What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-04-15 compared with 2021-04-15 · 155 added, 187 removed, 184 unchanged (65% of the section changed)

Kisses From Italy Inc.

(hereinafter referred

to as “us,”

“our,”

“we,”

the “Company”

or “Kisses”) was incorporated in the

(together with its subsidiaries,

hereinafter referred to as “us,” “our,” “we,” or the “Company”) was incorporated in the

State of Florida on March 7, 2013, with a focus on developing a fast, casual food dining chain restaurant business.

We commenced operations

by opening our initial corporately owned restaurant in Fort Lauderdale, Florida in May 2015.

By April 2016, we opened three additional

restaurants located in various Wyndham Hotel properties in the Pompano Beach, Florida area.

In September 2017, Hurricane Irma caused significant

damage to the area which resulted in Wyndham halting operations at its hotel properties for repairs and renovations and the closure of

our Wyndham hotel locations.

The Hurricane also impacted travel to Florida during this time.

The Company operates through its wholly-owned

subsidiaries, Kisses From Italy 9 th LLC, Kisses From Italy-Franchising LLC, Kisses From Italy, Inc.

(Canada) (a company incorporated

under the laws of Canada and registered in Quebec on December 23, 2020), and Kisses From Italy Italia SRLS (a limited liability company

incorporated in Italy), and its 70% owned subsidiary, Kisses-Palm Sea Royal LLC.

We commenced operations by opening our initial

corporate-owned restaurant in Fort Lauderdale, Florida in May 2015.

By April 2016, we opened three additional restaurants located in various

Wyndham Hotel properties in the Pompano Beach, Florida area.

In September 2017, Hurricane Irma caused significant damage to the area,

which resulted in Wyndham halting operations at its hotel properties for repairs and renovations and the closure of our Wyndham hotel

In December 2017, we vacated one of our restaurants in the Wyndham Hotel properties due to damage from the hurricane and have

not re-opened such restaurant.

During the first half of 2021, we consolidated the remaining two Wyndham stores into one location.

While our Fort Lauderdale location was reopened

7 unchanged sentences

licenses we hope to obtain if sufficient demand exists in the future.

In September 2017, we completed the sales of two franchise locations

We anticipate commencement of the building and development of these locations by mid-2021.

On October 24, 2019, we opened our first restaurant

in Italy, at Strada Provinciale 70 #100, Via Vittorio Veneto 100 Ceglie del Campo, Bari, Italia which we intend to also use as a training

facility for franchises in Europe.

The Bari location was closed in the fourth quarter of 2020 and currently remains closed as of the date

of this Report due to Covid-19.

Management recently began scouting various locations

in regions of Italy and believes that the regions of Rome and Puglia may offer opportunities for additional corporate-owned and franchise

However, there are no agreements in place as of the date of this Report to open any new facilities, either Company-owned or

franchises, and no assurances can be provided that we will expand our operations accordingly.

We opened our first European location in Ceglie

del Campo, Bari, Italy, in October 2019.

The Bari location closed in April 2020 due to the Covid-19 pandemic, briefly re-opened and has

not re-opened as of the date of this Report.

Such location was intended to serve as the distribution center for products for European

locations, as well as to be used as a training facility for European franchises.

However, this initiative has been severely curtailed

due to the onset and lingering impact of Covid -19 in Europe.

Our two corporate-owned

restaurants, one located in Fort Lauderdale, Florida, and one within the Wyndham location in Pompano Beach, Florida, have fully re-opened

without limitation or any social distancing requirement.

In September 2019, the Company's common stock

was approved for trading by FINRA and in mid-October 2019 was approved for up-listing by the OTC Markets Group to the OTCQB under the

symbol “KITL”.

In January of 2020, the Company completed its

first franchise agreement for a restaurant in the State of California.

As a result of the COVID-19 pandemic, the opening of this restaurant

has been delayed and is currently expected to begin operating in by the end by June 30, 2021.

