreement are for convenience only, and do not affect the construction of this Agreement.

 

c.       Counterpart Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument, Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof and shall be deemed an original signature for all purposes.

 

d.       Severability. If any provision of this Agreement shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained in this Agreement.

 

e.       Further Assurances. At any time or from time to time after the Closing, without further consideration, Lender shall, at the request of Buyer, execute and deliver such further instruments and document as Buyer may reasonably request as may be reasonably necessary to evidence or effect the consummation of the transactions contemplated by this Agreement.

 

f.       Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Buyer and Lender. No waiver by any party hereto of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

g.       Governing Law. This Agreement shall be governed by and interpreted in accordance with the internal laws of the Commonwealth of Pennsylvania (without reference to conflicts of law principles).

 

h.       WAIVER OF TRIAL BY JURY. LENDER AND BUYER HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHERHER SOUNDING IN CONTRACT, TOR, OR OTHERWISE. LENDER AND BUYER HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

 

 

 

  6  

 

 

i.       SUBMISSION TO JURISDICTION; SELECTION OF FORUM. EACH PARTY HERETO (A) AGREES THAT IT SHALL BRING ANY ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN TORT OR CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN (I) THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA OR IN THE EVENT THAT SUCH COURT LACKS SUBJECT MATTER JURISDICTION OVER THE ACT OR PROCEEDING, (II) IN AN APPROPRIATE STATE COURT LOCATED IN DAUPHIN COUNTY, PENNSYLVANIA (SUCH COURT IS HEREAFTER REFERRED TO AS THE "CHOSEN COURT" AND (B) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN COURT, (C) WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION TO LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE CHOSEN COURT, (D) WAIVES ANY ARGUMENT THAT THE CHOSEN COURT IS AN INCONVENIENT FORUM OR DOES NOT HAVE JURISDICTION OVER ANY PARTY THERETO, AND (E) AGREES THAT SERVICE OR PROCESS UPON ANY PARTY IN ANY SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH SECTION 16 OF THIS AGREEMENT.

 

j.       Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement, In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including", "included" or "include" shall mean "including without limitation".

 

k.       No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person or entity other than the parties hereto and their respective successors and permitted assigns.

 

I.       Successor and Assigns: This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. Neither party may assign its rights or interests hereunder without providing the other party with prior written notice; provided, however, that Buyer shall be entitled to assign its rights under this Agreement to an entity wholly-owned by it. Neither party may delegate all or any of its obligations or duties hereunder, without the prior written consent of the other party.

 

m.       Fees and Expenses. Lender and Buyer shall each bear their own expenses, including legal fees, incident to the negotiation and preparation of this Agreement and the consummation of the transactions contemplated hereby.

 

n.       Confidentiality. Buyer and Lender agree that they will hold in confidence all information, data and documents obtained by them or any of their representatives from any representative, officer, or employee of each other, and that none of them nor any of their representatives will disclose any such information, data or documents to any third party and none of them will discuss this Agreement or the transactions contemplated hereby with any party other than officers, employees, agents and representatives of the party or their legal counsel and financing sources deemed necessary to the completion of the transactions described herein.

 

o.       Survival. The parties' representations, warranties and obligations contain in this Agreement shall survive the Closing.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

  7  

 

 

IN WITNESS WHEREOF, Buyer and Lender have caused this Agreement to be executed as of the day and year first above written.

 

  LENDER:
   
  MID PENN BANK
   
  By:  _______________________
  Name: _____________________
  Title:______________________
   
   
   
  BUYER:
   
  YIC Acquisitions Corp., a Nevada business corporation
   
  By: /s/ Everett M. Dickson
  Name: Everett M. Dickson
  Title: President
   
   
  DEBTOR:
   
  Yuengling's Ice Cream Corporation
   
  By:  _______________________
  Name: _____________________
  Title:______________________

 

 

  8  

 

 

EXHIBIT A

 

SECURED DEBT— LIST OF LIABILITIES

 

As of 6/5/2019

 

SBA 1,056,807.27
Line of Credit 814,296.52
Freezer Truck Loan 17,908.02

 

 

 

 

  9  

 

 

 

Note 500075031 YUENGLING'S ICE CREAM CORP

 

  Relationship Date of Birth Phone Number Tax Identification
       
YUENGLINGIS ICE CREAM CORP Owner   ********** EIN **_*******
1058 CENTRE TURNPIKE        
ORWIGSBURG PA 17961-9055        

 

Additional Relationship 

Tax Name: YUENGLING'S ICE CREAM CORP

 

Summary

 

