Forward-looking Statements

There are "forward-looking statements" contained in this quarterly report. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate," "project," "forecast," "may," "should," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this quarterly report to conform forward-looking statements to actual results. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

· Inadequate capital and barriers to raising the additional capital or to


   obtaining the financing needed to implement our business plans;

· Our failure to earn revenues or profits;

· Inadequate capital to continue business;

· Volatility or decline of our stock price;

· Potential fluctuation in quarterly results;

· Rapid and significant changes in markets;

· Litigation with or legal claims and allegations by outside parties; and

· Insufficient revenues to cover operating costs.

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this quarterly report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.





Overview

Aureus, Inc. ("Aureus," "ARSN," "we," "us," or the "Company") was incorporated in Nevada on April 19, 2013. Our offices are located at One Glenlake Parkway #650, Atlanta, GA 30328. Our telephone number is (404) 885-6045, and our email address is aureus.now@gmail.com. Our website is www.aureusnow.com. We do not incorporate the information on or accessible through our website into this Registration Statement, and you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.

We are a food brand development company that builds and represents popular food concepts throughout the United States and international markets. Management is highly experienced at business integration and re-branding potential. With little territory available for the older brands, we intend to bring fresh, innovative brands with great potential. Our brands will be unique as we focus on niche markets that are still in need of development.









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We operate two lines of business. Through our subsidiary, YIC Acquisitions Corp. ("YICA"), we acquired the assets of Yuengling's Ice Cream ("YIC" or "Yuengling's") in June 2019. Yuengling's sells high-quality ice cream without artificial colors, flavoring, or preservatives and no added hormones. Yuengling's is currently sold in select retailers and convenience stores in eastern Pennsylvania. In September 2020, we entered into the micro-market segment and launched our second business line, Aureus Micro-Markets ("AMM"). Closely tied to the vending machine industry, micro-markets look and feel like modern convenience stores while functioning with the ease and efficiency of vending food service and refreshment services. They provide an improved customer experience and greater product variety, with a proven track record of increasing sales at vending locations while keeping labor costs down and improving operating efficiencies. Micro-markets are a hybrid form of vending, food service, coffee service, and convenience stores that provide an improved customer experience, exponentially greater product variety, and increased sales within a single location while keeping labor costs down and improving operational efficiencies. The expanded product variety, open flow, and cashless payment options mean that consumers spend less time in line fumbling with cash/change, can purchase multiple items with one transaction, and buy more items per transaction than with cash transactions.





Results of Operations

The three months ended April 30, 2021 compared to the three months ended April 30, 2021

Revenue

We had $230 in revenues for the three months ended April 30, 2021, compared to $27,367 for the three months ended April 30, 2020, a decrease of $27,137 or 99.2%. The large decrease in revenue is due to a loss in retail food service customers.





Cost of Goods Sold

We incurred $20,600 in costs of goods sold for the three months ended April 30, 2021, compared to $16,267 for the three months ended April 30, 2020, an increase of $4,333 or 26.6%. Of the $20,600, approximately $19,000, was a write down of our inventory due to expired or goods sold below cost.

General and administrative expenses

We had $16,366 of general and administrative expenses ("G&A") for the three months ended April 30, 2021, compared to $105,372 for the three months ended April 30, 2020, a decrease of $89,006 or 84.4%. The decrease is due to decreased spending on investor relations and marketing during the current three-month period compared to the prior period.

Consulting - related party

We had $80,000 of related party consulting expenses for the three months ended April 30, 2021, compared to $0 for the three months ended April 30, 2020. In the current period we made a one-time payment each of $40,000 to our CEO and to Robert Bohorad, YICA's Chief Operating Officer.

Professional fees

We incurred $19,200 of professional fees for the three months ended April 30, 2021, compared to $5,600 for the three months ended April 30, 2020, an increase of $13,600 or 243%. %. Professional fees generally consist of audit, legal and accounting fees. The increase is due to an increase of audit, legal and accounting fees.





Other income (expense)

For the three months ended April 30, 2021, we had total other income of $14,084, compared to total other expense of $49,271 for the three months ended April 30, 2020. In the current period we incurred $19,824 of interest expense, earned $372 of interest income and recognized a gain on forgiveness of debt of $33,536. In the prior period we incurred $50,308 of interest expense and earned $1,037 of interest income.





