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Assisted 4 Living, Inc. – ‘10-Q’ for 5/31/20

On:  Wednesday, 7/15/20, at 11:24am ET   ·   For:  5/31/20   ·   Accession #:  1640334-20-1778   ·   File #:  333-226979

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 7/15/20  Assisted 4 Living, Inc.           10-Q        5/31/20   36:1.4M                                   Pubco Reporting … Inc/FA

Document/Exhibit                   Description                      Pages   Size 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form  i 10-Q

(Mark One)

OR

( i 888)  i 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:

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. ☒  i 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). ☒  i 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.

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)  i ☐ Yes     ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 i 14,150,000 common shares issued and outstanding as of July 14, 2020.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ASSISTED 4 LIVING, INC.

INTERIM UNAUDITED 

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MAY 31, 2020

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ASSISTED 4 LIVING, INC.

Consolidated Balance Sheets

(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

ASSISTED 4 LIVING, INC.

Consolidated Statements of Operations

(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

ASSISTED 4 LIVING, INC.

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

For the Three and Six Months Ended May 31, 2020

For the Three and Six Months Ended May 31, 2019

The accompanying notes are an integral part of these unaudited consolidated financial statements.

ASSISTED 4 LIVING, INC.

Consolidated Statements of Cash Flows

(Unaudited) 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

ASSISTED 4 LIVING, INC.

Notes to the Consolidated Financial Statements

May 31, 2020

(Unaudited)

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 May 31, 2020 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended May 31, 2020 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, 2019 filed with the SEC on February 28, 2020.

Basis of Consolidation

Use of Estimates and Assumptions

Revenue Recognition

Leases

Recent Accounting Pronouncements

Information associated with the measurement of our remaining operating lease obligations as of April 30, 2020 is as follows:  

Future minimum lease payments under operating leases at May 31, 2020 were as follows: 

During the six months ended May 31, 2020 and May 31, 2019, the Company recorded rent expense of $ i 21,832 and $ i 11,140, respectively. 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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 an assisted living facility 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; including, 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 guide them through every step of the start-up process, working hand-in-hand with them to ensure that their facility begins operating properly and sustainably.

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 corporate website is www.assisted4living.com.

We have not been subject to any bankruptcy, receivership or similar 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.

Our Company leases the assisted living facility premises from a third-party landlord and is contracted to pay monthly rent of $3,265. 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 seeks to diversify our business model and capitalize on opportunities, to expand our revenue stream, 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 more involved in the assisted living industry in the Southwest Florida market. Being located in Florida presents many opportunities for operating assisted living facilities, as well as potential consulting clients that wish to enter the assisted living facility operations field.

Results of Operations

C0VID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic based on the rapid increase in global exposure. COVID-19 continues to spread throughout the world. The Company is closely monitoring developments and is taking steps to mitigate the potential risks related to the COVID-19 pandemic to the Company, its employees, as well as its residential and consulting clients.

While COVID-19 has not, to date, negatively impacted the Company’s revenues, the virus outbreak has materially impacted the operations of the Company’s ALF operated by its subsidiary A2L and may in the future impact A4L’s ALF and consulting businesses and revenues generated therefrom.  

The Company’s ALF, operated by its subsidiary A2L, has, in response to COVID-19 and governmental guidance in response thereto, implemented safety precautions, and operational requirements, to protect the facility’s employees, residents and third-party products and service providers.  Included among these precautions and requirements are the increased use of personal protective equipment, cleaning and sanitizing of the facility, and a restriction on visitors to the facility.

It is too early to know whether or not COVID-19 will materially affect the revenues generated by the Company from its ALF business.  Increased safety and operational guidance and/or regulations may have a material impact on the operating costs related to the Company’s ALF.  Such increased operating costs may or may not be offset by increased charges related thereto.  Furthermore, the contraction of COVID-19 by any employees or residents of the Company’s ALF, and any resulting negative health consequences arising therefrom, may have a materially negative affect on the Company’s ability to continue generating revenues from its ALF and could, in extreme cases result in the Company closing down its ALF due to safety and/or liability concerns.

The Company’s evaluations of its practices, procedures and operations, related to COVID-19, is ongoing and additional updates to policies, procedures and operations will occur as best practices are adopted and the Company deems necessary or advisable, or as further governmental guidance or regulations are implemented.

