ASSISTED 4 LIVING, INC. - Quarter Report: 2019 August (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended: August 31, 2019 | |||||||||
or
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from ___________ to ___________ | |||||||||
Commission File Number: 333-226979 | |||||||||
Assisted 4 Living, Inc. | |||||||||
(Exact name of registrant as specified in its charter) |
Nevada | 82-1884480 | ||||||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||||||
2382 Bartek Pl, North Port FL | 34289 | ||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||
(888) 609-1169
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
None | None | None |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No | ||||||||
| Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No | ||||||||
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | ||||||||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||
| Emerging growth company | ☒ | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ Yes ☒ No | ||||||||
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ NoPROCEEDINGS DURING THE PRECEDING FIVE YEARS | ||||||||
| APPLICABLE ONLY TO CORPORATE ISSUERS | ||||||||
| Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. | ||||||||
| 14,150,000 common shares issued and outstanding as of October 11, 2019. | ||||||||
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| 2 |
INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2019
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
| F-1 |
Consolidated Balance Sheets
(Unaudited)
As of | As of | |||||||
| August 31, | November 30, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 11,344 | $ | 21,019 | ||||
Total Current Assets | 11,344 | 21,019 | ||||||
TOTAL ASSETS | $ | 11,344 | $ | 21,019 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 34,412 | $ | 2,881 | ||||
Deferred revenue and customer deposits | 1,500 | — | ||||||
Due to related parties | 5,556 | — | ||||||
Total Current Liabilities | 41,468 | 2,881 | ||||||
Total Liabilities | 41,468 | 2,881 | ||||||
Stockholders' Equity (Deficit) | ||||||||
Preferred stock: 25,000,000 shares authorized; $0.0001 par value no shares issued and outstanding | — | — | ||||||
Common stock: 100,000,000 shares authorized; $0.0001 par value 14,150,000 and 13,050,000 shares issued and outstanding, respectively | 1,415 | 1,305 | ||||||
Additional paid in capital | 71,085 | 49,195 | ||||||
Accumulated deficit | (102,624 | ) | (32,362 | ) | ||||
Total Stockholders' Equity (Deficit) | (30,124 | ) | 18,138 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 11,344 | $ | 21,019 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements
.
| F-2 |
Consolidated Statements of Operations
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
August 31, | August 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | $ | 139,092 | $ | 4,500 | $ | 241,168 | $ | 14,200 | ||||||||
Cost of service | (76,594 | ) | — | (139,039 | ) | — | ||||||||||
Gross Profit | 62,498 | 4,500 | 102,129 | 14,200 | ||||||||||||
Operating Expenses: | ||||||||||||||||
General and administrative | 71,621 | 6,005 | 135,262 | 15,406 | ||||||||||||
Professional fees | 4,483 | 8,261 | 35,985 | 15,813 | ||||||||||||
Total operating expenses | 76,104 | 14,266 | 171,247 | 31,219 | ||||||||||||
Operating Loss | (13,606 | ) | (9,766 | ) | (69,118 | ) | (17,019 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Interest expense, net | (895 | ) | — | (1,144 | ) | — | ||||||||||
Total other expenses | (895 | ) | — | (1,144 | ) | — | ||||||||||
Net loss before income taxes | (14,501 | ) | (9,766 | ) | (70,262 | ) | (17,019 | ) | ||||||||
Provision for income tax | — | — | — | — | ||||||||||||
Net Loss | $ | (14,501 | ) | $ | (9,766 | ) | $ | (70,262 | ) | $ | (17,019 | ) | ||||
Basic and Diluted Loss per Common Share | $ | (0.00) | $ | (0.00) | $ | (0.01 | ) | $ | (0.00) | |||||||
Basic and Diluted Weighted Average Common Shares Outstanding | 14,150,000 | 13,009,239 | 13,948,540 | 11,015,091 | ||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-3 |
