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Item 8. Financial Statements and Supplementary Data

2021-04-15 compared with 2020-05-18 · 374 added, 343 removed, 239 unchanged (75% of the section changed)

STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

Reference is made to the Financial Statements,

the notes thereto, and the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, which Financial

Statements, notes and report are incorporated herein by reference.

to Consolidated Financial Statements

the notes thereto, and the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, which Financial Statements,

notes and report are incorporated herein by reference.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

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Notes to Consolidated Financial Statements

Report of Independent Registered Public

Accounting Firm

of Independent Registered Public Accounting Firm

To the shareholders and the board of directors

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balance sheets of Kisses From Italy, Inc.

as of December 31, 2019 and 2018, the related statements of operations, stockholders'

equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial

statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of

the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in

conformity with accounting principles generally accepted in the United States.

as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity

(deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States.

Basis for Opinion

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Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

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.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether 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

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable

basis for our opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s

Ability to Continue as a Going Concern

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the

Company has suffered recurring losses from operations and has a significant accumulated deficit.

In addition, the Company continues

to experience negative cash flows from operations.

These factors raise substantial doubt about the Company's ability to continue

as a going concern.

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has

suffered recurring losses from operations and has a significant accumulated deficit.

In addition, the Company continues to experience

negative cash flows from operations.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

The financial statements do not

include any adjustments that might result from the outcome of this uncertainty.

The financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

/S/ BF Borgers CPA PC

We have served as the Company's auditor

We have served as the Company's auditor since

April 15, 2021

Kisses From Italy Inc.

Consolidated Balance Sheets

Balance Sheets

Current assets:

Cash and cash equivalents

Accounts receivable

Other receivable

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Total current liabilities

Notes payable

Convertible Notes

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1,500,000 shares authorized;

zero shares issued and outstanding

zero shares issued and

Preferred stock, Series B $0.001 par value.

5,000,000 shares authorized;

zero shares issued and outstanding

zero shares issued and

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

59,610 shares and 50,000

shares issued and outstanding as of December 31, 2020 and December 31 2019, respectively

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

126,550,535 and 81,780,170 shares issued and outstanding as of December 31, 2019 and 2018, respectively

154,832,335 and 126,550,335 shares issued

and outstanding as of December 31, 2020 and December 31, 2019, respectively

Additional paid-in capital

Retained earnings deficit

Total Kisses From Italy Stockholders' Equity

Total Kisses From Italy Stockholders' Equity (Deficit)

Non-controlling interest

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Kisses From Italy Inc.

Consolidated Statements of Operations

Statements of Operations

Franchise sales

Total Revenue

Cost of goods sold

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Executive compensation

Stock based compensation -related party

Stock based compensation

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$ (3,709,402 )

$ (3,082,860 )

Basic and diluted earnings (loss) per common share

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Consolidated Statements of Changes in Stockholders' Equity

December 31, 2020 and December 31, 2019

Preferred Stock

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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

Net income (loss)

Non-controlling interest, net income (loss)

Issuance of Series C Preferred Stock

Beneficial conversion feature of convertible notes

Issuance of shares to management and consultants

Retirement of convertible debt and accrued interest

with common stock

December 31, 2019

$ (5,207,491 )

The accompanying notes are an integral part of the consolidated

financial statements.

Kisses from Italy

Statements of Changes in Stockholders' Equity (continued)

December 31, 2020 and December 31, 2019

Preferred Stock

Stockholders'

Balance, December 31, 2019

$ (5,207,491 )

Net income (loss)

Non-controlling interest, net income (loss)

Issuance of Series C Preferred stock

Conversion of Series C Preferred Stock to common stock

Beneficial conversion feature of Series C Preferred stock

Issuance of common stock in a private placement

Stock issued for services

Balance, December 31, 2020

$ (8,916,893 )

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

Kisses From Italy Inc.

