What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-04-15 compared with 2021-04-15 · 365 added, 346 removed, 267 unchanged (73% of the section changed)

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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.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Financial Statements

Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations for the years ended December 31, 2021 and 2020

Consolidated Statement of Shareholders’

Equity for the Two Years Ended December 31, 2019

Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020

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as of December 31, 2021 and 2020, 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

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generally accepted in the United States.

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.

Basis for Opinion

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

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.

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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.

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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.

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.

/S/ BF Borgers CPA PC

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Kisses From Italy Inc.

Balance Sheets

Consolidated Balance Sheets

Current assets:

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Accrued liabilities

Loans payable

Total current liabilities

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Stockholders' Equity:

Preferred stock, Series A $0.001 par value.

Preferred stock, Series A $ 0.001

shares authorized;

zero shares issued and

Preferred stock, Series B $0.001 par value.

zero shares issued and outstanding

Preferred stock, Series B $ 0.001

shares authorized;

zero shares issued and

zero shares issued and outstanding

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

59,610 shares and 50,000

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

240,080 shares and 79,610 shares issued and outstanding as of December 31, 2021 and December 31 2020, respectively

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

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

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

and 180,913,582 and 154,832,335 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

Retained earnings deficit

Total Kisses From Italy Stockholders' Equity (Deficit)

Accumulated deficit

( 13,859,006 )

( 8,916,893 )

Total Kisses From Italy Stockholders' Deficit

Non-controlling interest

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Kisses From Italy Inc.

Statements of Operations

Consolidated Statements of Operations

Franchise sales

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Income (loss) from operations

( 4,139,849 )

( 3,240,909 )

Other income (expense)

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Income (loss) before income taxes

( 4,938,727 )

( 3,738,522 )

Provision for income taxes (benefit)

( 4,938,727 )

( 3,738,522 )

net gain(loss) attributable to non-controlling interests

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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

December 31, 2020 and December 31, 2019

Kisses from Italy Inc.

Statements of Changes in Stockholders' Equity

Preferred Stock

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Stockholders'

December 31, 2018

Balance, December 31, 2019

$ ( 5,207,491 )

Net income (loss)

Non-controlling interest, net income (loss)

$ ( 129,714 )

( 3,709,402 )

Non-controlling interest, net 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

Conversion of Series C Preferred Stock to common stock

Beneficial conversion feature of Series C Preferred Stock

Private placement of common stock

Stock issued for services

Balance, December 31, 2020

$ ( 8,916,893 )

Kisses from Italy

Statements of Changes in Stockholders' Equity (continued)

December 31, 2020 and December 31, 2019

$ ( 172,350 )

Kisses from Italy Inc,

Consolidated Statements

of Changes in Stockholders' Equity (continued)

Preferred Stock

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$ ( 8,916,893 )

Net income (loss)

Non-controlling interest, net income (loss)

$ ( 172,350 )

Issuance of common stock in private placement

Issuance of stock options for services

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

Conversion of Series C Preferred to common stock

Issuance of common stock for services

Non-controlling interest, net income

( 4,942,113 )

Balance, December 31, 2021

$ ( 13,859,006 )

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)

$ ( 4,942,113 )

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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

Amortization of debt discount

Stock-based compensation for services

Interest expense on preferred stock issuance

Beneficial conversion feature of Preferred C Stock

Changes in operating assets and liabilities:

Account receivable

Other receivable

Accounts receivable

Account receivable-other

Accounts payable

Accrued liabilities

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

Purchase of fixed assets

Net cash provided by (used in) financing activities

Net cash used in financing activities

Cash flows from financing activities:

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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

Net cash provided by financing activities

Impact of foreign exchange

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

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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.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2020 and 2019

NOTE 1 –

ORGANIZATION AND DESCRIPTION

Notes to Unaudited Consolidated Financial Statements

For the Year Ended December 31, 2021 and 2020

NOTE 1 – ORGANIZATION AND DESCRIPTION

Kisses From Italy Inc.

(the “Company”)

was incorporated in Florida on March 7, 2013.

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.

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.

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 –

SUMMARY OF SIGNIFICANT

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.

commenced operations in May 2015 by opening its first location in Fort Lauderdale, Florida.

Three additional restaurants, located in various

Wyndham Hotel properties in the Pompano Beach, Florida area, were then opened within the following ten months.