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
(Unaudited)
For the Three and Nine Months Ended August 31, 2019
Additional | ||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid in | Accumulated | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
Balance - November 30, 2018 | — | $ | — | 13,050,000 | $ | 1,305 | $ | 49,195 | $ | (32,362 | ) | $ | 18,138 | |||||||||||||||
| Issuance of common shares for cash | — | — | 1,100,000 | 110 | 21,890 | — | 22,000 | |||||||||||||||||||||
Net loss for the period | — | — | — | — | — | (9,467 | ) | (9,467 | ) | |||||||||||||||||||
| Balance - February 28, 2019 | — | $ | — | 14,150,000 | $ | 1,415 | $ | 71,085 | $ | (41,829 | ) | $ | 30,671 | |||||||||||||||
Net loss for the period | — | — | — | — | — | (46,294 | ) | (46,294 | ) | |||||||||||||||||||
| Balance - May 31, 2019 | — | $ | — | 14,150,000 | $ | 1,415 | $ | 71,085 | $ | (88,123 | ) | $ | (15,623 | ) | ||||||||||||||
| Net loss for the period | — | — | — | — | — | (14,501 | ) | (14,501 | ) | |||||||||||||||||||
| Balance, August 31, 2019 | — | $ | — | 14,150,000 | $ | 1,415 | 71,085 | $ | (102,624 | ) | $ | (30,124 | ) | |||||||||||||||
For the Three and Nine Months Ended August 31, 2018
Additional | ||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid in | Accumulated | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
Balance - November 30, 2017 | — | $ | — | 10,000,000 | $ | 1,000 | $ | 19,000 | $ | (5,397 | ) | $ | 14,603 | |||||||||||||||
Net loss for the period | — | — | — | — | — | (4,613 | ) | (4,613 | ) | |||||||||||||||||||
| Balance - February 28, 2018 | — | $ | — | 10,000,000 | $ | 1,000 | $ | 19,000 | $ | (10,010 | ) | $ | 9,990 | |||||||||||||||
| Common shares issued for cash | 2,300,000 | 230 | 22,770 | 23,000 | ||||||||||||||||||||||||
Net loss for the period | — | — | — | — | — | (2,640 | ) | (2,640 | ) | |||||||||||||||||||
Balance - May 31, 2018 | — | $ | — | 12,300,000 | $ | 1,230 | $ | 41,770 | $ | (12,650 | ) | $ | 30,350 | |||||||||||||||
| Common shares issued for cash | — | — | 750,000 | 75 | 7,425 | — | 7,500 | |||||||||||||||||||||
| Net loss for the period | — | — | — | — | — | (9,766 | ) | (9,766 | ) | |||||||||||||||||||
| Balance - August 31, 2018 | — | $ | — | 13,050,000 | $ | 1,305 | 49,195 | $ | 22,416 | $ | 28,084 | |||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-4 |
Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | ||||||||
| August 31, | ||||||||
2019 | 2018 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (70,262 | ) | $ | (17,019 | ) | ||
Changes in current assets and liabilities: | ||||||||
Prepaid expenses | — | 3,705 | ||||||
Accounts payable and accrued liabilities | 31,531 | 7,181 | ||||||
Due to related parties | 5,556 | (950 | ) | |||||
Customer Deposits | 1,500 | — | ||||||
Net Cash Used in Operating Activities | (31,675 | ) | (7,083 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Issuance of common stock | 22,000 | 30,500 | ||||||
Net Cash Provided by Financing Activities | 22,000 | 30,500 | ||||||
Net change in cash for the period | (9,675 | ) | 23,417 | |||||
Cash at beginning of period | 21,019 | 11,737 | ||||||
Cash at end of period | $ | 11,344 | $ | 35,154 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Cash paid for income taxes | $ | — | $ | — | ||||
Cash paid for interest | $ | — | $ | — | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| F-5 |
Notes to the Unaudited Consolidated Financial Statements
August 31, 2019
NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN
Assisted 4 Living, Inc., (“Assisted 4 Living,” “the Company,” “we” or “us”) was incorporated in the state of Nevada on May 24, 2017. It is based in North Port, Florida. The Company incorporated a wholly-owned subsidiary, “Assisted 2 Live, Inc.” in the state of Florida on June 15, 2017. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company's fiscal year end is November 30.
