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Item 8. Financial Statements and Supplementary Data

2020-05-18 compared with 2019-04-16 · 315 added, 184 removed, 267 unchanged (65% of the section changed)

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Statements, notes and report are incorporated herein by reference.

Kisses from Italy, Inc.

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Accountant’s Audit

At December 31, 2018 and 2017

Independent Accountant’s Audit Report

Consolidated Balance Sheet

Consolidated Statement of Operations

Consolidated Statement of Cash Flows

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Operations for the Years Ended December 31, 2019 and 2018

Consolidated Statement of Shareholders’

Equity for the Two Years Ended December 31, 2019

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019 and 2018

Notes to Consolidated Financial Statements

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the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required

to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the

effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures

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/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company's auditor

April 16, 2019

Kisses From Italy Inc.

Consolidated Balance Sheet

Consolidated Balance Sheets

Current assets:

Cash and cash equivalents

Other receivable

Total current assets

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Total liabilities

Commitments and contingencies

Stockholders' Equity:

Preferred stock, $0.001 par value.

Preferred stock, Series A $0.001 par value.

1,500,000 shares authorized;

zero shares issued and outstanding

Preferred stock, Series B $0.001 par value.

5,000,000 shares authorized;

zero shares issued and outstanding

Preferred stock, Series C, $0.001 par value 1,000,000 shares authorized;

50,000 shares and zero shares issued and outstanding as of December 31, 2019 and 2018, respectively

Common stock, $0.001 par value, 200,000,000 shares authorized;

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Retained earnings deficit

Total Stockholders' Equity

Total Kisses From Italy Stockholders' Equity

Non-controlling interest

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Net loss attributable to Kisses From Italy, Inc.

$ (3,082,860 )

Basic and diluted earnings (loss) per common share

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

Kisses from Italy

Consolidated Statements of Changes in Stockholders' Equity

Preferred Stock

Stockholders'

Balance, December

$ (1,679,183 )

Non-controlling

interest, net income (loss)

conversion feature of convertible notes

December 31, 2018

$ (2,124,631 )

Non-controlling

interest, net income (loss)

Series A Preferred stock

shares to management and consultants

conversion feature of convertible notes

of convertible debt and accrued interest through the issuance of common stock

December 31, 2019

$ (5,207,491 )

The accompanying notes are an integral part of the consolidated

financial statements.

Kisses From Italy Inc.

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Net income (loss)

$ (3,089,503 )

Net income loss attributable to non-controlling interest

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Depreciation and amortization

Amortization of debt discount

Stock-based compensation

Interest expense recorded on preferred stock issuance

Amortization of debt discount

Changes in operating assets and liabilities:

Other receivable

Accounts payable

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Proceeds/payments from short term borrowings-net

Proceeds from the sale of preferred stock

Proceeds from the sale of convertible notes

Proceeds from private placements

Net cash provided by (used in) financing activities

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Cash paid for income taxes

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

Kisses from Italy

Consolidated Statements of Changes in Stockholders' Equity (restated)

Non-controlling

Total Stockholders'

December 31, 2016

$ (1,028,251 )

Net income (loss)

Non-controlling income (loss)

Issuance of common stock

in connection with sales made under private offerings

of common stock in exchange for consulting, professional and other services

December 31, 2017

$ (1,679,183 )

Non-controlling income

Beneficial conversion feature

of convertible notes

Net income (loss)

$ (2,124,631 )

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

The accompanying notes are an integral part of the consolidated

financial statements.

Kisses From Italy, Inc.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2018

For the Years Ended December 31, 2019 and

NOTE 1 –

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vacated one of its restaurants due to the hurricane and did not re-open that location in 2019.

The Company’s accounting year end

is December 31.

The Company’s accounting year end is

NOTE 2 –

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The accompanying consolidated financial

statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and

the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial

statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets

and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial

On a consolidated basis, the Company has incurred significant operating losses since inception.

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.

Historically, the Company has raised capital through private placements,

as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common

stock or other securities and obtaining some short-term loans.

The Company will be required to continue to so until its consolidated

operations become profitable.

Also, the Company has, in the past, paid for consulting services with its common stock to maximize

working capital, and intends to continue this practice where feasible.

For the year ended

December 31, 2019 we had an operating loss of $3,082,860.

