UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
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| Large accelerated filer ☐ | Accelerated filer ☐ | |
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Emerging growth company |
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PEDRO’S LIST, INC.
July 31, 2022
FORM 10-Q
TABLE OF CONTENTS
| Item # | Description |
Page Numbers |
| PART I | ||
| ITEM 1 | UNAUDITED FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS | 3 |
| ITEM 2 | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 16 |
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 17 |
| ITEM 4 | CONTROLS AND PROCEDURES | 17 |
| PART II | ||
| ITEM 1 | LEGAL PROCEEDINGS | 18 |
| ITEM 1A | RISK FACTORS | 18 |
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 19 |
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES | 19 |
| ITEM 4 | MINE SAFETY DISCLOSURES | 19 |
| ITEM 5 | OTHER INFORMATION | 19 |
| ITEM 6 | EXHIBITS | 20 |
| SIGNATURES | 21 |
| 2 |
ITEM 1. FINANCIAL STATEMENTS
PEDRO’S LIST, INC.
INDEX TO CONENSED FINANCIAL STATEMENTS
(Unaudited)
TABLE OF CONTENTS
| PAGE | |
| CONDENSED BALANCE SHEETS (UNAUDITED) | 4 |
| CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) | 5 |
| CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) | 6 |
| CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) | 7 |
| NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS | 8 |
| 3 |
Pedro’s List, Inc.
(Formerly Quest Management, Inc.)
Condensed Consolidated Balance Sheets
July 31, 2022 and October 31, 2021
(Unaudited)
| July 31, | October 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Note receivable | ||||||||
| Total Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) | ||||||||
| Current Liabilities | ||||||||
| Notes payable | $ | $ | ||||||
| Note payable-Related party | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable and accrued expenses-Related party | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders (Deficit) | ||||||||
| Common stock, par value, shares authorized; | ||||||||
| and shares issued and outstanding at | ||||||||
| Common stock, $0.001 par value, 750,000,000 shares authorized; 74,211 and 54,211 shares issued and outstanding at July 31, 2022 and October 31, 2021 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated (Deficit) | ( | ) | ( | ) | ||||
| Total Stockholders' (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders' (Deficit) | $ | $ | ||||||
The accompanying footnotes are an integral part of these unaudited condensed financial statements.
| 4 |
Pedro’s List, Inc.
(Formerly Quest Management, Inc.)
Condensed Consolidated Statement of Operations
For the Nine Months and Three Months Ended July 31, 2022 and 2021
(Unaudited)
| Nine Months Ended | Three Months Ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | — | $ | — | $ | — | $ | — | ||||||||
| Total revenues | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | ( | ) | ||||||||||||||
| Total operating expenses | ( | ) | ||||||||||||||
| (Loss) before other expenses | ( | ) | ( | ) | ( | ) | ||||||||||
| Other (expense) | ||||||||||||||||
| — | — | |||||||||||||||
| Impairment (loss) | ( | ) | ( | ) | ||||||||||||
| Interest (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Loss) before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income taxes | ||||||||||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| (Loss) per share -Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Weighted average shares outstanding | ||||||||||||||||
| Weighted average shares outstanding Basic and diluted | ||||||||||||||||
The accompanying footnotes are an integral part of these unaudited condensed financial statements.
| 5 |
Pedro’s List, Inc.
(Formerly Quest Management, Inc.)
Condensed Consolidated Statement of Stockholders’ (Deficit)
For the Three Months Ended July 31, July 31, January 31, 2022 and 2021
(Unaudited)
| Additional | ||||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | (Deficit) | (Deficit) | ||||||||||||||||
| Balance-November 1, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net (loss) for the three months ended January 31, 2021 | — | ( | ) | ( | ) | |||||||||||||||
| Balance-January 31, 2021 | ( | ) | ( | ) | ||||||||||||||||
| Net (loss) for the three months ended April 30, 2021 | — | ( | ) | ( | ) | |||||||||||||||
| Balance-April 30, 2021 | ( | ) | ( | ) | ||||||||||||||||
| Net (loss) for the three months ended July 31, 2021 | — | ( | ) | ( | ) | |||||||||||||||
| Balance-July 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Additional | ||||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | (Deficit) | (Deficit) | ||||||||||||||||
| Balance-November 1, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net (loss) for the three months ended January 31, 2022 | — | ( | ) | ( | ) | |||||||||||||||
| Balance-January 31, 2022 | ( | ) | ( | ) | ||||||||||||||||
| Net (loss) for the three months ended April 30, 2022 | — | ( | ) | ( | ) | |||||||||||||||
| Balance-April 30, 2022 | ( | ) | ( | ) | ||||||||||||||||
| Issuance of common stock for acquisition | ||||||||||||||||||||
| Distributions by Subsidiary | — | ( | ) | ( | ) | |||||||||||||||
| Net (loss) for the three months ended July 31, 2022 | — | ( | ) | ( | ) | |||||||||||||||
| Balance-July 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying footnotes are an integral part of
these unaudited condensed financial statements.
| 6 |
Pedro’s List, Inc.