The Company operates as an assisted living consulting company that specializes in acquiring, licensing, staffing, and operating assisted living facilities (“ALF”). The Company offers clients that wish to enter the ALF field an opportunity to purchase and run its own center(s), and will also act as a referral agent finding and placing clients that are in search of quality residential care. The Company will also offer a la carte consulting services such as submitting license applications, developing emergency plans, as well as other regulatory and compliance needs. The Company has commenced its assisted living facility operation since March 1, 2019.
Going Concern
The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of August 31, 2019, the Company has an accumulated deficit and has earned minimal revenues during the nine months ended August 31, 2019.
The ability of the Company to obtain profitability is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, 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.
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 or cease its operations.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.
In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of August 31, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended August 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended November 30, 2018 filed with the SEC on February 28, 2019.
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and the wholly-owned subsidiary, Assisted 2 Live, Inc. All material intercompany balances and transactions have been eliminated.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Revenue recognition
Effective January 1, 2018, the Company adopted ASC 606, “Revenue from Contracts with Customers.” Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from the rendering of business advisory services, such as training, implementation, consulting, and other customer-specific services. The five step model defined by ASC Topic 606 requires us to: (1) identify our contracts with customers, (2) identify our performance obligations under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to our performance obligations in those contracts and (5) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services.
Resident fees at our independent senior living and assisted living community consists of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally 30-day terms, with regular monthly charges billed in advance on the first day of each month.
Recent Accounting Pronouncements
The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.
NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities at August 31, 2019 and November 30, 2018 consist of the following:
| August 31, | November 30, | |||||||
2019 | 2018 | |||||||
Trade accounts | $ | 14,942 | $ | 2,881 | ||||
Credit card | 19,269 | — | ||||||
Sales tax payable | 201 | — | ||||||
| $ | 34,412 | $ | 2,881 | |||||
NOTE 4 - EQUITY
Preferred Stock
The Company has authorized 25,000,000 preferred shares with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.
As of August 31, 2019, and November 30, 2018, the Company had no classes of preferred shares designated.
Common Stock
The Company has authorized 100,000,000 common shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
During the nine months ended August 31, 2019 and 2018, the Company issued to unaffiliated investors 1,100,000 and 3,050,000 shares of common stock for $22,000 and $30,500, respectively.
As of August 31, 2019, and November 30, 2018, the Company had 14,150,000 and 13,050,000 common shares issued and outstanding, respectively.
NOTE 5 - RELATED PARTY TRANSACTIONS
During the nine months ended August 31, 2019 and 2018, the Company paid salaries to our two officers, one of which is our controlling shareholder, $18,920 and $0, respectively.
During the nine months ended August 31, 2019 and 2018, our CEO paid $5,556 and $0, respectively, for a property and liability insurance deposit on behalf of the Company, of which $5,556 remains payable to our CEO at August 31, 2019.
During the nine months ended August 31, 2019 and 2018, the Company paid consulting fees to a company controlled by our CEO, a total amount of $900 and $0, respectively.
The Company does not have employment contracts with its officers.
NOTE 6 – COMMITMENT
On March 7, 2019, the Company entered into the commercial real estate lease agreement. The Company leases a adult living facility building for $3,713 monthly, from March 7, 2019 until January 7, 2020. The term may be extended at the sole discretion of the landlord.
NOTE 7 – Subsequent Events
Subsequent to August 31, 2019, and through the date these financial statements were issued, the Company had no subsequent events to report.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we,” “us,” “our” and “our Company” mean Assisted 4 Living, Inc. (“A4L” or the “Company”), and our wholly owned subsidiary, Assisted 2 Live, Inc. a Florida corporation, unless otherwise indicated.