Principal Balance: $1,039,606.21   Interest Method: [6] 365/360 Payments P&I -
        Simple (30/360 Day Basis)
Interest Balance: $6,064.36   Current Payment Due Date: May 10, 2019
Net Payoff: $1,056,807.27   Current Payment Due $16,103.43
      Amount:  
Maximum Credit: $1,200,000.00   Date Last Payment: May 07, 2019
Maximum Credit Code: Non-Revolving   Amount Last Payment: $16,103.43
Current Available Credit: $0.00   Current Days Past Due: 26
Current Other Escrow $0.00   Total Amount Due: $43,342.56
Balance:        
Current Late Charge $11,135.70   Total Amount Past Due: $16,103.43
Balance:        
Current Other Escrow $0.00   Payment Frequency: Monthly
Interest Balance:        
Participation Balance: $779,704.65   Regular Payment Amount: $16,103.43
Net Principal: $259,901.56   Current Rate Over: 7.500000
Book Balance: $1,039,606.21   One Day's Interest: $216.5846
Net Book Balance: $259,901.56   Current Yield: 7.753615
Total Collateral Value: $0.00   Original Note Amount: $0.00
Pledge LTV: Secu red   Original Note Date: Oct 16, 2015
Payments Scheduled: 124   Renewal Date: Oct 17, 2015
Payments Billed: 44   Maturity Date: Mar 13, 2026
Payments Made: 42   Contract Date: Oct 16, 2015
Times Extended:     Months To Maturity: 81.3
Times Renewed: 1   Date Accrued Through: Jun 04, 2019
Times Past Due 1-29 Days: 22   Date Last Transaction May 20, 2019
      Activity:  
Times Past Due 30-59 Days: 4   Date Principal Paid To: Apr 10, 2019
Times Past Due 60-89 Days:     Date Interest Paid To: May 07, 2019
Times Past Due 90+ Days:     Date Last Change: Mar 11, 2019
      Date Last Updated: Jun 04, 2019
Available Credit        
Maximum Credit: $1,200,000.00      
Maximum Credit Code: Non-Revolving      
Available Credit: $0.00      
Line Available Balance Code: Original Note Amount      
Date Last Advance: Mar 07, 2016   Date Last Zero Balance: Oct 17, 2015
Amount Last Advance: $75,000.01   Payment Reserve Option: Include In Available Credit
      Internal Payment Option: (None)

 

 

 

  

  10  

 

 

 

Available Credit History

 

Print

 

  2019   2018 Loan-To-Date
Principal Advanced: $0.00   $0.00 $1,200,000.00
Principal Paid: $42,243.46   $84,478.16 $160,393.79
Average Balance: $1,058,538.01   $1,124,332.22  
Low Principal Balance: $1,039,606.21   $1,081,849.67  
High Principal Balance: $1,081,849.67   $1,166,327.83  
Days Active: 155   365  
Days Inactive:        
Interest Earned:        
Interest Paid” $33,966.65   $77,240.53 $255,952.34
  $32,477.61   $76,720.35 $249,887.98
         
Participation        
Participation Number: 6500075031   Percent Participated: 75.0000%
Principal Balance: $779,704.65   Interest Method: [7] 365/360 P&I Separate-Simple (30/360 Day Basis)
Interest Balance $4,548.27   Principal Payment Frequency: Maturity
Payoff: $784,252.92   Interest Payment Frequency: Maturity
Current Rate Over Split 7.500000   Percent Participated Method: Percentage of Base Note Balance
Service Fee Rate: 1.000000   Source Code: [600001]
Total Amount Past Due: $0.00   Recourse Code: No Recourse
Original Note Amount: $900,000.00      
Original Note Date: Mar 25, 2016      
Maturity Date (Extended) Mar 13, 2026      
         

 

 

  11  

 

 

 

YUENGLING'S ICE CREAM CORP

1058 CENTRE TURNPIKE

ORWIGSBURG PA 17961-9055

 

 

 

Loan Payoff Statement

 

 

 

 

Loan Payoff for: Loan Number: 500075031
YUENGLING'S ICE CREAM CORP Date Quoted: Jun 05, 2019
1058 CENTRE TURNPIKE Payoff Good To: Jun 05, 2019
ORWIGSBURG PA 17961-9055 Method: 6/6
     
Collateral:UCC FILING    
STATE #2014082901251    
     
Principal:  $1,039,606.21
Interest To Jun 05, 2019:   $6,064.36
Late Charges:   $11,135.70
UCC (1) STATE PAYOFF ADDENDA ON LOAN #2800296 $1.00
Net Amount Due:   $1,056,807.27

 

Additional Information
   
One Day's Interest:   $216.58

 

 

 

 

 

 

  12  

 

 

Note 2800296 - YUENGLING'S ICE CREAM CORP

 

  Relationship Date of Birth Phone Number Tax Identification
       
YUENGLINGIS ICE CREAM CORP Owner   ********** EIN **_*******
1058 CENTRE TURNPIKE        
ORWIGSBURG PA 17961-9055        

 

Additional Relationship 

Tax Name: YUENGLING'S ICE CREAM CORP

 

Principal Balance:
Interest Balance:

$800,000.00

$11,266.66

 

Interest Method:

Current Payment Due Date:

[7] 365/360 P&I Separate
Jun 30, 2049
Net Payoff: $814,296.52   Current Payment Due $800,000.00
      Amount:  
Maximum Credit: $800,000.00   Current Interest Payment May 01, 2019
      Due Date:  
Maximum Credit Code: Revolving   Current Interest Payment $4,188.88
      Due Amount:  
Current Available Credit: $0.00   Date Last Payment: Apr 30, 2019
Current Other Escrow $0.00   Amount Last Payment: $4,622.21
Balance:        
Current Late Charge $2,864.11   Current Days Past Due: 35
Balance:        
Current Other Escrow $0.00   Total Amount Due: $11,530.77
Interest Balance:        
Book Balance: $800,000.00   Total Amount Past Due: $8,666.66
Total Collateral Value: $100,000.00   Payment Frequency: Maturity
Pledge LTV: 800.00%   Regular Payment Amount: $800,000.00
Payments Scheduled: 1   Current Rate Over: 6.500000
Payments Billed:     One Day's Interest: $144.4444
Payments Made:     Current Yield: 6.590277
Times Extended:     Original Note Amount: $0.00
Times Renewed: 0   Original Note Date: Aug 27, 2014
Times Past Due 1-29 Days: 13   Maturity Date: Jun 30, 2049
Times Past Due 30-59 Days; 4   Contract Date: Aug 27, 2014
Times Past Due 60-89 Days:     Months to Maturity: 360.9
Times Past Due 90+ Days:     Date accrued Through: Jun 04, 2019
      Date Last Transaction Activity: May 16, 2019
      Date Principal Paid To: Aug 27, 2014
      Date Interest Paid To: Mar 19, 2019
      Date Last Change: Dec 19, 2018
      Date Last Updated: Jun 04, 2019
Available Credit        
Maximum Credit: $800,000.00      
Maximum Credit Code: Revolving      
Available Credit: $0.00      
Line Available Balance Code: Current Principal Balance      
Date Last Advance: Dec 21, 2016   Date Last Zero Balance: Aug 27, 2014
Amount Last Advance:     Payment Reserve Option: Not Included
      Internal Payment Option: (None)

 

 

  13  

 

 

 

         
      Payment Reserve Balance: $0.00
      Master Note: 1

  

Available Credit History

 

 

  2019   2018 Loan-To-Date
Principal Advanced: $0.00   $0.00 $803,000.00
Principal Paid: $0.00   $0.00 $3,000.00
Average Balance: $800,000.00   $800,000.00  
Low Principal Balance: $800,000.00   $800,000.00  
High Principal Balance: $800,000.00   $800.000.00  
Days Active: 155   365  
Days Inactive:        
Interest Earned:        
Interest Paid” $22,388.87   $47,927.71 $158,491.98
  $17,438.85   $46,961.07 $1487,225.32
         

 

 

 

  14  

 

 

 

YUENGLING'S ICE CREAM CORP

1058 CENTRE TURNPIKE

ORWIGSBURG PA 17961-9055

 

 

 

Loan Payoff Statement

 

 

 

 

Loan Payoff for: Loan Number: 2800296
YUENGLING'S ICE CREAM CORP Date Quoted: Jun 05, 2019
1058 CENTRE TURNPIKE Payoff Good To: Jun 05, 2019
ORWIGSBURG PA 17961-9055 Method: 7/0
     
Collateral: Multiple    
     
     
Principal:  $800,000.00
Interest To Jun 05, 2019:   $11,266.66
Late Charges:   $2,864.11
SATISFACTION FEE (UCC)   $105.00
SCHUYLKILL COUNTY   $60.75
Net Amount Due:   $814,296.52

 

Additional Information
   
One Day's Interest:   $144.44

 

 

 

 

  15  

 

 

 

Note 500075031 YUENGLING'S ICE CREAM CORP

 

  Relationship Date of Birth Phone Number Tax Identification
       
YUENGLINGIS ICE CREAM CORP Owner   ********** EIN **_*******
1058 CENTRE TURNPIKE        
ORWIGSBURG PA 17961-9055        

 

Additional Relationship 

Tax Name: YUENGLING'S ICE CREAM CORP

 

Summary

 

