UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021,~~

January 31, 2022,

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-56222

HOME BISTRO, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		27-1517938
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4014 Chase Avenue, #212

Miami Beach, FL 33140

(631) 964-1111

(Address of Principal Executive Offices and Zip Code)

(Registrant’s telephone number, including area code)

(Former name, former address and formal fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class		Trading Symbol(s)		Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of Home Bistro, Inc.’s common stock as of ~~November 11, 2021~~March 15, 2022 was ~~30,657,032.~~38,090,520.

HOME BISTRO, INC. AND SUBSIDIARIES

FORM 10-Q

~~SEPTEMBER 30, 2021~~JANUARY 31, 2022

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	~~Condensed~~ Consolidated Balance Sheets - As of ~~September 30, 2021~~January 31, 2022 (unaudited) and ~~December~~October 31, ~~2020~~2021	1
	~~Condensed~~ Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended of ~~September 30,~~January 31, 2022 and 2021 ~~and 2020~~ (unaudited)	2
	~~Condensed~~ Consolidated Statements of Changes in Stockholders’ ~~Deficit~~Equity for the Three ~~and Nine~~ Months Ended ~~of September 30,~~January 31, 2022 and 2021 ~~and 2020~~ (unaudited)	3
	~~Condensed~~ Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended of ~~September 30,~~January 31, 2022 and 2021 ~~and 2020~~ (unaudited)	54
	Condensed Notes to Unaudited Consolidated Financial Statements	65
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3833
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4741
Item 4.	Controls and Procedures	4741

	PART II - OTHER INFORMATION	4842
Item 1.	Legal Proceedings	4842
Item 1A.	Risk Factors	4842
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4842
Item 3.	Defaults Upon Senior Securities	4842
Item 4.	Mine Safety Disclosures	4842
Item 5.	Other Information	4842
Item 6.	Exhibits	4943

Signatures		5044

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance, or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

These factors include, among others:

●

current or future financial performance;

●

management’s plans and objectives for future operations;

●

uncertainties associated with product research and development

●

uncertainties associated with dependence upon the actions of government regulatory agencies;

●

product plans and performance;

●

management’s assessment of market factors; and

●

statements regarding our strategy and plans.

Actual results could differ materially from the results described in the forward-looking statements due to the risks and uncertainties set forth in this Report and those described from time to time in our future reports filed with the Securities and Exchange Commission (the “SEC”).

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts. These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances, or assumptions underlying such statements, or otherwise.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HOME BISTRO, INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS

September 30,
2021 December 31,
2020
ASSETS (Unaudited)

CURRENT ASSETS:
Cash $ 1,410,236 $ 447,354
Inventory 14,120 -
Prepaid expenses and other current assets 120,578 28,588
Note receivable - 5,000

Total Current Assets 1,544,934 480,942

OTHER ASSETS:
Property and equipment, net 110,189 2,728
Finance right-of-use assets, net 186,585 -
Operating lease right-of-use assets, net 287,643 -
Intangible assets, net of accumulated amortization $6,628 607,570 -
Deposits 10,000 -
Goodwill 1,780,964 -

Total Assets $ 4,527,885 $ 483,670

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable $ 486,074 $ 352,466
Accrued expenses and other liabilities 165,368 126,273
Liabilities to be settled with common stock 244,563 -
Convertible notes payable, net of debt discount 657,911 141,476
Convertible notes payable - related party, net of debt discount 35,915 -
Notes payable - current portion 11,028 20,068
Advances payable 117,175 78,497
Derivative liabilities 144,117 180,029
Unredeemed gift cards 159,872 48,311
Financing lease liability - current portion 61,596 -
Operating lease liabilities - current portion 114,216 -

Total Current Liabilities 2,197,835 947,120

LONG-TERM LIABILITIES:
Financing lease liability - long-term portion 130,164 -
Operating lease liability- long-term portion 173,939 -
Notes payable - long-term portion 295,872 151,544
Common stock repurchase obligation 711,275 1,300,000

Total Liabilities 3,509,085 2,398,664

Commitments and contingency (Note 11):

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock: $0.001 par value; 20,000,000 shares authorized;
Convertible Series B Preferred stock: $0.001 Par Value; 500,000 Shares Authorized; nil shares issued and outstanding as of September 30, 2021 and December 31, 2020 - -
Common stock: $0.001 par value; 1,000,000,000 shares authorized; 27,925,989 and 19,123,768 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively 27,925 19,123
Additional paid-in capital 11,057,754 4,399,272
Accumulated deficit (10,066,879 ) (6,333,389 )

Total Stockholders' Equity (Deficit) 1,018,800 (1,914,994 )

Total Liabilities and Stockholders' Equity (Deficit) $ 4,527,885 $ 483,670

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~HOME BISTRO, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~(UNAUDITED)~~

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020

Product sales, net $ 703,364 $ 299,178 $ 1,362,999 $ 964,944

Cost of sales 625,767 176,155 1,164,694 594,875

Gross profit 77,597 123,023 198,305 370,069

Operating Expenses:
Compensation and related expenses 238,912 66,581 409,826 477,381
Professional and consulting expenses 691,422 157,173 1,660,792 353,670
Product development expense - 360,000 - 360,000
Selling and marketing expenses 324,478 50,638 522,351 135,520
General and administrative expenses 196,631 51,596 377,108 129,409

Total Operating Expenses 1,451,443 685,988 2,970,077 1,455,980

Operating Loss from Continuing Operations (1,373,846 ) (562,965 ) (2,771,772 ) (1,085,911 )

Other Income (Expense):
Interest expense, net (433,688 ) (7,279 ) (1,235,742 ) (8,812 )
Change in fair value of derivative liabilities 1,528 - 232,641 -
Gain on extinguishment of debt - - 26,629 -
Gain on forgiveness of debt - - 14,754 -
Other income - - - 5,000

Total Other Expense, net (432,160 ) (7,279 ) (961,718 ) (3,812 )

Loss from Continuing Operations (1,806,006 ) (570,244 ) (3,733,490 ) (1,089,723 )

Discontinued Operations:
Income from Disposal of Discontinued Operations Before Provision for Income Taxes - 91,750 - 38,203

Income from Discontinued Operations - 91,750 - 38,203

Net Loss $ (1,806,006 ) $ (478,494 ) $ (3,733,490 ) $ (1,051,520 )

BASIC AND DILUTED LOSS PER COMMON SHARE:
Continuing operations - basic and diluted $ (0.07 ) $ (0.03 ) $ (0.17 ) $ (0.06 )
Discontinued operations - basic $ - $ 0.00 $ - $ 0.00
Discontinued operations - diluted $ - $ 0.00 $ - $ 0.00

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic
25,195,498
19,004,233
22,061,952
16,839,250
Diluted
25,195,498
29,957,928
22,061,952
27,762,175

	January 31, 2022			October 31, 2021
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash	$	1,253,844		$	2,275,397
Inventory		23,822			16,020
Prepaid expenses and other current assets		381,725			80,641

Total Current Assets		1,659,391			2,372,058

OTHER ASSETS:
Property and equipment, net		117,858			130,970
Finance lease right-of-use assets, net		164,306			181,015
Operating lease right-of-use assets, net		223,205			268,509
Intangible assets, net		3,000,400			3,225,361
Deposits		10,000			10,000
Goodwill		1,809,357			1,809,357
Total Assets	$	6,984,517		$	7,997,270

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	632,729		$	568,302
Accrued expenses and other liabilities		143,195			181,037
Liabilities to be settled with common stock		115,938			209,688
Convertible notes payable, net of debt discount		307,729			550,638
Convertible notes payable - related party, net of debt discount		12,364			30,172
Notes payable - current portion		16,409			15,361
Advances payable		51,147			101,945
Derivative liabilities		27,706			86,884
Unredeemed gift cards		216,902			164,912
Financing lease liability - current portion		63,675			62,210
Operating lease liabilities - current portion		80,138			101,431
Common stock repurchase obligation		524,777			618,275

Total Current Liabilities		2,192,709			2,690,855

LONG-TERM LIABILITIES:
Financing lease liability - long-term portion		108,231			124,649
Operating lease liability- long-term portion		145,524			166,923
Notes payable - long-term portion		290,491			291,539

Total Liabilities		2,736,955			3,273,966
Commitments and contingency (Note 12):

STOCKHOLDERS’ EQUITY:
Preferred Stock: $0.001 par value; 20,000,000 shares authorized;
Convertible Series B Preferred stock: $0.001 Par Value; 500,000 Shares Authorized; nil shares issued and outstanding as of January 31, 2022 and October 31, 2021		-			-
Common stock: $0.001 par value; 1,000,000,000 shares authorized; 37,563,563 and 35,152,623 shares issued and outstanding as of January 31, 2022 and October 31, 2021, respectively		37,563			35,152
Additional paid-in capital		27,480,563			25,198,035
Deferred compensation		(1,238,564	)		(1,374,219	)
Accumulated deficit		(22,032,000	)		(19,135,664	)

Total Stockholders’ Equity		4,247,562			4,723,304
Total Liabilities and Stockholders’ Equity	$	6,984,517		$	7,997,270

The accompanying notes are an integral part of these unaudited ~~condensed~~consolidated financial statements.

HOME BISTRO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended
	January 31,
	2022			2021

Product sales, net	$	801,799		$	399,027

Cost of sales		615,994			288,629

Gross profit		185,805			110,398

Operating Expenses:
Compensation and related expenses		287,579			68,037
Professional and consulting expenses, includes $1,189,314 and $0 of stock-based compensation in 2022 and 2021, respectively		1,652,054			68,847
Professional and consulting expenses - related party		30,000			-
Product development expense, includes $146,614 and $0 of stock-based compensation in 2022 and 2021, respectively		146,614			-
Selling and marketing expenses		364,584			75,940
General and administrative expenses		448,401			61,129

Total Operating Expenses		2,929,232			273,953

Loss from Operations		(2,743,427	)		(163,555	)

Other Income (Expense):
Interest expense, net		(212,087	)		(18,771	)
Change in fair value of derivative liabilities		59,178			32,315
Gain on extinguishment of accounts payable		-			7,075

Total Other Income (Expense), net		(152,909	)		20,619

Net Loss	$	(2,896,336	)	$	(142,936	)

BASIC AND DILUTED LOSS PER COMMON SHARE:
Continuing operations - basic and diluted	$	(0.08	)	$	(0.01	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted		36,873,228			19,026,157

The accompanying notes are an integral part of these unaudited consolidated financial statements.

