Kisses From Italy Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to the Financial Statements, the notes thereto, and the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, which Financial Statements, notes and report are incorporated herein by reference. Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 6771 ) F-1 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-2 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022 F-3 Consolidated Statement of Changes in Stockholders’ Deficit for the Two Years Ended December 31, 2023 F-4 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 F-6 Notes to Consolidated Financial Statements F-7 35 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM VICTOR MOKUOLU, CPA PLLC Accounting | Advisory | Assurance & Audit | Tax To the Board of Directors and Stockholders of Kisses From Italy Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Kisses From Italy Inc. (“the Company”) as of December 31, 2023, and the related consolidated statements of operations, changes in stockholders' deficit, and cash flows, for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. 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 3, Going Concern and Liquidity, to the financial statements, the Company has an accumulated deficit of $19,577,936 for the year ended December 31, 2023, and had working capital deficit of $789,627 at December 31, 2023. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Emphasis of a Matter The audit of the consolidated balance sheet of Kisses From Italy Inc. as of December 31, 2022, the related consolidated statement of operations, changes in stockholders' deficit, and cash flows, for the year then ended, and the related notes for the year then ended was completed by BF Borgers CPA PC. We have served as the Company’s auditor since 2024. /s/ Victor Mokuolu, CPA PLLC Houston, Texas July 15, 2024 PCAOB ID: 6771 F- 1 Kisses From Italy Inc. Consolidated Balance Sheets December 31, December 31, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 24,842 $ 324,493 Accounts receivable 5,117 13,470 Other receivables – 49,190 Inventory 11,917 14,359 Total current assets 41,876 401,511 Property and equipment, net – 3,687 Equipment not in service 40,852 40,852 Right of use assets – 473,561 Other Assets 2,745 2,745 Total assets $ 85,473 $ 922,355 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 114,456 $ 86,393 Accrued liabilities 42,049 149,393 Lease liability - short term – 45,577 Notes payable - related party 250,000 262,171 Convertible notes 425,000 488,400 Derivative liability – 73,398 Total current liabilities 831,505 1,105,333 Notes payable - long term-related party 102,497 – Lease liability - long term – 427,984 Total liabilities 934,002 1,533,317 Stockholders’ Deficit: Preferred stock, Series A $ 0.001 par value. 1,500,000 shares authorized; zero shares issued and outstanding – – Preferred stock, Series B $ 0.001 par value. 5,000,000 shares authorized; zero shares issued and outstanding – – Preferred stock, Series C, $ 0.001 par value 1,000,000 shares authorized; 175,080 shares and 145,080 shares issued and outstanding as of December 31, 2023 and December 31 2022, respectively 175 145 Common stock, $ 0.001 par value, 650,000,000 shares authorized; 336,763,187 and 189,216,582 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively 336,763 189,216 Additional paid-in capital 18,392,470 13,939,053 Accumulated deficit ( 19,577,936 ) ( 14,706,391 ) Total Kisses From Italy Inc. Stockholders’ Deficit ( 848,528 ) ( 577,977 ) Non-controlling interest ( 32,985 ) ( 32,985 ) Total Stockholders’ deficit ( 881,513 ) ( 610,962 ) Total liabilities and deficit $ 85,473 $ 922,355 The accompanying notes are an integral part of the consolidated financial statements. F- 2 Kisses From Italy Inc. Consolidated Statements of Operations Year Year Ended Ended December 31, December 31, 2023 2022 Food sales $ 225,953 $ 391,447 Cost of goods sold 118,005 213,106 Gross profit 107,948 178,341 Operating expenses: Depreciation and amortization 39,624 2,107 Stock based compensation-related party 2,481,300 – Stock based compensation 312,543 5,170 Payroll and other expenses 147,890 122,837 Rent 110,587 133,526 Consulting and professional fees 323,688 178,155 General and administrative 253,826 234,784 Total operating expenses 3,669,458 676,580 Loss from operations ( 3,561,510 ) ( 498,239 ) Other income Interest (expense) ( 1,455,389 ) ( 323,441 ) Other income (expense) 71,955 – Gain on the extinguishment of debt – 34,373 Change in the fair value of the derivative liability 73,398 ( 73,398 ) Total other (expense) ( 1,310,036 ) ( 362,466 ) Loss before income taxes ( 4,871,545 ) ( 860,705 ) Provision for income taxes (benefit) – – Net loss ( 4,871,545 ) ( 860,705 ) Less: net income (loss) attributable to non-controlling interests – ( 13,320 ) Net loss attributable to Kisses From Italy, Inc. $ ( 4,871,545 ) $ ( 847,385 ) Basic (loss) per common share $ ( 0.02 ) $ ( 0.00 ) Diluted (loss) per common share $ ( 0.02 ) $ ( 0.00 ) Weighted average number of shares outstanding: Basic 256,617,701 184,929,538 Diluted 256,617,701 184,929,538 The accompanying notes are an integral part of the consolidated financial statements. F- 3 Kisses from Italy Inc. Consolidated Statements of Changes in Stockholders’ Deficit Preferred Stock Preferred Stock Preferred Stock Series A Series B Series C Shares Value Shares Value Shares Value Balance, December 31, 2021 – $ – – $ – 240,080 $ 240 Stock based compensation – – – – – – Issuance of Series C Preferred Stock – – – – 5,000 5 Conversion of Series C Preferred to Common stock – – – – ( 100,000 ) ( 100 ) Issuance of common stock as financing commitment shares – – – – – – Conversion of convertible notes and accrued interest into common stock – – – – – – Issuance of warrants in connection with debt – – – – – – Non-controlling interest, net income (loss) – – – – – – Net income (loss) – – – – – – Balance, December 31, 2022 – $ – – $ – 145,080 $ 145 Additional Non- Total Common Stock Paid-in controlling Accumulated Stockholders’ Shares