S-1/A: Kisses From Italy Inc. Files Amendment No. 1 to Form S-1 Registration Statement for Resale of 77,081,584 Shares of Common Stock

Kisses From Italy Inc. is filing an amendment to its registration statement to allow selling stockholders to resell up to 77,081,584 shares of common stock.

Summary

• Kisses From Italy Inc. has filed Amendment No. 1 to its Form S-1 registration statement.
• The amendment covers the resale of up to 77,081,584 shares of the company's common stock by selling stockholders.
• The shares include those potentially purchased by MacRab LLC under a Standby Equity Commitment Agreement, as well as shares issuable upon exercise of warrants held by JSC, Firstfire, GS Capital Partners, and Coventry Enterprises.
• The company will not receive any proceeds from the sale of these shares by the selling stockholders, except to the extent that warrants are exercised for cash.
• The company is an emerging growth company and is subject to reduced public company reporting requirements.
• Investing in the company's common stock involves a high degree of risk, as detailed in the Risk Factors section of the prospectus.
• The company's financial condition and results of operations have been and may continue to be adversely affected by the COVID-19 pandemic or future pandemics or disease outbreaks.
• The company is vulnerable to changes in economic conditions and consumer preferences that could have a material adverse effect on our business, financial condition and results of operations.
• Changes in the cost of food could have a material adverse effect on our business, financial condition and results of operations.
• An important aspect of our growth strategy involves opening new restaurants in existing and new markets.
• We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges or opportunities, including the need to open additional restaurants.
• Incidents involving food-borne illness and food safety, including food tampering or contamination could adversely affect our brand perception, business, financial condition and results of operations.
• Damage to our reputation and negative publicity could have a material adverse effect on our business, financial condition and results of operations.
• Natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism could disrupt our business and result in lower sales, increased operating costs and capital expenditures.
• Our financial results may fluctuate from period to period as a result of several factors which could adversely affect our stock price.
• The fast-food segment of the restaurant industry is highly competitive.
• Our expansion into new markets may present increased risks due to our unfamiliarity with those areas and our target customers unfamiliarity with our brand.
• We expect to incur losses in the near future, which may impact our ability to implement our business strategy and adversely affect our financial condition.
• Failure to receive frequent deliveries of higher quality food ingredients and other supplies could harm our operations.
• If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we may not be able to achieve our anticipated level of growth and our business could suffer.
• Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.
• If we are unable to build and sustain proper information technology infrastructure, our business could suffer.
• We are dependent upon third party suppliers of our raw materials.
• Our inability to protect our trademarks, patents and trade secrets may prevent us from successfully marketing our products and competing effectively.
• We may be subject to legal claims against us or claims by us which could have a significant impact on our resulting financial performance.
• The requirements of being a public company may strain our resources, divert managements attention and affect our ability to attract and retain executive management and qualified board members.
• Our independent auditors have issued an audit opinion for our company, which includes a statement describing our going concern status.
• Our management and principal shareholders have the ability to significantly influence or control matters requiring a shareholder vote and other shareholders may not have the ability to influence corporate transactions.
• The sale of a large number of shares of Common Stock by our principal shareholders could depress the market price of our common stock.
• Our Common Stock is considered a penny stock, and any investment in our shares is considered to be a high-risk investment and is subject to restrictions on marketability.
• The market price of our Common Stock may fluctuate significantly in the future.
• The provisions of our Articles of Incorporation and Bylaws may delay or prevent a take-over that may not be in the best interests of our stockholders.
• Our future results may vary significantly, which may adversely affect the price of our Common Stock.
• Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
• The costs of being a public company could result in us being unable to continue as a going concern.
• We are an emerging growth company under the JOBS Act of 2012 and a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our Common Stock may be less attractive to investors.
• Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares.
• There is a limited trading market for our shares of common stock on the OTCQB.
• Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result.
• If we fail to remain current on our SEC reporting requirements, we could be removed from the OTCQB marketplace, which would limit the ability of broker-dealers to sell our securities in the secondary market.
• We do not intend to pay dividends on our Common Stock.
• Shares of our Common Stock issuable upon conversion of the outstanding convertible notes may represent overhang that may also adversely affect the market price of our Common Stock.
• We could face significant penalties for our failure to comply with the terms of our outstanding convertible notes.
• Certain of our outstanding convertible promissory notes include favored nation rights.
• The sale of shares of our Common Stock to MacRab under the Purchase Agreement may cause dilution, and the subsequent resale of the shares of our Common Stock acquired by MacRab, or the perception that such resales may occur, could cause the price of our Common Stock to fall.
• MacRab will pay less than the then-prevailing market price for our Common Stock.
• The issuance of our Common Stock upon exercise of our outstanding warrants in this Offering will cause immediate and substantial dilution.
• FINRA sales practice requirements may limit a stockholders ability to buy and sell our stock.
• Because our Common Stock is deemed a low-priced penny stock, it will be cumbersome for brokers and dealers to trade in our Common Stock, making the market for our Common Stock less liquid and negatively affect the price of our stock.
• State securities laws may limit secondary trading, which may restrict the states in which you can sell the shares offered by this Prospectus.