HOME BISTRO, INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF CHANGES IN ~~STOCKHOLDERS'~~STOCKHOLDERS’ EQUITY ~~(DEFICIT)~~

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~JANUARY 31, 2022 AND 2021

(UNAUDITED)

Preferred Stock Common Stock Additional Total
Number of Number of Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Equity (Deficit)

Balance at December 31, 2020 - $ - 19,123,767 $ 19,123 $ 4,399,272 $ (6,333,389 ) (1,914,994 )

Common stock issued as commitment fee - - 404,385 405 206,388 - 206,793

Warrants stock issued as commitment fee - - - - 76,667 - 76,667

Reduction of the repurchase obligation pursuant to the Put Option Agreement - - - - 145,634 - 145,634

Net loss - - - - - (521,534 ) (521,534 )

Balance at March 31, 2021 - - 19,528,152 19,528 4,827,961 (6,854,923 ) (2,007,434 )

Common stock issued as stock-based compensation - - 25,000 25 24,725 - 24,750

Common stock issued for services - - 2,000,000 2,000 380,500 - 382,500

Common stock issued for cash - - 379,207 379 284,026 - 284,405

Common stock issued as commitment fee - - 285,000 285 125,131 - 125,416

Warrants stock issued as commitment fee - - - - 49,762 - 49,762

Reduction of the repurchase obligation pursuant to the Put Option Agreement - - - - 99,272 - 99,272

Net loss - - - - - (1,405,950 ) (1,405,950 )

Balance at June 30, 2021 - - 22,217,359 22,217 5,791,377 (8,260,873 ) (2,447,279 )

Common stock issued for cash - - 3,436,320 3,436 2,425,487 - 2,428,923

Common stock issued for prepaid services - - 100,000 100 (100 ) - -

Accretion of deferred compensation - - - - 382,500 - 382,500

Common stock issued as commitment fee - - 164,000 164 86,181 - 86,345

Warrants stock issued as commitment fee - - - - 30,497 - 30,497

Common stock issued for acquisition of subsidiary (see Note 3) - - 2,008,310 2,008 1,997,992 - 2,000,000

Reduction of the repurchase obligation pursuant to the Put Option Agreement - - - - 343,820 - 343,820

Net loss (1,806,006 ) (1,806,006 )

Balance at September 30, 2021 - $ - 27,925,989 $ 27,925 $ 11,057,754 $ (10,066,879 ) $ 1,018,800

	Preferred Stock				Common Stock				Additional								Total
	Number of				Number of				Paid-in		Deferred			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Compensation			Deficit			Equity

Balance at October 31, 2021		-	$	-		35,152,623	$	35,152	$	25,198,035	$	(1,374,219	)	$	(19,135,664	)	$	4,723,304

Common stock issued for cash		-		-		1,378,399		1,378		989,790		-			-			991,168

Common stock issued for services and prepaid services		-		-		660,000		660		785,940		87,000			-			873,600

Common stock warrant issued for services		-		-		-		-		36,777		-			-			36,777

Reduction of the repurchase obligation pursuant to the Put Option Agreement		-		-		-		-		93,498		-			-			93,498

Common stock issued for product development agreements		-		-		100,000		100		99,900		46,614			-			146,614

Common stock issued pursuant to lock-up agreements		-		-		272,541		273		276,623		2,041			-			278,937

Net loss		-		-		-		-		-		-			(2,896,336	)		(2,896,336	)

Balance at January 31, 2022		-	$	-		37,563,563	$	37,563	$	27,480,563	$	(1,238,564	)	$	(22,032,000	)	$	4,247,562

	Preferred Stock				Common Stock				Additional							Total
	Number of				Number of				Paid-in		Deferred		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Compensation		Deficit			Equity

Balance at October 31, 2020		-	$	-		19,004,232	$	19,004	$	4,349,657	$	-	$	(6,238,085	)	$	(1,869,424	)

Common stock issued as commitment fee		-		-		148,920		149		61,584		-		-			61,733

Common stock warrant issued for services		-		-		-		-		11,471		-		-			11,471

Net loss		-		-		-		-		-		-		(142,936	)		(142,936	)

Balance at January 31, 2021		-	$	-		19,153,152	$	19,153	$	4,422,712	$	-	$	(6,381,021	)	$	(1,939,156	)

The accompanying notes are an integral part of these unaudited ~~condensed consolidated financial statements.~~

~~HOME BISTRO, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)~~

~~FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020~~

~~(UNAUDITED)~~

Preferred Stock Common Stock Additional Total
Number of Number of Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Equity (Deficit)

Balance at December 31, 2019 - $ - �� 419,254,217 $ 419,254 $ 4,400,795 $ (5,091,728 ) $ (271,679 )

Common stock issued a related party for cash - - - - 25,000 - 25,000

Accretion of stock-based compensation - - - - 45,824 - 45,824

Net loss - - - - - (79,991 ) (79,991 )

Balance at March 31, 2020 - - 419,254,217 419,254 4,471,619 (5,171,719 ) (280,846 )

Recapitalization of the Company 250,000 250 60,727,607 60,728 (255,702 ) - (194,724 )

Common stock and warrants a related party issued for cash - - 47,749 48 74,958 - 75,006

Common stock issued as stock-based compensation - - 127,942,741 127,943 110,325 - 238,268

Accretion of stock-based compensation - - - - 168,017 - 168,017

Common stock repurchase obligation (see Note 3) - - - - (1,300,000 ) - (1,300,000 )

Net loss - - - - - (493,035 ) (493,035 )

Balance at June 30, 2020 250,000 250 607,972,315 607,973 3,269,217 (5,664,754 ) (1,787,314 )

Disposal of a component with related party (see Note 3) (250,000 ) (250 ) - - 131,471 - 131,221

Warrant issued pursuant to an agreement - - - - 360,000 360,000

Net loss - - - - - (478,494 ) (478,494 )

Balance at September 30, 2020 - $ - 607,972,315 $ 607,973 $ 3,760,688 $ (6,143,248 ) $ (1,774,587 )

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~HOME BISTRO, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(UNAUDITED)~~

For the Nine Months Ended
September 30,
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss from continuing operations $ (3,733,490 ) $ (1,051,520 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 91,085 176
Stock-based compensation 24,750 213,841
Common stock and warrant issued for services 765,000 598,268
Gain on extinguishment of debt (26,629 ) -
Gain on forgiveness of debt (14,754 ) -
Amortization of debt discount 1,042,694 -
Change in fair value of derivative liabilities (232,641 ) -
Change in operating assets and liabilities:
Inventory 6,643 -
Prepaid expenses and other current assets (86,990 ) (1,698 )
Accounts payable 47,161 (23,298 )
Accrued expense and other liabilities (74,374 ) 127,079
Unredeemed gift cards 24,301 1,386

Net cash used in operating activities (2,167,244 ) (135,766 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds for acquisition of a subsidiaries (60,000 ) 4,917
Acquisition of property and equipment (137,772 ) (3,168 )

Net cash (used by) provided by investing activities (197,772 ) 1,749

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock, net of issuance cost 2,713,328 100,006
Proceeds from notes payable - 164,612
Proceeds from convertible note payable, net of debt discount 1,581,450 -
Proceeds from convertible note payable - related party, net of debt discount 100,000 -
Advance payable 442,900 59,000
Repayment of convertible notes payable (1,067,649 ) -
Repayment of note payable - in default - (3,738 )
Repayments of advance payable (407,522 ) (36,015 )
Repayment of convertible notes payable - related party (34,609 ) -

Net cash provided by financing activities 3,327,898 283,865

Net Change in Cash 962,882 149,848

Cash - beginning of period 447,354 7,137

Cash - end of period $ 1,410,236 $ 156,985

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 150,721 $ 7,670
Income taxes $ - $ -

Non-cash investing and financing activities:
Initial amount of ROU asset and related liability $ 540,041 $ 32,444
Reduction of the ROU asset and related liability $ - $ 4,232
Termination of the ROU asset and related liability $ - $ 25,426
Repurchase obligation pursuant to the Put Option Agreement $ - $ 1,300,000
Reduction of the repurchase obligation pursuant to the Put Option Agreement $ 588,725 $ -
Common stock issued as commitment fee $ 418,554 $ -
Warrants issued as commitment fee $ 156,926 $ -
Fair value of true-up shares in connection with the commitment fee $ 244,563 $ -
Initial derivative liability recorded in connection with convertible notes payable $ 223,358 $ -

Net Assets and Liabilities Assumed in Acquisition:
Cash $ - $ 4,917
Prepaid expenses and other assets 241 9,776
Inventory 20,763 -
Operating right-of-use asset 76,136 32,444
Computer software 66,198 -
Customer relationships 43,000 -
Trademark 505,000 -
Goodwill 1,780,964 -
Accounts payable and accrued liabilities (203,348 ) (209,417 )
Operating right-of-use liability (79,054 ) (32,444 )
Note Payable (149,900 ) -
Net assets acquired (liabilities assumed) $ 2,060,000 $ (194,724 )

~~The accompanying notes are an integral part of these unaudited condensed~~ consolidated financial statements.

HOME BISTRO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Three
Months Ended
January 31,
2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Loss from continuing operations $ (2,896,336 ) $ (142,936 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 75,125 264
Amortization on intangible assets 224,961 -
Common stock and warrant issued for services and prepaid services 910,377 11,471
Common stock and warrant issued for product development 146,614 -
Common stock issued pursuant to lock-up agreements 278,937 -
Gain on extinguishment of accounts payable - (7,075 )
Amortization of debt discount 174,929 7,983
Change in fair value of derivative liabilities (59,178 ) (32,315 )
Change in operating assets and liabilities:
Inventory (7,802 ) -
Prepaid expenses and other current assets (301,084 ) (4,014 )
Accounts payable 64,427 39,937
Accrued expense and other liabilities (95,487 ) (39,123 )
Unredeemed gift cards 51,990 25,696

Net cash used in operating activities (1,432,527 ) (140,112 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock, net of issuance cost 991,168 -
Proceeds from notes payable - 7,000
Proceeds from convertible note payable, net of debt discount - 489,100
Proceeds from advances payable - 80,000
Repayment of convertible notes payable (491,850 ) -
Repayments of advance payable (50,798 ) (42,280 )
Repayment of convertible notes payable - related party (37,546 ) -

Net cash provided by financing activities 410,974 533,820

Net Change in Cash (1,021,553 ) 393,708

Cash - beginning of period 2,275,397 57,082

Cash - end of period $ 1,253,844 $ 450,790

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 41,349 $ 2,840
Income taxes $ - $ -

Non-cash investing and financing activities:
Initial amount of ROU asset and related liability $ 540,041 $ -
Reduction of the repurchase obligation pursuant to the Put Option Agreement $ 93,498 $ -
Common stock issued as commitment fee in connection with convertible notes payable, recorded as debt discount $ - $ 61,733
Liabilities to be settled with common stock in connection with convertible notes payable $ 115,938 $ 13,223
Initial derivative liability recorded in connection with convertible notes payable $ - $ 222,244
The accompanying notes are an integral part of these unaudited consolidated financial statements.

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30,~~JANUARY 31, 2021

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

Home Bistro, Inc. (formerly known as Gratitude Health, Inc.) (the “Company”) was incorporated in the State of Nevada on December 17, 2009. Effective March 23, 2018, the Company changed its name from Vapir Enterprises Inc. to Gratitude Health, Inc. On September 14, 2020, the Company changed its name from Gratitude Health, Inc. to Home Bistro, Inc. The Company is in the business of providing prepackaged and prepared meals to consumers focused on offering a broad array of the highest quality meal delivery, and preparation services. The Company’s primary former operations were in the business of manufacturing, selling, and marketing functional RTD (Ready to Drink) beverages sold under the Company’s trademark (the “RTD Business”). The RTD Business was disposed on September 25, 2020 as discussed below.

~~On April 7, 2020, the Board of Directors of the Company approved the increase of authorized shares of common stock from 600,000,000 to 1,000,000,000 (see Note 10).~~

On April 20, 2020, the Company, Fresh Market Merger Sub, Inc., a Delaware corporation and a newly created wholly-owned subsidiary of the Company (“Merger Sub”), and Home Bistro, Inc., a privately-held Delaware corporation formed on April 9, 2013, engaged in the food preparation and home-delivery business (presently known as Home Bistro Holdings, Inc., a Nevada corporation) and now wholly-owned subsidiary of the Company (“Home Bistro Holdings”) (see Note 3), entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, among other things, Merger Sub agreed to merge with and into Home Bistro Holdings, with Home Bistro Holdings becoming a wholly-owned subsidiary of the Company and the surviving corporation in the merger (the “Merger”). Pursuant to the terms of the Merger Agreement, Home Bistro Holdings filed a Certificate of Merger with the Nevada Secretary of State on April 20, 2020 (see Note 3).

On April 20, 2020, pursuant to the terms of the Merger Agreement, Roy G. Warren, Jr., Mike Edwards, and Bruce Zanca resigned as directors of the Company and Roy G. Warren, Jr. resigned as Chief Operating Officer of the Company. The resignations were not the result of any disagreement related to the Company’s operations, policies, or practices. Furthermore, on April 20, 2020, Mr. Zalmi Duchman, the Chief Executive Officer of Home Bistro Holdings, Michael Finkelstein and Michael Novielli were appointed as directors of the Company. In addition, Mr. Duchman was appointed Chief Executive Officer.

The Merger constituted a change of control and the majority of the Board of Directors changed with the consummation of the Merger. The Company issued to the stockholders of Home Bistro Holdings shares of common stock and stock warrants which represented approximately 80% of the combined company on a fully converted basis after the closing of the Merger and approximately 51% of voting control. As a result of the above transactions and the Company’s intent to dispose or divest the assets and liabilities associated with the RTD Business, this transaction was accounted for as a reverse recapitalization effected by a share exchange of Home Bistro Holdings. The consolidated financial statements are those of Home Bistro Holdings (the accounting acquirer) prior to the Merger and include the activity of the Company (the accounting acquiree) from the date of the Merger (see Note 3).

