S-1/A: Yuenglings Ice Cream Corp. Announces $3 Million Equity Financing Agreement with Trillium Partners

Yuenglings Ice Cream Corporation (YCRM) enters into an equity financing agreement with Trillium Partners, LP for up to $3 million over 24 months, involving the resale of 600,000,000 shares of common stock.

Summary

• Yuenglings Ice Cream Corporation (YCRM) has entered into an equity financing agreement with Trillium Partners, LP, committing Trillium to purchase up to $3,000,000 of YCRM's common stock.
• The agreement spans a 24-month period following the SEC's declaration of effectiveness for the registration statement.
• YCRM may issue written put notices to Trillium on any trading day, specifying the dollar amount to be invested.
• Trillium will pay 85% of the lowest closing bid price during the ten trading days following the deposit of Put Shares, with a floor price of $0.005 per share.
• YCRM will not receive proceeds from Trillium's resale of shares but will receive proceeds from the sale of Put Shares, which will be used for general administrative expenses and accounting/audit fees.
• The offering involves the resale of up to 600,000,000 shares of common stock by Trillium, representing approximately 96.4% of YCRM's outstanding common stock.
• YCRM believes it is unlikely to receive the entire $3,000,000 due to current daily trading dollar volume.
• The company has also issued convertible notes and warrants to Trillium Partners, L.P. in November 2023 and January 2024.
• The company's analysis of business acquisition and operations cost indicates a requirement of $3,000,000 or more in additional funding.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the company secures a financing agreement, there are concerns about dilution, trading volume, and the company's financial stability. The shift to cybersecurity is a positive, but the risks associated with the company's financial situation temper the overall outlook.

Positives

• The agreement provides YCRM with access to capital over a 24-month period.
• The proceeds from the sale of Put Shares will be used for general administrative expenses and accounting/audit fees.
• The agreement allows YCRM to draw on the facility as and when it determines appropriate.

Negatives

• Existing stockholders may experience significant dilution.
• The stock price may decline due to the issuance of shares to Trillium.
• YCRM may be unable to draw sufficient funds when needed.
• The company believes it is unlikely to receive the entire $3,000,000 due to current daily trading dollar volume.
• The company has a history of operating losses and a significant accumulated deficit.

Risks

• The market price of YCRM's common stock could decline as a result of issuances and sales by YCRM, including pursuant to the Equity Line under the Equity Financing Agreement, or sales by YCRM's existing shareholders, of common stock, or the perception that these issuances and sales could occur.
• There is no guarantee that YCRM will satisfy the conditions to the Equity Financing Agreement.
• There is uncertainty as to the number of subscription shares and the amount Trillium will pay for the put shares.
• YCRM will need to raise additional capital in the future.
• YCRM's financial status raises doubt about its ability to continue as a going concern.
• YCRM may be unable to respond to rapid technology changes and innovative products.
• There is intense competition in YCRM's market.
• Future acquisitions may be unsuccessful and may negatively affect operations and financial condition.
• YCRM may be unable to protect its intellectual property.
• If YCRM loses its key personnel or is unable to hire additional personnel, it will have trouble growing its business.
• Acquisitions, investments and other strategic relationships and alliances, if pursued, may involve significant cash expenditures, debt incurrence, operating losses, and expenses that could have a material adverse effect on YCRM's financial condition and operating results.

Future Outlook

The company plans to expand its customer base, diversify services, and pursue strategic acquisitions to augment organic growth and enhance ARR.

Management Comments

• Management is highly experienced with business operation as well as acquisition and integration.
• Based on market response to our products, services, and technologies, it is managements opinion that we will require additional funding.

Industry Context

The document highlights YCRM's shift towards cybersecurity and IT services through the acquisition of ReachOut Technology, reflecting a broader trend of companies diversifying into high-growth sectors. The MSP market is intensely competitive, with challenges from other MSPs and private equity firms, especially in high-growth areas like cybersecurity.

Comparison to Industry Standards

• Traditional MSPs often suffer from poor response times and inefficient support lines, issues ReachOut Technology aims to address with rapid response times and expert technical support.
• ReachOut Technology differentiates itself by offering advanced cybersecurity services, including 24/7 Security Operations Center (SOC) support, which is more comprehensive than the basic cybersecurity services offered by many traditional MSPs.
• ReachOut Technology's approach includes proactive strategic engagement with clients through dedicated Executive and Technical Account Managers, a service level that may exceed industry standards for smaller MSPs.

Management Changes

Related Party Transactions

• In June 2022, Everett Dickson advanced the Company $6,000 for a general operating expense.
• During the year ended October 31, 2022, a $5,500 payment was mistakenly made to a company controlled by Everett Dickson.
• Pickle Jar advanced the Company $22,000, on September 1, 2023.
• On August 17, 2023, Everett Dickson paid $1,910, to a consultant of the Company.
• On September 1, 2023, Everett Dickson directly paid $13,500 to Diagonal Lending LLC on behalf of the Company.
• On September 1, 2023, Everett Dickson deposited $2,000, into the Company's bank accounts to fund payments.
• On January 14, 2023, the Company granted 30 million restricted common shares to Robert C. Bohorad.
• During the year ended October 31, 2023, Mr. Bohorad forgave $53,000 of accrued compensation.
• On October 30, 2023, the Company awarded Mr. Bohorad 3,000,000 shares of restricted common stock to facilitate the preparation of financial statements and in the transition of the Company to new ownership.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of shares to Trillium.
• The company's shift to cybersecurity may impact employees and customers of the former ice cream business.
• The company's ability to raise capital and execute its business plan will impact all stakeholders.

Next Steps

• The company must deliver to TRILLIUM a written put notice on any trading day (the Put Date), setting forth the dollar amount to be invested by TRILLIUM (the Put Notice).
• The company plans to identify and acquire other MSP firms and cybersecurity assets, focusing on those with stable customer contracts and strong recurring revenue, as well as specialized technologies and complementary products.
• Continued investment in research and development is planned to add new solutions to the product portfolio and enhance the reliability, availability, and scalability of the cloud security platform.

Key Dates

Keywords

equity financing, Trillium Partners, common stock, put shares, dilution, capital raise, YCRA, Yuenglings Ice Cream Corporation, ReachOut Technology