Sentiment

Score: 3

Explanation: The document presents a mixed picture, with some positive developments such as the strategic alliance with SC Culinary and the development of a new brand, but also significant risks and challenges, including the company's going concern status, limited operating history, and dependence on third-party suppliers. The overall sentiment is negative due to the high level of risk associated with investing in the company's common stock.

Positives

• The company has a strategic alliance with SC Culinary LLC and celebrity Chef Scott Conant.
• The company is developing a new brand, The Ponte Sangwich Shoppe and Italian DeliSM.
• The company has engaged Fransmart, LLC as its exclusive global franchise developer and representative.
• The company is working on new concepts and menu changes.

Negatives

• The company has a going concern status.
• The company has a limited operating history.
• The company expects to incur losses in the near future.
• The company is vulnerable to changes in economic conditions and consumer preferences.
• The company is dependent on third-party suppliers of raw materials.
• The company's common stock is considered a penny stock.

Risks

• The company's financial condition and results of operations have been and may continue to be adversely affected by the COVID-19 pandemic or future pandemics or disease outbreaks.
• The company is vulnerable to changes in economic conditions and consumer preferences that could have a material adverse effect on its business, financial condition and results of operations.
• Changes in the cost of food could have a material adverse effect on our business, financial condition and results of operations.
• An important aspect of our growth strategy involves opening new restaurants in existing and new markets.
• We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges or opportunities, including the need to open additional restaurants.
• Incidents involving food-borne illness and food safety, including food tampering or contamination could adversely affect our brand perception, business, financial condition and results of operations.
• Damage to our reputation and negative publicity could have a material adverse effect on our business, financial condition and results of operations.
• Natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism could disrupt our business and result in lower sales, increased operating costs and capital expenditures.
• Our financial results may fluctuate from period to period as a result of several factors which could adversely affect our stock price.
• The fast-food segment of the restaurant industry is highly competitive.
• Our expansion into new markets may present increased risks due to our unfamiliarity with those areas and our target customers unfamiliarity with our brand.
• We expect to incur losses in the near future, which may impact our ability to implement our business strategy and adversely affect our financial condition.
• Failure to receive frequent deliveries of higher quality food ingredients and other supplies could harm our operations.
• If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we may not be able to achieve our anticipated level of growth and our business could suffer.
• Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.
• If we are unable to build and sustain proper information technology infrastructure, our business could suffer.
• We are dependent upon third party suppliers of our raw materials.
• Our inability to protect our trademarks, patents and trade secrets may prevent us from successfully marketing our products and competing effectively.
• We may be subject to legal claims against us or claims by us which could have a significant impact on our resulting financial performance.
• The requirements of being a public company may strain our resources, divert managements attention and affect our ability to attract and retain executive management and qualified board members.
• Our independent auditors have issued an audit opinion for our company, which includes a statement describing our going concern status.
• Our management and principal shareholders have the ability to significantly influence or control matters requiring a shareholder vote and other shareholders may not have the ability to influence corporate transactions.
• The sale of a large number of shares of Common Stock by our principal shareholders could depress the market price of our common stock.
• Our Common Stock is considered a penny stock, and any investment in our shares is considered to be a high-risk investment and is subject to restrictions on marketability.
• The market price of our Common Stock may fluctuate significantly in the future.
• The provisions of our Articles of Incorporation and Bylaws may delay or prevent a take-over that may not be in the best interests of our stockholders.
• Our future results may vary significantly, which may adversely affect the price of our Common Stock.
• Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
• The costs of being a public company could result in us being unable to continue as a going concern.
• We are an emerging growth company under the JOBS Act of 2012 and a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our Common Stock may be less attractive to investors.
• Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares.
• There is a limited trading market for our shares of common stock on the OTCQB.
• Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result.
• If we fail to remain current on our SEC reporting requirements, we could be removed from the OTCQB marketplace, which would limit the ability of broker-dealers to sell our securities in the secondary market.
• We do not intend to pay dividends on our Common Stock.
• Shares of our Common Stock issuable upon conversion of the outstanding convertible notes may represent overhang that may also adversely affect the market price of our Common Stock.
• We could face significant penalties for our failure to comply with the terms of our outstanding convertible notes.
• Certain of our outstanding convertible promissory notes include favored nation rights.
• The sale of shares of our Common Stock to MacRab under the Purchase Agreement may cause dilution, and the subsequent resale of the shares of our Common Stock acquired by MacRab, or the perception that such resales may occur, could cause the price of our Common Stock to fall.
• MacRab will pay less than the then-prevailing market price for our Common Stock.
• The issuance of our Common Stock upon exercise of our outstanding warrants in this Offering will cause immediate and substantial dilution.
• FINRA sales practice requirements may limit a stockholders ability to buy and sell our stock.
• Because our Common Stock is deemed a low-priced penny stock, it will be cumbersome for brokers and dealers to trade in our Common Stock, making the market for our Common Stock less liquid and negatively affect the price of our stock.
• State securities laws may limit secondary trading, which may restrict the states in which you can sell the shares offered by this Prospectus.