In June of 2020, the Company entered into a

multi-unit development agreement (the “Development Agreement”) pursuant to which it granted development rights to

Demasar Management, Inc.

to open and operate up to 100 restaurants in Canada.

In September of 2020, we decided to enter retail

food and grocery stores with Kisses From Italy branded products in Canada.

The product launch began in November of 2020 and Kisses From

Italy branded products were in nine retail stores by the end of 2020.

Kisses From Italy branded products were in 20 stores across Ontario

and Quebec in Canada by March 31, 2021.

Covid-19 pandemic

was approved for trading by FINRA and in October 2019 was approved for uplisting by the OTC Markets Group to the OTCQB under the symbol

In June of 2020, the Company entered into a multi-unit

development agreement (the “Development Agreement”) pursuant to which it granted development rights to Demasar Management,

(“Demasar”) to open and operate up to 100 restaurants in Canada.

Under this Development

Agreement, the developer is obligated to open a minimum of 20 restaurants by June 17, 2025.

On November 20, 2021, we opened a franchise

location under the Development Agreement in Montreal, Quebec, Canada.

In September of 2020, we entered retail food and

grocery stores with Kisses From Italy branded products in Canada.

The product launch began in November of 2020 and Kisses From Italy branded

products were in nine retail stores by the end of 2020.

Currently, Kisses From Italy branded products are in 40 stores across Ontario

and Quebec, Canada.

of 2021, we entered into a Consulting Agreement (the “Consulting Agreement”) with Fransmart, LLC, a Delaware limited liability

company (“Fransmart”), pursuant to which we engaged Fransmart as our exclusive global franchise developer and representative

for a period of ten years.

In June of 2021, the Company’s first franchise

location opened in Chino, California.

In November of 2021, the Company opened its second franchise location in Montreal, Canada.

On March 11, 2020, the

World Health Organization (“WHO”) declared the COVID-19 outbreak to be a global pandemic.

In addition to the devastating effects

2 unchanged sentences

states and many countries have issued policies intended to stop or slow the further spread of the disease.

COVID-19 and the U.S.’s

response to the pandemic are significantly affecting the economy.

1 unchanged sentence

the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change.

of Covid-19 had a material adverse impact on our operations in 2020.

not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations.

The Company’s two US based locations are

fully opened without any Covid-19 limitation.

Our location in Bari, Italy remains closed due to Covid-19 restrictions.

We strive to provide the highest level of service,

7 unchanged sentences

Our menu includes grilled paninis including an

Italian style Panini, sausage, beef, sliced pork, or chicken topped with quality natural “sott'olio”

(grilled and marinated

Italian style Panini, sausage, beef, sliced pork, or chicken topped with quality natural “sott'olio” (grilled and marinated

vegetable) products at prices ranging from $5.95 to $7.95.

We also offer deli paninis including fresh cheese Panini, prosciutto, salami,

capocollo, bresaola, and turkey panini’s ranging in price from $5.95 to $7.95.

All our panini’s include lettuce, tomato, and

capocollo, bresaola, and turkey panini’s ranging in price from $5.95 to $7.95.

All our panini’s include lettuce, tomato, and

one choice of cheese and three choices of marinated vegetables, or three choices of grilled vegetables.

4 unchanged sentences

bottled water, and juices, as well as various flavors of granite (ices).

We also offer desserts including a Nutella sandwich,

a variety of fresh Danish, cannoli, Italian biscotti, sfogliatelle or a corneti, ranging in price from $1.50 to $2.50.

We will provide

an egg sandwich for breakfast only.

We will also have a full coffee and tea favorites,

including espresso, cappuccino, and other coffee drinks, soft drinks, bottled water, and juices, as well as various flavors of granite

Our vision is to transport true authentic and

rustic taste from the provinces of Italy through a fresh Panini with an espresso, latte, or cold slush espresso to go.

We intend to offer

products that will cater to all diets including gluten-free diets and emphasize fresh products with no preservatives.

rustic taste from the provinces of Italy through our menu items.

We intend to offer products that will cater to all diets, including gluten-free

diets and emphasize fresh products with no preservatives.