All locations, which are

in leased facilities, were fully operational by April 2016.

In December 2017, the Company vacated one of its restaurants due to a hurricane

and has not re-opened that location.

In June 2021, the Company consolidated its two Wyndham stores into one location to become more efficient.

The Company opened its inaugural 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.

In June 2021 and November 2021 the Company opened

its first two franchise locations in Chino, California and Montreal, Canada, respectively.

Due to the onset of Covid-19 the Company has

temporarily waived any franchise fees at both locations so that the franchisees could establish operations at each of those locations.

The Company’s accounting year-end is December

On March 11, 2020, the World Health Organization

declared the Covid-19 outbreak to be a global pandemic.

In addition to the devastating effects on human life, the pandemic has had a negative

ripple effect on the global economy, leading to disruptions and volatility in the global financial markets.

Most US states and many countries

have issued policies intended to stop or slow the further spread of the disease.

Covid-19 and we believe, the US’s response

to the pandemic has significantly affected the economy.

There are no comparable events that provide guidance as to the effect the Covid-19

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

We do not yet know

the full extent of the effects on the economy, the markets we serve, our business, or our operations.

Except for our Bari location which remains closed,

our US locations are now open and are operating at near pre-Covid revenue levels.

NOTE 2 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

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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.

have been prepared in accordance with generally accepted accounting principles in the United States (“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, 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.

All intercompany accounts and transactions are

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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 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.

The accompanying unaudited consolidated financial

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

the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements.

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.

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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

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.

Historically, the Company has raised capital through private placements of equity and convertible debt as interim

measures to finance working capital needs and may continue its efforts to raise additional capital through the sale of common stock or

other securities and obtain short-term loans.

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

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

with 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

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Actual results could differ from these estimates.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the net value

Accounts Receivable and Allowance

for Doubtful Accounts

Accounts receivables 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.

The allowance for doubtful accounts is the Company’s best estimate of the

amount of probable credit losses in its 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.

Interest is not charged on past

due accounts.

These receivables are related to the sale of our private label branded products sold in retail and grocery stores in Canada.

As of December 31, 2021, and December 31, 2020,

our trade receivable amounted to $ 12,900 and $ 5,761 , respectively, with an allowance for doubtful accounts of $- 0 - for both periods.

Other Receivables

Other receivables are comprised of two components,

a receivable from the government for Employee Retention Credits (“ERC”) and Value Added Tax at the Company’s Bari location

The purpose of the ERC is to encourage

employers to keep employees on the payroll, even if they are not working during the covered period due to the effects of the

coronavirus outbreak.

The updated ERC provides a refundable credit of up to $5,000 for each full-time equivalent employee a company

retained from March 13, 2020, to December 31, 2020, and up to $14,000 for each retained employee from January 1, 2021, to June 30,

The Company qualifies as an employer if it was ordered to fully or partially shut down or if the Company’s gross

receipts fell below 50% for the same quarter in 2019 (for 2020) and below 80% (for 2021).

As of December 31, 2021 and December 31,

2020 the Company had ERC credits receivable of $ 41,717

and no ERC credits receivable, respectively.

Valued Added Tax (“VAT”)

The Valued Added Tax

(“VAT”) 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

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

As of December 31,

2021 and December 31, 2020, respectively, the Company had a VAT net receivable from its Bari location amounting to $ 4,839 .

Foreign Currency Translation

The functional and reporting currency of the company’s

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

Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur

in foreign currencies.

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Average monthly rates are used to translate revenues and expenses.

To date, this difference has been immaterial for the Bari

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.

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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 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, 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.

Equity transactions are recorded at the historical

rate when the transaction occurred.

Since the Company began the branded retail products

operations initiative in Canada in late 2020, the difference in the exchange rate and the average monthly rate did not have a material

impact on the Company’s financial statements.

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

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

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.

The Company recognizes revenue under the guidelines

Sales, as presented in the Company’s consolidated statement of earnings, represent franchise revenue;

and food and beverage

product sold which is presented net of discounts, coupons, employee meals and complimentary meals.

Revenue is recognized using the five

step approach required under the guidelines of ASC 606.

Non-controlling interest

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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.

On December 31, 2020 and December 31, 2019,

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

The Company considers all highly liquid

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

On December 31, 2021 and

December 31, 2020, the Company cash equivalents totaled $ 139,485 and

$ 37,336 , respectively.