As of December 31, 2019 we had a working capital deficit of $181,492

and a retained earnings deficit of $5,207,491.

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.

Historically, the Company has raised capital through private placements, as an interim measure to finance

working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining

some short-term loans.

The Company will be required to continue to so until its consolidated operations become profitable.

the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue

this practice where feasible.

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 and the reported amounts of revenues

and expenses during the reporting period.

The most significant estimates relate to revenue recognition, valuation of accounts

receivable and inventories, purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation

of financial instruments, 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.

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 and the reported amounts of revenues and

expenses during the reporting period.

The most significant estimates relate to revenue recognition, valuation of accounts receivable

and inventories, purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation of financial

instruments, 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.

Foreign Currency Translation

The functional and reporting currency of the

company’s Bari location in Italy is the Euro.

Management has adopted ASC 830 “Foreign Currency Matters”

for transactions

that occur in foreign currencies.

Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing

at the balance sheet date.

Average monthly rates are used to translate revenues and expenses.

Transactions denominated in currencies other

than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction.

Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective

Assets and liabilities of the Company’s

operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet

Revenue and expenses are translated at average rates in effect during the reporting periods.

Equity transactions are recorded

at the historical rate when the transaction occurred.

For the approximate two month period ended

December 31, 2019 when Bari began operation, the difference in the exchange rate and the average monthly rate was not material.

Revenue Recognition

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as of January 1, 2018.

Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period

amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605.

of and for the year ended December 31, 2018, the consolidated financial statements were not materially impacted as a result of

the application of Topic 606 compared to Topic 605.

Non-controlling interest

Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior

period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC

As of and for the years ended December 31, 2019 and 2018, respectively, the consolidated financial statements were not

materially impacted as a result of the application of Topic 606 compared to Topic 605.

Non-controlling interest

represents third-party ownership in the net assets of one of our consolidated subsidiaries.

For financial reporting purposes,

the assets and liabilities of our majority-owned subsidiary consolidated with those of the

Company’s wholly-owned subsidiaries, with any third-party investor’s interest shown as non-controlling interest.

Non-controlling interest represents third-party

ownership in the net assets of one of our consolidated subsidiaries.

For financial reporting purposes, the assets and liabilities

of our majority-owned subsidiary consolidated with those of the Company’s wholly-owned

subsidiaries, with any third-party investor’s interest shown as non-controlling interest.

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 considers all highly liquid temporary

cash investments with an original maturity of three months or less to be cash equivalents.

At December 31, 2019 and December 31,

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Property and equipment

Property and equipment are stated at cost

or fair value.

Property and equipment are stated at cost or

During 2018 the Company closed one of its locations and removed all property and detachable leaseholds.

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Lesser of lease term or estimated useful life

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.

benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing

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 on a quarterly basis 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.

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”

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 on a quarterly basis 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

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do not render the requisite service.

The Company follows the guidance in ASC

The Company currently follows the guidance

in ASC 840 “

Leases ,”

which requires us to evaluate the lease agreements the Company enters into to determine whether

they represent operating or capital leases at the inception of the lease.

which requires us to evaluate the lease agreements the Company enters into to determine

whether they represent operating or capital leases at the inception of the lease.

In February 2016, the FASB issued ASU

2016-02, Leases (Topic 842) , which establishes a new lease accounting model for lessees.

The updated guidance

requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative

and quantitative disclosures.

The amended guidance is effective for fiscal years, and interim periods within those years, beginning

after December 15, 2018, with early adoption permitted.

In March 2019, the FASB issued ASU 2019-01, Codification Improvements ,

which clarifies certain aspects of the new lease standard.

The FASB issued ASU 2018-10, Codification Improvements to Topic

842, Leases in July 2018.

Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements,

which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized

as an adjustment to retained earnings.

The amendments have the same effective date and transition requirements as the new lease

standard On November 15, 2019, the FASB has issued ASU 2019-10, which amends the effective dates for three major accounting standards.

ASU defers the effective dates for the credit losses, derivatives and leases standards for certain companies.

Since the Company

is classified as a small reporting company and has a calendar-year end companies the Company eligible for deferring the adoption

of ASC 842 to January 1, 2021.