All our sott'olio and coffee products are made

6 unchanged sentences

Quick Service Restaurants

Between May 2015 and May 2016, we opened four

(4) restaurants in Southern Florida.

Each of our restaurants is owned by a wholly-owned limited liability company.

Our initial restaurant

is located at 3146 NE 9 th Street in Fort Lauderdale, Florida.

This location is across the street from an Atlantic Ocean public

beach and consists of approximately 1,000 square feet of a retail restaurant with seating for up to 25 guests.

Subsequently, we opened

three additional similar restaurants, all in Southern Florida.

Our initial restaurant is located at 3146 NE 9 th

Street in Fort Lauderdale, Florida.

This location is across the street from an Atlantic Ocean public beach and consists of approximately

1,000 square feet of a retail restaurant with seating for up to 25 guests.

Subsequently, we opened three additional similar restaurants,

all in Southern Florida.

Except for the Fort Lauderdale location, all of

1 unchanged sentence

Of our three restaurants, two are located in Wyndham timeshare resort properties where they are the only restaurants on site.

Our lease agreements provide for our restaurants to provide room service that can be charged to the customer’s room, as well as

an opportunity to provide food and beverage service to various sales, orientations, marketing, and owner events held by Wyndham regularly

1 unchanged sentence

Wyndham remits payments for these services bi-weekly and charges us with a 5% administrative fee for processing costs.

Our menu includes grilled paninis including an

Italian style Panini, sausage, beef, sliced pork, or chicken topped with quality natural “sott'olio”

(grilled and marinated

vegetable) products at prices ranging from $5.95 to $7.95.

We also offer deli paninis including fresh cheese Panini, prosciutto, salami,

capocollo, bresaola, and turkey panini’s ranging in price from $5.95 to $7.95.

All our panini’s include lettuce, tomato, and

one choice of cheese and three choices of marinated vegetables, or three choices of grilled vegetables.

We also offer desserts including a Nutella sandwich,

a variety of fresh Danish, cannoli, Italian biscotti, sfogliatelle or a corneti, ranging in price from $1.50 to $2.50.

Our breakfast menu

is served all day We also have a full coffee and tea favorites, including espresso, cappuccino, and other coffee drinks, soft drinks,

bottled water, and juices, as well as various flavors of granite (ices).

We have continued our discussions with Wyndham,

as well as other similar companies, and believe that our continued expansion of our restaurant concept will be enhanced as a result of

our developing a more extensive relationship with Wyndham or another similar company.

There are no assurances this will occur.

Our flagship location, at 3146 NE 9 TH

in Fort Lauderdale, suffered the greatest impact from the Hurricane Irma in 2017 of all of our locations.

The commercial building where

our restaurant was located sustained severe damage.

We have remained the sole tenant on the property since September 2017.

Property repair

from the Hurricane did not commence until the second half of 2018.This has greatly reduced the foot traffic to the surrounding area thereby

affecting our exposure to any potential walk-by customers.

As repairs to the building finally commenced in mid-2018, we were asked by

the building landlord to close for the entire month of July 2018.

We complied and received a rent abatement for a period of four months.

The impact from these on-going repairs continued well in 2019 with no clear of estimated time as to when the repairs will be completed.

While no assurances can be provided we are confident that once the repairs are complete the area will return to its once sought out status.

Each location is managed

by one senior employee/manager and individually assessed based on foot traffic, seasonality, and other demographic factors.

the standards and rules set forth by the State of Florida Department of Health.

Michele Di Turi, our CEO has the Certified Food Manager

accreditation and have the proper authority to provide necessary food safety courses.

Each location is managed by one senior employee/manager

and individually assessed based on foot traffic, seasonality, and other demographic factors.

locations abide by the standards

and rules set forth by the State of Florida Department of Health, and our Italian location abides by the standards and rules set forth

by Italy’s Ministry of Health and the Puglia (Apulia) region’s legislative/administrative authority.

Michele Di Turi, our

CEO, possesses the Certified Food Manager accreditation and has the proper authority to provide necessary food safety courses.

