FRQN 10-K & 10-Q changes, risk factors and insider trading

Forward Looking Statements

Except for statements of historical fact, the information presented herein constitutes forward-looking statements. These forward-looking statements generally can be identified by phrases such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “foresees,” “intends,” “plans,” or other words of similar import. Similarly, statements herein that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, our ability to: successfully commercialize our technology; generate revenues and achieve profitability in an intensely competitive industry; compete in products and prices with substantially larger and better capitalized competitors; secure, maintain and enforce a strong intellectual property portfolio; attract additional capital sufficient to finance our working capital requirements, as well as any investment of plant, property and equipment; develop a sales and marketing infrastructure; identify and maintain relationships with third party suppliers who can provide us a reliable source of raw materials; acquire, develop, or identify for our own use, a manufacturing capability; attract and retain talented individuals; continue operations during periods of uncertain general economic or market conditions, and; other events, factors and risks previously and from time to time disclosed in our filings with the Securities and Exchange Commission, including, specifically, the “Risk Factors” enumerated herein. Although we believe the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on our forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

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

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

Our Website

The Company’s primary web site is: www.reachoutit.com

Business Objectives

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

Business Overview

Founded in 2010 by Rick Jordan to fill a critical gap in the IT services market, ReachOut is evolving into a formidable nationwide cybersecurity entity. We are not your typical MSP. We are a transformative force in cybersecurity and IT services, dedicated to serving SMBs with unparalleled excellence. Our innovative approach and resolute commitment to superior solutions have established us as industry trailblazers, redefining standards and crafting extraordinary client experiences. At ReachOut, our partners are more than just clients; they are integral members of a movement that is reshaping the future of cybersecurity.

Our mission at ReachOut is succinct yet profound: ‘Cybersecurity for All.’ Committed to revolutionizing the Cybersecurity & IT Service Provider landscape for SMBs, we are on a relentless pursuit to establish the first nationwide brand in our sector. This commitment is deeply rooted in our ethos, as envisioned by our founder, Rick Jordan. We recognize that many IT firms fall short in adequately protecting SMBs, leaving them vulnerable. At ReachOut, we are dedicated to leveling the playing field, ensuring that businesses of all sizes and locations have access to top-tier security solutions

Operating Strategy

ReachOut is the first independently public Managed Service Provider (MSP) following our reverse merger with Yuengling’s Ice Cream Corp. Our journey, driven by a commitment to transforming cybersecurity and IT services for Small to Medium Sized Businesses (SMBs), has positioned us as a leader in innovation and reliability in the technology sector.

The essence of our brand, ‘ReachOut’ embodies our mission to democratize advanced IT solutions for businesses traditionally limited by resources. We’ve become a trusted ally for SMBs, bridging the gap in reliable IT support. As we enter the public domain, our dedication to empowering organizations with cutting-edge cybersecurity and IT solutions remains steadfast.

We are at the cusp of a cybersecurity revolution, one where the integration of cybersecurity, cloud computing, and IT services is not just a necessity but a critical component of business success across various industries. The opportunities for ReachOut in this evolving landscape are substantial and multifaceted.

OUR FOUNDATION

We’ve brought together a powerful team to execute on our vision, and we’re just getting started. ReachOut already has a strong and visible media presence through our CEO, and professional competency in its team to match.

Nationally recognized in business and cybersecurity, Jordan is a frequent presence on global networks like Bloomberg, NewsNation, Newsmax, and CBS, offering expert insights that have even been sought after in the White House. His deep involvement and motivational leadership style are evident in his weekly “CEO Talk,” inspiring the company’s culture and aligning the team with its vision. Additionally, Jordan’s influence extends beyond corporate walls through his podcast, “ALL IN with Rick Jordan,” which ranks in the top 2.5% globally and resonates with audiences in over 70 countries.