Future Outlook

The company intends to use the proceeds that it receives from the purchases under the Purchase Agreement and the exercise of warrants, if applicable, for general corporate purposes and our working capital requirements, including the costs of preparing this prospectus and the registration statement of which it forms a part.

Management Comments

• The restaurant and foodservice industry is fueling the American economy.
• Our hiring rate and wage increases are outpacing the overall private sector, and this year our industry will contribute nearly $1 trillion to the economy, said Michelle Korsmo, president & CEO of the National Restaurant Association.
• With profitability under pressure, operators are launching new business models within the industry, re-engineering current concepts, and allocating more space to off-premises business in order to satisfy customers in 2023.

Industry Context

The restaurant industry is highly competitive and fragmented, with competition based on taste, speed of service, value, name recognition, restaurant location, and customer service.

Comparison to Industry Standards

• The company competes with Jimmy Johns, Subway, Chipotle Mexican Grill, Miami Subs Grill, and Starbucks, all of which are larger and have significantly greater financial resources.
• The 2023 National Restaurant Association State of the Restaurant Industry report examines key factors impacting the industry including the current state of the economy, operations, workforce, and food and menu trends to forecast sales and market trends for the year ahead.

Management Changes

Related Party 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.
• 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.
• On June 28, 2023, we issued an aggregate of 26,000,000 shares for related party services which were valued at $980,300, including: (a) 5,000,000 shares of common stock issued to Mr. DiTuri, our Co-Chief Executive Officer, President and a director, as bonus compensation; (b) 20,000,000 shares of common stock issued to Mr. Ferri, our Co-Chief Executive Officer, Chief Investment Officer and a director, as bonus compensation; and (c) 1,000,000 shares of common stock issued to Mr. Fraccalvieri, a director, as bonus compensation.
• On July 17, 2023, we issued an aggregate of 30,000,000 shares for related party services which were valued at $1,215,000, including: (a) 15,000,000 shares of common stock issued to Mr. DiTuri, our Co-Chief Executive Officer, President and a director, as bonus compensation; and (b) 15,000,000 shares of common stock issued to Mr. Ferri, our Co-Chief Executive Officer, Chief Investment Officer and a director, as bonus compensation.
• On November 9, 2023, we issued an aggregate of 22,000,000 shares of common stock for related party services which were valued at $283,800, including: (a) 2,000,000 shares issued to Mr. DiTuri, our Co-Chief Executive Officer, President and a director, as bonus compensation; (b) 10,000,000 shares issued to Mr. Ferri, our Co-Chief Executive Officer, Chief Investment Officer and a director, as bonus compensation; and (c) 10,000,000 shares issued to Mr. Conant, our director and Brand and Development Officer, as bonus compensation.

Stakeholder Impact

• Shareholders may experience dilution as a result of the sale of shares by selling stockholders and the issuance of shares upon exercise of warrants.
• The company's ability to continue as a going concern is uncertain, which could impact the value of shareholders' investments.
• The company's employees may be affected by the company's financial condition and ability to continue operations.
• The company's customers may be affected by the company's ability to provide high-quality products and services.
• The company's suppliers may be affected by the company's ability to pay its obligations.

Next Steps

• The selling stockholders may offer all or part of the shares for resale from time to time.
• The company intends to use the proceeds that it receives from the purchases under the Purchase Agreement and the exercise of warrants, if applicable, for general corporate purposes and our working capital requirements, including the costs of preparing this prospectus and the registration statement of which it forms a part.

Key Dates

Keywords

common stock, resale, registration statement, warrants, MacRab, selling stockholders, Kisses From Italy