On September 14, 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to effect (i) a 1 for 31.993 reverse stock split of its common stock, par value $0.001 per share, with fractional shares rounding up to the nearest whole share (the “Reverse Stock Split”), and (ii) the change of the Company’s name from “Gratitude Health, Inc.” to “Home Bistro, Inc.”. All share and per-share data and amounts have been retroactively adjusted as of the earliest period presented in the consolidated financial statements to reflect the Reverse Stock Split (see Note 3).

On September 14, 2020, the Financial Industry Regulatory Authority approved the Company’s symbol change from “GRTD” to “HBIS”, effective twenty (20) business days from the approval date (see Note 3).

On September 25, 2020, the Company entered into, and closed the transactions contemplated by, that certain Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, Gratitude Keto Holdings, Inc., a Florida corporation (the “Buyer” or “Gratitude Keto”), and the holder of 250,000 of the Company’s issued and outstanding shares of Series B Preferred Stock, $0.001 par value per share (such stock, the “Series B Preferred Stock”, and such stockholder, the “Stockholder”). Pursuant to the Asset Purchase Agreement, among other things, the Company agreed to sell to the Buyer all of the Company’s business, assets and properties used, or held or developed for use, in its functional RTD Business, and the Buyer agreed to assume certain debts, obligations and liabilities related to the RTD Business. Furthermore, in connection with the Asset Purchase Agreement, the Buyer returned the 250,000 shares of Series B Preferred Stock held by the Stockholder which was then cancelled by the Company upon return. As a result, the Company has no outstanding shares of preferred stock. Additionally, the RTD Business activities were reclassified and reported as part of “discontinued operations” for all periods presented on the consolidated statements of operations. In addition, the Company assumed an accounts payable liability in the amount of $14,000 related to accounting expenses of the RTD Business for a period prior to the Merger. Pursuant to the Asset Purchase Agreement, the Buyer reimbursed the Company for the accounting expenses in amount of $14,000, of which $7,000 was payable in cash and the balance in form of a promissory note dated September 25, 2020 in the amount of $7,000. The promissory note bears an interest rate of 5% per annum, matures on April 25, 2021 and is payable in monthly installments of $1,000 commencing on October 25, 2020 through maturity (see Note 3).

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2021~~

The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The COVID-19 pandemic has the potential to significantly impact the Company’s supply chain, food manufacturers, distribution centers, or logistics and other service providers. Additionally, the Company’s service providers and their operations may be disrupted, temporarily closed or experience worker or meat or other food shortages, which could result in additional disruptions or delays in shipments of Home Bistro’s products. To date, the Company has been able to avoid layoffs and furloughs of employees. The Company is not able to estimate the duration of the pandemic and potential impact on the business if disruptions or delays in shipments of product occur. To date, the Company is not aware of any such disruptions. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including weakened demand for product and a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly. The Company has applied for and received certain financial assistance under the Coronavirus, Aid, Relief, and Economic Security Act (“CARES Act”) enacted in March 2020 by the U.S. Government in response to COVID-19 (see Note 5)6).

On July 6, 2021, the Company entered and closed on an Agreement and Plan of Merger with the members of Model Meals, LLC (“Model Meals”), acquiring Model Meals through a reverse triangular merger, whereby Model Meals merged with Model Meals Acquisition Corp., a wholly owned subsidiary of the Company, with Model Meals being the surviving entity (the “Acquisition”). As a result, Model Meals became a wholly owned subsidiary of the Company, and the members of Model Meals received and aggregate of 2,008,310 shares of common stock and were paid $60,000 in cash. Pursuant to the Acquisition, the Company issued ~~on a~~ ~~pro rata~~ ~~basis,~~ 2,008,310 shares of common stock ~~equal to $2,000,000 divided by the 30-day volume weighted average price (“VWAP”) immediately prior to closing~~with grant date fair value of ~~the Acquisition~~$ 2,028,393 (see Note 3).

In January 2022, the Company’s board of directors and management changed the Company’s fiscal year end from December 31^st to October 31^st, effective immediately (see Note 2).

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information, which present the unaudited ~~condensed~~ consolidated financial statements of the Company and its ~~wholly-owned subsidiaries.~~active wholly owned subsidiaries, Home Bistro Holdings, Inc. and Model Meals LLC (acquired on July 6, 2021) for the period ending January 31, 2022. All intercompany transactions and balances have been eliminated. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. Significant intercompany accounts and transactions have been eliminated in consolidation. The results for the interim period are not necessarily indicative of the results to be expected for the fiscal year ending ~~December~~October 31, ~~2021.~~2022.

~~These interim unaudited condensed~~Certain information and disclosures normally included in the notes to the annual consolidated financial statements ~~for~~have been condensed or omitted from these interim consolidated financial statements. Accordingly, these interim consolidated financial statements should be read in conjunction with the ~~period ending September 30, 2021 consist of~~consolidated financial statements and notes thereto included in our Transition Report, due to our change in fiscal year end, on Form 10-KT filed with the interim unaudited condensed consolidated balance sheets of the Company as of September 30, 2021 and the related interim unaudited condensed consolidated statements of operations, changes in stockholders’ equity deficit and cash flows for the three and nine month periods ended September 30, 2021 and 2020, and the related notes, and reflect the acquisition of the Company’s wholly-owned subsidiaries, Home Bistro Holdings and Model Meals which are fully disclosed in Note 3.SEC on January 31, 2022.

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2021

Going Concern

The 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. As reflected in the accompanying unaudited ~~condensed~~ consolidated financial statements, for the ~~nine~~three months ended ~~September 30, 2021,~~January 31, 2022, the Company had net loss and cash used in operations of ~~$3,733,490~~$2,896,336 and ~~$2,167,244,~~$1,432,527, respectively. At ~~September 30, 2021,~~January 31, 2022, the Company had an accumulated deficit, stockholders’ equity, and working capital deficit of ~~$10,066,879, $1,018,800~~$22,032,000, $4,247,562 and ~~$652,901,~~$533,318, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. The Company’s primary source of operating funds ~~in 2021 was~~has primarily from the ~~third-party advances and convertible notes payable and~~ sale of common stock ~~through private placements.~~and the issuance of convertible debt notes. The Company has experienced net losses from operations since inception but expects these conditions to improve in the near term and beyond as it develops its business model.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. Management believes that the Company’s capital resources are not currently adequate to continue operating and maintaining its business strategy for a period of twelve months from the issuance date of this report. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2021~~

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates as of ~~September 30,~~January 31, 2022 and October 31, 2021 ~~and December 31, 2020~~ include the assumptions used in the redemption recognition method for unredeemed gift cards, ~~collectability of receivables and note receivable, value of inventory,~~ useful life of property and equipment and intangible assets, valuation of right-of-use (“ROU”) assets and lease liabilities, estimates of current and deferred income taxes and deferred tax valuation allowances, fair value of assets acquired and liabilities assumed in a business combination, and the fair value of non-cash equity transactions and derivative liabilities.

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At ~~September 30,~~January 31, 2022 and October 31, 2021, ~~and December 31, 2020,~~ the Company did not have any cash equivalents.

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. As of ~~September 30,~~January 31, 2022 and October 31, 2021, ~~and December 31, 2020,~~ the bank balance was in excess of FDIC insured levels by approximately ~~$1,160,000~~$1,004,000 and ~~$197,000,~~$2,025,000, respectively. The Company has not experienced any losses in such accounts through ~~September 30, 2021.~~January 31, 2022.

Fair Value of Financial Instruments and Fair Value Measurements

FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on ~~September 30, 2021.~~January 31, 2022. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2021

The three levels of the fair value hierarchy are as follows:

	Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

	Level 2—Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

	Level 3—Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, due from and to related parties, prepaid expenses, accounts payable and accrued liabilities approximate their fair market value based on the short-term maturity of these instruments.

Assets or liabilities measured at fair value or a recurring basis included embedded conversion options in convertible debt (see Note 4) and were as follows at ~~September 30, 2021:~~January 31, 2022:

	September 30, 2021						December 31, 2020						January 31, 2022						October 31, 2021
Description	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative liabilities	$	—	$	—	$	144,117	$	—	$	—	$	180,029	$	—	$	—	$	27,706	$	—	$	—	$	86,884

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2021~~

A roll forward of the level 3 valuation financial instruments is as follows:

Nine Months
Ended
September 30,
2021
(Unaudited)
Balance at December 31, 2020 $ 180,029
Initial valuation of derivative liabilities included in debt discount 223,358
Reclassification of derivative liability to gain on debt extinguishment (26,629 )
Change in fair value of derivative liabilities (232,641 )
Balance at September 30, 2021 $ 144,117

	Three Months Ended January 31, 2022
	(Unaudited)
Balance at October 31, 2021	$	86,884
Change in fair value of derivative liabilities		(59,178	)
Balance at January 31, 2022	$	27,706

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding equity instruments.

Derivative Liabilities

The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10 – Derivative and Hedging – Contract in Entity’s Own Equity. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.

Goodwill and ~~Other~~Indefinite Lived Intangible Assets

~~In accordance with ASC 350-30-65,~~Goodwill represents the ~~Company assesses~~excess of purchase prices over the fair value of nets assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Goodwill is evaluated for impairment on an annual basis at a level of ~~identifiable intangibles whenever~~reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the ~~carrying value~~asset may ~~not~~ be ~~recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:~~impaired.

~~Significant underperformance relative to expected historical or projected future operating results;~~

~~Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and~~

~~Significant negative industry or economic trends.~~

~~When~~Goodwill and indefinite lived intangible assets are tested for impairment at the ~~Company determines~~reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the ~~carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying~~fair value of the ~~asset cannot be recovered from projected undiscounted cash flows,~~reporting unit is less than its carrying amount. The qualitative assessment considers macroeconomic conditions, industry and market considerations, cost factors and overall company financial performance. If the ~~Company records an~~reporting unit does not pass the qualitative assessment, the carrying amount of the reporting unit, including goodwill, is compared to its fair value. When the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment ~~charge. The Company measures any~~loss is recognized up to a maximum amount of the recorded goodwill related to the reporting unit. Goodwill impairment ~~based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with~~losses are not reversed. There was no impairment loss of goodwill or indefinite lived intangible assets for the ~~risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.~~three months ended January 31, 2022.

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2021

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, the Company reviews long-lived assets including intangible assets with finite life, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.

Inventory

Inventory consists of non-perishable food items distributed by the Company and are stated at the lower of cost and net realizable value utilizing the first-in first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are based on estimates and included in cost of sales. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the inventory balances were insignificant and the Company determined that there was no allowance needed.

Revenue Recognition

The Company’s revenues consist of high quality, direct-to-consumer, ready-made meals that can be ordered by customers through www.homebistro.com, www.modelmeals.com and restaurant quality meats and seafood through its Colorado Prime Brand. Revenues from the Company’s ready-made meals are recognized when the product is delivered to the customer and title has ~~transferred,~~transferred. It is at this point in time that the Company’s performance obligations have been completed. Product sales are recorded net of any discounts or allowances and include shipping charges.

Customers can purchase gift cards via phone or online through the Company’s e-commerce website. Gift card purchases are initially recorded as unredeemed gift card liabilities and are recognized as product sales upon redemption. Historically, the majority of gift cards are redeemed within two to three years of issuance. The Company does not charge administrative fees on unused gift cards, and its gift cards do not have an expiration date.

Based on historical redemption patterns, a portion of issued gift cards are not expected to be redeemed (breakage). The Company uses the redemption recognition method for recognizing breakage related to unredeemed gift cards for which it has sufficient historical redemption information. Under the redemption recognition method, breakage revenue is recorded in proportion to, and over the time period gift cards are actually redeemed. The estimated breakage rate is based on historical issuance and redemption patterns and is re-assessed by the Company on a regular basis. At least three years of historical data, which is updated annually, is used to estimate redemption patterns. ~~Breakage revenue is included in product sales and the Company recorded~~ ~~nil~~ ~~for the three and nine months ended September 30, 2021 and 2020 (see Note 7).~~ Model meals, the Company’s wholly-owned subsidiary, does not have sufficient historical redemption information to recognize breakage. Therefore, all issued gift cards are recorded as a liability upon issuance and revenue when used.