Consolidated Statements of Cash Flows

Consolidated Statements

of Cash Flows

Cash flows from operating activities of continuing operations:

Net income (loss)

$ (3,709,402 )

$ (3,082,860 )

Net income loss attributable to non-controlling interest

Common stock issued for services

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

Stock-based compensation

Interest expense recorded on preferred stock issuance

Amortization of debt discount

Stock-based compensation for services

Interest expense on preferred stock issuance

Changes in operating assets and liabilities:

Account receivable

Other receivable

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Proceeds/payments from short term borrowings-net

Proceeds from the sale of preferred stock

Proceeds from notes payable, net

Proceeds from the sale of common stock

Proceeds from the sale of convertible notes

Proceeds from the sale of preferred stock

Net cash provided by (used in) financing activities

Impact of foreign exchange

Net increase (decrease) in cash and cash equivalents

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Cash paid for income taxes

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.

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was incorporated in Florida on March 7, 2013.

The Company’s main focus is to develop a fast, casual food dining chain restaurant

business of corporate-owned restaurants and expanding through a nationwide/international franchise and territory sales program.

Kisses From Italy is a restaurant chain operator,

Franchisor, and product distributor with locations in North America and Europe.

The Company’s main focus is to develop a

fast, casual food dining chain restaurant business of corporate-owned restaurants and expanding through a nationwide/international franchise

and territory sales program.

The Company commenced operations in May 2015 by opening its first location in Ft.

Lauderdale, Florida.

Three additional restaurants,

which were located in various Wyndham Hotel properties in the Pompano Beach, Florida area, were then opened within the following

additional restaurants, which were located in various Wyndham Hotel properties in the Pompano Beach, Florida area, were then opened within

the following ten months.

All locations, which were in leased facilities, were fully operational by April 2016.

In December 2017, the Company

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

In December 2017, the

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

In May of 2019, we began the initial steps of

developing our first European restaurant location, which is located at Strada Provinciale 70 #100, Ceglie del Campo, 70129, Bari, Italia.

Our European location began its operation on October 24, 2019.

Our European location will also act as our distribution center for European

products destined for our current locations and future corporate-owned and franchised locations.

The Bari location was closed in the

fourth quarter of 2021 and currently remains closed as of the date of this Report due to Covid-19.

The Company’s accounting year end is December

NOTE 2 –

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ACCOUNTING POLICIES

Basis of Presentation and Principles

of Consolidation

The consolidated financial statements

of the Company have been prepared in accordance with GAAP.

This basis of accounting involves the application of accrual accounting

and consequently, revenues and gains are recognized when earned, and expenses and losses or recognized when incurred.

The consolidated

financials include the accounts of the Company and its wholly-owned subsidiaries;

Kisses from Italy 9 th LLC, Kisses

from Italy-Franchising LLC;

Basis of Presentation and Principles of

Consolidation

The consolidated financial statements of the Company

have been prepared in accordance with GAAP.

This basis of accounting involves the application of accrual accounting and consequently,

revenues and gains are recognized when earned, and expenses and losses or recognized when incurred.

The consolidated financials include

the accounts of the Company and its wholly-owned subsidiaries;

Kisses from Italy 9 th LLC, Kisses from Italy-Franchising

and its 70% owned subsidiary, Kisses-Palm Sea Royal LLC.

All intercompany accounts and transactions

are eliminated in consolidation.

All intercompany accounts and transactions are

eliminated in consolidation.

Going Concern

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

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

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.

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.

On a consolidated

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

For the year ended December 31, 2020 we had an operating

loss of $3,709,402.

As of December 31, 2020 we had a working capital deficit of $161,294 and an accumulated deficit of $8,916,893.

Because the Company does not expect that existing

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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.

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

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.

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.

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

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

The most significant estimates relate to revenue recognition, valuation of accounts receivable and the allowance for doubtful

accounts, 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 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.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the net value

of face amount less any allowance for doubtful accounts.

The allowance for doubtful accounts is the Company’s best

estimate of the amount of probable credit losses in our existing accounts receivable.

The Company reviews the allowance for doubtful

accounts on a regular basis, and all past due balances are reviewed individually for collectability.

Account balances are charged

against the allowance when placed for collection.