(Formerly Quest Management, Inc.)
Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended July 31, 2022 and 2021
(Unaudited)
| Nine Months Ended | ||||||||
| July 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used | ||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Impairment loss | ||||||||
| — | ||||||||
| Changes in assets and liabilities: | ||||||||
| Increase in accounts payable and accrued expenses | ||||||||
| Net cash (used) in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Assumption of note payable by an outside party | ( | ) | ||||||
| Increase in notes payable | ||||||||
| Increase in notes payable-Related party | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash | ||||||||
| CASH AT BEGINNING PERIOD | ||||||||
| CASH AT END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Impairment loss | $ | 647,739 | $ | — | ||||
The accompanying footnotes are an integral part of these unaudited condensed financial statements.
| 7 |
PEDRO’S LIST, INC.
(formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 1- Business, Basis of Presentation and Significant Accounting Policies
Nature of Operations
Pedro’s List, Inc., formerly known as Quest Management, Inc. (the “Company”) was incorporated in the State of Nevada on October 12, 2014. The Company originally intended to engage in the business of development of marketing channels to distribute fitness equipment to the wholesale market in the United States. The Company acquired Pedro’s List U.S. L.L.C. on May 23, 2022 through the exchange of shares ( shares on a pre-reverse stock split basis) of its common stock and is entering into the business of offering an online service to consumers looking for credible and reputable home service and repair providers in Mexico. This acquisition was treated as a purchase with Pedro’s List, Inc. being the Acquirer.
The Company may continue to seek the acquisition of other business activities and the related capital needed to enter into an activity to bring operations that would be profitable and increase the value to the shareholders. The activities may be in the industries currently or previously pursued, but it is not known at this point in time, and the current operations will be financed by its parent company and/or debts incurred by the Company.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are presented in US dollars. The Financial Statements and related disclosures as of October 31, 2021 are audited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). All other periods presented in these financial statements are unaudited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, all references to “Quest Management,” “we,” “us,” “our” or the “Company” are to Pedro’s List, Inc.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Revenue Recognition
The Company applies ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company will recognize revenue from the sale of our exercise equipment by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue as each performance obligation is satisfied.
Advertising
Advertising costs are expensed as incurred. Advertising expenses for the nine months ended July 31, 2022 and 2021 were $0.
| 8 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 1 – Business, Basis of Presentation and Significant Accounting Policies (Continued)
Intangibles with Finite Lives
The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment, where applicable to all long lived assets. FASB ASC 360-10 addresses accounting and reporting for impairment and disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with FASB ASC 360-10. FASB ASC 360-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
The Company does not amortize any intangible assets with finite lives.
Goodwill and intangible assets are reviewed for potential impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Management determined an impairment adjustment related to these intangibles was necessary at July 31, 2022. The Company impaired the goodwill allocated from the purchase of its Subsidiary in the amount of $647,739.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under US GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use
of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 — Quoted prices for identical assets and liabilities in active markets;
Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Use of Estimates
The preparation of financial statements in conformity with US GAAP 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 periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
| 9 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 1 – Business, Basis of Presentation and Significant Accounting Policies (Continued)
Emerging Growth Company Critical Accounting Policy Disclosure
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. 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. As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has chosen to “opt out” of such extended transition period, and as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted ASC 740-10-25, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.
Net loss per common share is computed pursuant to ASC 260-10-45, Earnings Per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period, unless their effect is anti-dilutive due to continuing losses. There were no potentially dilutive shares outstanding as of July 31, 2022 and 2021, respectively
Principles of Consolidation
The consolidated financial statements include the accounts of Pedro’s List, Inc. and its wholly-owned Subsidiary Pedro’s List U.S. L.L.C. (“Pedro’s List, LLC) All intercompany transactions are eliminated in consolidation.
| 10 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
j NOTE 1 – Business, Basis of Presentation and Significant Accounting Policies (Continued)
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations or financial position.