Cost of Sales

The Company’s policy is to recognize product related cost of sales in conjunction with revenue recognition, when the product costs are incurred which is upon delivery of product. Cost of sales includes the food and processing costs directly attributable to fulfillment and the delivery of the product to customers including both inbound and outbound shipping costs. In addition, the royalty fee related to the Joint Product Development and Distribution Agreement (see Note 11) was also included in cost of sales.

Shipping and handling costs incurred for product shipped to customers are included in cost of sales and amounted to ~~$317,844~~$182,472 and ~~$79,563 for the nine months ended September 30, 2021 and 2020, respectively, and 168,331 and $22,709~~$83,302 for the three months ended ~~September 30,~~January 31, 2022 and 2021, ~~and 2020,~~ respectively. Shipping and handling costs charged to customers are included in sales.

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30,~~JANUARY 31, 2021

Stock-Based Compensation

Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation–Stock Compensation”, which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Advertising ~~costs~~Costs

The Company participates in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. Advertising costs charged to operations were ~~$520,776~~$364,584 and ~~$135,520, for the nine months ended September 30, 2021 and 2020, respectively, and $330,803 and $50,638~~$75,940, for the three months ended ~~September 30,~~January 31, 2022 and 2021, ~~and 2020,~~ respectively, are presented on the accompanying ~~condensed~~unaudited consolidated statement of operations as selling and marketing expenses.

Income Taxes

The Company accounts for income taxes using the liability method prescribed by ASC 740 - Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. For the ~~nine~~three months ended ~~September 30, 2021,~~January 31, 2022, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements.

Leases

~~In February 2016,~~The Company accounts for its leases using the ~~Financial~~method prescribed by ASC 842 – Lease Accounting ~~Standards Board (“FASB”) issued ASU 2016-02,~~ ~~Leases~~ ~~(Topic 842)~~. The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The updated guidance is effective for interim and annual periods beginning after December 15, 2018.

~~On January 1, 2019, the~~ Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessedassess whether the contract is, or contains, a ~~lease. The Company’s assessment~~lease at the inception of a contract which is based ~~on: (1)~~on (i) whether the contract involves the use of a distinct identified asset, ~~(2)~~(ii) whether the Company obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and ~~(3)~~(iii) whether the Company has the right to direct the use of the asset. The Company ~~will allocate~~allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for short-term leases that have a term of 12 months or less.

Operating and financing lease ROU assets represents the right to use the leased asset for the lease term. Operating and financing lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the ~~condensed~~ consolidated statements of operations.

Basic and Diluted Loss Per Share

Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock options and stock warrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutive in the future.

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30,~~JANUARY 31, 2021

The potentially dilutive common stock equivalents as of ~~September 30,~~January 31, 2022 and 2021 ~~and 2020~~ were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss. The following were the computation of diluted shares outstanding and in periods where the Company has a net loss, all dilutive securities are excluded.

	September 30,				January 31,
	2021		2020		2022		2021
Common Stock Equivalents:
Stock Options		—		60,638
Stock Warrants		12,235,462		11,267,571		17,892,446		11,278,211
Convertible Notes		1,204,192		—		573,164		282,017
Total		13,439,654		11,328,209		18,465,610		11,560,228

Concentration Risk

The Company purchased approximately 100% of its food products from one vendor during the three months ended January 31, 2021. The Company is not obligated to purchase from these vendors and, if necessary, there are other vendors from which the Company can purchase food products. As of January 31, 2021, the Company had accounts payable balance of $10,554 to this vendor.

During the three months ended January 31, 2022, the Company had two kitchen facilities located at Pembroke Pines, FL 33009 and Santa Ana, CA. The Company started producing and packaging its food products at these locations in addition to purchasing food products from other vendors which mitigated this concentration risk.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and edging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) to simplify the accounting for convertible instruments by removing certain separation models in Subtopic 470- 20, Debt with Conversion and Other Options, for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate when applying the guidance in Topic 835, Interest. The amendments in ASU 2020-06 provide financial statement users with a simpler and more consistent starting point to perform analyses across entities. The amendments also improve the operability of the guidance and reduce, to a large extent, the complexities in the accounting for convertible instruments and the difficulties with the interpretation and application of the relevant guidance. To further improve the decision usefulness and relevance of the information being provided to users of financial statements, amendments in ASU 2020-06 increased information transparency by making the following amendments to the disclosure for convertible instruments:

1.	Add a disclosure objective

2.	Add information about events or conditions that occur during the reporting period that cause conversion contingencies to be met or conversion terms to be significantly changed

3.	Add information on which party controls the conversion rights

4.	Align disclosure requirements for contingently convertible instruments with disclosure requirements for other convertible instruments

5.	Require that existing fair value disclosures in Topic 825, Financial Instruments, be provided at the individual convertible instrument level rather than in the aggregate.

Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, amendments in ASU 2020-06 added disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital.

HOME BISTRO, INC. AND SUBSIDIARIES

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2021

The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of its annual fiscal year and are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. If an entity elects the fully retrospective method of transition, the cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. The Company early adopted ASU 2020-06 during the three months ended January 31, 2022 and did not have a significant impact on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company does not believe the adoption of this ASU will have a significant impact on its consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements.

NOTE 3 – ~~ACQUISITIONS AND DISPOSAL~~ACQUISITION OF ~~THE DISCONTINUED OPERATIONS~~A SUBSIDIARY

~~Acquisition of Home Bistro Holdings and Disposal of The Discontinued Operations of the RTD Business~~

Home Bistro, Inc. was formed on April 9, 2013 as a Delaware corporation, under the name DineWise, LLC. On December 1, 2014, it underwent a statutory conversion filed under Section 8-265 of the Delaware Code to convert from a limited liability company to a corporation and changed its name to Home Bistro, Inc.

On September 22, 2020, Home Bistro, Inc. filed a Certificate of Conversion under Section 266 of the Delaware General Corporation Law to convert its state of domicile from Delaware to Nevada and simultaneously filed an Articles of Conversion with the Nevada Secretary of State for the same and changed its name from Home Bistro, Inc. (the now wholly-owned subsidiary of the Company) to Home Bistro Holdings, Inc., each effective as of September 30, 2020.

Home Bistro manufactures, packages, and sells, direct-to-consumer, gourmet meals under the Home Bistro brand and markets restaurant quality meats and seafood under the Prime Chop and Colorado Prime brands. The Company’s meals are freshly prepared, flash-frozen, to preserve freshness, and packaged in its facility located in Miami, Florida. Home Bistro meals are ordered on-line and delivered to consumers in containers designed to keep the products frozen during transport. Orders for restaurant quality meats and seafood through the Company’s Prime Chop and Colorado Prime brands are processed through a third-party co-packer based in North Carolina who fulfills and ships customer orders.

~~Agreement and Plan of Merger~~

On April 20, 2020, the Company, Fresh Market Merger Sub, Inc., a Delaware corporation and a newly created wholly-owned subsidiary of the Company, also referred to herein as Merger Sub, and Home Bistro, Inc., a privately-held Delaware corporation engaged in the food preparation and home-delivery business (presently known as Home Bistro Holdings, Inc., a Nevada corporation), also referred to herein also Home Bistro Holdings, entered into an Agreement and Plan of Merger, also referred to herein as the Merger Agreement, pursuant to which, among other things, Merger Sub agreed to merge with and into Home Bistro Holdings, with Home Bistro Holdings becoming a wholly-owned subsidiary of the Company and the surviving corporation in the merger, also referred to herein as the Merger. Pursuant to the terms of the Merger Agreement, Home Bistro Holdings filed a Certificate of Merger with the Nevada Secretary of State on April 20, 2020 (see Note 1).

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2021~~

Prior to the effective time of the Merger, the Company and certain of its existing securityholders entered into an Exchange Agreement providing for, among other things, the exchange (the “Exchange”) of securities held by such securityholders for shares of common stock, as more fully detailed therein. As a result of the Exchange, all of the Company’s issued and outstanding shares of Series A Preferred Stock, Series C Preferred Stock and convertible notes were converted into an aggregate of 5,405,479 shares of common stock on a fully diluted basis, consisting of 1,364,222 shares of common stock and warrants to purchase up to 4,041,258 shares of common stock. The 250,000 shares of Series B Preferred Stock owned by a former officer were cancelled on April 9, 2020 pursuant to a General Release Agreement and 250,000 shares of Series B Preferred Stock held by a related party remained issued and outstanding as of the date of the Merger.

~~After the Exchange, a total of 1,899,094 shares of common stock, warrants to purchase 4,041,258 shares of common stock and 60,638 stock options were deemed issued and outstanding.~~

At the effective time of the Merger, and subject to the terms and conditions of the Merger Agreement, each outstanding share of common stock of Home Bistro Holdings was converted into the right to receive approximately four hundred seventy-three (473) shares of common stock. Accordingly, the aggregate shares of the Company’s common stock issued in the Merger to the former securityholders of Home Bistro Holdings is 24,031,453 shares of common stock on a fully diluted basis consisting of 17,105,139 shares of common stock and warrants to purchase up to 6,926,314 shares of common stock.

Subsequent to the Merger, the Company had an aggregate of 30,031,501 shares of common stock issued and outstanding on a fully diluted basis consisting of 19,004,233 shares of common stock, 60,638 stock options and warrants to purchase up to 10,967,572 shares of common stock.

In connection with the Merger, certain Company stockholders entered into a Lock-Up and Leak-Out Agreement with the Company pursuant to which, among other thing, such stockholders agreed to certain restrictions regarding the resale of common stock for a period of two years from the date of the Merger Agreement, as more fully detailed therein.

Additionally, on April 20, 2020, the Company and a stockholder entered into a Put Option Agreement (see Note 11), pursuant to which, among other things, the Company agreed, at the election of the stockholder, to purchase certain shares of common stock from such stockholder no sooner than two years from the date of the Put Option Agreement (the “Market Period”). Pursuant to the Put Option Agreement, in the event that the stockholder does not generate $1.3 million dollars (the “Total Investment”) in gross proceeds from the sale of its shares of common stock by the second anniversary of the Put Option Agreement, then the stockholder has the right to cause the Company to purchase shares held by the stockholder at a price equal to the difference between the Total Investment and the net proceeds actually realized by the stockholder from shares of common stock sold during the Market Period and the number of shares of common stock held by the stockholder on the date the put right is exercised. The put right expires fourteen (14) days from end of the Market Period. In connection with the Put Option Agreement, the Company recorded an initial common stock repurchase obligation in the amount of $1.3 million, reflected in the accompanying consolidated balance sheets as a long-term liability, ~~Common stock repurchase obligation~~ ~~(see Note 11).~~

Effective April 20, 2020, the Company acquired all the issued and outstanding shares of Home Bistro Holdings pursuant to the Merger Agreement and Home Bistro Holdings became a wholly owned subsidiary of the Company. As a result of the Merger, for financial statement reporting purposes, the Merger between the Company and Home Bistro Holdings has been treated as a reverse acquisition and recapitalization with Home Bistro Holdings deemed the accounting acquirer and the Company deemed the accounting acquiree in accordance with FASB Accounting Standards Codification (“ASC”) Section 805-10-55. At the time of the Merger, both the Company and Home Bistro Holdings had their own separate operating segments. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements after the Merger are those of Home Bistro Holdings and are recorded at the historical cost basis of Home Bistro Holdings. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Home Bistro Holdings which are recorded at historical cost. The results of operations of the Company are consolidated with results of operations of Home Bistro Holdings starting on the date of the Merger Agreement. The equity of the consolidated entity is the historical equity of Home Bistro Holdings retroactively restated to reflect the number of shares deemed issued by the Company in the reverse acquisition.