Recoveries of receivables previously written off are recorded when received.

is not charged on past due accounts.

As of December 31, 2020 and 2019 , our trade receivable

amounted to $5,761 and $-0-, respectively, with an allowance for doubtful accounts of $-0- for both periods.

Foreign Currency Translation

The functional and reporting currency of the

company’s Bari location in Italy is the Euro.

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.

for transactions that occur

in foreign currencies.

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

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

Transactions denominated in currencies other than

the functional currency, such as the Company’s current retails sales in Canada for Kisses From Italy branded products, 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 periods.

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

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

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.

Equity transactions are recorded at the

historical rate when the transaction occurred.

For the approximate two month period ended December

31, 2020 when the Company began the branded retail products operations initiative in Canada, the difference in the exchange rate and the

average monthly rate was not material.

Revenue Recognition

Sales, as presented in the Company’s

consolidated statement of earnings, represents food and beverage product sold and is presented net of discounts, coupons, employee

meals and complimentary meals.

Sales, as presented in the Company’s consolidated

statement of earnings, represents food and beverage product sold and is presented net of discounts, coupons, employee meals and complimentary

Revenue from restaurant sales is recognized when food and beverage products are sold.

January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with

Customers (“ASC 606”), using the modified retrospective method applied to those contracts which were not completed

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

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.

On January 1, 2018, the Company adopted Accounting

Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified

retrospective method applied to those contracts which were not completed 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.

As of and for the years ended December 31, 2020 and 2019, 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

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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.

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

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

At December 31, 2019 and December 31,

On December 31, 2020 and December 31, 2019,

the Company cash equivalents totaled $37,336 and $26,841 respectively.

Property and equipment

Property and equipment are stated at cost or

Property and equipment are stated at cost or fair

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

believes that this equipment and leaseholds which are in excellent condition can be used at existing and new locations and that

the undepreciated book value is equivalent to its fair market value, thus no impairment was recorded.

Depreciation is computed

by the straight-line method and is charged to operations over the estimated useful lives of the assets.

Maintenance and repairs

are charged to expense as incurred.

The carrying amount and accumulated depreciation of assets sold or retired are removed from

the accounts in the year of disposal and any resulting gain or loss is included in results of operations.

The estimated useful

lives of property and equipment are as follows:

The Company believes that

this equipment and leaseholds which are in excellent condition can be used at existing and new locations and that the undepreciated book

value is equivalent to its fair market value, thus no impairment was recorded.

Depreciation is computed by the straight-line method and

is charged to operations over the estimated useful lives of the assets.

Maintenance and repairs are charged to expense as incurred.

carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting

gain or loss is included in results of operations.

The estimated useful lives of property and equipment are as follows:

Computers, software, and office equipment

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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”

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 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

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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.

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

The Company accounts for stock-based compensation

using the fair value method following the guidance set forth 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).

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.

The Company currently follows the guidance

in ASC 840 “

using the fair value method following the guidance set forth 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.

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.

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.

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 No.

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.

guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption

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.

The 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 December 15, 2021.

ASC 842 will be effective for the Company beginning

on December 15, 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, 2020, the Company had a VAT net receivable from is new Bari location which opened in

2019, amounting to $4,839 compared to 4,442 for the period ended December 31, 2019.

Canadian Government and Provincial Sales Tax (“G.S.T.”

and “P.S.T.”)

The Company does not collect any Canadina G.S.T.

(Government Sales Tax) and P.S.T.

(Provincial Sales Tax) as the company acts as product distributor and not as a final sales retailer.

The inventory is comprised of alcoholic beverages

at our new Bari location in Italy which opened in 2020, and inventory for retail sales held in Canada.

Our US locations do not have liquor

The balance of inventory on December 31, 2020 and 2019 was $4,051 and $1,987 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

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.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No.

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

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.

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.

guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption

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.

The 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 December 15, 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.