Harrington’s entrepreneurial journey, marked by the creation of the infomercial, revolutionized television marketing and opened new avenues for entrepreneurs and startups to reach global audiences. His career is distinguished by the launch of over 20 businesses, each surpassing $100 million in revenue, showcasing his remarkable ability to identify and capitalize on market opportunities. As an author, Harrington shares his wealth of knowledge and experience, offering inspiration to both aspiring and established entrepreneurs. At ReachOut, he plays a crucial role in steering the company’s strategic direction, especially in technology and cybersecurity, helping to drive innovation and maintain the company’s leading position in the industry. Harrington’s involvement is not only a testament to his illustrious career but also signifies his commitment to propelling ReachOut to new heights of innovation and market leadership.

In his role at ReachOut Technology, Charles plays a key role in guiding the company through complex financial landscapes. His collaborative work with professionals like tax experts, CPAs, and attorneys has honed his ability to offer comprehensive, strategic financial advice. Under his leadership, his team has built a strong network of legal and financial partners, enhancing ReachOut’s capacity for comprehensive financial and strategic management. Charles’s strategic vision and ‘eyes-wide-open’ approach are invaluable in steering ReachOut Technology towards financial stability and market adaptability.

Since joining the MSP sector in 2017, Kedra has rapidly grown her industry expertise, contributing significantly to ReachOut’s expansion. Her approach to M&A focuses on creating long-term value and driving growth through strategic acquisitions. A notable career achievement includes leading a SaaS company’s business development, boosting its revenue from $2M to over $100M, demonstrating her exceptional ability to enhance business performance and market value.

OUR PRODUCTS

These key offerings highlight ReachOut’s commitment to providing innovative, comprehensive, and tailored IT and cybersecurity solutions to its clients.

Employees

The company currently has approximately 60 full-time employees, including officers and directors. Our employees are not represented by any labor union.

ITEM 1A. RISK FACTORS

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

Bad debt expense

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

Officer compensation

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

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

We had net income of $1,290,481 for the three months ended June 30, 2025, compared to a net loss of $1,673,434 for the three months ended June 30, 2024.

Results of Operations for the Six Months ended June 30, 2025 and 2024

We incurred $303,646 in costs of goods sold for the six months ended June 30, 2025, compared to $1,435,690 for the six months ended June 30, 2024. This decrease is primarily due to the Company’s restructuring.

We incurred $3,505,069 in impairment loss for the six months ended June 30, 2025 compared to $2,117,502 for the six months ended June 30, 2024.

We had $267,008 of G&A for the six months ended June 30, 2025, compared to $654,516 for the six months ended June 30, 2024, a decrease of $387,508 or 59.2%. The decrease in revenue is primarily due to the Company’s restructuring.

We had $1,068,957 in compensation for the six months ended June 30, 2025 compared to $2,057,472 of compensation for the six months ended June 30, 2024, a decrease of $988,515 or 48%. The decrease in revenue is primarily due to the Company’s restructuring.

We incurred $283,487 of professional fees for the six months ended June 30, 2025, compared to $388,159 for the six months ended June 30, 2024, a decrease of $104,672 or 27%. Professional fees generally consist of audit, legal, accounting and investor relation service fees. The decrease in the current period is due to a decrease in audit fees.

For the six months ended June 30, 2025, we had total other income of $11,927,209, compared to total other expenses of $7,417,906 for the six months ended June 30, 2024.

In the current period we had gain on disposal of $11,233,944, $175,495 of expense related to our derivatives, a gain of $1,767,895 for the change in fair value of derivatives, interest expense of $636,679 and a loss on conversion of debt of $262,456.

In the prior period we had $20,722,300 of expense related to our derivatives, a gain of $13,136,512 for the change in fair value of derivatives, interest expense of $822,630 and a loss on conversion of debt of $179,921 and a gain on the extinguishment of debt of $1,170,433.

Net Profit (loss)

We had net income of $7,831,658 for the six months ended June 30, 2025, compared to a net loss of $10,660,143 for the six months ended June 30, 2024.

For the six months ended June 30, 2024, we netted $529,644 from financing activities. We received $287,705 from proceeds from a loan (Fox) and $662,500 from the issuance of convertible notes. We repaid $92,295 on the Fox loan, $316,577 on the Fora loan and $113,177 on repayment of seller notes. We had a new vehicle loan of $53,896, note issued of $125,000, a repayment of vehicle loans of $26,129, and repayments of affiliate advances of $36,550.