General Overview
We were incorporated in Nevada on May 24, 2017, with an objective to operate as a facilitator of assisted living projects and related services. Our Company has positioned itself as a go-to resource for individuals or private groups that wish to enter and operate within the Assisted Living Facility (ALF) industry. Our Company’s first target market is Florida, and operates within the State through our solely owned subsidiary Assisted 2 Live, Inc. The goal being to use Florida as a test market to streamline our consulting processes and ultimately transition to a national company in the assisted living field. The barriers to entering the ALF space are considerable and require a detailed understanding of each State’s regulatory environment and processes. There are a myriad of steps that must be navigated to properly set up an ALF residence, included, but not limited to licensing, complying with building codes, medical care requirements, staffing and industry regulations. Our Company is designed to mentor prospective ALF clients and walk them through every step of the start-up process, working hand-in-hand with them to ensure that their facility gets off to a proper and sustainable start.
We have a wholly owned subsidiary, Assisted 2 Live, Inc., a Florida corporation (“A2L”), which was incorporated on June 15, 2017.
Our principal executive office is located at 2382 Bartek Pl., North Port, FL 34289 and our telephone number is (888) 609-1169. Our fiscal year end is November 30. Our corporate website is http://www.assisted2live.com/.
We have never declared bankruptcy, been in receivership, or have been involved in any kind of legal proceeding.
Our Current Business
On March 1, 2019, our Company took over the management of a 28-bed assisted living facility in Punta Gorda, FL. Our Company is responsible for all aspects of its operations from the care of the residents, to the staffing, cooking, and collection of rent. We inherited four (4) existing employees from the former operators, of the facility, and have hired five (5) more to bring the total workforce to nine (9) employees.
Our Company leases the assisted living facility premises from a third-party landlord and is contracted to pay monthly rent of $3,713. We possess all of our State and County accreditations (licenses) to run the facility for the next 2 years.
In growing the business solely from a consulting firm to also operating a physical brick and mortar facility, our Company is seeking to diversify our business model and capitalize on opportunities as they arise. Our Company will still assist outside clients that wish to start and operate their own facility, however, in securing our own physical location our Company can grow revenues, secure our foothold in a growing assisted living market, and use our location as a training center for new clients wishing to enter the field. Our Company is also actively searching for other nearby properties to convert into an assisted living facility, or that perhaps are already currently operating as an assisted living facility but need new management.
Our Company foresees utilizing this revised business model for the next number of years and intends to become a main assisted living player in the Southwest Florida market. Being located in Florida presents many opportunities for an assisted living business, as well as new customers and clients that wish to enter the assisted living facility field.
Results of Operations
The following summary of our operations should be read in conjunction with our unaudited interim financial statements for the nine months ended August 31, 2019 and 2018, which are included in this report. On March 1, 2019, we commenced our operation of an assisted living facility (“ALF”) in Florida. Historical results will not reflect our current operations and will not be comparable to results of operations being reporting in the current period.
For the Three Months Ended August 31, 2019 Compared to the Three Months Ended August 31, 2018
Three Months Ended | ||||||||||||
August 31, | ||||||||||||
2019 | 2018 | Change | ||||||||||
Revenue | $ | 139,092 | $ | 4,500 | $ | 134,592 | ||||||
Cost of service | 76,594 | — | 76,594 | |||||||||
Operating expenses | 76,104 | 14,266 | 61,838 | |||||||||
Other expense | 895 | — | 895 | |||||||||
Net loss | $ | 14,501 | $ | 9,766 | $ | 4,735 | ||||||
We recognized revenue of $139,092 for the three months ended August 31, 2019, compared to $4,500 for the three months ended August 31, 2018. The increase in revenue is due to commencing an ALF business in 2019.