NOTE 2 – Financial Condition and Going Concern
The Company’s financial statements have been
presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company had limited operations during the period from October 12, 2014 (date of inception) to July
31, 2022 resulted in accumulated deficit of $
Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail its operations.
NOTE 3 – Acquisition
Effective May 23, 2022 acquired all membership interests in Pedro’s List LLC
The purchase price for the acquisition of Pedro’s List, LLC was the issuance of 20,000 shares (100,000,000 shares on a pre-reverse stock split basis) of the Company’s common stock at ( on a pre-reverse stock split basis) per share and the assumption of the net liabilities of Pedro’s List, LLC. One hundred percent of the purchase price was allocated to goodwill.
| 11 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 3 – Acquisition (Continued)
The allocation of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed are shown below.
| Cash | $ | |||
| Intercompany debt offset | ||||
| Note receivable | ||||
| Total assets acquired | ||||
| Accounts payable and accrued expenses | ||||
| Notes payable | ||||
| Total liabilities assumed | ||||
| Net debt assumed | ||||
| Common stock issued | ||||
| Amount allocated to goodwill(impaired) | $ |
NOTE 4 – Notes Payable
The Company’s debt consists of the following:
| July 31, 2022 | October 31, 2021 | |||||||
| Notes payable, non-interest bearing, due upon demand, unsecured. | $ | $ | ||||||
| Note payable, non-interest bearing, due upon demand, unsecured. | ||||||||
| Note payable, | ||||||||
| Note payable, non-interest bearing, due upon demand, unsecured. | ||||||||
| Note payable, non-interest bearing, due upon demand, unsecured. | ||||||||
| Notes payable, non-interest bearing, due upon demand, unsecured | ||||||||
| Total due | ||||||||
| Current Portion | ||||||||
| Long-term portion | $ | $ | ||||||
| 12 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 5 – Note Payable -Related Party
The Company’s related party debt consists of the following:
| July 31, 2022 | October 31, 2021 | |||||||
| Notes payable, non-interest bearing, due upon demand, unsecured | $ | 12,500 | $ | 12,500 | ||||
| Total due | 12,500 | 12,500 | ||||||
| Current Portion | ||||||||
| Long-term portion | $ | — | $ | — | ||||
NOTE 6 – Income Taxes
The Company adopted the provisions of ASC 740-10 (formerly known as FIN No. 48, Accounting for Uncertainty in Income Taxes). ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740-10 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. The application of income tax law is inherently complex. Laws and regulation in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding the income tax exposures. Interpretations and guidance surrounding income tax laws and regulations change over time. As such, changes in the subjective assumptions and judgments can materially affect amounts recognized in the balance sheets and statements of income.
The Company has no unrecognized tax benefit, which would affect the effective tax rate if recognized. There has been no significant change in the unrecognized tax benefit during the period ended July 31, 2022.
We classify interest and penalties arising from the underpayment of income taxes in the statement of income under general and administrative expenses. As of July 31, 2022, we had no accrued interest or penalties related to uncertain tax positions.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. 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.
| 13 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 6 – Income Taxes (Continued)
The components of deferred income tax assets (liabilities) at July 31, 2022, were as follows:
| Balance | Rate | Tax | ||||||||||
| Federal loss carryforward | $ | (1) | % | $ | ||||||||
| Valuation allowance | ( | ) | ||||||||||
| Deferred tax asset | $ | — | ||||||||||
| (1) | This amount has been restated due to an adjustment in a previous period for the value assigned to shares issued for services. |
NOTE 7 – Capital Stock
On May 23, 2022, the Company issued 20,000 shares (100,000,000 shares on a pre-reverse stock split basis) of its common stock valued at $27.50 ($0.0055 on a pre-reverse stock split basis) per share for the acquisition of Pedro’s List, LLC. This transaction was determined to be an acquisition for accounting purposes with Pedro’s List, Inc. being the Acquirer.
On August 11, 2022, he Company effected a reverse
split of its common stock on a one for five thousand
NOTE 8 – Contingencies and Commitments
The Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.
The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
| 14 |
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Condensed Consolidated Unaudited Financial Statements
July 31, 2022
NOTE 8 – Contingencies and Commitments (Continued)
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
Management of the Company has conducted a diligent search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates.