ASC 842 will be effective for the Company

beginning on January 1, 2021.

While we continue to evaluate the impact of the new standard, we expect the adoption of this guidance

will have not have any impact on our financial statements.

Valued Added Tax

(“VAT”)

The VAT is a broadly-based

consumption tax which is assessed to the value that is added to goods and services.

The Value Added Tax (“VAT”),

applies to nearly all goods and services that are bought and sold within the European Union.

In Italy where the Company

operates, the VAT tax ranges between 4 and 10% for food products and alcohol.

As of December 31, 2019, the Company had a VAT

net receivable from is new Bari location which opened in 2019, amounting to $4,442.

The VAT tax amounted to $-0- as of

December 31, 2018 because the Company had no foreign locations subject to VAT tax.

The inventory is comprised of alcoholic

beverages at our new Bari location in Italy which opened in 2019.

Our US locations do not have liquor licenses.

The balance of

inventory at December 31, 2019 and 2018 was $1,987 and $-0- respectively.

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.

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

Recent Accounting Pronouncements

In February 2016, the FASB issued

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) , which establishes a new lease accounting model for lessees.

guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with

additional qualitative and quantitative disclosures.

The amended guidance is effective for fiscal years, and interim periods

within those years, beginning after December 15, 2018, with early adoption permitted.

In March 2019, the FASB issued ASU

2019-01, Codification Improvements , which clarifies certain aspects of the new lease standard.

The FASB issued

ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018.

Also in 2018, the FASB issued ASU

2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the

new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings.

The amendments have

the same effective date and transition requirements as the new lease standard.

The updated guidance requires

an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and

quantitative disclosures.

The amended guidance is effective for fiscal years, and interim periods within those years, beginning

after December 15, 2018, with early adoption permitted.

In March 2019, the FASB issued ASU 2019-01, Codification Improvements ,

which clarifies certain aspects of the new lease standard.

The FASB issued ASU 2018-10, Codification Improvements to Topic

842, Leases in July 2018.

Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements,

which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized

as an adjustment to retained earnings.

The amendments have the same effective date and transition requirements as the new lease

On November 15, 2019, the FASB has issued ASU 2019-10, which amends the effective dates for three major accounting standards.

ASU defers the effective dates for the credit losses, derivatives and leases standards for certain companies.

Since the Company

is classified as a small reporting company and has a calendar-year end companies the Company eligible for deferring the adoption

of ASC 842 to January 1, 2021.

ASC 842 will be effective for us beginning

on January 1,2020.

While we continue to evaluate the impact of the new standard, we expect the adoption of this guidance will

have not have any impact on our financial statements.

While we continue to evaluate the impact of the new standard, we expect the adoption of this guidance will have

not have any impact on our financial statements.

NOTE 3 –

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Total fixed assets

For the years ended December 31, 2018 and

December 31, 2017, the Company recorded depreciation and amortization of $39,753 and $36,694, respectively.

For the years ended December 31, 2019 and December

31, 2018, the Company recorded depreciation and amortization of $43,303 and $39,573 respectively.

NOTE 4 –

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Total accrued liabilities

The Company is in arrears on its payroll

tax payments as of December 31, 2018.

The Company is in arrears on its payroll tax

payments as of December 31, 2019.

Included in the “payroll tax liabilities”

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LOANS PAYABLE

We have one asset-based line of credit

The amount of credit available to be accessed is dependent on the amount of documented credit receipts received by

the Company’s restaurants.

The due dates on these credit advances are typically between 90 and 180 days.

The interest rate

on the facility is approximately 32%, plus additional processing fees of approximately 5%.

asset-based line of credit of $15,950 as of December 31, 2019.

The amount of credit available to be accessed is dependent on the

amount of documented credit receipts received by the Company’s restaurants.

The due dates on these credit advances are typically

between 90 and 180 days.

The interest rate on the facility is approximately 25%, plus additional processing fees of approximately

As of December 31, 2019, and December

31 2018, loan payable balances were $6,000 and $5,643 respectively.

The amount of loans outstanding was significantly reduced due

to proceeds from less expensive (in terms of the interest rate) convertible debt that was applied against loan balances.

The amount of loans outstanding was significantly reduced

due to proceeds from less expensive (in terms of the interest rate) convertible debt that was applied against loan balances.

