Kisses From Italy Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Report. These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Based on this evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of December 31, 2021. Inherent Limitations Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the exemption provided to issuers that are not “large accelerated filers” or “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act. 15 Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: · Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; · Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and the receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and · Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013. Based on its assessment, management has concluded that as of December 31, 2021, our disclosure controls and procedures and internal control over financial reporting were effective. This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 16 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The following table sets forth information regarding our executive officers and directors: Name Age Position Michele Di Turi 46 Co-Chief Executive Officer, President, and Chairman of the Board Claudio Ferri 46 Co-Chief Executive Officer, Chief Investment Officer, and a director Leonardo Fraccalvieri 39 Chief Operating Officer and Director Our directors are elected for a term of one year and serve until such director’s successor is elected and qualified. Each executive officer serves at the pleasure of the Board of Directors. Michele Di Turi has been our Co-Chief Executive Officer, President, and a director since our inception in March 2013. In addition, Mr. Di Turi was chief operating officer and a director of Sunshine Biopharma, Inc., a publicly held biotech company from October 15, 2009 until February 20, 2015. Since November 2008, Mr. Di Turi has also been President of Sunshine Bio Investments, Inc., a privately held Canadian corporation engaged in the sale of non-regulated biotechnology and medical products. Prior thereto, from February 2003 through November 2008, Mr. Di Turi was employed by Mazda President, Inc., Montreal, Canada, as a sales representative and director of customer service. Mr. Di Turi’s investment experience led to his appointment to the Board. Claudio Ferri has been our Co-Chief Executive Officer, Chief Investment Officer and a director since our inception in March 2013. From May 2001 through September 2013, Mr. Ferri was employed by State Street Global Advisors, Montreal, Canada as Vice President, Senior Portfolio Manager and Trader where his responsibilities included the management of Canadian government bonds and provincial/agency investment strategies and trading for active and enhanced fixed income portfolios. Mr. Ferri received a Bachelor of Commerce degree from Concordia University in 2001 with a major in finance. Mr. Ferri’s investment experience led to his appointment to the Board. Leonardo Fraccalvieri has been our Chief Operating Officer and a director since our inception in March 2013. Previously, from April 2013 through January 2014, he was business development manager at Italy America Chamber of Commerce, West LA, CA, where he was responsible for management of project development and evaluation of Italian companies looking to expand in the US. From June 2012 through December 2013, Mr. Fraccalvieri was a business analyst at 10EQS Management Consulting where he was responsible for market strategy definition. From May 2009 through June 2011, he was a business development specialist at BusinessviaItaly, where he worked with companies looking to expand their business internationally to find new commercial partners abroad, as well as providing new business opportunities for foreign nationals. Mr. Fraccalvieri attended Universita’ Commerciale Luigi Bocconi Milano and received an undergraduate degree in Economics of International Market and New Technologies in Milan and a graduate degree from 2 Universita’ Commerciale Luigi Bocconi Milano in Milan where he received a Masters’ degree in International Management and Business Administration, majoring in Management Consulting and Strategy. Mr. Fraccalvieri’s business development experience led to his appointment to the Board. Employment Agreements We do not have employments agreements or consulting agreements with any of our officers or directors. 17 Board Committees The Company has no nominating, audit, or compensation committees. The entire Board participates in the nomination and audit oversight processes and considers executive and director compensation. Given the size of the Company and its stage of development, the entire Board is involved in such decision-making processes. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors. Family Relationships There are no family relationships between any of our officers and directors. Involvement in certain legal proceedings Our directors and executive officers have not been involved in any of the following events during the past ten years: · Any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; · Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); · Being subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities, or banking activities or to be associated with any person practicing in banking or securities activities; · Being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; · Being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended, or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or · Being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons associated with a member. Director Independence Our Board is currently composed of three members. Our common stock is not currently listed for trading on a national securities exchange and, as such, we are not subject to any director independence standards. No member of our Board of Directors is considered an independent director. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors and persons beneficially owning more than 10% percent of our equity securities ("Reporting Persons") to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Based solely on our review of copies of such reports and representations from the Reporting Persons, we believe that during the year ended December 31, 2021, the Reporting Persons timely filed all such reports, except that Denis Senecal failed to file a Form 3 reporting his status as a 10% shareholder and beneficial ownership of 22,771,153 shares, Mr. DiTuri, our Co-Chief Executive Officer, President and a director, failed to timely file a Form 4 reporting the award of 5,000,000 shares of common stock as a bonus and Mr. Ferri, our Co-Chief Executive Officer, Chief Investment Officer and a director, failed to timely file a Form 4 reporting the award of 5,000,000 shares of common stock as a bonus. 18 Code of Ethics The Company has not as yet adopted a code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions as required by the Sarbanes-Oxley Act of 2002 due to our small size and limited resources and because management’s attention has been focused on matters pertaining to raising capital and the operation of the business. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information concerning compensation awarded to, earned by, or paid to our Chief Executive Officer and the other executive officer with compensation exceeding $100,000 during fiscal 2021 (each a "Named Executive Officer"). SUMMARY COMPENSATION TABLE Name and principal position Year Salary ($) Bonus($) Stock Awards ($)(5) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Michele Di Turi, 2021 21,327 993,600(1) 1,014,927 Co-Chief Executive Officer, President, and Chairman 2020 17,361 – 360,000 (2) – – – – 377,361 Claudio Ferri, 2021 993,600(3) 993,600 Co-Chief Executive Officer and Chief Investment Officer 2020 – – 360,000 (4) – – – – 360,000 ____________________ (1) Represents a stock award of 7,000,000 shares for services performed (2) Represents a stock award of 3,600,000 for services performed (3) Represents a stock award of 7,000,000 shares for services performed (4) Represents a stock award of 3,600,000 for services performed (5) The value of all of the stock awards was determined by multiplying the numbers shares issued times the market price of the Company’s common stock on the date of approval of the share issuance by the Company’s Board of Director’s Director Compensation During the year ended December 31, 2021, no compensation has been paid to our directors in consideration for their services rendered in their capacities as directors. S tock Plan We have not adopted a stock plan but may do so in the future. 19 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table lists, as of April 13, 2022, the number of shares of common stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each of our Named Executive Officers and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest. Except as noted below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s address is c/o Kisses From Italy Inc., 80 SW 8 th Street, Suite 2000, Miami, Florida 33130. As of April 13, 2022, there were 184,413,582 shares outstanding. Name and Address of Beneficial Owner # of Shares % of Class Directors and Executive Officers Michele Di Turi 65,600,000 35.6% Claudio Ferri (1) 43,010,000 (1) 23.1% Leonardo Fraccalvieri 1,000,000 * All officers and directors as a group (3 persons) 109,200,000 59.2% 5% Shareholders Denis Senecal 21,671,153 12.3% * Less than 1% (1) Includes 410,000 shares held by Mr. Ferri’s wife. Excludes 15,100 shares of Series C Stock held by Mr. Ferri and 5,000 shares of Series C Stock held by Mr. Ferri’s spouse, which based upon the closing price of $0.0545 of the Company’s common stock on April 11, 2022, are convertible into 453,000 shares and 150,000 shares, respectively, of the Company’s common stock. The Series C Stock does not have voting rights. Change-in-Control Agreements The Company does not have any change-in-control agreements with any of its executive officers. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Certain Relationships and Related Transactions On April 19, 2021, we issued 5,000,000 shares of common stock to Mr. DiTuri, our Co-Chief Executive Officer, President and a director, as bonus compensation. 20 On April 19, 2021, we issued 5,000,000 shares of common stock to Mr. Ferri, our Co-Chief Executive Officer, Chief Investment Officer and a director, as bonus compensation. On September 27, 2021 and October 1, 2021, we issued 692,841 and 4,102,097 shares to Senecal, a 10% shareholder, upon the conversion of 30,000 and 150,000 shares, respectively of Series C Stock. On December 15, 2021, we issued 2,000,000 shares of common stock to Mr. DiTuri, our Co-Chief Executive Officer, President and a director, as bonus compensation. On December 15, 2021, we issued 2,000,000 shares of common stock to Mr. Ferri, our Co-Chief Executive Officer, Chief Investment Officer and a director, as bonus compensation. Director Independence None of our current directors are deemed “independent” pursuant to SEC rules. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Audit Fees The following table presents audit fees rendered by BF Borgers CPA PC, our independent auditors, during our fiscal years ended December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Audit Fees $ 43,200 $ 45,000 Total $ 43,200 $ 45,000 Audit Fees consist of fees for professional services rendered for the audit of our financial statements included in our Annual Report on Forms 10-K and for the review of our interim financial statements included in our Quarterly Reports on Form 10-Q. Administration of the Engagement; Pre-Approval of Audit and Permissible Non-Audit Services We have not yet established an audit committee. Until then, there are no formal pre-approval policies and procedures. Nonetheless, the auditors engaged for these services are required to provide and uphold estimates for the cost of services to be rendered. The percentage of hours expended on BF Borgers CPA PC’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%. 21 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Exhibit No. Description 3.1 Articles of Incorporation filed with the Florida Department of State on March 7, 2013 (incorporated by reference to the Company’s Form S-1 Registration Statement filed on May 15, 2018) 3.2 Articles of Amendment to Articles of Incorporation filed with the Florida Department of State on May 11, 2018 (incorporated by reference to the Company’s Form S-1 Registration Statement filed on May 15, 2018) 3.3 Bylaws of Registrant (incorporated by reference to the Company’s Registration Statement on Form S-1 filed on May 15, 2018) 3.4 Articles of Amendment to Articles of Incorporation Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock (incorporated by reference to the Company’s Current Report on Form 8-K filed on December 26, 2019) 3.6 Articles of Amendment to Articles of Incorporation filed with the Florida Department of State on March 15, 2022 (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 21, 2022) 4.1 Warrant, dated November 22, 2021 issued to MacRab LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 30, 2021) 4.2 Description of Securities * 10.1 Assignment of Lease Agreement between Registrant and Paradigm Shift Holdings, Inc. and Palm Vacation Group for Palm Aire Location (incorporated by reference to the Company’s Registration Statement on Form S-1 filed on May 15, 2018) 10.2 Assignment of Lease Agreement between Registrant and Paradigm Holdings, Inc. and Sea Garden Beach and Tennis Resort, Inc. for Sea Garden Location (incorporated by reference to the Company’s Registration Statement on Form S-1 filed on May 15, 2018) 10.3 Online Virtual Office Arrangement between Registrant and Regis Management Group, LLC commencing July 1, 2018 (incorporated by reference to the Company’s Registration Statement on Form S-1 filed on May 15, 2018) 10.4 Form of 8% Convertible Debenture (incorporated by reference to the Company’s Registration Statement on Form S-1/A filed on July 11, 2018) 10.5 Form of Convertible Debenture, 2018-9 Offering (incorporated by reference to the Company’s Annual Report on Form 10-K filed April 16, 2019) 10.6 Consulting Agreement, dated April 22, 2021, between the Company and Fransmart, LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed on April 28, 2021) 22 10.7 Development Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed June 23, 2020) 10.8 Distribution Financing -Lead Generation Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed June 23, 2020) 10.9 Registration Rights Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed June 23, 2020) 10.10 Investor Relations Consulting Agreement, between the Company and HIR Holdings, LLC (incorporated by reference to Company’s quarterly Report on Form 10-Q filed on November 13, 2020) 10.11 Corporate Communication Consulting Agreement between the Company and Impact IR (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2020) 10.12 Standby Equity Commitment Agreement, dated November 22, 2021, between the Company and MacRab LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 30, 2021 ) 10.13 Registration Rights Agreement, dated November 22, 2021, between the Company and MacRab LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 30, 2021) 21.1 List of Subsidiaries * 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 101.INS Inline XBRL Instances Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). * Filed herewith. ITEM 16. FORM 10-K SUMMARY None. 23 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. KISSES FROM ITALY INC. Dated: April 15 , 2022 By: s/ Michele Di Turi Michele Di Turi, C o-Chief Executive Officer and President ( Principal Executive Officer) By: s/ Claudio Ferri Claudio Ferri, Principal Financial and Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. s/ Michele Di Turi April 15, 2022 Michele Di Turi, Director s/ Claudio Ferri April 15, 2022 Claudio Ferri, Director s/ Leonardo Fraccalvieri April 15, 2022 Leonardo Fraccalvieri, Director 24