The effects of Covid -19 could impact our ability to operate under the going concern and maintain sufficient liquidity to continue operations. The impact of Covid-19 on companies is evolving rapidly and its future effects are uncertain. There are material uncertainties from Covid-19 that cast significant doubt on the company’s ability to operate under the going concern. It is highly likely that our company will have issues relating to the current situation that need to be considered by management. There will be a wide range of factors to take into account in going concern judgments and financial projections including travel bans, restrictions, government assistance and potential sources of replacement financing, financial health of suppliers and customers and their effect on expected profitability and other key financial performance ratios including information that shows whether there will be sufficient liquidity to continue to meet obligations when they are due.
NOTE 9 – Related Party Transactions
A loan amount of $12,500 is due to Custodian of the company on a note payable. The note payable is non-interest bearing, unsecured and is payable on demand.
NOTE 10 – Subsequent Events
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to July 31, 2022 through the date these financial statements were issued and has determined that it has no material subsequent events to disclose in these financial statements.
| 15 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Plan of Operation
As disclosed elsewhere in this report, on May 23, 2022, the Company acquired Pedro’s List U.S. L.L.C. (“Pedro’s List, LLC") in a reverse acquisition transaction. Item 2.01(f) of Form 8-K states that if the registrant was a shell company, as we were immediately before the reverse acquisition transaction disclosed under Item 2.01, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10, which was done in the Form 8-K.
Our plan of operation for the next 12 months is to: (i) enter into the business as described below, and (ii) seek to raise additional equity funding. During the next 12 months, our minimum cash requirements include expenses to; the payment of our SEC reporting filing expenses, including associated legal and accounting fees; and costs incident to maintaining our good standing as a corporation in our state of organization. We anticipate that we will need to raise additional equity funds to successfully commence and operate Pedro’s List operations, as described below. We have no commitments to raise any additional funds at the present time, and we can offer no assurance that we will be able to raise additional funds on terms acceptable to the Company.
Business
Pedro’s List LLC’s main business operations is connecting homeowners and consumers with service professionals for home repair, maintenance and improvement projects. Pedro’s List provides the technology tools and resources to allow homeowners to find local pre-screened, customer reviewed service professionals and instantly book appointments online or through the mobile application. Pedro’s list also provides consumers with other home-related services resources. The concept of consumers writing reviews based on experience to assist others in the determination of their choices, is a proven business model we have implemented in the build a robust technology application to facilitate these transactions. An experienced team has been assembled to implement the plan to offer these services to consumers in a better way and significantly benefit service providers.
Corporate History
Pedro’s List, LLC was founded in 2018.
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Nature of Operations
Pedro’s List, LLC is a technology company that helps consumers find reputable service providers for home-related services. A list of these services include over 600 different types of home-related repair services like plumbing, painting, electrical, etc. The technology that brings consumers with customer reviewed service providers and facilitates these transactions has been extensively tested for a variety of functions. One is functionality. The ability to service the consumers with a number of complex scenarios has been positively evaluated from several experienced sources. The second is security. The technology has the same high-level security protocols as many other financial services companies currently use. The third is scalability. Scalability has been repeatedly tested and third-party tested as well. We are launching in Cabo San Lucas, which has a total population of around 120,000 people. We plan to launch in a smaller market to determine any possible challenges, learn from our customers and determine the most effective processes. We then plan to launch in Mexico City. The company will have revenue from service providers, advertising and consumers. A percentage of the total cost of a job is charged for referring consumers the business to service providers. Several types of a subscription-based fee to service providers, multiple levels of advertising on the website and the app and after the initial free download of the app, different levels and options are available to consumers.
Results of Operations
Our revenues for the three months ended July 31, 2022 and 2021 were $0 for both periods, respectively. Our revenues for the nine months ended July 31, 2022 and 2021 were $0 for both periods, respectively. Our cost of goods sold for the three and nine months ended July 31, 2022 and 2021 was $0, resulting in gross profit of $0 for both periods, respectively. Our operating expenses for the three months ended July 31, 2022 and 2021 were $41,571 and $(4,234) resulting in a net operating loss (gain) of $41,571 and $(4,234), respectively. Our operating expenses for the nine months ended July 31, 2022 and 2021 were $92,526 and $24,432 resulting in a net operating loss of $92,526 and $24,432, respectively. The Company had $597,853 in other expenses for the three months ended July 31, 2022 and $16 in other expense during the three months ended July 31, 2021. This results in a net loss (gain) for the three months ended July 31, 2022 and 2021 in the amounts of $639,424 and $(4,218), respectively. The Company had a net loss for the nine months ended July 31, 2022 and 2021 of $690,379 and $24,464, respectively.
Liquidity
We had $126 in cash and $6,000 in Note Receivable and $297,371 in current liabilities as of July 31, 2022.