Net loss

We incurred a net loss of $121,852 for the three months ended April 30, 2021, compared to $149,143 for the three months ended April 30, 2020, a decrease of $27,291 or 18.3%.









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The six months ended April 30, 2021 compared to the six months ended April 30, 2021

Revenue

We had $3,616 in revenues for the six months ended April 30, 2021, compared to $53,097 for the six months ended April 30, 2020, a decrease of $49,481 or 93.2%. The large decrease in revenue is due to a loss in retail food service customers.

Cost of Goods Sold

We incurred $53,051 in costs of goods sold for the six months ended April 30, 2021, compared to $39,781 for the six months ended April 30, 2020, an increase of $13,270 or 33.4%. Of the $53,051, approximately $47,500, was a write down of our inventory due to expired or goods sold below cost.

General and administrative expenses

We had $90,031 of G&A expense for the six months ended April 30, 2021, compared to $158,830 for the six months ended April 30, 2020, a decrease of $68,799 or 43.3%. The decrease is due to decreased spending on investor relations and marketing during the current period compared to the prior period.

Consulting - related party

We had $85,000 of related party consulting expenses for the six months ended April 30, 2021, compared to $0 for the six months ended April 30, 2020. In the current period we made a payment of $40,000 to our CEO and two payments totaling $45,000 to Robert Bohorad, YICA's Chief Operating Officer.

Professional fees

We incurred $24,200 of professional fees for the six months ended April 30, 2021, compared to $18,100 for the six months ended April 30, 2020, an increase of $6,100 or 33.7%. Professional fees generally consist of audit, legal and accounting fees. The increase is due to increased legal fees during the period.

Other income (expense)

For the six months ended April 30, 2021, we had total other expense of $27,124, compared to $92,019 for the six months ended April 30, 2020. In the current period we incurred $36,032 of interest expense, earned $372 of interest income, recognized a gain on forgiveness of debt of $33,536 and a loss on conversion of debt of $26,000. In the prior period we incurred $78,348 of interest expense, earned $1,037 of interest income and recognized a loss on conversion of debt of $26,000.





Net loss

We incurred a net loss of $275,790 for the six months ended April 30, 2021, compared to $255,633 for the six months ended April 30, 2020, an increase of net loss of $20,157 or 7.9%.

Liquidity and Capital Resources

Cash flow from operations

Cash used in operating activities for the six months ended April 30, 2021 was $219,138 compared to $87,823 of cash used in operating activities for the six months ended April 30, 2020.





Cash Flows from Investing

Cash used in investing activities for the purchase of equipment for the six months ended April 30, 2021 was $1,000 compared to $0 of cash used in investing activities for the six months ended April 30, 2020.

Cash Flows from Financing

For the six months ended April 30, 2021, we received $218,434 from financing activities. $30,584 from proceeds from notes payable, $188,600 from the sale of preferred stock and $4,250 from related party loans. We repaid $5,000 of a note payable during the same period. For the six months ended April 30, 2020, we netted $18,922 from financing activities, mostly from $35,000 from proceeds from notes payable, $77,500 from the sale of common stock and repayments of $72,128 of notes payable.









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Going Concern

As of April 30, 2021, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our operations.

We have suffered recurring losses from operations and have not yet generated any revenue. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Our future success and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues or raise additional capital may have a material and adverse effect upon us and our shareholders.

Management's plans with regard to these matters encompass the following actions: (i) obtaining funding from new investors to alleviate our working capital deficiency, and (ii) implementing our plan of operation to generate sales. Our continued existence is dependent upon our ability to resolve our liquidity problems and increase profitability in our business operations. However, the outcome of management's plans cannot be ascertained with any degree of certainty. Our financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.

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 are material to investors.





Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 2 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

We recognize deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled. Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred tax asset will be realized.

Recent Accounting Pronouncements

We have reviewed other recently issued accounting pronouncements and plan to adopt those that are applicable to us. We do not expect the adoption of any other pronouncements to have an impact on our results of operations or financial position.









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