Cost of service is direct labor directly related to the operations of our assisted living facility. Cost of service expenses commenced with the operations of our ALF. For the three months ended August 31, 2019, our gross profit was $62,498 or 44.9%.
Operating expenses for the three months ended August 31, 2019 increased $61,838 from $14,266 for the three months ended August 31, 2018. Our increase in operating expenses were primarily due to increased general and administrative expenses related to the new ALF operations.
Our net loss for the three months ended August 31, 2019 increased $4,735 from $9,766 for the three months ended August 31, 2018.
For the Nine Months Ended August 31, 2019 Compared to the Nine Months Ended August 31, 2018
| Nine Months Ended | ||||||||||||
| August 31, | ||||||||||||
2019 | 2018 | Change | ||||||||||
Revenue | $ | 241,168 | $ | 14,200 | $ | 226,968 | ||||||
Cost of service | 139,039 | — | 139,039 | |||||||||
Operating expenses | 171,247 | 31,219 | 140,028 | |||||||||
Other expense | 1,144 | — | 1,144 | |||||||||
Net loss | $ | 70,262 | $ | 17,019 | $ | 53,243 | ||||||
We recognized revenue of $241,168 for the nine months ended August 31, 2019, compared to $14,200 for the nine months ended August 31, 2018. The increase in revenue is mainly due to commencing an assisted living facility business in 2019.
Cost of service is direct labor directly related to the operations of our assisted living facility. Cost of service expenses commenced with the operations of our ALF. For the nine months ended August 31, 2019, our gross profit was $102,129 or 42.3%.
Operating expenses for the nine months ended August 31, 2019 increased $140,028 from $31,219 for the nine months ended August 31, 2018. Our increase in operating expenses, during 2019, were primarily due to increased general and administrative expenses related to the operations of our ALF of approximately $120,000 and increased professional fees of approximately $20,000 related to the preparation and filing of our S-1 Registration Statement which was declared effective on June 3, 2019.
Our net loss for the nine months ended August 31, 2019 increased $53,243 from $17,019 for the nine months ended August 31, 2018, due to our increased general and administrative expenses and professional fees.
Cost of service is direct labor directly related to the operations of our assisted living facility. Cost of service expenses commenced with the operations of our ALF. For the nine months ended August 31, 2019, our gross profit was $102,129 or 42.3%.
Operating expenses for the nine months ended August 31, 2019 increased $140,028 from $31,219 for the nine months ended August 31, 2018. Our increase in operating expenses, during 2019, were primarily due to increased general and administrative expenses related to the operations of our ALF of approximately $120,000 and increased professional fees of approximately $20,000 related to the preparation and filing of our S-1 Registration Statement which was declared effective on June 3, 2019.
Our net loss for the nine months ended August 31, 2019 increased $53,243 from $17,019 for the nine months ended August 31, 2018, due to our increased general and administrative expenses and professional fees.
Liquidity and Capital Resources
The following table provides selected financial data about our Company as of August 31, 2019, and November 30, 2018, respectively.
Working Capital
| August 31 | November 30, | ||||||||||
2019 | 2018 | Change | |||||||||
Current Assets | $ | 11,344 | $ | 21,019 | $ | (9,675 | ) | ||||
Current Liabilities | $ | 41,468 | $ | 2,881 | 38,587 | ||||||
| Working Capital (Deficiency) | $ | (30,124 | ) | $ | 18,138 | $ | (48,262 | ) | |||
Cash Flows
| Nine Months Ended | |||||||||||
| August 31, | |||||||||||
2019 | 2018 | Change | |||||||||
Cash used in operating activities | $ | (31,675) | $ | (7,083) | $ | (24,592 | ) | ||||
Cash provided by financing activities | $ | 22,000 | $ | 30,500 | (8,500 | ) | |||||
Net change in cash for period | $ | (9,675 | ) | $ | 23,417 | $ | (33,092 | ) | |||
As at August 31, 2019, and November 30, 2018, our Company’s current assets were $11,344 and $21,019 respectively. As at August 31, 2019, and November 30, 2018 current assets consisted solely of cash.