Property and equipment

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.

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.

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 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:

Estimated useful lives of property

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”

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 Company accounts for income taxes under

the Financial Accounting Standards Board (“FASB”) ASC 740, “Accounting for Income Taxes” .

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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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.

18, 2019, FASB released Accounting Standards

Update (“ASU”) 2019-12, which affects general principles within Topic 740, Income Taxes.

The amendments of ASU 2019-12 are

meant to simplify and reduce the cost of accounting for income taxes.

The FASB has stated that the ASU is being issued as part of its

Simplification Initiative, which is meant to reduce complexity in accounting standards by improving certain areas of GAAP without compromising

information provided to users of financial statements.

The Company adopted this guidance on January 1, 2021 which had no impact on the

Company’s financial statements.

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

using the fair method following the guidance set forth in Section 718-10 of the FASB Accounting Standards Codification for disclosure

about Stock-Based Compensation.

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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

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 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.

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.

The ASU defers the effective dates for the credit losses, derivatives, and lease 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.

We expect that the adoption of this guidance will

have no impact on our financial statements.

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

and “P.S.T.”)

The Company does not collect any Canadian 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.

Inventory is comprised of alcoholic

beverages at our Bari location in Italy which opened in 2019 and inventory for retail sales held in Canada.

Our US locations do not

have liquor licenses.

The balance of inventory at December 31, 2021 and December 31, 2020 was $ 5,270 and

$ 4,051 , 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 by the weighted average shares of common stock 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 shares of common stock and dilutive common share equivalents outstanding.

Recent Accounting Pronouncements

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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.

In March 2019, the FASB issued ASU 2019-01, Codification Improvements , which clarifies certain aspects of the new lease

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.

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, the Company is 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 –

PROPERTY AND EQUIPMENT

The following table sets forth the components

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

December 31, 2020

December 31, 2019

Accumulated Depreciation

Capital assets subject to depreciation:

Furniture and equipment

Leasehold improvements

Total fixed assets

For the years ended December 31, 2020 and December

31, 2019, the Company recorded depreciation and amortization of $51,970 and $43,303 respectively.

NOTE 4 –

ACCRUED AND OTHER LIABILITIES

NOTE 3 – GOING CONCERN AND LIQUIDITY

As of December 31, 2021 the Company had cash

on hand of $ 139,485 and

an accumulated deficit of $ 13,859,006 .

Management has concluded that these financial

statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities

and commitments in the normal course of business.

It is the Company’s current intention to

raise debt and/or equity financing to fund ongoing operating expenses.

The Company believes it will be successful in raising sufficient

capital to operate for the next 12 months, however, there is no assurance that financing, whether debt or equity, will be available to

the Company, satisfactorily completed or on terms favorable to the Company.

Any issuance of equity securities, if accomplished, could

cause substantial dilution to existing stockholders and any debt financing may contain covenants limiting certain corporate actions.

failure by the Company to successfully raise additional financing would have a material adverse effect on its business, including the

possible inability to continue operations.

NOTE 4 – PROPERTY AND EQUIPMENT

As of December 31, 2021 and December 31, 2020,

the Company had $ 5,793 and $ 8,480

in property and equipment, all located at its Bari location in Italy.

As of March 31, 2021 all property and equipment and leaseholds

at its US locations had been fully depreciated.

NOTE 5 – ACCRUED AND OTHER LIABILITIES

The following table sets forth the components

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

of the Company’s accrued liabilities on December 31, 2021 and December 31, 2020.

Schedule of accrued and other liabilities

Sales tax payable

4 unchanged sentences

as of December 31, 2021.

Included in the “payroll tax liabilities”

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

and penalties.

NOTE 5 –

LOANS AND NOTES PAYABLE

Included in the “payroll tax liabilities” as of December 31, 2021 is approximately $ 43,001 in

interest and penalties.

NOTE 6 – PROMISSORY NOTES PAYABLE

As of December 31, 2021 and December 31, 2020,

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

We currently have no available lines of credit.

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

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 –

CONVERTIBLE NOTES

NOTE 7 – CONVERTIBLE NOTES

As of December 31, 2021 and December 31, 2020,

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

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 –

STOCKHOLDERS EQUITY

Capital Stock

the outstanding principal balance of convertible notes was $ 10,000 .