It is also too early to tell how COVID-19 will impact the Company’s consulting business.  The ongoing presence of COVID-19 and/or governmental regulatory response thereto may discourage potential clients from entering the ALF market, which would likely have a materially negative impact on the Company’s consulting business.  However, the continued presence of COVID-19 and/or governmental regulatory response thereto may increase demand for the Company’s expertise and consulting services to assist ALF businesses in complying with regulatory requirements and best practices.

The following summary of our operations should be read in conjunction with our unaudited interim financial statements for the six months ended May 31, 2020 and 2019, 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 May 31, 2020 Compared to the Three Months Ended May 31, 2019

We recognized revenue of $224,504 for the three months ended May 31, 2020, compared to $97,576 for the three months ended May 31, 2019. The increase in revenue is due to commencing an ALF business in March 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 May 31, 2020, our gross profit was $104,464 or 46.5%. The increase in gross profit is primarily due to an increase in customer to staff ratio, from an increased customer care base.

Operating expenses for the three months ended May 31, 2020 increased to $119,220 from $81,176 for the three months ended May 31, 2019. Our increase in operating expenses were primarily due to increased general and administrative expenses related to the ALF operations.

Our net loss for the three months ended May 31, 2020 decreased to $15,472 from $46,294 for the three months ended May 31, 2019 as a net result of the factors mentioned above.

For the Six Months Ended May 31, 2020 Compared to the Six Months Ended May 31, 2019

We recognized revenue of $437,400 for the six months ended May 31, 2020, compared to $102,076 for the six months ended May 31, 2019. The increase in revenue is due to commencing an ALF business in March 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 six months ended May 31, 2020, our gross profit was $203,858 or 46.6%. The increase in gross profit is primarily due to a decrease in a percentage of salary and wage resulting of an increase in our customers.

Operating expenses for the six months ended May 31, 2020 increased to $223,758 from $95,143 for the six months ended May 31, 2019. Our increase in operating expenses were primarily due to increased general and administrative expenses related to the ALF operations.

Our net loss for the six months ended May 31, 2020 decreased $20,603 from $55,761 for the six months ended May 31, 2019, due to the net result of the factors mentioned above.

Liquidity and Capital Resources

The following table provides selected financial data about our Company as of May 31, 2020 and November 30, 2019.

Working Capital

As at May 31, 2020 and November 30, 2019, our Company’s current assets were $24,961 and $9,854, respectively.

As at May 31, 2020, current assets consisted solely of cash.

As at May 31, 2020, our Company had current and total liabilities of $129,535, compared with current and total liabilities of $54,837 as at November 30, 2019. As at May 31, 2020, liabilities consisted of $46,084 accounts payable, $20,590 loan payable, $9,867 line of credit, deferred revenue $10,000, lease liability $36,988 and $6,006 payable to an officer of our Company. As at November 30, 2019, liabilities consisted of $42,581 accounts payable, deferred revenue and customer deposits $6,700 and $5,556 payable to an officer of our Company.

As of May 31, 2020, our working capital deficiency increased to $104,574, primarily due to an increase in current liability.

Cash Flows

Cash Flow from Operating Activities

During the six months ended May 31, 2020, our Company used $13,660 in cash from operating activities, compared to $30,925 cash used in operating activities during the six months ended May 31, 2019. The cash used from operating activities for the six months ended May 31, 2020, was attributed to net loss of $20,603, which was increased by a net change in working capital of $6,943. The cash used from operating activities for the six months ended May 31, 2019, was attributed to net loss of $55,761, which was reduced by a net change in working capital of $24,836.

Cash Flow from Financing Activities

During the six months ended May 31, 2020, we received net proceeds of $9,867 from a bank line of credit and $20,590 from Paycheck Protection Program loan. During the six months ended May 31, 2019, we received $22,000 from the issuance of 1,100,000 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.

Refer to Note 2 - Significant Accounting Policies and the unaudited consolidated financial statements that are included in this Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

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 May 31, 2020. 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 May 31, 2020 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 control over financial reporting during the quarter ended May 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

______

* Filed herewith

** Furnished herewith

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.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing		Date		Other Filings
		5/31/21
		11/30/20
Filed on:		7/15/20
		7/14/20
For Period end:		5/31/20
		5/4/20
		5/1/20
		4/30/20
		2/29/20		10-Q
		2/28/20		10-K
		1/8/20
		1/7/20
		12/1/19
		11/30/19		10-K
		5/31/19		10-Q
		3/7/19
		3/1/19
		2/28/19		10-K,  10-Q,  NT 10-Q
		11/30/18		10-K
		6/15/17
		5/24/17
				List all Filings

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