10-Q/A: Kisses From Italy Inc. Restates Q1 2024 Financials Due to Accounting Errors and Files Amended 10-Q/A

Kisses From Italy Inc. files an amended 10-Q/A to restate its financial statements for the quarter ended March 31, 2024, addressing prior accounting errors and including a review by an independent public accountant.

Summary

• Kisses From Italy Inc. has filed an Amendment No. 1 on Form 10-Q/A to amend its original Form 10-Q for the three-month period ended March 31, 2024.
• The original filing was made on July 15, 2021, and this amendment addresses the fact that the interim financial statements in the original filing were not reviewed by an independent public accountant.
• The company was unable to obtain a review by its independent public accountant of its financial statements before the Original Filing.
• The financial statements included in this amended filing have now been reviewed in accordance with Statement of Auditing Standards No. 100 (SAS100).
• The amendment also addresses an incorrect classification of $8,223 in interest expense and an understatement of accrued liabilities by $25,100 in the original filing.
• This reclassification and understatement of an accrued liability had the impact of understating the Company's loss from operations for the three months ended March 31, 2024, by $25,100.
• The company's Principal Executive and Principal Financial Officer have provided new certifications dated as of the date of this filing.
• The company had cash on hand of $2,008 as of March 31, 2024.
• The company had negative working capital of $933,424 as of March 31, 2024.
• The company had an accumulated deficit of $19,534,867 as of March 31, 2024.
• The company's total revenues for the three months ended March 31, 2024, were $33,119, compared to $115,460 for the three months ended March 31, 2023.
• The company incurred a net loss of $135,218 for the three months ended March 31, 2024, compared to a net loss of $952,381 for the three months ended March 31, 2023.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the restatement of financials, going concern warning, and significant decrease in revenue. However, there are some positives such as the decrease in operating expenses and net loss.

Positives

• Operating expenses decreased significantly to $125,197 for the three months ended March 31, 2024, compared to $531,283 during the three months ended March 31, 2023.
• Net loss decreased to $135,218 for the three months ended March 31, 2024, compared to $952,381 for the three months ended March 31, 2023.
• Net cash used in operating activities decreased to $55,249 during the three months ended March 31, 2024, compared to $290,238 during the three months ended March 31, 2023.

Negatives

• The company restated its financial statements due to accounting errors.
• The company had negative working capital of $933,424 as of March 31, 2024.
• The company had an accumulated deficit of $19,534,867 as of March 31, 2024.
• Total revenues decreased to $33,119 for the three months ended March 31, 2024, compared to $115,460 during the three months ended March 31, 2023.

Risks

• The company's ability to continue as a going concern is dependent on raising debt and/or equity financing.
• There is no assurance that financing will be available to the company on favorable terms or at all.
• The company's inability to obtain additional financing may have a significant negative impact on its continued development and results of operations.
• The company's 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.

Future Outlook

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

Management Comments

• 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.

Industry Context

Without more information about the fast casual dining sector, it is difficult to assess the company's performance relative to its peers. However, the restatement of financials and the going concern warning signal potential challenges.

Management Changes

Stakeholder Impact

• Shareholders face potential dilution if the company issues more equity.
• Employees' jobs are at risk if the company cannot secure additional financing.
• Customers may be impacted if the company is forced to close locations.

Next Steps

• The company needs to secure additional financing to continue operations.
• The company needs to regain compliance with the OTCQB Standards.
• The company is evaluating relocating its operations to other areas within South Florida.

Key Dates

Keywords

restatement, financial statements, Form 10-Q/A, accounting errors, going concern, liquidity, revenues, net loss, Kisses From Italy Inc.