As at August 31, 2019, our Company had current and total liabilities of $41,468, compared with current and total liabilities of $2,881 as at November 30, 2018. As at August 31, 2019, liabilities consisted of $34,412 accounts payable, $5,556 payable to an officer of our Company, $1,500 customer deposits. As at November 30, 2018, liabilities consisted solely of accounts payable.
As of August 31, 2019, our working capital decreased $48,262 from November 30, 2018, primarily due to an increase in current liabilities of $38,587.
As at August 31, 2019, our Company had current and total liabilities of $41,468, compared with current and total liabilities of $2,881 as at November 30, 2018. As at August 31, 2019, liabilities consisted of $34,412 accounts payable, $5,556 payable to an officer of our Company, $1,500 customer deposits. As at November 30, 2018, liabilities consisted solely of accounts payable.
As of August 31, 2019, our working capital decreased $48,262 from November 30, 2018, primarily due to an increase in current liabilities of $38,587.
Cash Flow from Operating Activities
During the nine months ended August 31, 2019, our Company used $31,675 in cash from operating activities, compared to $7,083 cash used in operating activities during the nine months ended August 31, 2018. The cash used from operating activities for the nine months ended August 31, 2019, was attributed to net loss of $70,262, which was reduced by a net change in working capital of $38,587. The cash used from operating activities for the nine months ended August 31, 2018, was attributed to net loss of $17,019, which was reduced by a net change in working capital of $9,936.
Cash Flow from Financing Activities
Net cash from financing activities was $22,000 for the nine months ended August 31, 2019, compared to net cash received from financing activities of $30,500 for the nine months ended August 31, 2018. During the nine months ended August 31, 2019, we received $22,000 from the issuance of 1,100,000 shares of common stock to investors. During the nine months ended August 31, 2018, we received $30,500 from the issuance of 3,050,000 shares of common stock to investors.
Off-Balance Sheet Arrangements
We have no 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 stockholders.
Critical Accounting Policies
We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our financial statements.
While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
Revenue recognition
Effective January 1, 2018, our Company adopted ASC 606, “Revenue from Contracts with Customers.” Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that our Company expects to receive in exchange for those goods or services. Our Company derives its revenues from the rendering of business advisory services, such as training, implementation, consulting, and other customer-specific services. Our Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
• | identify the contract with a customer; | |
• | identify the performance obligations in the contract; | |
• | determine the transaction price; | |
• | allocate the transaction price to performance obligations in the contract; and | |
• | recognize revenue as the performance obligation is satisfied. |
Also, refer to Note 2 - Significant Accounting Policies and the unaudited consolidated financial statements that are included in this Report.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2019. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the period ended August 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our Company’s annual or interim financial statements would not be prevented or detected on a timely basis.
We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended August 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
From time to time, we may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we area party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
None.
None.
Not Applicable.
None.
Exhibit Number | Description | Incorporated By Reference | ||||||
Form | Exhibit | Filing Date | ||||||
S-1 | 3.1 | August 23, 2018 | ||||||
S-1 | 3.2 | August 23, 2018 | ||||||
(21) | Subsidiaries of the Registrant | |||||||
21.1 | Assisted 2 Live, Inc., a Florida corporation | |||||||
(31) | Rule 13a-14 (d)/15d-14d) Certifications | |||||||
(32) | Section 1350 Certifications | |||||||
101 * | Interactive Data File | |||||||
101.INS | XBRL Instance Document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
______
* Filed herewith
** Furnished herewith
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.
ASSISTED 4 LIVING, INC. | |||
(Registrant) | |||
| Dated: October 11, 2019 | /s/ Romulus Barr | ||
Romulus Barr | |||
President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director | |||
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
| 9 |