Value Capital Interest Deficit Equity Balance, December 31, 2021 180,913,582 $ 180,913 $ 13,702,813 $ ( 19,665 ) $ ( 13,859,006 ) $ 5,295 Stock based compensation – – 5,170 – – 5,170 Issuance of Series C Preferred Stock – – 4,995 – – 5,000 Conversion of Series C Preferred to Common stock 3,000,000 3,000 ( 2,900 ) – – – Issuance of common stock as financing commitment shares 1,607,000 1,607 73,977 – – 75,584 Conversion of convertible notes and accrued interest into common stock 3,696,000 3,696 54,331 – – 58,027 Issuance of warrants in connection with debt – – 100,667 – – 100,667 Non-controlling interest, net income (loss) – – – ( 13,320 ) – ( 13,320 ) Net (loss) – – – – ( 847,385 ) ( 847,385 ) Balance, December 31, 2022 189,216,582 $ 189,216 $ 13,939,053 $ ( 32,985 ) $ ( 14,706,391 ) $ ( 610,962 ) The accompanying notes are an integral part of the consolidated financial statements. F- 4 Kisses from Italy Inc. Consolidated Statements of Changes in Stockholders’ Deficit continued Preferred Stock Preferred Stock Preferred Stock Series A Series B Series C Shares Value Shares Value Shares Value Balance, December 31, 2022 – $ – – $ – 145,080 $ 145 Stock based compensation for services – – – – – – Common stock issued for accounts payable – – – – – – Issuance of common stock as financing commitment shares – – – – – – Conversion of convertible notes and accrued interest into common stock – – – – – – Issuance of warrants for financing – – – – – – Stock based compensation for- services related party – – – – – – Sale of common shares pursuant to the Company’s equity line of credit – – – – – – Issuance of preferred shares to pay accrued interest – – – – 30,000 30 Warrant exercises for commitment fees – – – – – – Noncontrolling interest – – – – – – Net loss – – – – – – Balance December 31, 2023 – $ – – $ – 175,080 $ 175 Additional Non- Total Common Stock Paid-in controlling Accumulated Stockholders’ Shares Value Capital Interest Deficit Deficit Balance, December 31, 2022 189,216,582 $ 189,216 $ 13,939,053 $ ( 32,985 ) $ ( 14,706,391 ) $ ( 610,962 ) Stock based compensation for services 9,161,034 9,161 303,382 – – 312,543 Common stock issued for accounts payable 1,301,952 1,302 30,748 – – 32,050 Issuance of common stock as financing commitment shares 14,000,000 14,000 462,000 – – 476,000 Conversion of convertible notes and accrued interest into common stock 18,855,890 18,856 467,344 – – 486,200 Issuance of warrants for financing – – 56,630 – – 56,630 Stock based compensation for- services related party 78,000,000 78,000 2,403,300 – – 2,481,300 Sale of common shares pursuant to the Company’s equity line of credit 2,392,416 2,392 62,681 – – 65,073 Issuance of preferred shares to pay accrued interest – – 29,970 – – 30,000 Warrant exercises for commitment fees 23,835,313 23,835 637,362 – – 661,197 Noncontrolling interest – – – – – 0 Net loss – – – – ( 4,871,545 ) ( 4,878,545 ) Balance December 31, 2023 336,763,187 $ 336,763 $ 18,392,470 $ ( 32,985 ) $ ( 19,577,936 ) $ ( 881,513 ) The accompanying notes are an integral part of the consolidated financial statements. F- 5 Kisses From Italy Inc. Consolidated Statements of Cash Flows Year Year Ended Ended December 31, December 31, 2023 2022 Cash flows from operating activities: Net (loss) $ ( 4,871,545 ) $ ( 847,385 ) Balances attributable to non-controlling interest 32,985 ( 13,320 ) Depreciation and amortization 39,624 2,107 (Gain) on the extinguishment of debt – ( 34,373 ) Stock-based compensation for services 2,793,843 5,170 Change in the fair market value of derivative liability ( 73,398 ) 73,398 Issuance of financing commitment shares 476,000 75,584 Issuance of financing commitment warrants and exercises 717,827 100,667 Changes in operating assets and liabilities: Accounts receivable 8,353 ( 570 ) Account receivable-other 49,190 ( 747 ) Inventory 2,442 ( 9,089 ) Accounts payable 96,973 33,731 Accrued liabilities ( 107,344 ) 35,688 Net cash (used in) operating activities ( 835,051 ) ( 579,140 ) Cash flows from investing activities: Purchase of fixed assets – ( 40,852 ) Net cash (used in) financing activities – ( 40,852 ) Cash flows from financing activities: Proceeds from equity line 65,073 – Proceeds from notes payable-related party 102,497 250,000 Repayment of notes payable-related party ( 12,171 ) – Proceeds from convertible notes 450,000 550,000 Repayment of convertible notes ( 70,000 ) – Proceeds from the sale of preferred stock – 5,000 Net cash provided by financing activities 535,399 805,000 Net increase (decrease) in cash and cash equivalents ( 299,651 ) 185,008 Cash and cash equivalents at beginning of period 324,493 139,485 Cash and cash equivalents at end of period $ 24,842 $ 324,493 Supplemental disclosure of cash flow information: Cash paid for interest $ – $ – Cash paid for income taxes $ – $ – Supplemental disclosure of non-cash investing and financing activities Conversion of convertible notes and accrued interest into common stock $ 486,200 $ 58,027 Reduction of accounts payable and accrued interest with common stock $ 62,050 $ – The accompanying notes are an integral part of the consolidated financial statements. F- 6 KISSES FROM ITALY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Kisses From Italy Inc. (the “Company”) was incorporated in Florida on March 7, 2013. The Company’s accounting year-end is December 31. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company 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. Kisses-Palm Sea Royal closed its store on September 30, 2023 but remained as an operating entity. Management is actively evaluating current market conditions and exploring the possibility of relocating our operations to other areas within South Florida. This decision stems from our ongoing commitment to strategic growth and optimizing our operational footprint. The consideration to relocate is driven by several factors, including but not limited to: Market Dynamics: Analysis of market trends and opportunities suggests potential advantages in certain geographic locations within South Florida that align more closely with our strategic objectives. Operational Efficiency: Evaluating alternative locations may provide opportunities to enhance operational efficiency, reduce costs, and improve service delivery to our customers. Infrastructure and Resources: Assessing the availability of suitable infrastructure, resources, and talent pool in different areas to support our long-term growth plans. At this time it has not been considered discontinued operations in accordance with ASC 205-20 because the division has not been disposed of nor is disposal in the plan. Use of Estimates The preparation of consolidated financial statements in conformity 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and the allowance for doubtful accounts, inventories, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. F- 7 Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the net value of the 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 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. 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, 2023, and December 31, 2022, our trade receivables amounted to $ 5,117 and $ 13,470 respectively, with an allowance for doubtful accounts of $- 0 - for both periods. Other Receivables As of December 31, 2023, the balance of other receivables was $ 0 . Foreign Currency Translation The functional and reporting currency of the Company’s Bari location in Italy is the Euro. Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. To date, this difference has been immaterial for the Bari location. Transactions denominated in currencies other than the functional currency, such as the Company’s current retails sales in Canada for Kisses From Italy branded products, are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet 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 occurs. Revenue Recognition The Company recognizes revenue under the guidelines of ASC 606. Sales, as presented in the Company’s consolidated statement of operations, represent franchise revenue; and food and beverage products 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: 1. Identify the contract with the client, 2. Identify the performance obligations in the contract, 3. Determine the transaction price, 4. Allocate the transaction price to performance obligations in the contract 5. Recognize revenues when or as the Company satisfies a performance obligation At the corporate owned restaurants all five steps of revenue recognition occur almost simultaneously. The customer orders food from a menu, it is prepared, delivered to the customer who then pays for the food order at the cash register. Our restaurant business represented approximately 95 % of our revenue for the years ended December 31, 2023 and December 31, 2022. F- 8 For our branded retail products goods sold in Canada, the Company receives a detailed purchase order from grocery store retailers that specifies the goods ordered, their price, payment terms and the required delivery date. Once the delivery of items on the purchase order is made to the client and title passes to the retailer, the Company has met its performance obligation and recognizes revenue. Non-controlling interest A non-controlling interest represents third-party ownership in the net assets of one of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority-owned subsidiary consolidated with those of the Company’s wholly-owned subsidiaries, with any third-party investor’s interest shown as non-controlling interest. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On December 31, 2023 and December 31, 2022, the Company’s cash equivalents totaled $ 24,842 and $ 324,493 , respectively. Property and equipment Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in the results of operations. The estimated useful lives of property and equipment are as follows: Schedule of estimated useful lives of property Computers, software, and office equipment 1 – 6 years Machinery and equipment 3 – 5 years Leasehold improvements Lesser of lease term or estimated useful life Income taxes The Company accounts for income taxes under the Financial Accounting Standards Board (“FASB”) ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05,“Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit. On December 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 the consolidated financial statements. The Company adopted this guidance on January 1, 2021 which had no impact on the Company’s consolidated financial statements. F- 9 Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. As of December 31, 2023 and December 31, 2022, the balance of the derivative liability was $- 0 - and $ 73,398 , respectively. Stock-based Compensation The Company accounts for stock-based compensation 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. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. On November 15, 2019, the FASB 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 emerging growth company and has a calendar-year end, the Company was eligible for deferring the adoption of ASC 842 to January 1, 2022. In the first quarter of fiscal 2022, we adopted ASU 2016-02 related solely to operating leases at our store locations. The most significant impact of adoption was the recognition of right of use operating lease assets and right of use operating lease liabilities of approximately $ 562,000 each, respectively. As of December 31, 2023, we have one operating lease on a month-to-month basis. As a result, we reduced the right of use assets and lease liabilities to $- 0 - as of December 31, 2023. Inventory Inventory is comprised of wholesale food inventory at our retail operations. The value of the food at our US locations is very minimal at any one time and is charged to cost of sales as soon as it arrives at the store. Our US locations do not have liquor licenses. The balance of inventory on December 31, 2023 and December 31, 2022 was $ 11,917 and $ 14,359 , respectively. F- 10 Net Loss per Share Net loss per common share is computed by dividing 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. Due to the Company’s net losses for the years ended December 31, 2023 and December 31, 2022, all of its outstanding stock options, warrants, and shares issuable if convertible notes or Preferred C shares was converted to common stock; are all considered anti-dilutive. The number of these anti-dilutive equivalents was not calculated and are excluded from the calculation of net loss per share. Recent Accounting Pronouncements In August 2020, FASB issued ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The Company adopted this guidance on January 1, 2022. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. The Company will be required to adopt this ASU for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of Topic 326 is not expected to have a material effect on the Company’s consolidated financial statements and financial statement disclosures. NOTE 3 – GOING CONCERN AND LIQUIDITY As of December 31, 2023 the Company had cash on hand of $ 24,842 , negative working capital of $ 789,627 and an accumulated deficit of $ 19,577,936 . Management has concluded that these consolidated 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. 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. Any 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, 2023 and December 31, 2022, the Company had $- 0 - and $ 3,687 in property and equipment respectively. As of December 31, 2023 all property and equipment and leaseholds at its US locations had been fully depreciated. Also, as of the December 31, 2023 and 2022 we had $ 40,852 of equipment not in service. F- 11 NOTE 5 – ACCRUED LIABILITIES The following table sets forth the components of the Company’s accrued liabilities on December 31, 2023 and December 31, 2022. Schedule of accrued and other liabilities December 31, 2023 December 31, 2022 Sales tax payable $ 2,686 $ 3,957 Accrued interest payable 39,363 50,330 Payroll tax liabilities – 95,106 Total accrued liabilities (1) $ 42,049 $ 149,393 _________________ (1) As of December 31, 2023 the Company had no payroll tax liabilities. NOTE 6 – PROMISSORY NOTES PAYABLE-RELATED PARTIES As of December 31, 2023 and December 31, 2022, the balance of notes payable was $ 352,497 and $ 262,171 , respectively. The balance as of December 31, 2023 is comprised of three unsecured 8 % notes payable amounting to $ 250,000 , $ 58,507 , and $ 43,990 extended to the Company by a significant shareholder of the Company that matures on July 13, 2024 . NOTE 7 – CONVERTIBLE NOTES As of December 31, 2023 and December 31, 2022, the outstanding principal balance of convertible notes was $ 425,000 and $ 488,400 , respectively. On April 11, 2022, the Company entered into a securities purchase agreement, dated as of April 6, 2022, (the “Talos Purchase Agreement”) with Talos Victory Fund, LLC, a Delaware limited liability company (“Talos”), pursuant to which the Company issued to Talos a promissory note in the principal amount of $ 165,000 (the “Talos Note”). The Company received $ 148,500 gross proceeds from Talos due to the original issue discount on the Talos Note. In connection with the execution and delivery of the Talos Purchase Agreement and the issuance of the Talos Note, the Company issued to Talos 500,000 commitment shares and a warrant to purchase an additional 1,650,000 shares of common stock of the Company at an exercise price of $ 0.10 . On April 13, 2022, the Company entered into a securities purchase agreement, dated as of April 11, 2022, (the “Blue Lake Purchase Agreement”) with Blue Lake Partners, LLC, a Delaware limited liability company (“Blue Lake”), pursuant to which the Company issued to Blue Lake a promissory note in the principal amount of $ 165,000 (the “Blue Lake Note”). The Company received $ 148,500 gross proceeds from Blue Lake due to the original issue discount on the Blue Lake Note. In connection with the execution and delivery of the Blue Lake Purchase Agreement and the issuance of the Blue Lake Note, the Company issued to Blue Lake 500,000 commitment shares and a warrant to purchase an additional 1,650,000 shares of common stock of the Company at an exercise price of $ 0.10 . On May 13, 2022, the Company entered into a securities purchase agreement, dated as of May 11, 2022, (the “Fourth Man Purchase Agreement”) with Fourth Man, LLC (“Fourth Man”), pursuant to which the Company issued to Fourth Man a promissory note in the principal amount of $ 150,000 (the “Fourth Man Note”). The Company received $ 135,000 gross proceeds from Fourth Man due to the original issue discount on the Fourth Man Note. In connection with the execution and delivery of the Fourth Man Purchase Agreement and the issuance of the Fourth Man Note, the Company issued to Fourth Man, 607,000 commitment shares and a warrant to purchase an additional 1,500,000 shares of common stock of the Company. Each of the notes bear interest at 12 % and has a fixed price conversion to common stock at $ 0.025 per share. F- 12 Using the Black Scholes model, the Company recording a financing expense of $ 97,453 for the total of 4,800,000 warrants issued on the Talos Note, Blue Lake Note and the Fourth Man Note. During the three months ended September 30, 2022, the Company granted an underwriter 162,000 warrants exercisable for five years at an exercise price of $ 0.11 , and 56,250 warrants exercisable for five 5 years at $ 0.12 per share. Using the Black Scholes model, the Company recording a financing expense of $ 3,214 for these warrants. As a result of the above transactions, the Company has recorded $ 100,167 in total financing fees in 2022 on these warrants issued to the noteholders and the underwriter. As of June 30, 2022 the Talos Note, Blue Lake Note and the Fourth Man Note had converted their convertible notes to equity and no balance or accrued interest was due to these lenders. On July 26, 2022 the Company entered into a $ 70,000 convertible note agreement at 9 % interest with a maturity date of July 26, 2023 with 1800 Diagonal Lending LLC (“Diagonal”). Under the terms of the note agreement Diagonal had the