NOTE 6 –

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the balance of convertible notes was $10,000 and $277,650 respectively.

In April 2018, the Company commenced a

private offering of up to $250,000 in convertible debenture (the “Debentures”), to non-residents of the US.

accrue interest at the rate of 8% per annum and are convertible into shares of the Company’s Common Stock and are only convertible

In April 2018, the Company commenced a private

offering of up to $700,000 in convertible debenture (the “Debentures”), to non-residents of the US.

These notes accrue

interest at the rate of 8% per annum and are convertible into shares of the Company’s Common Stock and are only convertible

until such time as the Company’s Common Stock is approved for trading, of which there is no assurance, at a conversion rate

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the issuance date.

As of the date hereof, an aggregate of $277,649 in Debentures have been issued.

None have been converted.

Since the Company’s shares

were previously sold in a private placement at a price of $0.10 per share, the difference in price is considered a beneficial

conversion feature.

Since the holders of the Notes have the right to convert immediately, the beneficial conversion feature of

$92,457 has been immediately expensed and recorded as interest expense.

Since the Company’s shares were previously

sold in a private placement at a price of $0.10 per share, the difference in price is considered a beneficial conversion feature.

Since the holders of the Notes have the right to convert immediately, the beneficial conversion feature of $221,843 has been immediately

expensed and recorded as interest expense.

During the three month period ended September

30, 2019, convertible noteholders holding $656,195 of convertible notes along with accrued interest of $30,074 converted their

notes into 10,294,285 shares of Common Stock.

NOTE 7 –

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Capital Stock

At December 31, 2018 and December 31, 2017,

there were 81,780,170 shares of Common Stock issued and outstanding, with a $0.001 par value.

25,000,000 shares of Preferred Stock, with

a par value $0.01 per share, are authorized, none of which has been issued or was outstanding as of December 31, 2018 and 2017,

respectively.

In May 2018, the Company’s Board of Directors and Shareholders approved an amendment to the Company’s

Articles of Incorporation, increasing the number of authorized Common Shares to 200,000,000, par value $0.01 per share.

Common Stock Issued in Private

During the year ended December 31, 2018,

the Company did not accept any subscription agreements to purchase its Common Stock.

During the year ended December 31, 2017,

the Company accepted subscription agreements from 9 investors and issued 1,350,000 shares of its Common Stock at a price of $0.10

per shares for gross proceeds totaling $135,000.

Common Stock Issued in Exchange

During the year ended December 3, 2018,

the Company did not issue any shares of its Common Stock for services.

During the year ended December 31, 2017,

the Company issued 4,685,000 shares of its Common Stock for services valued at $0.10 per share, valued at $468,500.

were issued to an aggregate of 13 persons.

The price of $0.10 represented the Company’s share price in its private placement

throughout all of 2017.

The Company has authorized 200,000,000 shares

of Common Stock authorized.

At December 31, 2019 and December 31, 2018, there were 126,550,553 and 81,780,170 shares of Common Stock

issued and outstanding, with a $0.001 par value.

Common Stock Issued in Private Placements

During the year ended December 31, 2019, the

Company did not accept any subscription agreements to purchase its Common Stock.

Common Stock Issued in Exchange for

During the year ended December 31, 2019, the

Company issued 34,476,080 shares of its Common Stock to its management and consultants for services.

These shares were values at

Preferred Stock

On December 19, 2019, the Company filed a Certificate

of Designation with the state of Florida to set up three categories of preferred stock:

Series A Preferred Stock, Series B Preferred

Stock and Series C Preferred Stock (the “Certificate of Designation”).

The Certificate of Designation designated 1,500,000

shares of the Company’s authorized preferred stock as Series A Preferred Stock (“Series A Stock”), 5,000,000

shares as Series B Preferred Stock (“Series B Stock”) and 1,000,000 shares as Series C Preferred Stock (“Series

C Stock”).

A summary of the material provisions of the

Certificate of Designation governing the Series A Stock, the Series B Stock and the Series C Stock is as follows:

Series A Stock

The Series A Stock is not convertible.

share of Series A Stock shall entitle the holder to three hundred (300) votes for each share of Series A Stock.