The Merger constituted a change of control and the majority of the Board of Directors changed with the consummation of the Merger. The Company issued to the stockholders of Home Bistro Holdings shares of common stock and stock warrants which represented approximately 80% of the combined company on a fully converted basis after the closing of the Merger. As a result of the above transactions and the Company’s intent to dispose or divest the assets and liabilities associated with the RTD Business as discussed below, this transaction was accounted for as a reverse recapitalization of Home Bistro Holdings where Home Bistro Holdings is considered the historical registrant and the historical operations presented will be those of Home Bistro Holdings.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2021~~

~~The following assets and liabilities were assumed in the Merger~~:

Cash $ 4,917
Prepaid expense 9,776
Operating right-of-use asset 32,444
Total assets acquired 47,137

Accounts payable and accrued expenses (209,417 )
Operating right-of-use liability (32,444 )
Total liabilities assumed $ (241,861 )

Net liability assumed $ (194,724 )
~~Disposal of Discontinued Operations of the RTD Business~~
On September 25, 2020, pursuant to the Asset Purchase Agreement, among other things, the Company agreed to sell all of the Company’s business, assets and properties used, or held or developed for use, in its functional RTD (Ready to Drink) beverage segment (the “RTD Business”), and the Buyer agreed to assume certain debts, obligations and liabilities related to the RTD Business. The Company assumed an accounts payable liability in the amount of $14,000 related to accounting expense of the RTD Business for a period prior to the Merger. Pursuant to the Asset Purchase Agreement, the Buyer reimbursed the Company for accounting expenses in amount of $14,000 incurred prior to the Merger, of which $7,000 was payable in cash and the balance in form of a promissory note dated September 25, 2020 in the amount of $7,000. The promissory note bears interest at a rate of 5% per annum, matures on April 25, 2021 and is payable in monthly installments of $1,000 commencing on October 25, 2020 through April 25, 2021. As of December 31, 2020, $5,000 remained due on the promissory note. The Company received the $7,000 cash portion of the consideration as of December 31, 2020. The $14,000 reimbursement was recorded to additional paid in capital as reflected in the accompanying consolidated statements of changes in stockholders’ deficit.
ASC 205-20 “Discontinued Operations” establishes that the disposal or abandonment of a component of an entity or a group of components of an entity should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. As a result, the component’s results of operations have been classified as discontinued operations on a retrospective basis for all periods presented. The results of operations of this component, for all periods, are separately reported as “discontinued operations” on the consolidated statements of operations.
~~The Asset Purchase Agreement, discussed above under~~ ~~Agreement and Plan of Merger~~, was intended to be part of the Merger and in effect transferred the RTD Business and the related assets and liabilities to Gratitude Keto, whose CEO, Roy Warren Jr., formerly served as the Company’s director and Chief Operating Officer and was considered a related party, in substance, in the accounting of this transaction. Therefore, the disposal of net liabilities and the reimbursement discussed above in connection with the disposal of the RTD Business was recorded to additional paid in capital as reflected in the accompanying consolidated statements of changes in stockholders’ deficit.
~~The following table set forth the selected financial data of the net liabilities recorded to additional paid in capital as of September 24, 2020.~~
September 24,
2020
Assets:
Other assets:
Operating lease right-of-use assets, net $ 2,417
Total assets $ 2,417

Liabilities:
Current liabilities:
Accounts payable $ 112,212
Accrued expenses and other liabilities 5,009
Operating lease liabilities, current portion 2,417
Total current liabilities 119,638
Total liabilities $ 119,638

Net liabilities $ 117,221
Expense reimbursement by Buyer 14,000
Disposal of net liabilities to a related party $ 131,221

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
Acquisition of Model Meals

Model Meals, LLC (the “Model Meals”) was formed on May 1, 2015. Model Meals provides prepackaged and prepared meals as a solution for time-constrained but discerning consumers focused on satisfying every member of the family by offering a broad array of the highest quality meal planning, delivery, and preparation services. Products are customized meal solutions, delivered fresh directly to the home and utilizes third-party food delivery services to fulfill customers’ orders.

On July 6, 2021, the Company entered and closed on an Agreement and Plan of Merger with the members of Model Meals, acquiring Model Meals through a reverse triangular merger, whereby Model Meals merged with Model Meals Acquisition Corp., a wholly owned subsidiary of the Company, with Model Meals being the surviving entity (the “Acquisition”). As a result, Model Meals became a wholly owned subsidiary of the Company, and the members of Model Meals received and aggregate of 2,008,310 shares of common stock and were paid $60,000 in cash. Pursuant to the Acquisition, the Company issued ~~on a~~ ~~pro rata~~ ~~basis,~~ 2,008,310 shares of common stock ~~equal to $2,000,000 divided by the 30-day volume weighted average price (“VWAP”) immediately prior to closing~~with grant date fair value of ~~the Acquisition~~$ 2,028,393 (see Note 1). The shares are subject to a 24-month Lockup and Leak-Out Agreement and were issued pursuant to Section 4(a)(2) of the Securities Act. The acquisition of Model Meals will allow the Company the ability to increase its customer base, geographic distribution area, and prepared meals available on its ecommerce sights.

Further, on August 12, 2021, the Company filed, in an amended current report Form 8-K/A, Model Meals’; (i) audited balance sheets and audited statement of operations as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019, respectively,; (ii) balance sheet and statement of operations as of March 31, 2021 and for the three months ended March 31, 2021, respectively, and; (iii) unaudited pro forma combined financial information derived by the application of pro forma adjustments to the historical consolidated financial statements of the Company and Model Meals which gives effect to the Acquisition between the Company and Model Meals as if the Acquisition had occurred on January 1, 2020 with respect to the unaudited annual pro forma combined statement of operation, and as of January 1, 2021 for the three months ended March 31, 2021 unaudited pro forma combined statement of operation, and as of March 31, 2021 with respect to the unaudited pro forma combined balance sheets.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
In connection with the Acquisition, the assets acquired and liabilities assumed were recorded at fair value on the acquisition date. The fair values are subject to adjustment during measurement period with subsequent changes recognized in earnings or loss. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business acquisition date. As a result, during the purchase price measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the purchase price measurement period, the Company will record any adjustments to assets acquired or liabilities assumed in operating expenses in the period in which the adjustments may have been determined. Based upon the purchase price allocation, the following table summarizes the preliminary fair value of the assets acquired and liabilities assumed at the date of the acquisition:

Total Total
Assets acquired:
Current assets $ 97,140 $ 97,140
Computer software 66,198 66,198
Customer relationships 43,000 43,000
Trademark 505,000 505,000
Goodwill 1,780,964 1,809,357
Total assets acquired at fair value 2,492,302 2,520,695
Less: total liabilities assumed (432,302 ) (432,302 )
Net asset acquired $ 2,060,000 $ 2,088,393

Purchase consideration paid:
Fair value of common shares issued $ 2,000,000 $ 2,028,393
Cash consideration 60,000 60,000
Total purchase consideration paid $ 2,060,000 $ 2,088,393

~~Intangible assets, acquired during the three months ended September 30, 2021, net consisted~~Goodwill recognized as a result of the ~~following:~~

Estimated
Life
September 30,
2021
(Unaudited)
Computer software 3.5 years $ 66,198
Customer relationships 7 years 43,000
Trademark Indefinite 505,000
Less: Accumulated amortization (6,628 )
$ 607,570
~~During the three months ended September 30, 2021, the Company recorded a total of $6,628 of amortization expense~~acquisition is not deductible for tax purposes. See Note 4 for additional information about other intangible assets. The recognized goodwill related to Model Meals is directly attributable to synergies expected to arise after the ~~intangible assets acquired.~~acquisition.

The following unaudited pro forma consolidated results of operations for the ~~nine~~three months ended ~~September 30,~~January 31, 2021 ~~and 2020~~ have been prepared as if the acquisition of Model Meals had occurred as of the beginning of the ~~following periods:~~period:

Nine Months Ended Nine Months Ended Three Months
Ended
September 30,
2021 September 30,
2020 January 31,
2021
Net Revenues $ 2,472,073 $ 2,697,311 $ 867,660
Net Loss $ (3,733,490 ) $ (1,079,842 ) $ (275,249 )
Net Loss per Share $ (0.17 ) $ (0.06 ) $ (0.02 )

Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results.

NOTE 4 – GOODWILL AND INTANGIBLE ASSETS
On July 6, 2021, the Company acquired Model Meals’ net assets with total fair value of $279,036, which includes computer software, customer relationships and trademarks, for a total consideration of $2,088,393 (see Note 3). The excess consideration over the fair value of the net assets acquired of $1,809,357 was recorded as goodwill.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
Asset Acquisition – License Agreement
On June 24, 2021, the Company entered into a licensing agreement (“License Agreement”) with a celebrity chef and majority member interest holder of Homemade Meals, LLC (“Homemade Meals”). As a condition to finalizing the License Agreement, the Company executed a Membership Interest Purchase Agreement (the “Member Agreement”) and issued an aggregate of 2,266,667 shares of common stock issued to other members with an aggregate fair value of $2,969,334, valued based on the market price of common stock on the close date of October 25, 2021. The shares issued to the other members were consideration to terminate an exclusivity and non-compete agreement the celebrity chef had with Homemade Meals. The Company issued the celebrity chef 2,000,000 shares of common stock with a fair value of $2,620,000, valued based on the market price of common stock on the close date of Company’s common stock. The Company’s primary reason for acquiring the membership interests in Homemade Meals was to terminate the non-compete agreement between the celebrity chef and Homemade Meals, thereby enabling the celebrity chef to execute the License Agreement with the Company. At the time of execution of the Member Agreement, Homemade meals held no significant assets and had no business operations, and the Member Agreement was solely executed to terminate the exclusivity and non-compete agreement the celebrity chef had with Homemade Meals. The Company recorded the shares given to the celebrity chef and the members of Homemade Meals has two separate transactions.
The Company and the celebrity chef (collectively as “Parties”) had a preexisting relationship and other arrangements before negotiations for the acquisition of Homemade Meals and had planned to enter into a License Agreement during the negotiations, which is separate from the Member Agreement. Since ASC 805-50 includes only general principles related to accounting for an asset acquisition and in the absence of specific guidance, the Company analogized to the guidance in ASC 805-10-25-20 through 25-21– Business Combination to identify and account for transactions that are separate from a business combination. Under this guidance, the Company, when applying the acquisition method, recognized “only the consideration transferred to acquire the asset, the license. Any separate transactions were accounted for separately from acquisition of the License Agreement in accordance with the relevant GAAP.
Therefore, in accordance with ASC 805-10-25-21, the Company accounted for the 2,000,000 shares of common stock with fair value of $2,620,000, valued based on the market price of common stock on the acquisition date, issued to the celebrity chef as the cost of the License Agreement and was recorded as an intangible asset in the accompanying consolidated balance sheet and will be amortized over the three-year term of the License Agreement. In addition, the aggregate of 2,266,667 shares of common stock issued to other members with an aggregate fair value of $2,969,334, valued based on the market price of common stock on the acquisition date, was accounted for as compensation to terminate the exclusivity and non-compete agreement and was recorded as product development expense in the accompanying consolidated statement of operations.
Goodwill
Estimated
Life January 31,
2022 October 31,
2021
(Unaudited)
Goodwill Indefinite $ 1,809,357 $ 1,809,357
Less: Impairment — —
Goodwill, net $ 1,809,357 $ 1,809,357
Intangible Assets
Estimated
Life January 31,
2022 October 31,
2021
(Unaudited)
Computer software 3.5 years $ 66,198 $ 66,198
Customer relationships 7 years 43,000 43,000
Trademark Indefinite 505,000 505,000
License agreement 3 years 2,620,000 2,620,000
Total 3,234,198 3,234,198
Less: Accumulated amortization (233,798 ) (8,837 )
Intangible assets, net $ 3,000,400 $ 3,225,361
Intangible assets with a finite life, net $ 2,495,400 $ 2,720,361
During the three months ended January 31, 2022, the Company recorded a total of $224,961 of amortization expense related to the intangible assets.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

Amortization of intangible assets attributable to future periods is as follows:
Year ending October 31: Amount
2022 $ 674,883
2023 899,845
2024 898,147
2025 6,143
2026 6,143
2027 6,143
2028 4,096
Total $ 2,495,400
NOTE 45 – CONVERTIBLE NOTES

At ~~September 30,~~January 31, 2022 and October 31, 2021, the convertible debt consisted of the following:

September 30,
2021
(Unaudited)
Principal amount $ 1,156,351
Less: debt discount (498,440 )
Convertible notes payable, net $ 657,911

Principal amount – related party $ 75,391
Less: debt discount – related party (39,479 )
Convertible notes payable - related party, net $ 35,915

Total convertible notes payable balance, net $ 693,826
~~December 2020 Financing~~
~~December 2020 Note I:~~
On December 18, 2020, the Company entered a Securities Purchase Agreement (the “December 2020 SPA I”) with an investor for the sale of the Company’s convertible note. Pursuant to the December 2020 SPA I, among other things, (i) the Company issued a self-amortization promissory note (the “December 2020 Note I”, and together with the December 2020 SPA I, the “December 2020 Agreements I”) in the aggregate principal amount of $275,000, and (ii) issued a total of 75,546 shares of common stock, as a commitment fee and 183,866 shares (the “Second Commitment Shares”) issued as a returnable commitment fee. Accordingly, the Company deems the Second Commitment Shares as unissued shares for accounting purposes. The 75,546 shares of common stock were recorded as a debt discount of $23,546 based on the relative fair value method. Pursuant to the December 2020 Note I, the Company received net proceeds of $234,100, net of $27,500 OID and $13,400 of issuance costs. The OID, issuance costs and issued commitment fee shares of common stock have been recorded as a debt discount to be amortized into interest expense over the twelve-month term of the note. The December 2020 Note I bears an interest rate of 12% per annum (which shall increase to 16% per annum upon the occurrence of an Event of Default (as defined in the December 2020 Note I) and shall mature on December 18, 2021. The investor has the right, only upon the occurrence of an Event of Default, to convert all or any portion of the then outstanding and unpaid principal amount and interest thereon (including any default interest) into shares of common stock equal to the lesser of (i) 105% multiplied by the closing bid price of the common stock on the trading day immediately preceding the issue date ($1.04) or (ii) the closing bid price of the common stock on the trading day immediately preceding the date of the respective conversion (the “Conversion Price”), subject to certain percentage of ownership limitations. The Second Commitment Shares must be returned to the Company’s treasury if the December 2020 Note I is fully repaid and satisfied on or prior to the maturity date, the. Upon the occurrence and during the continuation of any Event of Default (as defined in December 2020 Note I), the investor is no longer required to return the Second Commitment Shares to the Company and the December 2020 Note I becomes immediately due and payable thereunder in the amount equal to the principal amount then outstanding plus accrued interest (including any default interest) through the date of full repayment multiplied by 125%. The obligations of the Company under the December 2020 Note I rank senior with respect to any and all unsecured indebtedness incurred following the issue date except with respect to the Company’s current and future indebtedness with Shopify and any further loans that may be received pursuant to the CARES Act and the SBA’s Economic Injury Disaster loan program. Further, the December 2020 Note I contain standard anti-dilution provisions and price protections provisions in the event that the Company issues securities for a price per share less than the Conversion Price. The December 2020 Agreements I contain other provisions, covenants, and restrictions common with this type of debt transaction. Furthermore, the Company is subject to certain negative covenants under the December 2020 Agreements I, which the Company also believes are customary for transactions of this type. The December 2020 SPA I also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. As of December 31, 2020, the December 2020 Note I had outstanding principal and accrued interest of $275,000 and $1,175, respectively.
On March 18, 2021 (the “Redemption Date”), the Company elected, pursuant to terms of payment as described in the December 2020 Note I, to pay an aggregate amount of 283,615.75 (the “Payoff Amount”) consisting of $275,000 of principal, $7,865.75 of accrued interest and $750.00 in administrative fees (the “Redemption Amount”).The December 2020 Note I is deemed to have been paid in full; the lender will not exercise any of its rights relating to any potential default that may have occurred after the issue date of the December 2020 Note I and the Second Commitment Shares were returned by the lender to the Company’s transfer agent for cancellation as provided for in the December 2020 Agreements I. The fair value of the derivative liability associated with the December 2020 Note I at Redemption Date amounted to $26,629 and was reclassified to gain on debt extinguishment in the accompanying condensed consolidated statement of operation upon redemption. Any remaining unamortized debt discounts were recognized as interest expense on the Redemption Date. As of September 30, 2021, the December 2020 Note I had no outstanding balance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
~~December 2020 Note II:~~
On December 28, 2020, the Company entered into a Securities Purchase Agreement (the “December 2020 SPA II”) with an investor for the sale of the Company’s convertible note. Pursuant to the SPA II, among other things, (i) the Company issued a self-amortization promissory note (the “December 2020 Note II”, and together with the December 2020 SPA II, the “December 2020 Agreements II”) in the aggregate principal amount of $172,000, and (ii) issued 45,989 shares of common stock as a commitment fee and 114,667 shares (the “Second Commitment Shares”) issued as a returnable commitment fee. Accordingly, the Company deems the Second Commitment Shares as unissued shares for accounting purposes. The 45,989 shares of common stock issued were recorded as a debt discount of $14,720 based on the relative fair value method. Pursuant to the December 2020 Note II, the Company received net proceeds of $150,000, net of $15,500 OID and $6,500 of issuance costs. The OID, issuance costs and issued commitment fee shares of common stock have been recorded as a debt discount to be amortized into interest expense over the twelve-month term of the note. The December 2020 Note II matures on December 28, 2021 and bears an interest rate of 12% per annum (which shall increase to 16% per annum upon the occurrence of an Event of Default (as defined in the December 2020 Note II). The Company shall make nine monthly cash payments (“Amortization Payments”) in the amount of $19,264 beginning at the end of the third month from the issuance date of the note. The Company can elect to extend the Amortization Payment due date by thirty-days by notifying the holder on or before the of the Amortization Payment due date and pay an extension fee of $1,926, provided that the note is not in default. The first twelve months of interest (equal to $20,640) shall be guaranteed and earned in full as of the issue date, however if the note is repaid in its entirety, on or prior to, the due date of the first Amortization Payment, then the interest shall be accrued on a per annum basis based on the number of days elapsed as of the repayment date from the issue date. As of December 31, 2020, the December 2020 Note II had outstanding principal and accrued interest of $172,000 and $0, respectively. During the nine months ended September 30, 2021, the Company fully paid the December 2020 Note II. As of September 30, 2021, the December 2020 Note II had had no outstanding balance.
The investor has the right, only upon the occurrence of an Event of Default, to convert all or any portion of the then outstanding and unpaid principal amount and interest thereon (including any default interest) into shares of common stock equal to the lesser of (i) 105% multiplied by the closing bid price of the common stock on the trading day immediately preceding the issue date ($1.00) or (ii) the closing bid price of the common stock on the trading day immediately preceding the date of the respective conversion (the “Conversion Price”), subject to certain percentage of ownership limitations. The Second Commitment Shares must be returned to the Company’s treasury if the December 2020 Note II is fully repaid and satisfied on or prior to the maturity date, the. Upon the occurrence and during the continuation of any Event of Default (as defined in the December 2020 Note II), the investor is no longer required to return the Second Commitment Shares to the Company and the December 2020 Note II becomes immediately due and payable thereunder in the amount equal to the principal amount then outstanding plus accrued interest (including any default interest) through the date of full repayment multiplied by 125%. The December 2020 Note II rank senior with respect to any and all unsecured indebtedness incurred following the issue date except with respect to the Company’s current and future indebtedness with Shopify and any further loans that may be received pursuant to the CARES Act and the SBA’s Economic Injury Disaster loan program. Further, the December 2020 Note II contain standard anti-dilution provisions and price protections provisions in the event that the Company issues securities for a price per share less than the Conversion Price. The December 2020 Agreements II contain other provisions, covenants, and restrictions common with this type of debt transaction. Furthermore, the Company is subject to certain negative covenants under the December 2020 Agreements II, which the Company also believes are also customary for transactions of this type. The December 2020 SPA II also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended.
The Company also entered into a Registration Rights Agreement (“Registration Agreement”) in connection with the December 2020 Agreements II (see Note 11). Pursuant to which the Company is required to prepare and file with the SEC a Registration Statement or Registration Statements (as is necessary) covering the resale of all of the Registrable Securities , which Registration Statement(s) shall state that, in accordance with Rule 415 promulgated under the Securities Act, such Registration Statement also covers such indeterminate number of additional shares of Securities as may become issuable upon stock splits, stock dividends or similar transactions. The Company shall initially register for resale all of the Registerable Securities, or an amount equal to the maximum amount allowed under Rule 415 (a)(1)(i) as interpreted by the SEC. In the event the Company cannot register sufficient shares of Securities, due to the remaining number of authorized shares of Securities being insufficient, the Company will use its best efforts to register the maximum number of shares it can base on the remaining balance of authorized shares and will use its best efforts to increase the number of its authorized shares as soon as reasonably practicable.
The Company shall use its best efforts to have the Registration Statement filed with the SEC within 60 or 120 days following the closing date of the December 2020 Agreements II (collectively as “Filing Deadline”). The Company shall pay the holder the sum of 1% of the purchase amount of the December 2020 Note II as liquidated damages, and not as a penalty for each time it fails to meet the Filing Deadline. The liquidated damages set forth in the Registration Agreement shall be paid, at the holder’s option, in cash or securities priced at the share price, or portion thereof. Failure of the Company to make payment within five business days of the Filing Date shall be considered a breach of the Registration Agreement.
On March 24, 2021, the December 2020 Note II was amended (“Amendment”) pursuant to which, the Company issued a warrant to purchase up to 78,250 shares of common stock (“December 2020 Warrant II”) as additional commitment fee. The December 2020 Warrant II; (i) was valued at $4,227 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
~~In addition, the Amendment also provided for a Commitment Share True-Up provision (as discussed below under~~ ~~Commitment Share True-Up Provision)~~~~. At the inception of the December 2020 Note II, the Commitment Share True-Up had a fixed monetary value of $22,995 and was recorded as a debt discount to be amortized over the twelve-month term.~~
~~The Amendment was accounted for as a debt modification in accordance with ASC 470-50-40-10 -~~ ~~Debt Modification and Extinguishment~~. The present value of the cash flows under the amended terms is less than 10% different from the present value of the remaining cash flows of the current terms and no gain or loss was recognized on modification on March 24, 2021. The warrant issued as additional commitment fee was capitalized and amortized as of the original issue date based on the Company’s elected accounting policy.
January 31,
2022 October 31,
2021
(Unaudited)
Principal amount $ 536,329 $ 1,028,179
Less: debt discount (228,600 ) (477,541 )
Convertible notes payable, net $ 307,729 $ 550,638

Principal amount – related party $ 25,523 $ 63,069
Less: debt discount – related party (13,159 ) (32,897 )
Convertible note payable - related party, net $ 12,364 $ 30,172