Principal Balance: $1,039,606.21   Interest Method: [6] 365/360 Payments P&I -
        Simple (30/360 Day Basis)
Interest Balance: $6,064.36   Current Payment Due Date: May 10, 2019
Net Payoff: $1,056,807.27   Current Payment Due $16,103.43
      Amount:  
Maximum Credit: $1,200,000.00   Date Last Payment: May 07, 2019
Maximum Credit Code: Non-Revolving   Amount Last Payment: $16,103.43
Current Available Credit: $0.00   Current Days Past Due: 26
Current Other Escrow $0.00   Total Amount Due: $43,342.56
Balance:        
Current Late Charge $11,135.70   Total Amount Past Due: $16,103.43
Balance:        
Current Other Escrow $0.00   Payment Frequency: Monthly
Interest Balance:        
Participation Balance: $779,704.65   Regular Payment Amount: $16,103.43
Net Principal: $259,901.56   Current Rate Over: 7.500000
Book Balance: $1,039,606.21   One Day's Interest: $216.5846
Net Book Balance: $259,901.56   Current Yield: 7.753615
Total Collateral Value: $0.00   Original Note Amount: $0.00
Pledge LTV: Secu red   Original Note Date: Oct 16, 2015
Payments Scheduled: 124   Renewal Date: Oct 17, 2015
Payments Billed: 44   Maturity Date: Mar 13, 2026
Payments Made: 42   Contract Date: Oct 16, 2015
Times Extended:     Months To Maturity: 81.3
Times Renewed: 1   Date Accrued Through: Jun 04, 2019
Times Past Due 1-29 Days: 22   Date Last Transaction May 20, 2019
      Activity:  
Times Past Due 30-59 Days: 4   Date Principal Paid To: Apr 10, 2019
Times Past Due 60-89 Days:     Date Interest Paid To: May 07, 2019
Times Past Due 90+ Days:     Date Last Change: Mar 11, 2019
      Date Last Updated: Jun 04, 2019
Available Credit        
Maximum Credit: $1,200,000.00      
Maximum Credit Code: Non-Revolving      
Available Credit: $0.00      
Line Available Balance Code: Original Note Amount      
Date Last Advance: Mar 07, 2016   Date Last Zero Balance: Oct 17, 2015
Amount Last Advance: $75,000.01   Payment Reserve Option: Include In Available Credit
      Internal Payment Option: (None)

 

 

 

  

  16  

 

 

 

Available Credit History

 

Print

 

  2019   2018 Loan-To-Date
Principal Advanced: $0.00   $0.00 $1,200,000.00
Principal Paid: $42,243.46   $84,478.16 $160,393.79
Average Balance: $1,058,538.01   $1,124,332.22  
Low Principal Balance: $1,039,606.21   $1,081,849.67  
High Principal Balance: $1,081,849.67   $1,166,327.83  
Days Active: 155   365  
Days Inactive:        
Interest Earned:        
Interest Paid” $33,966.65   $77,240.53 $255,952.34
  $32,477.61   $76,720.35 $249,887.98
         
Participation        
Participation Number: 6500075031   Percent Participated: 75.0000%
Principal Balance: $779,704.65   Interest Method: [7] 365/360 P&I Separate-Simple (30/360 Day Basis)
Interest Balance $4,548.27   Principal Payment Frequency: Maturity
Payoff: $784,252.92   Interest Payment Frequency: Maturity
Current Rate Over Split 7.500000   Percent Participated Method: Percentage of Base Note Balance
Service Fee Rate: 1.000000   Source Code: [600001]
Total Amount Past Due: $0.00   Recourse Code: No Recourse
Original Note Amount: $900,000.00      
Original Note Date: Mar 25, 2016      
Maturity Date (Extended) Mar 13, 2026      
         

 

 

  17  

 

 

 

YUENGLING'S ICE CREAM CORP

1058 CENTRE TURNPIKE

ORWIGSBURG PA 17961-9055

 

 

 

Loan Payoff Statement

 

 

 

 

Loan Payoff for: Loan Number: 500075031
YUENGLING'S ICE CREAM CORP Date Quoted: Jun 05, 2019
1058 CENTRE TURNPIKE Payoff Good To: Jun 05, 2019
ORWIGSBURG PA 17961-9055 Method: 6/6
     
Collateral:UCC FILING    
STATE #2014082901251    
     
Principal:  $1,039,606.21
Interest To Jun 05, 2019:   $6,064.36
Late Charges:   $11,135.70
UCC (1) STATE PAYOFF ADDENDA ON LOAN #2800296 $1.00
Net Amount Due:   $1,056,807.27

 

Additional Information
   
One Day's Interest:   $216.58

 

 

 

 

 

 

  18  

 

 

Note 500072673 - YUENGLING'S ICE CREAM CORP

 

  Relationship Date of Birth Phone Number Tax Identification
       
YUENGLINGIS ICE CREAM CORP Owner   ********** EIN **_*******
1058 CENTRE TURNPIKE        
ORWIGSBURG PA 17961-9055        

 

Additional Relationship 

Tax Name: YUENGLING'S ICE CREAM CORP

 

Summary

 

