NOTES
TO FINANCIAL STATEMENTS
OCTOBER
31, 2022 AND 2021
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Arax
Holdings Corp. (the “Company”, “we”, “our” or “us”) was incorporated under the
laws of the State of Nevada on February 23, 2012 with a business plan to sell hot dogs from mobile hot dog stands throughout the
major cities in Mexico. As of the filing of the 10K for 2016, the Company stated that it was re-evaluating its business plan.
It
was further indicated as possible that a new business model could be related to a new business sector other than the food sector,
and that any new business model could entail a capital restructuring of the Company in order to provide new capital and a broader
base of shareholders. Such a capital restructuring of the Company could involve a merger or acquisition of assets through various
techniques, including a possible reverse-merger. On October 31, 2016 management believed that the best business model for our
investors is to pursue business activity in the Life Sciences sector of the United States and possibly internationally.
The
Company had been dormant from September 28, 2017 to October 31, 2020.
On
December 30, 2020, as a result of a custodianship in Clark County, Nevada, Case Number: A-20-825346-B, Custodian Ventures LLC
(“Custodian”) was appointed custodian of the Company. On the same date, Custodian appointed David Lazar as the Company’s
Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Board of Directors.
On
June 24, 2021, as a result of a private transaction, 10,000,000 shares of Series A Preferred Stock, $0.001 par value per share
(the “Shares”) of Arax Holdings Corp., a Nevada corporation (the “Company”), were transferred from Custodian
Ventures, LLC to Michael Pieter Loubser (the “Purchaser”). As a result, the Purchaser became an approximately 90.6%
holder of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company,
and became the controlling shareholder. In connection with the transaction, David Lazar released the Company from all debts owed
to him and/or Custodian Ventures, LLC.
On
June 24, 2021, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an
officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and
a Director. At the effective date of the transfer, Michael Pieter Loubser consented to act as the new Chairman of the Board of
Directors of the Company, Ockert Cornelius Loubser consented to act as the new Chief Executive Officer of the Company, and Rastislav
Vašička consented to act as the new Chief Information Officer of the Company.
On August
31st, 2021, the Company appointed Christopher D. Strachan as its Chief Financial Officer. The Company began a transition into
a software and technology holding company, negotiating agreements with various technology companies in Europe to acquire some
of their related assets. The Company has removed the shell status and has commenced operations. As of the date of this Report,
our management has had discussions with representatives of many other entity regarding a potential business combination. These
negotiations have led the Company to enter into a Binding Letter of Intent and Deal Terms for the acquisition of certain IP and
technologies together with some liabilities for the purpose of expanding operations and bringing further value to shareholders
The Company has no employment contracts
with any of its officers.
COVID-19
On March 11, 2020, the World Health Organization
(“WHO”) declared the Covid-19 outbreak to be a global pandemic. In addition to the devastating effects on human life,
the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial
markets. Most US states and many countries have issued policies intended to stop or slow the further spread of the disease.
Covid-19 and the U.S’s response to
the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the
Covid-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We
do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have
been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard
Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized
by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted
accounting principles (“GAAP”) in the United States.
Going Concern
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business for the twelve months following the date of these financial statements. The Company
has incurred operating losses since its inception. As of October 31, 2021, the Company had a working capital deficit of $26,012
and an accumulated deficit of $730,393.
Because the Company does not expect that
existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about
the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently
exploring alternative sources of financing. The Company is currently being funded by a company related to Michael Pieter Loubser.
The Company will be required to continue to rely on this entity until its operations become profitable.
Use of Estimates
The preparation of financial statements
in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate
to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various
other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial
statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. Actual results could differ from these estimates.
Cash and cash equivalents
The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company has no cash equivalents.
Income taxes
The Company accounts for income taxes under
FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB
ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken
or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities.
The amount recognized is measured as the
largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses
the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen
that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
Stock-based Compensation
The Company accounts for stock-based compensation
using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for
disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That
cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the
requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees
do not render the requisite service.
Net Loss per Share
Net loss per common share is computed by
dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards,
ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined
by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per
common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common
share equivalents outstanding. The Company has 100,000,000 and 0 shares issuable upon the conversion of preferred stock that were
not included in the computation of dilutive loss per share because their inclusion is antidilutive for the years ended October
31, 2021 and 2020, respectively.
NOTE 3 – EQUITY
Common Stock
The Company has authorized 75,000,000 shares
of $0.001 par value, common stock. As of October 31, 2022 and 2021 there were 10,335,294 shares of common stock issued and outstanding.
Preferred Stock
On March 31, 2021 the Company took a corporate
action and authorized 10,000,000 shares of Series A Preferred Stock with a par value of $0.001. These shares which are convertible
into common stock on a 10 for 1 basis, were awarded to Custodian Ventures managed by David Lazar in recognition of importance of
Mr. Lazar ’s experience and expertise in devising a strategic plan to enable the Company to become a viable operating entity,
and the fact that Mr. Lazar has provided the Company with its only source of liquidity via interest-free loans. These shares of
Series A Preferred Stock in return for a reduction of $16,166 on Mr. Lazar’s loan of $21,941 due from the Company.
Due to the thinly traded nature of the
Company’s stock and its status as a “shell”, the Company used the par value of the common stock which was determined
to be $100,000 to value this issuance and recorded $16,166 for repayment of the loan and $83,834 as share-based compensation in
the Company’s Statements of Operations.
On June 24, 2021, as a result of a private
transaction, the 10,000,000 shares of Series A Preferred Stock were transferred from Custodian Ventures, LLC to Michael Pieter
Loubser.