Total convertible notes payable, net $ 320,093 $ 580,810

January 2021 ~~Financings~~Financing

January 2021 Note I:II
On January 12, 2021, the Company entered into a Securities Purchase Agreement (the “January 2021 SPA I”) with an investor for the sale of the Company’s convertible note. Pursuant to the January 2021 SPA I, the Company; (i) issued a self-amortization promissory note (the “January 2021 Note I”, and together with the January 2021 SPA I, the “January 2021 Agreements I”) in the aggregate principal amount of $120,000; (ii) issued a total of 29,385 shares of common stock as a commitment fee and; (iii) shall issue 73,269 shares of common stock which is returnable pursuant to the terms of the January 2021 Agreements I (the “Second Commitment Shares”). The 29,385 shares of common stock issued were recorded as a debt discount of $17,297 based on the relative fair value method. The Company received net proceeds of $105,000, net of $10,000 OID and $5,000 issuance cost. The OID, issuance costs and issued commitment fee shares of common stock have been recorded as a debt discount to be amortized into interest expense over the twelve-month term of the note. The January 2021 Note I matures on January 12, 2022 and bears an interest rate of 10% per annum (which shall increase to 16% per annum upon the occurrence of an Event of Default (as defined in the January 2021 Note I)). The Company shall make nine monthly cash payments (“Amortization Payments”) in the amount of $14,666.66 beginning April 12, 2021. The Company can elect to extend the Amortization Payment due date by thirty-days by notifying the holder on or before the of the due date and pay an extension fee of $3,080, provided that the note is not in default. The first twelve months of interest (equal to $12,000) shall be guaranteed and earned in full as of the issue date, however if the note is repaid in its entirety, on or prior to, the due date of the first Amortization Payment, then the interest shall be accrued on a per annum basis based on the number of days elapsed as of the repayment date from the issue date. During the nine months ended September 30, 2021, the Company fully paid the January 2021 Note I. As of September 30, 2021, the January 2021 Note I had no outstanding balance.
The investor has the right, only upon the occurrence of an Event of Default, to convert all or any portion of the then outstanding and unpaid principal amount and interest thereon (including any default interest) into shares of common stock equal to the lesser of (i) 105% multiplied by the closing bid price of the common stock on the trading day immediately preceding the issue date or (ii) the closing bid price of the common stock on the trading day immediately preceding the date of the respective conversion (the “Conversion Price”), subject to certain percentage of ownership limitations. The Second Commitment Shares must be returned to the Company’s treasury if the January 2021 Note I is fully repaid and satisfied on or prior to the maturity date. Upon the occurrence and during the continuation of any Event of Default (as defined in the January 2021 Note I), the investor is no longer required to return the Second Commitment Shares to the Company and the January 2021 Note I becomes immediately due and payable thereunder in the amount equal to the principal amount then outstanding plus accrued interest (including any default interest) through the date of full repayment multiplied by 125%. The January 2021 Note I rank senior with respect to any and all unsecured indebtedness incurred following the issue date except with respect to the Company’s current and future indebtedness with e-commerce platform provider and any further loans that may be received pursuant to the CARES Act and the SBA’s Economic Injury Disaster loan program. Further, the January 2021 Note I contain standard anti-dilution provisions and price protections provisions in the event that the Company issues securities for a price per share less than the Conversion Price. The January 2021 Agreements I contain other provisions, covenants, and restrictions common with this type of debt transaction. The January 2021 SPA I also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended.
On March 31, 2021, the January 2021 Note I was amended (“Amendment”) pursuant to which, the Company issued a warrant to purchase up to 55,000 shares of common stock (“January 2021 Warrant I”) as additional commitment fee. The January 2021 Warrant I; (i) was valued at $6,173 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
~~In addition, the Amendment also provided for a Commitment Share True-Up provision as discussed below under~~ ~~Commitment Share True-Up Provision~~. At the inception of the January 2021 Note I, the Commitment Share True-Up had fixed monetary value of $13,223 which was recorded as a debt discount to be amortize over the twelve-month term of the note.
~~The Amendment was accounted for as a debt modification in accordance with ASC 470-50-40-10 -~~ ~~Debt Modification and Extinguishment~~. The present value of the cash flows under the amended terms is less than 10% different from the present value of the remaining cash flows of the current terms and no gain or loss was recognized on modification on March 31, 2021. The warrant issued as additional commitment fee was capitalized and amortized as of the original issue date based on the Company’s elected accounting policy.
~~January 2021 Note II:~~

On January 27, 2021, the Company entered into a Securities Purchase Agreement (the “January 2021 SPA II”) with an investor for the sale of the Company’s convertible note. Pursuant to the January 2021 SPA II, the Company; (i) issued a convertible note with principal amount of $330,000 (the “January 2021 Note II”) with the Company receiving $300,000 in net proceeds, net of $33,000 of OID recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) issued 150,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) (as discussed below under Commitment Share True-Up Provision) and; (iii) a warrant to purchase up to 150,000 shares of common stock (the “January 2021 Warrant II”, and together with the January 2021 SPA II and the January 2021 Note II, the “January 2021 Agreements II”). The 150,000 shares of common stock and 150,000 warrants issued were valued at $85,981 and $31,821, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $93,750, all recorded as a debt discount to be amortized over the twelve-month term of the note. The January 2021 Note II matures on February 1, 2022 and a one-time interest charge of 8% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the January 2021 Note II immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”) in the amount of $39,600 beginning May 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the January 2021 Note II at any time or times on or after the occurrence of an Event of Default. The January 2021 Note II is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The January 2021 Agreements II contain other provisions, covenants, and restrictions common with this type of debt transaction. The January 2021 SPA II also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$175,537~~$213,570 of principal and ~~$22,463~~$24,030 of accrued interest. During the three months ended January 31, 2022, the Company paid the remaining $116,430 of principal and $2,370 of accrued interest. As of ~~September 30,~~January 31, 2022, and October 31, 2021, the January 2021 Note II had outstanding principal and accrued interest of ~~$154,463~~$0 and ~~$0,~~$116,430, respectively.

The January 2021 Warrant II, issued to the investor as commitment fee, provides for the right to purchase up to 150,000 shares of common stock; (i) valued at $31,821 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
March 2021 Financings

March 2021 Note I:I

On March 22, 2021, the Company entered into a Securities Purchase Agreement (the “March 2021 SPA I”) with an investor for the sale of the Company’s convertible note. Pursuant to the March 2021 SPA I, the Company; (i) issued a convertible note with principal amount of $55,000 (the “March 2021 Note I”) with the Company receiving $50,000 in net proceeds, net of $5,000 of OID recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) issued 25,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) (as discussed below under Commitment Share True-Up Provision) and; (iii) a warrant to purchase up to 25,000 shares of common stock (the “March 2021 Warrant I”, and together with the March 2021 SPA I and the March 2021 Note I, the “March 2021 Agreements I”). The 25,000 shares of common stock and 25,000 warrant issued were valued at $6,949 and $1,346, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $5,133, all recorded as a debt discount to be amortized over the twelve-month term of the note. The March 2021 Note I mature on March 1, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the March 2021 Note I immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $6,455 due on the first day of each month, beginning July 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the March 2021 Note I at any time or times on or after the occurrence of an Event of Default. The March 2021 Note I is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The March 2021 Agreements I contain other provisions, covenants, and restrictions common with this type of debt transaction. The March 2021 SPA I also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months Ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$17,307~~$23,467 of the principal and ~~$2,058~~$2,353 of accrued interest. During the three months ending January 31, 2022, the Company paid $18,772 of the principal and $593 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the March 2021 Note I had outstanding principal of $12,761 and ~~accrued interest of $37,693 and $0,~~$31,533, respectively.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
The March 2021 Warrant I, issued to the investor as commitment fee, provides for the right to purchase up to 25,000 shares of common stock; (i) valued at $1,346 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expire on the fifth-year anniversary from the date of issuance.

~~March 2021 Note II:~~
On March 29, 2021, the Company entered into a Securities Purchase Agreement (the “March 2021 SPA II”) with an investor for the sale of the Company’s convertible note. Pursuant to the March 2021 SPA II, the Company; (i) issued a convertible note with principal amount of $110,000 (the “March 2021 Note II”) with the Company receiving $100,000 in net proceeds, net of $10,000 of OID to be amortized over the twelve-month term of the note; (ii) issued 50,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) (as discussed below under ~~Commitment Share True-Up Provision)~~ and; (iii) a warrant to purchase up to 50,000 shares of common stock (the “March 2021 Warrant II”, and together with the March 2021 SPA II and the March 2021 Note II, the “March 2021Agreements II”). The 50,000 shares of common stock and 50,000 warrant issued were valued at $24,504 and $8,350, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $23,500, all recorded as a debt discount to be amortized over the twelve-month term of the note. The March 2021 Note II mature on March 21, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the March 2021 Note II immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $12,911 due on the first day of each month, beginning June 26, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the March 2021 Note II at any time or times on or after the occurrence of an Event of Default. The March 2021 Note II is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The March 2021 Agreements II contain other provisions, covenants, and restrictions common with this type of debt transaction. The March 2021 SPA II also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the nine months ended September 30, 2021, the Company paid $106,556 of principal and $6,199 of accrued interest. As of September 30, 2021, the March 2021 Note II had outstanding principal and accrued interest of $3,44 and $0, respectively.
The March 2021 Warrant II, issued to the investor as commitment fee, provides for the right to purchase up to 50,000 shares of common stock; (i) valued at $8,350 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
March 2021 Note III – Related ~~Party:~~Party

On March 30, 2021, the Company entered into a Securities Purchase Agreement (the “March 2021 SPA III”) with an investor, who is also a major stockholder and director and considered to be a related party, for the sale of the Company’s convertible note. Pursuant to the March 2021 SPA III, the Company; (i) issued a convertible note with principal amount of $110,000 (the “March 2021 Note III”) with the Company receiving $100,000 in net proceeds, net of $10,000 of OID recorded as a debt discount to be amortize over the twelve-month term of the note; (ii) issued 50,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) (as discussed below under Commitment Share True-Up Provision) and; (iii) a warrant to purchase up to 50,000 shares of common stock (the “March 2021 Warrant III”, and together with the March 2021 SPA III and the March 2021 Note III, the “March 2021 Agreements III”). The 50,000 shares of common stock and 50,000 warrant issued were valued at $23,718 and $7,924, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $22,250, all recorded as a debt discount to be amortized over the twelve-month term of the note. The March 2021 Note III mature on March 30, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the March 2021 Note III immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $12,911 due on the first day of each month, beginning July 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the March 2021 Note III at any time or times on or after the occurrence of an Event of Default. The March 2021 Note III is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The March 2021 Agreements III contain other provisions, covenants, and restrictions common with this type of debt transaction. The March 2021 SPA III also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$34,610~~$46,931 of principal and ~~$4,124~~$4,714 of accrued interest. During the three months ended January 31, 2022, the Company paid $37,546 of principal and $1,188 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the March 2021 Note III had outstanding principal of $25,523 and ~~accrued interest of $75,390 and $0,~~$63,069 respectively.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

The March 2021 Warrant III, issued to the investor as commitment fee, provides for the right to purchase up to 50,000 shares of common stock; (i) valued at $7,924 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

March 2021 Note ~~IV:~~V
On March 30, 2021, the Company entered into a Securities Purchase Agreement (the “March 2021 SPA IV”) with an investor for the sale of the Company’s convertible note. Pursuant to the March 2021 SPA IV, the Company; (i) issued a convertible note with principal amount of $55,000 (the “March 2021 Note IV”) with the Company receiving $50,000 in net proceeds, net of $5,000 of OID recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) issued 25,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) (as discussed below under ~~Commitment Share True-Up Provision)~~ and; (iii) a warrant to purchase up to 25,000 shares of common stock (the “March 2021 Warrant IV”, and together with the March 2021 SPA IV and the March 2021 Note IV, the “March 2021Agreements IV”). The 25,000 shares of common stock and 25,000 warrant issued were valued at $11,845 and $3,957, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $11,125, all recorded as a debt discount to be amortized over the twelve-month term of the note. The March 2021 Note IV mature on March 21, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the March 2021 Note IV immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $6,455 due on the first day of each month, beginning June 26, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the March 2021 Note IV at any time or times on or after the occurrence of an Event of Default. The March 2021 Note IV is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The March 2021 Agreements IV contain other provisions, covenants, and restrictions common with this type of debt transaction. The March 2021 SPA IV also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the nine months ended September 30, 2021, the Company paid $53,985 of principal and $3,100 of accrued interest. As of September 30, 2021, the March 2021 Note IV had outstanding principal and accrued interest of $1,015 and $0, respectively.
The March 2021 Warrant IV, issued to the investor as commitment fee, provides for the right to purchase up to 25,000 shares of common stock; (i) valued at $3,957 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
~~March 2021 Note V:~~

On March 31, 2021, the Company entered into a Securities Purchase Agreement (the “March 2021 SPA V”) with an investor for the sale of the Company’s convertible note. Pursuant to the March 2021 SPA V, the Company; (i) issued a convertible note with principal amount of $165,000 (the “March 2021 Note V”) with the Company receiving $150,000 in net proceeds, net of $15,000 of OID recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) issued 75,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) (as discussed below under Commitment Share True-Up Provision) and; (iii) a warrant to purchase up to 75,000 shares of common stock (the “March 2021 Warrant V”, and together with the March 2021 SPA V and the March 2021 Note V, the “March 2021Agreements V”). The 75,000 shares of common stock and 75,000 warrant issued were valued at $36,499 and $12,352, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $34,500, all recorded as a debt discount to be amortized over the twelve-month term of the note. The March 2021 Note V mature on March 1, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the March 2021 Note V immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $20,167 due on the first day of each month, beginning July 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the March 2021 Note V at any time or times on or after the occurrence of an Event of Default. The March 2021 Note V is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The March 2021 Agreements V contain other provisions, covenants, and restrictions common with this type of debt transaction. The March 2021 SPA V also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$49,609~~$68,191 of principal and ~~$10,893~~$12,477 of accrued interest. During the three months ended January 31, 2022, the Company paid $57,292 of principal and $3,209 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the March 2021 Note V had outstanding principal of $39,518 and ~~accrued interest of $115,392 and $0,~~$96,809, respectively.