Principal Balance: $16,749.08   Interest Method: [6] 365/360 Payments P&I
Interest Balance: $101.42   Current Payment Due Date: May 06, 2019
Net Payoff: $17,908.02   Current Payment Due $1,321.91
      Amount:  
Current Other Escrow $0.00   Date Last Payment: May 07, 2019
Balance:        
Current Late Charge $1,057.52   Amount Last Payment: $1,321.91
Balance:        
Current Other Escrow $0.00   Current Days Past Due: 30
Interest Balance:        
Book Balance: $16,749.08   Total Amount Due: $3,701.34
Total Collateral Value: $71,108.00   Total Amount Past Due: $1,321.91
Pledge LTV: 23.55%   Payment Frequency: Monthly
Payments Scheduled: 60   Regular Payment Amount: $1,321.91
Payments Billed: 49   Current Rate Over: 4.950000
Payments Made: 47   One Day's Interest: $2.3029
Times Extended:     Current Yield: 4.707332
Times Renewed: 0   Original Note Amount: $70,000.00
Times Past Due 1-29 Days: 21   Original Note Date: May 06, 2015
Times Past Due 30-59 Days: 2   Maturity Date: May 06, 2020
Times Past Due 60-89 Days:     Contract Date: May 06, 2015
Times Past Due 90+ Days:     Months To Maturity: 11.1
      Date Accrued Through: Jun 04, 2019
      Date Last Transaction May 21, 2019
      Activity:  
      Date Principal Paid To: Apr 06, 2019
      Date Interest Paid To: Apr 23, 2019
      Date Last Change: Feb 13, 2019
      Date Last Updated: Jun 04, 2019

 

 

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YUENGLING'S ICE CREAM CORP

1058 CENTRE TURNPIKE

ORWIGSBURG PA 17961-9055

 

 

 

Loan Payoff Statement

 

 

 

 

Loan Payoff for: Loan Number: 500072673
YUENGLING'S ICE CREAM CORP Date Quoted: Jun 05, 2019
1058 CENTRE TURNPIKE Payoff Good To: Jun 05, 2019
ORWIGSBURG PA 17961-9055 Method: 6/0
     
Collateral: VEHICLE TITLE    
2015 CHEV 4500 COMM CUTAWAY    
     
Principal:  $16,749.08
Interest To Jun 05, 2019:   $101.42
Late Charges:   $1,057.52
Net Amount Due:   $17,908.02

 

Additional Information
   
One Day's Interest:   $2.30

 

 

 

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EXHIBIT B COLLATERAL

 

Collateral:

 

Inventory located at Harvest Storage in Kinzers, PA

 

Accounts Receivable

 

Assets

 

Yuengling's Ice Cream trademark

 

Butterbeer trademark

 

Black & Tan trademark

 

Three Ice cream carts

 

Three Chest Freezers

 

Three Epson Ink Jet printers

 

Five Laptop computers

 

Three Coleman Coolers

 

Two insulated bags

 

Miscellaneous Office supplies

 

 

 

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EXHIBIT C

 

BILL OF SALE

 

BILL OF SALE PRIVATE UCC SALE

 

THIS BILL OF SALE PRIVATE UCC SALE (the "Bill of Sale"), dated as of June 18th , 2019, is by and between MID PENN BANK, a State Chartered Bank ("MPB"), as agent for itself ("Lender"), as authorized pursuant to 13 P.A.C.S.A 9617, on behalf of Yuengling's Ice Cream Corporation, a Pennsylvania business corporation (the "Debtor") and YIC Acquisitions Corp., a Nevada corporation ("Buyer").

 

I.       RECITALS

 

A.       Lender and Buyer are parties to that certain Secured Creditor Asset Purchase Agreement of even date herewith (the "Purchase Agreement"). Capitalized terms used in this Bill of Sale and defined in the Purchase Agreement shall have the meanings set forth in the Purchase Agreement unless otherwise defined herein.

 

B.       Under the Purchase Agreement, Lender agreed to sell and Buyer agreed to buy the Transferred Assets, as more fully described on Exhibit "A" attached hereto (the "Transferred Assets").

 

C.       Lender has exercised its post-default remedies with respect to the Transferred Assets and has noticed the sale of the Transferred Assets to Buyer by private UCC sale in accordance with 13 PA.C.S.A. 9-610 of the Uniform Commercial Code (the "UCC Foreclosure Sale")

 

D.       In accordance with 13 PA.C.S.A. 9-617, Lender and Buyer now desire to confirm the conveyance of all of Debtor's rights, title and interest in and to the Transferred Assets to Buyer as a result of the UCC Foreclosure Sale.

 

II.       AGREEMENTS

 

NOW, THEREFORE, for good a valuable consideration as set forth in the Purchase Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender, for itself and for and on behalf of Debtor, hereby sells, conveys, transfers and assigns unto Buyer, its successors and assigns, all Debtor's interest in the Transferred Assets.