Restaurant Franchising

3 unchanged sentences

our National Franchise License which permits us to sell franchises in all of the states in the United States except for New York, Virginia,

and Maryland which we intend to add at later dates if sufficient demand exists.

On June 23, 2017 we completed the sale of our initial

two Florida franchises at a price of $15,000 per location.

These locations are set to be developed at a later date.

We anticipate commencement

of the building and development by the end of 2021.

and Maryland which we intend to obtain if sufficient demand exists in the future.

In January of 2020, the Company completed its

first franchise agreement for a restaurant in the State of California.

As a result of the COVID-19 pandemic, the opening of this restaurant

has been delayed and is currently expected to begin operating in the second quarter of 2021.

In June 2021, we opened our first franchise in Chino, California.

Due to the onset of Covid-19, we temporarily waived any franchise fees so that the franchisee could well establish its operations at such

In June of 2020, the Company entered into the

Development Agreement pursuant to which it granted development rights to Demasar to open and operate up to 100 restaurants in Canada.

Demasar will be taking the lead for franchise expansion and assisting in the Canadian brand building for the Kisses From Italy brand.

Under the Development Agreement, among other things, Demasar is obligated to open a minimum of 20

restaurants by June 17, 2025.

Demasar will be taking the lead for franchise expansion and assisting in the Canadian brand building

for the Kisses From Italy brand.

In November 2021, we opened a franchise location under the Development

Agreement in Montreal, Quebec, Canada.

Each of our franchise

restaurants are required to conform to a standard of interior design, featuring a distinctive and comfortable Italian décor.

prior approval is required for each specific location of a proposed franchise restaurant, which includes a requirement that the same be

11 unchanged sentences

requires our franchisee to pay royalties of 9% of gross sales, which are defined to be total actual charges for all products (food and

non-food) and services, such as catering and delivery, sold to customers, exclusive of taxes, every week.

We retain 6% of this royalty

and the remaining 3% goes towards a marketing fund.

The marketing fund is broken down in two parts, 2% for local marketing and 1% for

national marketing.

We anticipate that until national coverage is warranted, local and/or regional marketing campaigns will be implemented.

non-food) and services, such as catering and delivery, sold to customers, exclusive of taxes.

We retain 6% of this royalty and the remaining

3% goes towards local and national marketing.

We anticipate that until national coverage is warranted, only local and/or regional marketing

campaigns will be implemented.

We also require that our franchisee enter into

a collateral assignment and assumption of lease through which we are granted a security interest in all of the furniture, removable trade

fixtures, inventory, licenses, and supplies located in the restaurant as collateral for (1) the payment of any obligation owed to us,

(2) any default or breach under the terms of the lease, and (3) any default or breach of any of the terms and provisions of the franchise

In the event of a breach of or default under the lease or payment by a franchisee as a result of a breach or default, we may

be entitled to possession of the restaurant and all of our rights, title, and interest in and to the lease.

We also enter into a conditional

fixtures, inventory, licenses, and supplies located in the restaurant as collateral for the payment of any obligation owed to us, any

default or breach under the terms of the lease, and any default or breach of any of the terms and provisions of the franchise agreement.

In the event of a breach of or default under the lease or payment by a franchisee as a result of a breach or default, we may be entitled

to take possession of the restaurant and all of our rights, title, and interest in and to the lease.

We also entered into a conditional

assignment of telephone numbers and listings that assigns us telephone numbers and directory listings upon termination or expiration of

10 unchanged sentences

We are required to perform the following services:

Solicitation of new franchise owners - Actively and continuously market and promote through advertising and

solicit prospective franchise owners in their territory according to an annual plan and budget that a franchisee develops and submits

for our approval.

Solicitation of new franchise owners - Actively and continuously market and promote through advertising and solicit prospective franchise owners in their territory according to an annual plan and budget that a franchisee develops and submits for our approval.

Site selection, leasing, and build-out - Consult and advise franchise owners with site selection and lease negotiation of the restaurants.