No transactions were recorded for the fiscal year ended October
31, 2022
Liquidation Preference
In the event of any liquidation, dissolution
or winding up of the Corporation, either voluntary or involuntary, subject to the rights of any existing series of Preferred Stock
or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of the
Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the
Corporation to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the price per share
actually paid to the Corporation upon the initial issuance of the Series A Preferred Stock (each, the “the Original Issue
Price”) for each share of Series A Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation
can establish a different Original Issue Price in connection with a particular sale of Series A Preferred Stock, the Original Issue
Price shall be $0.001per share for the Series A Preferred Stock. If, upon the occurrence of any liquidation, dissolution or winding
up of the Corporation, the assets and funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient
to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of any existing series
of Preferred Stock or to the rights of any series Arax Holdings Corp. Pursuant to Section 78.1955 of the Nevada Revised Statutes
SERIES A PREFERRED STOCK.
On behalf of Arax Holdings Corp., a Nevada
corporation (the “Corporation”), the undersigned hereby certifies that the following resolution has been duly adopted
by the board of directors of the Corporation (the “Board”): RESOLVED, that, pursuant to the authority granted to and
vested in the Board by the provisions of the articles of incorporation of the Corporation (the “Articles of Incorporation”),
there hereby is created, out of the Ten Million (10,000,000) shares of preferred stock, par value $0.001 per share, of the Corporation
authorized by the Corporation’s Articles of Incorporation (“Preferred Stock”), Series A Preferred Stock, consisting
of Ten Million (10,000,000) shares, which series shall have the following powers, designations, preferences and relative participating,
optional and other special rights, and the following qualifications, limitations and restrictions: of Preferred Stock which may
from time to time hereafter come into existence, the entire assets and funds of the corporation legally available for distribution
shall be distributed ratably among the holders of the each series of Preferred Stock in proportion to the preferential amount each
such holder is otherwise entitled to receive.
(b) Upon the completion of the distribution
required by Section 2(a) above and any other distribution that may be required with respect to the rights of any existing series
of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence,
if assets remain in the Corporation, the remaining assets shall be distributed to the holders of the Common Stock until such time
as the holders of the Common stock shall have received a return of the capital originally contributed thereby. Thereafter, if assets
remain in the Corporation, all remaining assets shall be distributed to all holders of Common Stock and to each series of Preferred
Stock, pro rata based on the number of shares of Common Stock held by each (assuming conversion of all such Preferred Stock
into Common Stock).
(c) For purposes of this Section 2, a liquidation,
dissolution or winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the acquisition of the Corporation
by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization,
merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation);
or (ii) a sale of all or substantially all of the assets of the Corporation, unless the Corporation’s stockholders of record
as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Corporation’s acquisition or sale or otherwise) hold at least fifty percent (50%) of the
voting power of the surviving or acquiring entity in approximately the same relative percentages after such acquisition or sale
as before such acquisition or sale.
(d) In any of the events specified in (c)
above, if the consideration received by the corporation is other than cash, its value will be deemed its fair market value. Any
securities shall be valued as follows:
(i) Securities not subject to investment
letter or other similar restrictions on free marketability:
(A) If traded on a securities exchange,
the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period
ending three (3) days prior to the closing;
(B) If actively traded over-the-counter,
the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period
ending three (3) days prior to the closing; and
(C) If there is no active public market,
the value shall be the fair market value thereof, as determined in good faith by the Board of Directors.
(ii) The method of valuation of securities
subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a
stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value
determined as above in (i) (A), (B) or (C) to reflect the approximate fair market value thereof, as mutually determined by the
Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.
(iii) In the event the requirements of
Section 2(c) are not complied with, the Corporation shall forthwith either:
(A) cause such closing to be postponed
until such time as the requirements of this Section 2 have been complied with; or
(B) cancel such transaction, in which event
the rights, preferences and privileges of the holders of the Series A Preferred Stock shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date of the first notice referred to in Section 2(c)(iv) hereof.
(iv) The Corporation shall give each holder
of record of Series A Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the
stockholders’ meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever
is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices
shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and the corporation
shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than
twenty (20) days after the corporation has given the first notice provided for herein or sooner than ten (10) days after the corporation
has given notice of any material changes provided for herein; provided, however, that time periods set forth in this paragraph
may be shortened upon the written consent of the holders of Series A Preferred Stock that are entitled to such notice rights or
similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Series
A Preferred Stock.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
The Company did not have any contractual
commitments of October 31, 2022 and 2021.
NOTE 5 – NOTES PAYABLE-RELATED
PARY
Mr. Lazar, the principal member of the
Company’s Court-appointed custodian, is considered a related party. During the three months ended April 30, 2021, Custodian
Venture extended $9,220 in interest-free demand loans to the Company. As of April 30, 2021, the total amount due to Mr. Lazar amounted
to $5,775. On June 24, 2021, in connection with the change of control transaction described in Note 1, Mr. Lazar forgave this amount,
which has been credited to paid in capital.
NOTE 6 – ADVANCES FROM RELATED
PARTY
An entity controlled by the Company’s
Chairman has advanced an aggregate of $57,756 to the Company as of October 31, 2022. These funds were used to pay corporate expenses
of the Company, and the payments were made directly to the vendors by this entity.
NOTE 6 – SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10, Subsequent
Events, the Company has analyzed its operations subsequent to October 31, 2022, to the date these consolidated financial statements
were issued.
On December 13, 2022 the Company entered
into an agreement to purchase the assets, technology, IP, and some liabilities of Core Business Holdings which is anticipated to
be completed in the second fiscal quarter of 2023.