 

LENDER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING BUT NOT LIMITED TO: THE TITLE TO THE TRANSFERRED ASSETS; THE CONDITION, DESIGN, OR QUALITY OF THE TRANSFERRED ASSETS; THE FITNESS OF THE TRANSFERRED ASSETS FOR USE OR FOR A PARTICULAR PURPOSE; THE MERCHANTABILITY OF THE TRANSFERRED ASSETS; COMPLIANCE OF THE TRANSFERRED ASSETS WITH THE REQUIREMENTS OF ANY LAWS, RULES, SPECIFICATIONS OR CONTRACTS PERTAINING THERETO; PATENT INFRINGEMENT; LATENT DEFECTS; THE QUALITY OF THE MATERIALOR WORKMANSHIP OF THE TRANSFERRED ASSETS OR THE CONFORMITY OF THE TRANSFERRED ASSETS TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE ORDER RELATING THERETO; THE OPERATION, USE, OR PERFORMANCE OF THE TRANSFERRED ASSETS; OR ANY OTHER REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSFERRED ASSETS. BUYER ALSO AKNOWLEDGES THAT LENDER HAS MADE NO REPRESENTATION OR WARRANTY OF ANY KIND, NATURE OR DESCRIPTION EXPRESS OR IMPLIED, WITH RESPECT TO THE OPERATION, USE OR PERFORMANCE OF THE TRANSFERRED ASSETS.

 

LENDER SHALL HAVE NO LIABILITY TO BUYER OR ANY PERSON WHOMSOEVER (INCLUDING LESSEES OR PURCHASERS OF ALL OR ANY OF THE TRANSFERRED ASSETS) FOR ANY CLAIM, LOSS, DAMAGE OR EXPENSES (INCLUDING ATTORNEYS FEES) OF ANY KIND OR NATURE, WHETHER SPECIAL, CONSEQUENTIAL, ECONOMIC OR OTHERWISE, CAUSED OR ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTALLY, OR CONSEQUENTIALLY BY THE TRANSFERRED ASSETS OR ANY PART THEREOF OR PRODUCTS THEREFROM, BY ANY INADEQUACY OF THE TRANSFERRED ASSETS OR DEFCT OR DEFICIENCY THEREIN, BY ANY INCIDENT WHATSOEVER ARISING IN STRICT LIABILITY OR OTHERWISE FORM LENDER'S OR BUYER'S NEGLIGENCE OR OTHERWISE, OR FOR ANY LOSS OF BUSINESS OR DAMAGE WHATSOEVER AND HOWSOEVER CAUSED, OR ARISING OUT OF THE TRANSFERRED ASSETS.

 

 

 

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Buyer acknowledges that Lender has made no representation or warranty concerning the location of the Transferred Assets nor whether all of the Transferred Assets are in existence or operational. BUYER PURCHASES THE ASSETS "AS IS" AND WHERESOEVER LOCATED, WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND. Buyer accepts the Transferred Assets subject to the terms of this Bill of Sale, and subject to the terms, conditions, and warranties contained in the Purchase Agreement.

 

Except as set forth in the Purchase Agreement, Buyer agrees to be responsible for all taxes, that are now existing or hereafter are incurred, assessed, or imposed on the Transferred Assets or as a result of the ownership or sale of the Transferred Assets.

 

This Bill of Sale may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the first date set forth above.

 

LENDER:

 

Mid Penn Bank

Pursuant to 13 PA. C.S.A. §9617

And for and on behalf of Yuengling's Ice Cream Corporation

 

 

 

By: _____________________________

 

Name: ___________________________

 

Title: ____________________________

 

 

 

BUYER:

 

YIC Acquisitions Corporation,

a Nevada corporation

 

By: /s/ Everett M. Dickson

Name: Everett M. Dickson

Title: President

 

 

 

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EXHIBIT D

 

EXCLUDED ASSETS

 

 

None.

 

 

 

 

 

 

 

 

 

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EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assumption Agreement"), dated June 19, 2019, is by and between MID PENN BANK, a Pennsylvania State Chartered Bank, as agent for itself ("Assignor"), as authorized pursuant to 13 PA. C.S.A. §9617, on behalf of Yuengling's Ice Cream Corp a Pennsylvania corporation (the "Debtor"), and YIC Acquisitions Corporation., a Nevada corporation ("Assignee").

 

I. RECITALS

 

A. Assignor and Assignee are parties to that certain Secured Creditor Asset Purchase Agreement of even date herewith, as amended (the "APA"), pursuant to which Assignor agreed to sell, and Assignee agreed to purchase certain assets of Debtor.1

 

B. Pursuant to the APA, Assignee also agreed to assume certain liabilities of Debtor.

 

C. In connections with the purchase and sale of the assets of Debtor and pursuant to the APA, Assignor has agreed to assign to Assignee certain contracts and other agreements relating to the Debtor's business.

 

II.       AGREEMENTS

 

NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

 

1.       Assignor hereby sells, assigns and transfers to Assignee all of Assignor's and Debtor's right, title and interest in the contracts and other agreements set forth in Exhibit "A" attached hereto.

 

2.       Assignee hereby assumes any and all obligations associated with the contracts and other agreements set forth in Exhibit "A".

 

3.       Assignee hereby assumes and agrees to timely pay, perform and discharge when due the liabilities as described in Exhibit "A" of the APA.