NOTE 8 – STOCKHOLDERS EQUITY

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 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.

shares of common stock.

On December 31, 2021 and December 31, 2020, there were 180,913,582

and 154,832,335 shares of common stock

issued and outstanding, respectively, with a $ 0.001

par value per share.

During the year ended December 31, 2021,

the Company issued the following shares of common stock:

14,000,000 shares to its executive officers valued at $ 1,987,200

4,408,334 shares to service providers valued at $ 538,568

1,750,000 shares to accredited

investors for gross proceeds of $ 175,000

5,922,903 shares upon the conversion of Series C Stock

These shares were valued based on the trading

price of the Company’s stock on the date of approval of the respective share issuances by the Company’s Board of Directors

times the number of shares issued.

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”).

On December 19, 2019, the Company filed a

Certificate of Designation with the State of Florida to designate 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

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A Stock ranks pari passu with the Series C Stock.

The were no shares of Series A Stock outstanding

as of December 31, 2020.

There were no shares of Series A Stock

outstanding as of December 31, 2021 and December 31, 2020.

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 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.

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

The Board has the authorization to establish a minimum price for the conversion price of 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 by applicable law.

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

6 unchanged sentences

and applicable securities laws.

There were no shares of Series B Stock outstanding

as of December 31, 2020.

There were no

shares of Series B Stock outstanding as of December 31, 2021.

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.

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.

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 divided

by the floor price of $0.10 established by the Board of Directors.

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

except as otherwise provided for by applicable law.

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

8 unchanged sentences

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.

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 –

COMMITMENTS AND CONTINGENCIES

As of December 31, 2020 and 2019, the Company

had four operating store locations.

The Series C 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, 2021 and December 31,

2020 there were 240,080

shares and 79,610 shares of Series C Stock outstanding, respectively, which were purchased at a price of $ 1.00

NOTE 9 – COMMITMENTS AND CONTINGENCIES

As of December 31, 2021 the Company had three

operating restaurants.

The Company leases these spaces based upon the following schedules:

Kisses From Italy 9 th LLC based in Fort Lauderdale, Fl.

leases approximately 990 square feet of space at a cost of $2,650 per month through the period ended July 31, 2018.

Beginning on August 1, 2018 the rent increased to $5,773 per month for eight months and then it will be reduced to $3,274 per month.

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.

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.

The lease ends on May 1, 2021.

The Company has a one-year automatic renewal provision for this lease.

Kisses From Italy -Sea Gardens based in Pompano Beach, Florida leases approximately 600 square feet of space at a cost of $595.40 per month.

The lease ends on August 1, 2021.

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.

The Company also rents professional and furnished

space on a month to month basis in Miami, Florida at a cost of $251 per month, which has been designated the Company’s principal

place of business.

NOTE 9 –

SUBSEQUENT EVENTS

Italy 9 th LLC based in Fort Lauderdale, Florida leases approximately 990

square feet and has paid $3,273 per month since 2018, pending completion of the required renovations to the exterior and interior of

the property necessitated due to hurricane damage that occurred to the location in 2018.

The landlord has been very slow in making

these changes.

It was agreed upon that when work was completed, and approved by the City of Fort Lauderdale, the rent would be

increased to the market rate at that time.

Beginning on May 1, 2021, the rent increased to $5,857.50 per month and was renewed by

the Company for an additional five-year term with standard annual escalator costs.

Sea Royal LLC based in Pompano Beach, Florida leases approximately 2,300

square feet for $3,933 per month.

The Company has a one-year automatic renewal provision for this lease on May 1st of each year

under the same

Kisses From Italy Italia

SRLS based in Bari, Italy, leases approximately 2,200 square

feet of space for 1,400 euros per month under the terms of a six-year lease which ends on May 5, 2024 and has an optional automatic

renewal provision for six years.

NOTE 10 – SUBSEQUENT EVENTS

For the period from January 1, 2022 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.

date of this Report, the Company received $143,090 in proceeds from the sale of a 12% convertible promissory note due in April 11, 2023.

In connection with the issuance of the note, the Company issued 500,000 common shares as a commitment fee.

Additionally the Company issued

3,000,000 common shares upon the conversion of 100,000 Series C Preferred shares.

Also, a Company officer purchased 5,000 Preferred C

shares for $5,000.

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