6 unchanged sentences

Provide pre-opening and post-opening assistance for each new restaurant.

Monitoring, audit, and inspection - Be responsible for at least monthly monitoring of the operation of their restaurants, including monitoring and reporting of the sales volume and other data as determined from time to time.

Monitoring, audit, and inspection – At least monthly monitoring of the operation of their restaurants, including monitoring and reporting of the sales volume and other data as determined from time to time.

Monitor and communicate to our franchisee the marketing efforts of our restaurants.

7 unchanged sentences

staffing levels.

For the first development year, we require each location to have 2 corporate employees, increasing to 3 in the fifth

development year.

For the first development year, we require each location to have two corporate employees, increasing to three in the

fifth development year.

If a franchisee fails to perform services and

we need to assume such tasks, we require that they pay us an amount equal to 125% of the expenditures incurred by us.

and we have the

right to terminate the agreement after notice of a 30-day cure period.

we need to assume such tasks, we require a franchisee pay an amount equal to 125% of our expenses and we have the right to terminate the

agreement after notice of a 30-day cure period.

Each franchisee must refer all inquiries for franchises

5 unchanged sentences

franchises is to contact individuals or entities that have previously developed franchises in other concepts.

This strategy allows us

to find people with the proper knowledge, experience, and financial resources to develop a successful franchise operation in a timely

We believe that this strategy

allows us to find people with the proper knowledge, experience, and financial resources to develop a successful franchise operation in

a timely fashion.

We seek individuals or groups with the skills

4 unchanged sentences

considerable experience in the management of food service venues who also have sufficient start-up capital to open several of our restaurants.

We have entered into discussions with several possible franchise owners, however.

we currently have no franchise agreements.

We will consider the skills and investment capital

5 unchanged sentences

be restricted from opening additional restaurants beyond the minimum for their territory.

We have not yet generated revenue from the sourcing

of franchises and there are no assurances we will ever generate revenues from this business concept.

Retail Products

In September of 2020, we entered retail food and

grocery stores with Kisses From Italy branded products in Canada.

The product launch began in November of 2020 and Kisses From Italy branded

products were in nine retail stores by the end of 2020.

Currently, Kisses From Italy branded products are in 40 stores across Ontario

and Quebec, Canada.

Commissary System

We plan to develop centralized commissary facilities

that will serve all of the restaurants that we own in a given region.

We believe that a commissary that serves a region of restaurants

will improve efficiency and consistency for the restaurant concept.

We also believe that a commissary system will allow our restaurants

to be approximately 500 square feet smaller than they would otherwise be.

We plan to build commissaries in areas with lower rent.

manner, we plan to save the difference between the 500 fewer square feet that retail rental space would cost and the commissary’s

We currently plan to develop centralized commissary

facilities that will serve all of the restaurants that we own in a given region.

We believe that a commissary that serves a region of

restaurants will improve efficiency and consistency for the restaurant concept.

We also believe that a commissary system will allow our

restaurants to be approximately 500 square feet smaller than they would otherwise be.

We plan to build commissaries in areas with lower

In this manner, we plan to save the difference between the 500 fewer square feet that retail rental space would cost and the commissary’s

costs located in a lower rent area.

Our commissary will have storage space for paper products as well as walk-in coolers to store food.

Food preparation for sauces, salad dressings, and other base ingredients will be done in the commissary “clean room”

Food preparation for sauces, salad dressings, and other base ingredients will be done in the commissary “clean room” and then

delivered to local restaurants daily.

We believe central food preparation of sauces and base ingredients will maintain the consistency

of our restaurants’

products and possibly reduce labor costs.

of our restaurants’ products and possibly reduce labor costs.

Restaurant Advertising

Our advertising has and will consist primarily

of newspaper print ads, direct mailing efforts and also through social media, including Facebook, Twitter, and other social media outlets.

We also participated in other forms of advertising.

For example, we intend to use an airplane to advertise our Kisses banner to the Fort

Lauderdale beach crowd, offering promotional free coffee and T-shirts.