 

4.       Assignee does not hereby assume nor agree to pay, perform, or discharge, and the Debtor shall remain unconditionally liable for, any and all liabilities not set forth on Exhibit A of the APA.

 

5.       The assumption by Assignee of the liabilities is not intended by the parties to expand the rights and remedies of any third party against Assignee in respect of such liabilities as compared to the rights and remedies which such third party would have had against the Debtor in respect of such liabilities had Assignee not consummated the transactions contemplated by the APA. Nothing contained herein shall, or shall be construed to, prejudice the right of Assignee to contest any claim or demand with respect to any liability assumed hereunder and Assignee shall have all rights which the Debtor may have or have had to defend or contest any such claim or demand.

 

____________________________

1 All capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the APA.

 

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6.       The scope, nature and extent of the liabilities assumed are expressly set forth in the APA. Nothing contained herein shall change, amend, extend or alter (nor shall it be deemed or construed as changing, amending, extending or altering) the terms or conditions of the APA in any manner whatsoever. This Assumption Agreement does not create or establish liabilities or obligations not otherwise created or existing under or pursuant to the APA. To the extent any terms and provisions of this Assumption Agreement are inconsistent with or in conflict with any term, condition provision of the terms and provisions of the APA, the terms of the APA shall govern and control.

 

7.       Assignor agrees to take such actions and to execute such documents as Assignee shall reasonably request in order to fully effectuate this Agreement.

 

8.       This Assumption Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania.

 

9.       This Assumption Agreement shall inure to the benefit of and be binding upon the successors and assigns of Assignor and Assignee, respectively.

 

10.       This Assumption Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

 

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IN WITNESS WHEREOF, the parties have executed this Assumption Agreement on the date set forth above.

 

MID PENN BANK

A Pennsylvania State Chartered Bank

Pursuant to 13 PA C.S.A. 9-617

For itself and on behalf of Yuengling Ice Cream Corp.,

a Pennsylvania corporation

 

By: _____________________________

 

Name: ___________________________

 

Title: ____________________________

 

 

 

YIC Acquisitions Corporation

a Nevada corporation

 

By: /s/ Everett M. Dickson

Name: Everett M. Dickson

Title: President

 

 

[Signature Page to Assignment and Assumption Agreement]

 

 

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EXHIBIT F

 

LIABILITIES NOT ASSUMED

 

LITIGATION

 

Except as expressly set forth in Section 4a. above, Buyer shall not assume or become obligated in any way to pay any liabilities, debts or obligations of Lender or of Debtor whatsoever.

 

Below is a list of litigation or threatened litigation:

 

Klunk & Milian Advertising Design, Inc. — Filed suit against Yuengling's Ice Cream Corporation and David Yuengling — initial claim in the amount of $225,349.28

 

Krasdale Foods, Inc — Filed suit Yuengling's Ice Cream Corporation in the amount of $8,782.31

 

De Lage Landen Financial Services, Inc. ("DLL") — Filed suit against Yuengling's in the amount of $15,902.29

 

EchoHR ongoing arbitration — EchoHR is seeking $214,500. EchoHR proposed a settlement of $27,000

 

Harris Teeter - Demand letter / threat — Harris Teeter requested payment in the amount of $85,863.66

 

T3C (formerly Retail Solutions) — Emailed threat from Altus Collection Agency — Requested payment of $6,067

 

Robert Salna requesting repayment on $250,000 9 month 12% convertible note with Yuengling's Ice Cream. Original note signed on December 28, 2017 with Danny landoli. Robert Salna purchased the note from D. landoli on February 1, 2019 for $50,000

 

Ahold — Threat from the Leviton Law Firm. They have requested payment of $49,958.17

 

 

 

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EXHIBIT G

 

ASSIGNMENT OF PATENTS

 

NONE

 

 

 

 

 

 

 

 

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EXHIBIT H

 

TRADEMARK ASSIGNMENT

 

This TRADEMARK ASSIGNMENT ("Assignment") is made by MID PENN BANK, a Pennsylvania State Chartered Bank, as agent for itself and Yuengling's Ice Cream Corp. ("Yuengling") (collectively "Assignor"), and YIC Acquisitions Corporation, a Nevada corporation ("Assignee"), and having its principal place of business at 123 W. Nye Lane, Suite 129, Carson City, Nevada 89706, effective as of June 19, 2019, as follows:

 

RECITALS

 

WHEREAS, ASSIGNOR has acquired the right and authority to transfer and assign ail rights, title and interest of Yuengling (defined below), in and to the trademark registrations and applications (collectively, the "Marks") set forth in SCHEDULE A, attached hereto and made a part hereof; said trademarks, including all registrations and applications for registration thereof and all rights to sue and recover for past infringement thereof, and all goodwill associated therewith, being collectively referred to herein as the "ASSIGNED TRADEMARKS": found in the attached SCHEDULE A.