We do not believe that our cash balance is sufficient to fund our limited levels of operations beyond one year’s time unless additional revenues are generated or unless we borrow additional funds.
Plan of Operation for the next 12 months
Our cash balance is $126 as of July 31, 2022.
Over the next twelve months we plan to launch our app and expand our business operations. These are estimates based on our projections and could materially differ from actual expenses that we will incur.
We anticipate that we will incur the following operating expenses over the upcoming 12 months to implement the business acquired:
| Estimated Funding Required During the Next 12 Months | ||||
| Expense | Amount ($) | |||
| Intellectual Property Registrations | $ | 10,000 | ||
| Marketing | 3,725,000 | |||
| Payroll | 3,863,630 | |||
| Research and Development | 575,000 | |||
| Consulting and Management Fees | 245,000 | |||
| Professional Fees | 500,000 | |||
| Rent | 600,000 | |||
| Travel | 260,000 | |||
| Other General Administrative Expenses | 1,042,000 | |||
| Total | $ | 10,820,630 | ||
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We will continue to analyze and evaluate opportunities to acquire strategic businesses or product lines with the potential to strengthen our industry position or enhance our existing products and services. Our strategy is to raise sufficient capital to launch the app. Even if we do, such investments may involve significant expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We do not anticipate the purchase significant equipment during the next twelve months.
Our independent registered public accountant has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we generate additional revenue sufficient to maintain operations or obtain additional capital to pay our bills. There is no assurance we will ever reach that stage.
See our Plan of Operation above for information about our cash requirements for the next twelve months.
Capital Resources
The cash flows used in operating activities for the nine months ended July 31, 2022 consisted of the following: an increase in net loss from $24,464 during the nine months ended July 31, 2021 to $690,379 for the nine months ended July 31, 2022. Adjustments to reconcile net loss to net cash used in operating activities for the nine months ended July 31, 2022 consisted of $550,000 for impairment loss and $46,783 for bargain loss. Increase in accounts payable and accursed expenses increased from $20,441 during the nine months ended July 31, 2021 to $41,453 for the nine months ended July 31, 2022.
The cash flows from financing activities for the nine months ended July 31, 2022 consisted of an increase of notes payable in the amount of $52,269, for total net cash provided from financing activities in the amount of $52,269.
As reflected in the financial statements, the Company has incurred current period losses and has had negative cash flows from operating activities. The Company also incurred losses in prior periods. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. We intend to fund future operations for the next twelve months through raising funds from debt and/or equity offerings. Currently, we cannot provide assurance that such financing will be available to us on favorable terms, or at all. If, after utilizing the existing sources of capital available to us, further capital needs are identified and if we are not successful in obtaining the required financing, we may be forced to curtail our existing or planned future operations. We believe our plans will enable us to continue our current operations for in excess of one year from the issuance date of this Annual Report. However, those plans are dependent upon obtaining additional capital until cash flows from operations generated are sufficient to fund operations.
Emerging Growth Company Critical Accounting Policy Disclosure
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. 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. As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of the benefits of this extended transition period in the future.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements.
Changes in Internal Control over Financial Reporting
Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.
The Company is not required by current SEC rules to include, and does not include an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required to provide the information required by this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On May 23, 2022, we issued 20,000 shares (100,000,000 shares on a pre-reverse stock split basis)
of our common stock to Andrew Birnbaum, the sole member and owner of Pedro’s List, LLC as part of the closing of the Share Exchange
Agreement in exchange for all of the membership units and ownership interests of Pedro’s List, LLC. The issuance of the shares was
made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFTEY DISCLOSURES
N/A
ITEM 5. OTHER INFORMAION
None.
ITEM 6. EXHIBITS.
The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our Registration Statement on Form S-1, filed under SEC File Number 333-201215, at the SEC website at www.sec.gov:
|
Exhibit Number |
Description | |
| 3.1 | Articles of Incorporation* | |
| 3.2 | Bylaws* | |
| 31.1 | Sec. 302 Certification of Principal Executive Officer | |
| 31.2 | Sec. 302 Certification of Principal Financial Officer | |
| 32.1 | Sec. 906 Certification of Principal Executive Officer | |
| 32.2 | Sec. 906 Certification of Principal Financial Officer | |
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PEDRO’S LIST, INC. | ||
| (Registrant) | ||
| Dated: October 7, 2022 | By: | /s/ Andrew Birnbaum |
| Andrew Birnbaum | ||
| (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Sole Director) | ||