right to convert its note at a discount of 35% to the Company’s lowest trading price in the 10 days prior to conversion. On January 23, 2023 the Company paid off this $ 70,000 convertible note along with accrued interest of $ 3,863 and a $ 20,000 prepayment penalty for a total payment of $ 93,863 . On February 13, 2023 the Company entered into a new $ 70,000 note with a 180 maturity on the same terms as the previous $ 70,000 note. On May 24, 2022, the Company, entered into a Securities Purchase Agreement (the “JSC Purchase Agreement”) with Jefferson Street Capital LLC, a New Jersey limited liability company (“JSC”), pursuant to which the Company issued to JSC a promissory note in the principal amount of $ 110,000 .00 (the “JSC Note”). The Company received $ 100,000 .00 gross proceeds from JSC due to the original issue discount on the Note. In connection with the execution and delivery of the Purchase Agreement and the issuance of the Note, the Company issued to JSC 500,000 commitment shares (the “JSC Commitment Shares”) and a warrant to purchase an additional 1,000,000 shares of common stock of the Company (the “JSC Warrant”). The JSC Note bears interest at a rate of 10 % per annum and is due and payable no later than February 9, 2024. Although the Company has the right to prepay the JSC Note without penalty, the annual interest is due if the JSC Note is paid in full by the Company prior to maturity. Upon default of the Note, the interest increases to 15 %. The JSC Note is convertible at a fixed conversion price of $ 0.01 (the “JSC Conversion Price”), subject to standard adjustments. If the Company issues securities for less than the JSC Conversion Price, the JSC Conversion Price shall be reduced to such an amount. The JSC Warrant provides for the purchase of up to 1,000,000 shares of the Company’s common stock (the “JSC Warrant Shares”) at an exercise price of $ 0.10 per share. The JSC Warrant is exercisable on the earlier of 180 days from the date it was issued or when a registration statement covering the JSC Warrant Shares is declared effective. The JSC Warrant may be exercised on a cashless basis unless a registration statement covering the JSC Warrant Shares has been declared effective at the time of exercise. The number of the JSC Warrant Shares is subject to customary adjustments. On June 6, 2023, but effective on June 12, 2023, the Company, entered into a Securities Purchase Agreement (the “Firstfire Purchase Agreement”) with Firstfire Global Opportunity Fund, LLC, a Delaware limited liability company (“Firstfire”), pursuant to which the Company issued to Firstfire a promissory note in the principal amount of $ 110,000 .00 (the “Firstfire Note”). The Company received $ 100,000 gross proceeds from Firstfire due to the original issue discount on the Note. In connection with the execution and delivery of the Firstfire Purchase Agreement and the issuance of the Firstfire Note, the Company issued to Firstfire 500,000 commitment shares (the “Firstfire Commitment Shares”) and a warrant (the “Firstfire Warrant”; and together with the Firstfire Purchase Agreement and the Firstfire Note, the “Firstfire Transaction Documents”) to purchase an additional 1,000,000 shares of common stock of the Company. F- 13 The Firstfire Note bears interest at a rate of 10 % per annum and is due and payable on June 5, 2024. Although the Company has the right to prepay the Firstfire Note without penalty, the annual interest is due if the Firstfire Note is paid in full by the Company prior to maturity. Upon default of the Firstfire Note, the interest increases to the lesser of 18 % per annum or the maximum amount permitted by law. The Firstfire Note is convertible at the option of Firstfire, at any time at a fixed conversion price of $ 0.01 (the “Firstfire Conversion Price”), subject to standard adjustments. If the Company issues securities for less than the Firstfire Conversion Price, the Firstfire Conversion Price shall be reduced to such an amount. The Firstfire Warrant issued to Firstfire provides for the purchase of up to 1,000,000 shares of the Company’s common stock (the “Firstfire Warrant Shares”) at an exercise price of $ 0.10 per share. The Firstfire Warrant is exercisable commencing on the date of issuance and ending on the five-year anniversary of the date of issuance. The Firstfire Warrant may be exercised on a cashless basis, and the number of Firstfire Warrant Shares is subject to customary adjustments. The Company’s sales of shares of common stock to Firstfire under the Firstfire Transaction Documents are limited to no more than the number of shares that would result in the beneficial ownership Firstfire and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Common Stock. The Company and Firstfire made certain representations and warranties to each other that are customary for transactions similar to this one, subject to specified exceptions and qualifications. On June 16, 2023 the Company paid off its $ 70,000 Diagonal Note along with $ 20,067 in accrued interest and fees. On June 21, 2023, the Company entered into an amendment (the “Amendment”) to the JSC Warrant with JSC, pursuant to which the parties provided that any stock issuances to MacRab LLC, officers, directors, vendors, and suppliers of the Company in satisfaction of amounts owed to such parties, would not result in an adjustment to the exercise price. In consideration for the Amendment, the Company issued 3,000,000 shares of Common Stock to JSC. NOTE 8 – STOCKHOLDERS EQUITY Common Stock The Company has authorized 650,000,000 shares of common stock. On December 31, 2023 and December 31, 2022, there were 336,763,187 and 189,216,582 shares of common stock issued and outstanding, respectively, with a $ 0.001 par value per share. During the three months ended December 31, 2023, the Company issued the following shares of common stock: · 22,000,000 shares were issued for related party services which were valued at $ 286,000 · 411,034 shares were issued for services which were valued at $ 5,343 · 6,954,545 shares were issued as