NOTE 3 –

1 unchanged sentence

The following table sets forth the components

of the Company’s property and equipment at December 31, 2019, and December 31, 2018:

of the Company’s property and equipment on December 31, 2020, and December 31, 2019:

December 31, 2020

11 unchanged sentences

The following table sets forth the components

of the Company’s accrued liabilities at December 31, 2019 and December 31, 2018.

of the Company’s accrued liabilities on December 31, 2020 and December 31, 2019.

Sales tax payable

1 unchanged sentence

Payroll tax liabilities

Accrued other

Total accrued liabilities

The Company is in arrears on its payroll tax

payments as of December 31, 2019.

The Company is in arrears on its payroll tax payments

as of December 31, 2020.

Included in the “payroll tax liabilities”

as of December 31, 2019, is approximately

$35,209 in interest and penalties.

as of December 31, 2020, is approximately $148,519 in interest

and penalties.

NOTE 5 –

LOANS PAYABLE

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

LOANS AND NOTES PAYABLE

As of December 31, 2020, and December 31 2019,

loan payable balances were $-0- and $6,000 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.

We currently have no available lines of credit.

As of December 31, 2020 we had two unsecured 8%

notes payable amounting to $12,171 that mature in June 2023.

We had no notes outstanding as of December 31, 2019.

NOTE 6 –

2 unchanged sentences

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

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

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.

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.

During the year ended December, 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 –

1 unchanged sentence

Capital Stock

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.

The Company has authorized 200,000,000

shares of Common Stock authorized.

On December 31, 2020 and December 31, 2019, there were 154,832,335 and 126,550,335 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, 2020, the company

accepted one subscription from an accredited investor for $19,900 and issued 200,000 shares of common stock.

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.

Common Stock Issued in Exchange for Services

During the year ended December 31, 2020, the Company

issued 25,391,800 shares of its Common Stock to its management and consultants for services.

These shares were values at $3,028,201.

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 $2,309,897.

Preferred stock converted to common stock

During the year ended December 31, 2020, the

Company issued 2,690,000 shares of common stock upon the conversion of 125,990 shares of Series C Stock described below.

There were no

conversions of preferred stock to common stock in the year ended December 31, 2019.

Preferred Stock

1 unchanged sentence

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 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”).

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 outstanding.

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

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.

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.

A Stock ranks pari passu with the Series C Stock.

The were no shares of Series A Stock outstanding

2 unchanged sentences

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

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 shares.

The Board has the authorization to establish a minimum price for the price the Series B Stock (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 the Board.

Liquidation Preference

The holders of Series B Stock shall not be

entitled to any distributions upon a liquidation of the Company.

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.

The shares of the Series B 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

3 unchanged sentences

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.

Board has established a minimum conversion price 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.

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.

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.

As of December 31, 2020 and 2019 there were 79,610

shares and 50,000 shares of Series C Preferred outstanding, respectively, which were purchased at a price of $1.00 per share.

NOTE 8 –

1 unchanged sentence

As of December 31, 2020 and 2019, the Company

had three operating store locations.

had four operating store locations.

The Company leases these spaces based upon the following schedules:

3 unchanged sentences

The increased rent amount of $5,773 includes an additional payment of $2,500 per month for these 8 months, arising out of a $20,000 dispute settlement related to a rent dispute.

For financial statement purposes, this amount for the months of September and August 2018 ($5,000) has been recorded as “rent expense”

on the Company’s financial statement The lease ends on December 9, 2020.

This amount for the months of September and August 2018 ($5,000) has been recorded as “rent expense”

on the Company’s financial statement The lease ends on June 30, 2021.

Kisses From Italy-Palm Aire based in Pompano Beach, Florida leases approximately 2,300 square feet of space at a cost of $4,051.83 per month.

4 unchanged sentences

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

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.

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

3 unchanged sentences

SUBSEQUENT EVENTS

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.

For the period from January 1, 2021 through the

date of this Report, the Company received $145,000 in proceeds from the sale of 1,450,000 common shares to three different accredited

Additionally, the Company issued 1,500,000 for services to an investor relations firm.

CHANGES IN AND DISAGREEMENTS WITH

1 unchanged sentence

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