Our ads will contain a coupon for a free coffee with the purchase

of any meal item.

of newspaper print ads, direct mailing efforts and social media outlets, including Facebook and Twitter.

We also intend to use other forms

of advertising, such as nh an airplane to advertise our Kisses banner to the Fort Lauderdale beach crowd, offering promotional free coffee

and T-shirts.

Our ads will contain a coupon for a free coffee with the purchase of any meal item.

As we open restaurants in new markets we plan

4 unchanged sentences

There are no assurances we will successfully open multiple restaurants in the future.

We currently employ 8 full-time persons, plus

our officers.

We currently have five full-time employees, plus

our two officers.

We do not have any part-time employees.

Employees include 4 chefs, 3 baristas and an inventory manager.

Our employees work

at will and are not represented by a collective bargaining unit.

We believe our relationship with our employees is excellent in most cases.

Our employees

work at will and are not represented by a collective bargaining unit.

We believe our relationship with our employees is excellent in most

We require all our employees and consultants to sign a confidentiality and non-disclosure agreement.

Our success relies on our ability

to hire additional employees, particularly on the local sales side.

We believe there are numerous quality people to choose from throughout

our area of targeted expansion.

Our success relies on our

ability to hire additional employees, particularly on the local sales side.

We believe there are numerous quality people to choose from

throughout our area of targeted expansion.

As we grow, we anticipate we will require a franchise

21 unchanged sentences

may provide competition to our proposed restaurants because they all are franchise operations that sell sandwiches and coffee:

Jimmy John’s

Chipotle Mexican Grill

2 unchanged sentences

and have significantly greater financial resources than we currently have available.

Government Regulations

We are subject to various federal, state, and

local laws affecting our business.

Our restaurants must comply with licensing and regulation by a number of governmental authorities,

which include health, sanitation, safety, and fire agencies in the state or municipality in which the restaurant is located.

we must comply with various state laws that regulate the franchisor/franchisee relationship.

Our restaurants must comply with licensing and regulation by governmental authorities, including health,

sanitation, safety, and fire agencies in the state or municipality in which the restaurant is located.

In addition, we must comply with

various state laws that regulate the franchisor/franchisee relationship.

We are also subject to federal and state laws

3 unchanged sentences

We are also subject to federal and state child

labor laws which, among other things, prohibit the use of certain “hazardous equipment”

by employees 18 years of age or younger.

labor laws which, among other things, prohibit the use of certain “hazardous equipment” by employees 18 years of age or younger.

Under the Americans with Disabilities Act, we could be required to expend funds to modify our restaurants to better provide service to,

4 unchanged sentences

have a material adverse effect on our operations.

As a potential franchisor, we will be soliciting

prospects for franchises and are subject to federal and state laws pertaining to franchising.

These laws require that certain information

be provided to franchise prospects at certain times and regulate what can be said and done during the offering process.

Some states require

the franchise offering circular to be registered and renewed on an annual basis.

Trademarks and Patents

We have applied for and received a registered

trademark of our logo in Italy, No.

This trademark expires in September 2029.

We have also obtained the registered trademark

of our logo in the United States (the United States Patent and Trademark Office) Serial No.

This trademark expires in August

Both trademarks are subject to automatic renewal if the Company pays the renewal fees.

We are a smaller reporting company and not required to include this

disclosure in this Report.

As a franchisor, we will be soliciting prospects

for franchises and are subject to federal and state laws pertaining to franchising.

These laws require that certain information be provided

to franchise prospects at certain times and regulate what can be said and done during the offering process.

Some states require the franchise

offering circular to be registered and renewed on an annual basis.

Intellectual Property

We have a registered trademark of our logo in

0001 528191), which expires in September 2029.

We have a registered trademark of our logo in the United States from the United

States Patent and Trademark Office (Serial No.

87138230), which expires in August 2026.

Both trademarks are subject to automatic renewal

if the Company pays the renewal fees.

As a smaller reporting company, we are not required to provide the

information required by this Item.

UNRESOLVED STAFF COMMENTS

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 1. Business