commitment fees with the exercise of warrants which were valued at $ 79,977 · 3,800,000 shares valued at $ 52,700 were issued upon the conversion of convertible notes and accrued interest · 850,000 shares valued at $ 17,000 were issued upon the conversion of accounts payable During the three months ended September 30, 2023, the Company issued the following shares of common stock: · 30,000,000 shares were issued for related party services which were valued at $ 1,215,000 · 1,000,000 shares were issued for services which were valued at $ 34,000 · 16,880,768 shares were issued upon the exercise of warrants which were valued at $ 581,219 · 4,000,000 shares valued at $ 131,000 were issued as a commitment fee to obtain financing · 890,914 common shares were sold pursuant to the Company’s credit line for gross proceeds of $ 15,072 F- 14 During the three months ended June 30, 2023, the Company issued the following shares of common stock: · 26,000,000 shares were issued for related party services which were valued at $ 980,300 · 1,750,000 shares were issued for services which were valued at $ 66,500 · 6,503,000 shares were issued upon the conversion of convertible notes and accrued interest. These shares were valued at $ 234,400 . · 4,000,000 shares valued at $ 147,000 were issued as a commitment fee to obtain financing · 1,501,502 common shares were sold pursuant to the Company’s credit line for gross proceeds of $ 50,000 During the three months ended March 31, 2023, the Company issued the following shares of common stock: · 6,000,000 shares for services valued at $ 206,700 · 6,000,000 shares for financing commitments valued at $ 198,000 · 8,552,000 shares upon the conversion of convertible notes and accrued interest valued at $ 381,860 · 451,952 shares to pay off an accounts payable balance of $ 15,050 During the year ended December 31, 2022, the Company issued the following shares of stock: · 3,000,000 shares upon the conversion of Series C Stock · 1,607,000 shares for financing commitments valued at $ 97,453 · 3,696,000 shares upon the conversion of convertible notes valued at $ 58,027 Preferred 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 of Designation governing the Series A Stock, the Series B Stock and the Series C Stock is as follows: Series A Stock The Series A Stock is not convertible. Each share of Series A Stock shall entitle the holder to three hundred votes for each share of Series A Stock. Any amendment to the Certificate of Designation requires the consent of the holders of at least two-thirds of the shares of Series A Stock then outstanding. The holders of Series A Stock are not entitled to dividends until and unless determined by the Board of Directors of the Company. Liquidation Preference No distribution shall be made to holders of shares of capital stock ranking junior to the Series A Preferred Stock upon liquidation, dissolution or winding-up of the Company. The Series A Stock ranks pari passu with the Series C Stock. There were no shares of Series A Stock outstanding as of December 31, 2023 and December 31, 2022. F- 15 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 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 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. Liquidation Preference The holders of Series B Stock shall not be entitled to any distributions upon a liquidation of the Company. Restrictions of Transferability The shares of the Series B Stock shall not, directly, or indirectly, be sold, hypothecated, transferred, assigned, or disposed of in any manner without the prior written consent of the Board and applicable securities laws. There were no shares of Series B Stock outstanding as of December 31, 2023, or December 31, 2022. 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 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 by the Board. Liquidation Preference Upon any liquidation of the Company, the holders of Series C Stock shall be entitled to the amount paid for the shares of Series C Stock prior to the holders of shares ranking junior to the Series C Stock. Upon the holders of the Series C Stock and any series of stock ranking pari passu with the Series C Stock having received distributions to which they are entitled, the remaining assets of the Company shall be distributed to the other holders pro rata in proportion to the shares held by each holder. Restrictions of Transferability The 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, 2023, and December 31, 2022 there were 175,080 and 145,080 shares of Series C Stock outstanding, respectively, which were purchased at a price of $ 1.00 per share. F- 16 On July 11, 2023 (the “Issue Date”), the Company, entered into a Securities Purchase Agreement (the “GSC Purchase Agreement”) with GS Capital Partners, LLC, (“GSC”), pursuant to which the Company issued to GSC a 10 % promissory note in the principal amount of $ 115,000 .00 (the “GSC Note”). The Company received $ 105,000 .00 gross proceeds from GSC due to the original issue discount on the GSC Note of $ 10,000 . In connection with the execution and delivery of the GSC Purchase Agreement and the issuance of the GSC Note, the Company issued to GSC 500,000 commitment shares (the “GSC Commitment Shares”) and a warrant to purchase an additional 862,500 shares of common stock of the Company (the “GSC Warrant”) at an exercise price of $ 0.10 per share (the “GSC Exercise Price”). In addition to the Commitment Shares, the Company issued 1,500,000 returnable shares to GSC (the “Returnable Shares”), which are held in book-entry and returnable to the Company by GSC unless there is an uncured default during the 12-month term of the GSC Note. The GSC Note bears interest at a rate of 10 % per annum, at a fixed conversion price of $ 0.01 (the “GSC Conversion Price”) and is due and payable no later than July 11, 2024. Interest on the GSC Note is payable in shares of the Company’s common stock (the “Common Stock”) commencing on the Issue Date. The Note may be prepaid at an amount equal to 110% of the principal plus accrued interest