Any amendment to

the Certificate of Designation requires the consent of the holders of at least two-thirds of the shares of Series A Stock then

The holders of Series A Stock are not entitled to dividends until and unless determined by the Board of Directors

of the Company (the “Board”).

Liquidation Preference

No distribution shall be made to holders of

shares of capital stock ranking junior to the Series A Preferred Stock upon liquidation, dissolution or winding-up of the Company.

The Series A Stock ranks pari passu with the Series C Stock.

The were no shares of Series A Stock outstanding

as of December 31, 2019.

Series B Stock

The Series B Stock is convertible at any time

by the holder into the number of shares of common stock of the Company based on two times the price paid by the holder paid for

The Board has the authorization to establish a minimum price for the price (so that if the market price of the common

stock of the Company drops below the issuance price, the conversion rate will then be based on the minimum price established by

the Board and not the price paid for the shares).

The holders of the Series B Stock shall not be entitled to voting rights except

as otherwise provided for in the law.

The holders of Series B Stock are not entitled to dividends until and unless determined by

Liquidation Preference

The holders of Series B Stock shall not be

entitled to any distributions upon a liquidation of the Company.

Restrictions of Transferability

The shares of the Series B Preferred Stock

shall not, directly or indirectly, be sold, hypothecated, transferred, assigned or disposed of in any manner without the prior

written consent of the Board and applicable securities laws.

There were no shares of Series B Stock outstanding

as of December 31, 2019.

Series C Stock

The Series C Stock is convertible at any time

by the holder into the number of shares of common stock of the Company on the basis of three times the price paid for the shares.

The Board has established a minimum price for the price paid of $0.10 per share.

The holders of the Series C Stock shall not be

entitled to voting rights except as otherwise provided for in the law.

The holders of Series C Stock are not entitled to dividends

until and unless determined by the Board.

Liquidation Preference

Upon any liquidation of the Company, the holders

of Series C Stock shall be entitled to the amount paid for the shares of Series C Stock prior to the holders of shares ranking

junior to the Series C Stock.

Upon the holders of the Series C Stock and any series of stock ranking pari passu with the Series

C Stock having received distributions to which they are entitled, the remaining assets of the Company shall be distributed to the

other holders pro rata in proportion to the shares held by each holder.

Restrictions of Transferability

The shares of the Series C Preferred Stock

shall not, directly or indirectly, be sold, hypothecated, transferred, assigned or disposed of in any manner without the prior

written consent of the Board and applicable securities laws.

There were 50,000 shares of Series C Preferred,

par value $0.001 which were purchased at a price of $1.00 per share, outstanding as of December 31, 2019.

NOTE 8 –

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The Company has a one-year automatic renewal provision for this lease but is not obligated to exercise this renewal provision.

In addition to the above, Kisses from Royal

Vista, which closed in September 2017, previously had been paying $1,800 per month in rent for approximately 950 square feet of

The Company also rents professional and

furnished space on a month to month basis in Miami, Florida at a cost of $223 per month, which has been designated the Company’s

principal place of business.

Italian location - Strada Provinciale 70 #100, Ceglie del Campo, 70129, Bari, Italia -The Lease was signed

for a six year term in June 2019, at a rate of approximately $1,570 per month.

The Company also rents professional and furnished

space on a month to month basis in Miami, Florida at a cost of $223 per month, which has been designated the Company’s principal

place of business.

NOTE 9 –

SUBSEQUENT EVENTS

April 2018, the Company commenced a private offering of up to $250,000 in convertible debenture (the “Debentures”),

to non-residents of the US.

These notes accrue interest at the rate of 8% per annum and are convertible into shares of the Company’s

Common Stock and are only convertible until such time as the Company’s Common Stock is approved for trading, of which there

is no assurance, at a conversion rate of $0.0667 per share.

Interest is payable annually, on or before February 15 of each year.

The Debentures mature three years after the issuance date.

As of the date hereof, an aggregate of $277,649 in Debentures have

Of this total, $101,000 was raised subsequent to December 31, 2018.

None have been converted.

CHANGES IN AND DISAGREEMENTS

WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

For the period from January 1, 2020 through

the date of this Report, the Company received $93,100 in proceeds from the sale of Series C Preferred Stock to six different accredited

Additionally, an accredited investor providing services to the Company converted $10,000 of unpaid fees into $10,000

of Series C Preferred Stock.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data