10-K: Yuenglings Ice Cream Corp Transitions to Tech Holding Company, Reports Net Profit Amidst Strategic Shift

Yuenglings Ice Cream Corporation, rebranding as a technology holding company, reports a net profit of $4.39 million for 2024, driven by fair market value changes and debt extinguishment gains, while strategically divesting its ice cream assets.

Summary

• Yuenglings Ice Cream Corporation (OTC: YCRM) is transitioning into a diversified technology holding company, drawing inspiration from Berkshire Hathaway and Alphabet.
• The company's flagship operating company, ReachOut, is a national leader in cybersecurity solutions for small to medium-sized businesses (SMBs).
• ReachOut offers services including 24/7 threat monitoring, compliance support, and AI-driven automation, delivered through a subscription-based model.
• The company is expanding its portfolio beyond traditional IT services with ventures like TRUSTLESS, a blockchain-based identity management platform.
• The company aims to emulate the customer-centric approach of companies like T-Mobile, offering accessible, high-quality cybersecurity services to underserved SMBs.
• The company reported revenue of $4,811,040 for the year ended December 31, 2024, compared to $3,775,142 for the year ended December 31, 2023.
• The company incurred a net profit of $4,395,134 for the year ended December 31, 2024, compared to a net loss of $22,906,015 for the year ended December 31, 2023.
• The company is selling its wholly owned subsidiary ReachOut Technology Corp. (ReachOut) to an unrelated third party on March 31, 2025.
• The sale consideration was $1.00.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company reports a net profit and revenue increase, it also faces legal challenges, has ineffective disclosure controls, and has significant deficits. The strategic shift to a technology holding company and the sale of ReachOut could be positive moves, but the overall financial health and internal control issues temper the optimism.

Positives

• The company achieved a net profit of $4.39 million in 2024, a significant turnaround from a $22.91 million net loss in 2023.
• Revenue increased to $4.81 million in 2024 from $3.78 million in 2023.
• The company is transitioning into a high growth technology holding company.
• The company is selling its wholly owned subsidiary ReachOut Technology Corp. (ReachOut) to an unrelated third party on March 31, 2025 for $1.00.

Negatives

• The company's disclosure controls and procedures were deemed ineffective as of December 31, 2024.
• The company has a working capital deficit of $12,970,927 as of December 31, 2024.
• The company has a stockholders deficit of $15,714,062 as of December 31, 2024.
• The company has an accumulated deficit of $20,859,786 as of December 31, 2024.

Risks

• The company faces risks related to integration, cultural alignment, and operational scalability.
• The technology landscape evolves rapidly, particularly in AI and cybersecurity, requiring continuous innovation and investment to maintain service relevance.
• Market volatility, macroeconomic fluctuations, and capital availability may impact the pace of acquisitions and expansion.
• The company's high-growth profile and media-forward leadership may attract increased public scrutiny.
• The company's disclosure controls and procedures were deemed ineffective as of December 31, 2024.
• The company has a working capital deficit of $12,970,927 as of December 31, 2024.
• The company has a stockholders deficit of $15,714,062 as of December 31, 2024.
• The company has an accumulated deficit of $20,859,786 as of December 31, 2024.

Future Outlook

The company aims to build a portfolio of synergistic, high-growth technology subsidiaries and achieve a successful uplisting to NASDAQ.

Management Comments

• Management is highly experienced with business operation as well as acquisition and integration.
• Management believes the case is procedurally and substantively flawed, expects dismissal, and does not view this matter as having any material impact on its financial position, results of operations, or strategic plans.

Industry Context

The cybersecurity and IT services industry serving small to medium-sized businesses (SMBs) remains highly fragmented, with thousands of regional providers competing for localized market share.

Comparison to Industry Standards

• The company's strategy is to emulate the customer-centric approach of companies like T-Mobile, offering accessible, high-quality cybersecurity services to underserved SMBs.
• The company is executing a strategic shift into a modern holding company structuremodeled after Berkshire Hathaways capital efficiency and Alphabets innovation strategy.

Management Changes

Legal Proceedings

• ReachOut Technology Corp. filed a lawsuit against the former members of RedGear, LLC related to certain representations and warranties made in the Membership Interest Purchase Agreement.
• IND Holding, Inc. filed a lawsuit against ReachOut Technology NE Holdings, LLC and ReachOut Technology Corp., alleging breach of contract related to a prior acquisition.

Related Party Transactions

• The Company and a private company controlled by the CEO shared services and customer responsibilities.
• The Company issued notes to former owners of the membership interest in Innovative Network Designs, LLC (now ReachOut IND) and committed to purchase universal life insurance for officers of ReachOut IND.
• The Company issued notes totaling $ 1,314,787 to the former owners of the membership interest in RedGear, LLC and paid cash of $ 1,249,248.
• RedGear is obligated under office leases to a company controlled by the former owners of the RedGear membership interests.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of convertible notes and preferred stock.
• Employees of ReachOut may be affected by the sale of the subsidiary.
• Customers of ReachOut may experience changes in service as a result of the sale of the subsidiary.
• The company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations.

Next Steps

• The company intends to expand the size of its board and its committees and allocate responsibilities accordingly.
• The company is selling its wholly owned subsidiary ReachOut Technology Corp. (ReachOut) to an unrelated third party on March 31, 2025.

Key Dates

Keywords

technology holding company, cybersecurity, ReachOut, TRUSTLESS, SMBs, AI, blockchain, acquisitions, IT services