within 180 days. The GSC Note can be accelerated upon the occurrence of an event of default, which shall occur, among other events, (i) if the Company defaults in the payment of principal or interest on the GSC Note or any other note issued to GSC by the Company, (ii) if a majority of the members of the board of directors of the Company on the Issue Date are no longer serving as members of the board, (iii) the Company is not current in its filings with the Securities and Exchange Commission, (iv) if the Common Stock are delisted from an exchange (including the OTC Market exchange), or if the Common Stock trades on an exchange, and trading in the Common Stock is suspended for more than 10 consecutive days, or (v) the Company ceases to file its reports under the Securities Act of 1933, as amended (the “Act”). Upon an event of default, interest on the GSC Note shall accrue at a default interest rate of 24 % per annum, and the GSC Conversion Price shall decrease from $ .01 per share to $ 0.005 per share. The parties agree that while any principal amount, interest or fees, or expenses are still outstanding under the GSC Note, the Company will not enter into any public or private offering of its securities in which the Company receives cash proceeds in the aggregate of more than $ 450,000 with another investor or investor that establishes rights or benefiting such other investor or investors in any manner more favorable in any material respect than the rights and benefits established in favor of GSC. The GSC Warrant provides for the purchase of up to 862,500 shares of the Common Stock (the “GSC Warrant Shares”) at the GSC Exercise Price and is exercisable at any time on or after the Issue Date and terminating on the five-year anniversary of the Issue Date. The GSC Warrant may be exercised, in whole or part, on a cashless basis unless a registration statement covering the GSC Warrant Shares is effective at the time of exercise, entitling GSC to receive the number of shares calculated based on the closing price of the Common Stock immediately preceding the date on which GSC elects to a cashless exercise of the GSC Warrant at the GSC Exercise Price, as adjusted. The Company’s sales of shares of Common Stock to GSC under the GSC Purchase Agreement is limited to no more than the number of shares that would result in the beneficial ownership by the Buyer and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Common Stock. The Company and GSC made certain representations and warranties to each other that are customary for transactions similar to this one, subject to specified exceptions and qualifications. On August 22, 2023 (the “Coventry Issue Date”), the Company entered into a Securities Purchase Agreement (the “Coventry Purchase Agreement”) with Coventry Enterprises, LLC, (“Coventry”), pursuant to which the Company issued to Coventry a 10% promissory note in the principal amount of $ 115,000 .00 (the “Coventry Note”). The Company received $ 105,000 .00 gross proceeds from Coventry due to the original issue discount of $ 10,000 . In connection with the execution and delivery of the Coventry Purchase Agreement and the issuance of the Coventry Note, the Company issued to Coventry 500,000 commitment shares (the “Coventry Commitment Shares”) and a warrant to purchase an additional 862,500 shares of Common Stock (the “Coventry Warrant”) at an exercise price of $ 0.10 per share (the “Exercise Price”). In addition to the Coventry Commitment Shares, the Company issued 1,500,000 returnable shares to Coventry, which are held in book-entry and returnable to the Company by Coventry unless there is an uncured default during the 12-month term of the Coventry Note. F- 17 The Coventry Note bears interest at a rate of 10 % per annum, at a fixed conversion price of $ 0.01 (the “Conversion Price”) and is due and payable no later than August 22, 2024. Interest on the Coventry Note is payable in shares of Common Stock commencing on the Coventry Issue Date. The Coventry Note and all accrued interest on the Coventry Note may be prepaid in whole or in part without premium or penalty of any type. The Coventry Note can be accelerated upon the occurrence of an event of default, which shall occur, among other events, (i) if the Company defaults in the payment of principal or interest on the Coventry Note or any other note issued to Coventry by the Company, (ii) if a majority of the members of the board of directors of the Company on the Coventry Issue Date are no longer serving as members of the board, (iii) the Company is not current in its filings with the Securities and Exchange Commission, (iv) if the Common Stock are delisted from an exchange (including the OTC Market exchange), or if the Common Stock trades on an exchange, and trading in the Common Stock is suspended for more than 10 consecutive days, or (v) the Company ceases to file its reports under the Act. Upon an event of default, interest on the Coventry Note shall accrue at a default interest rate of 24 % per annum, and the Conversion Price shall decrease from $ .01 per share to $ 0.005 per share. The Warrant provides for the purchase of up to 862,500 shares of Common Stock (the “Warrant Shares”) at the Exercise Price and is exercisable at any time on or after the Coventry Issue Date and terminating on the five-year anniversary of the Coventry Issue Date. The Warrant may be exercised, in whole or part, on a cashless basis unless a registration statement covering the Warrant Shares is effective at the time of exercise, entitling Coventry to receive the number of shares calculated based on the closing price of the Common Stock immediately preceding the date on which Coventry elects to a cashless exercise of the Warrant at the Exercise Price, as adjusted. The Company’s sales of shares of Common Stock to Coventry under the Purchase Agreement is limited to no more than the number of shares that would result in the beneficial ownership by Coventry and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of Common Stock. The Company and the Buyer made certain representations and warranties to each other that are customary for transactions similar to this one, subject to specified exceptions and qualifications. Stock Options As of December 31, 2023, there were 16,000,000 vested 10-year stock options outstanding. 