 

WHEREAS, Assignee and Assignor are parties to the Secured Creditor Asset Purchase Agreement of even date herewith (the "Agreement"), pursuant to which Assignor has agreed to, among other things, sell and Assignee has agreed to purchase through a private sale under 13 PA C.S.A §9-610 of the Uniform Commercial Codes substantially all of the assets of Yuengling, including without limitation the ASSIGNED TRADEMARKS; and

 

WHEREAS, ASSIGNEE and ASSIGNOR wish to transfer record title of the ASSIGNED TRADEMARKS and to execute a document suitable for recordation in the United States Patent and Trademark Office ("USPTO") and other trademark offices worldwide.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, ASSIGNOR does grant, assign, transfer, convey and deliver to ASSIGNEE all Yuengfing's right, title and interest in, to and under the ASSIGNED TRADEMARKS throughout the world, together with the goodwill of the business in connection with which the ASSIGNED TRADEMARKS have been used in the United States or any other countries.

 

BOTH PARTIES give to the bearer of an original copy of this Assignment all power to complete all necessary formalities in order to render it fully effective and to represent the Assignee at the USPTO or any trademark office or authority in any country in view of the recording of the change of ownership of these Trademarks.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

 

 

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IN WITNESS WHEREOF, ASSIGNOR and ASSIGNEE have caused this Assignment to be executed by their duly authorized representatives. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument.

 

  ASSIGNOR:
   
  MID PENN BANK
  A Pennsylvania State Chartered Bank
  Pursuant to 13 PA C.S.A. §9-617
  For itself and for and on behalf of Yuengling's
  Ice Cream Corporation
   
  By: ______________________________
   
  Name: ____________________________
   
  Title: _____________________________
   
   
  ASSIGNEE:
   
  YIC ACQUISITIONS CORP.,
  a Nevada corporation
   
  By: /s/ Everett M. Dickson
   
  Name: Evertt M. Dickson
   
  Title: President

 

 

 

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Exhibit 12.1

 

John E. Lux, Esq.
Attorney at Law
1629 K Street, Suite 300
Washington, DC 20006
(202) 780-1000
Admitted in Maryland and the District of Columbia

 

July 24, 2019

 

Everett Dickson

Board of Directors

AUREUS, INC.

1170 Peachtree Street #1200

Atlanta, GA 30309

 

Gentlemen:

 

I have acted, at your request, as special counsel to AUREUS, INC.., a Delware corporation, (“AUREUS, INC..”) for the purpose of rendering an opinion as to the legality of 38,000,000 shares of AUREUS, INC.. common stock, par value $0.001 per share to be offered and distributed by AUREUS, INC.. (the “Shares”), pursuant to an Offering Statement to be filed under Regulation A of the Securities Act of 1933, as amended, by AUREUS, INC.. with the U.S. Securities and Exchange Commission (the "SEC") on Form 1-A, for the purpose of registering the offer and sale of the Shares (“Offering Statement”).

 

For the purpose of rendering my opinion herein, I have reviewed statutes of the State of Nevada, to the extent I deem relevant to the matter opined upon herein, certified or purported true copies of the Articles of Incorporation of AUREUS, INC.. and all amendments thereto, the By-Laws of AUREUS, INC.., selected proceedings of the board of directors of AUREUS, INC.. authorizing the issuance of the Shares, certificates of officers of AUREUS, INC.. and of public officials, and such other documents of AUREUS, INC.. and of public officials as I have deemed necessary and relevant to the matter opined upon herein. I have assumed, with respect to persons other than directors and officers of AUREUS, INC.., the due and proper election or appointment of all persons signing and purporting to sign the documents in their respective capacities, as stated therein, the genuineness of all signatures, the conformity to authentic original documents of the copies of all such documents submitted to me as certified, conformed and photocopied, including the quoted, extracted, excerpted and reprocessed text of such documents.

 

Based upon the review described above, it is my opinion that the Shares are duly authorized and when, as and if issued and delivered by AUREUS, INC.. against payment therefore, as described in the offering statement, will be validly issued, fully paid and non-assessable.

 

I have not been engaged to examine, nor have I examined, the Offering Statement for the purpose of determining the accuracy or completeness of the information included therein or the compliance and conformity thereof with the rules and regulations of the SEC or the requirements of Form 1-A, and I express no opinion with respect thereto. My forgoing opinion is strictly limited to matters of Nevada corporation law; and, I do not express an opinion on the federal law of the United States of America or the law of any state or jurisdiction therein other than Nevada, as specified herein.

 

I hereby consent to the filing of this opinion as Exhibit 12.1 to the Offering Statement and to the reference to our firm under the caption “Legal Matters” in the Offering Circular constituting a part of the Offering Statement. We assume no obligation to update or supplement any of the opinion set forth herein to reflect any changes of law or fact that may occur following the date hereof.

 

Very truly yours,

 

/s/ John E. Lux

 

John E. Lux