5,333,334 options had a strike price of $0.07, 5,333,333 had a strike price of $0.25 and 5,333,333 had a strike price of $0.50 and a remaining life of 8.25 years. All options were immediately expensed during the second quarter of 2022 and the Company recorded an expense of $ 1,239,823 related to these options. There have been no stock option issuances since June 30, 2021. As of December 31, 2023, these options had no intrinsic value. NOTE 9 – SUBSEQUENT EVENTS On February 8, 2024, the Company and SC Culinary LLC entered into a termination agreement, pursuant to which the parties terminated the SAA and agreed that neither the Company nor SC Culinary has any further liability or obligation to the other with respect to the terms of the SAA, and the Company has no interest in any intellectual property rights owned or used by either SC Culinary or Scott Conant. Additionally, Scott Conant resigned from the board of directors of the Company effective immediately. On February 9, 2024, the “Company” received the letter (the "Notification Letter") from OTC Markets, Inc. notifying the Company that its bid price has closed below $0.01 for more than 30 consecutive calendar days and that the Company no longer meets the Standards for Continued Eligibility for OTCQB (the “OTCQB Standards”), which requires maintaining proprietary priced quotations published by a Market Maker in OTC Link with a minimum closing bid price of $0.01 per share on at least one of the prior 30 consecutive calendar days (the “Minimum Closing Bid Price”). F- 18 The Notification Letter states that pursuant to Section 4.1 of the OTCQB Standards, the Company was granted a cure period of 90 calendar days, or until May 9, 2024, to regain compliance with the Minimum Closing Bid Price under the OTCQB Standards. To continue trading on the OTCQB marketplace, the closing bid price for the Company’s common stock must be $0.01 or greater for 10 consecutive trading days during this 90-day cure period. On May 6, 2024, OTC Markets granted the Company an additional cure period to regain compliance with the Minimum Closing Bid Price by July 12, 2024. In addition, OTC Markets granted the Company the cure period under the OTCQB Standards to file the annual report on form 10-K for the year ended December 31, 2023, and the quarter report on Form 10-Q for the period ended March 31, 2024, with the Commission by July 12, 2024. The Company intends to regain compliance with these OTCQB Standards by July 12, 2024. On February 26, 2024, the Company dissolved its subsidiary, The Ponte San’gwich Shoppe and Italian Deli. On February 23, 2024, the Company issued 600,000 shares of Series A Preferred voting stock to each of Mr. Ferri and Mr. Di Turi. On January 26, 2024, the Company sold 2,346,674 shares through the Company’s equity line of credit for net proceeds $10,483 and an interest and fee expense of $5,567. On February 14, 2024, the Company sold 16,921,582 shares through the Company’s equity line of credit for net proceeds $14,582.89 and an interest and fee expense of $21,697. On February 28, 2024, 16,888,888 shares valued at $19,000 were issued to Jefferson Street Capital upon the conversion of convertible notes, accrued interest and fees. Effective as of May 3, 2024, Kisses from Italy Inc. dismissed BF Borgers CPA P.C. (“BF Borgers”) as its independent registered public accounting firm. The decision to change independent registered public accounting firms was made with the recommendation and approval of the Company’s board of directors. BF Borgers had served as the Company’s independent auditor since 2018. BF Borgers’ audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles, except that such reports included explanatory paragraphs with respect to the Company’s ability, in light of its accumulated losses and negative cash flows from operations, to continue as a going concern. During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through the date of this report, there were no disagreements, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, between the Company and BF Borgers on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to BF Borgers’ satisfaction, would have caused BF Borgers to make reference to such disagreements in its audit reports. During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through the date of this report, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K. The U.S. Securities and Exchange Commission (the “SEC”) has advised that, in lieu of obtaining a letter from BF Borgers stating whether or not it agrees with the statements herein, the Company may indicate that BF Borgers is not currently permitted to appear or practice before the SEC for reasons described in the SEC’s Order Instituting Public Administrative and Cease-and-Desist Proceedings pursuant to Section 8A of the Securities Act of 1933, Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order, dated May 3, 2024. Effective as of May 16, 2024, the Board of Directors of the Company unanimously approved the engagement of Victor Mokuolu, CPA PLLC (“Victor Mokuolu”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2023 and to review the Company’s unaudited financial information for each of the three quarters, March 31, 2024, June 30, 2024, September 30, 2024. During the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period through the date of this report, neither the Company nor anyone on its behalf has consulted with Victor Mokuolu regarding either (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided nor oral advice was provided to the Company that Victor Mokuolu concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was either the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph 304(a)(1)(v)) of Regulation S-K). F- 19 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.