The March 2021 Warrant V, issued to the investor as commitment fee, provides for the right to purchase up to 75,000 shares of common stock; (i) valued at $12,352 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

April 2021 Financing

On April 7, 2021, the Company closed a Securities Purchase Agreement dated March 29, 2021 (the “April 2021 SPA”) with an investor for the sale of the Company’s convertible note. Pursuant to the April 2021 SPA, the Company; (i) issued a convertible note with principal amount of $165,000 (the “April 2021 Note”) with the Company receiving $146,500 in net proceeds, net of $15,000 of OID and $3,500 of legal fees; (ii) issued 75,000 shares of common stock, subject to a true-up based upon the trading price of the common stock and the investor’s ownership limitations (“Commitment Share True-up”) and; (iii) issued warrant to purchase up to 75,000 shares of common stock (the “April 2021 Warrant”, and together with the April 2021 SPA and the April 2021 Note, the “April 2021Agreements”). The 75,000 shares of common stock and 75,000 warrant issued were valued at $31,913 and $9,669, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $27,375, recorded as a debt discount to be amortized over the twelve-month term of the note. The April 2021 Note I mature on March 30, 2022 and a one-time interest charge of 8% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the April 2021 Note immediately prior to the occurrence of the Event of Default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $19,800 due on the first day of each month, beginning July 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the April 2021 Note at any time or times on or after the occurrence of an Event of Default. The April 2021 Note is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The April 2021 Agreements contain other provisions, covenants, and restrictions common with this type of debt transaction. The April 2021 SPA also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$50,824~~$69,316 of principal and ~~$8,576~~$9,884 of accrued interest. During the three months ended January 31, 2022, the Company paid $56,755 of principal and $2,645 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the April 2021 Note had outstanding principal of $38,929 and ~~accrued interest of $114,176 and $0,~~$95,684, respectively.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
The April 2021 Warrant, issued to the investor as commitment fee, provides for the right to purchase up to 75,000 shares of common stock; (i) valued at $9,669 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
May 2021 Financings

May 2021 Note I:I

On May 17, 2021, the Company closed a Securities Purchase Agreement (the “May 2021 SPA I”) with an investor for the sale of the Company’s convertible note. Pursuant to the May 2021 SPA I, the Company; (i) issued a convertible note with principal amount of $132,000 (the “May 2021 Note I”) with the Company receiving $111,700 in net proceeds, net of $12,000 of OID and $8,300 of legal fees; (ii) issued 60,000 shares of common stock (the “First Commitment Shares”) as commitment fee and shall issue 165,000 shares of common stock (the “Second Commitment Shares”) issued as a returnable commitment fee, accordingly, the Company deems the Second Commitment Shares as unissued for accounting purposes and; (iii) issued warrant to purchase up to 60,000 shares of common stock (the “May 2021 Warrant I”, and together with the May 2021 SPA I and the May 2021 Note I, the “May 2021 Agreements I”). The 60,000 shares of common stock and 60,000 warrant issued were valued at $26,824 and $9,767, respectively, using the relative fair value method and the Commitment Share True-up had a fixed monetary value of $26,700, recorded as a debt discount to be amortized over the twelve-month term of the note. The May 2021 Note I matures on May 10, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date; in an event of default, the interest rate shall increase to 16% per annum. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the May 2021 Note I immediately prior to the occurrence of the event of default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $15,667 due on the first day of each month, beginning August 9, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the May 2021 Note I at any time or times on or after the occurrence of an event of default. The May 2021 Note I is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The May 2021 Agreements I contain other provisions, covenants, and restrictions common with this type of debt transaction. The May 2021 SPA I also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$25,532~~$41,159 of principal and ~~$4,802~~$5,842 of accrued interest. During the three months ended January 31, 2022, the Company paid $44,752 of principal and $2,249 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the May 2021 Note I had outstanding principal of $46,089 and ~~accrued interest of $105,468 and $0,~~$90,841, respectively.

The May 2021 Warrant I, issued to the investor as commitment fee, provides for the right to purchase up to 60,000 shares of common stock; (i) valued at $9,767 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
May 2021 Note ~~II:~~II

On May 28, 2021, the Company closed a Securities Purchase Agreement (the “May 2021 SPA II”) with an investor for the sale of the Company’s convertible note. Pursuant to the May 2021 SPA II, the Company; (i) issued a convertible note with principal amount of $285,000 (the “May 2021 Note II”) with the Company receiving $250,000 in net proceeds, net of $28,500 of OID and $6,500 of legal fees; (ii) issued 150,000 shares of common stock (the “Commitment Shares”) as commitment fee and; (iii) issued warrant to purchase up to 150,000 shares of common stock (the “May 2021 Warrant II”, and together with the May 2021 SPA II and the May 2021 Note II, the “May 2021Agreements II”). The 150,000 shares of common stock and 150,000 warrant issued were valued at $69,583 and $30,326, respectively, using the relative fair value method, all recorded as a debt discount to be amortized over the twelve-month term of the note. The May 2021 Note II matures on May 26, 2022 and a one-time interest charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the May 2021 Note II immediately prior to the occurrence of the event of default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $31,350 due on the first day of each month, beginning August 26, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the May 2021 Note II at any time or times on or after the occurrence of an event of default. The May 2021 Note II is convertible at a conversion price of $0.70 (“Conversion Price”). The May 2021 Agreements II contain other provisions, covenants, and restrictions common with this type of debt transaction. The May 2021 SPA II also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the ~~nine months ended September 30,~~transitional period ending October 31, 2021, the Company paid ~~$20,300~~$48,219 of principal and ~~$11,050~~$14,481 of accrued interest. During the three months ended January 31, 2022, the Company paid $115,342 of principal and $10,058 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the May 2021 Note II had outstanding principal of $121,439 and ~~accrued interest of $264,700 and $3,431,~~$236,781, respectively.

The May 2021 Warrant II, issued to the investor as commitment fee, provides for the right to purchase up to 150,000 shares of common stock; (i) valued at $30,326 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $1.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
September 2021 Financings
September 2021 Note I:I
On September 1, 2021, the Company closed a Securities Purchase Agreement (the “September 2021 SPA I”) with an investor for the sale of the Company’s convertible note. Pursuant to the September 2021 SPA I, the Company; (i) issued a convertible note with principal amount of $110,000 (the “September 2021 Note I”) with the Company receiving $100,000 in net proceeds, net of $10,000 of OID; (ii) issued 50,000 shares of common stock (the “First Commitment Shares”) as commitment fee and; (iii) issued warrant to purchase up to 50,000 shares of common stock (the “September 2021 Warrant I”, and together with the September 2021 SPA I and the September 2021 Note I, the “September 2021 Agreements I”). The 50,000 shares of common stock and 50,000 warrant issued were valued at $24,877 and $9,493, respectively, using the relative fair value method, recorded as a debt discount to be amortized over the nine-month term of the note. The September 2021 Note I matures on June 1, 2022 and a one-time OID charge of 10% was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the September 2021 Note I immediately prior to the occurrence of the event of default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $13,444 due on the first day of each month, beginning October 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the September 2021 Note I at any time or times on or after the occurrence of an event of default. The September 2021 Note I is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The September 2021 Agreements I contain other provisions, covenants, and restrictions common with this type of debt transaction. The September 2021 SPA I also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the three months ended January 31, 2022, the Company paid $34,565 of principal and $5,767 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the September 2021 Note I had outstanding principal of $75,435 and ~~accrued interest of~~ $110,000, ~~and $1,222,~~ respectively.
The September 2021 Warrant I, issued to the investor as commitment fee, provides for the right to purchase up to 50,000 shares of common stock; (i) valued at $9,493 using the relative fair value method and recorded as a debt discount to be amortized over the nine-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
September 2021 Note ~~II:~~II

On September 8, 2021, the Company closed a Securities Purchase Agreement (the “September 2021 SPA II”) with an investor for the sale of the Company’s convertible note. Pursuant to the September 2021 SPA II, the Company; (i) issued a convertible note with principal amount of $250,000 (the “September 2021 Note II”) with the Company receiving $218,250 in net proceeds, net of $25,000 of OID and $6,750 of legal fees; (ii) issued 114,000 shares of common stock (the “First Commitment Shares”) as commitment fee and; (iii) issued warrant to purchase up to 114,000 shares of common stock (the “September 2021 Warrant II”, and together with the September 2021 SPA II and the September 2021 Note II, the “September 2021 Agreements II”). The 114,000 shares of common stock and 114,000 warrant issued were valued at $59,468 and $21,004, respectively, using the relative fair value method, recorded as a debt discount to be amortized over the twelve-month term of the note. The September 2021 Note II matures on August 1, 2022 and 10% of OID was applied on the issue date and will be payable on the maturity date. Upon an event of default, the outstanding balance will immediately and automatically increase to 140% of the outstanding balance under the September 2021 Note II immediately prior to the occurrence of the event of default and becomes immediately due and payable. The Company shall make nine monthly cash payments (“Amortization Payments”), in the amount of $30,556 due on the first day of each month, beginning December 1, 2021. If the first day of any calendar month is not on a business day, then the Company shall make monthly payments on the next business day. The investor may only convert the September 2021 Note II at any time or times on or after the occurrence of an event of default. The September 2021 Note II is convertible at the rate equal to 105% of the lowest trading price occurring during the twenty-five consecutive trading days immediately preceding the applicable conversion date (“Conversion Price”). The September 2021 Agreements II contain other provisions, covenants, and restrictions common with this type of debt transaction. The September 2021 SPA II also provides the investor with certain “piggyback” registration rights, permitting them to request that the Company include the issued shares for sale in certain registration statements filed by the Company under the Securities Act of 1934, as amended. During the three months ended January 31, 2022, the Company paid $47,842 of principal and $13,270 of accrued interest. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the September 2021 Note II had outstanding principal of $202,158 and ~~accrued interest of~~ $250,000, ~~and $2,778,~~ respectively.

The September 2021 Warrant II, issued to the investor as commitment fee, provides for the right to purchase up to 114,000 shares of common stock; (i) valued at $21,004 using the relative fair value method and recorded as a debt discount to be amortized over the twelve-month term of the note; (ii) has an exercise price of $2.50; (iii) subject to ~~the~~ adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

The Company uses the Binomial Valuation Model to determine the fair value of its stock warrants which requires the Company to make several key judgments including:

● the value of the Company’s common stock;
● the expected life of issued stock warrants;
● the expected volatility of the Company’s stock price;
● the expected dividend yield to be realized over the life of the stock warrants; and
● the risk-free interest rate over the expected life of the stock warrants.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
The Company’s computation of the expected life of issued stock warrants was based on the simplified method as the Company does not have adequate exercise experience to determine the expected term. The interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The computation of volatility was based on the historical volatility of the Company’s common stock.
~~During the nine months ended September 30, 2021, the fair value of the stock warrants was estimated at issuance using the Binomial Valuation Model with the following assumptions:~~
September 30,
2021
~~Dividend rate~~ — %
~~Term~~ ~~2.5 year~~s
~~Volatility~~ ~~60% to 70~~ %
~~Risk—free interest rate~~ ~~0.14 to 0.24~~ %
Commitment Share True-Up Provision
The ~~Amended December Note I, Amended January Note I, January Note II,~~ March Financings, April 2021 Financing and May 2021 Note I (collectively as “Notes”), as discussed above, included a Commitment Share True-Up provision whereby if during the period beginning on the six-month anniversary of the date of the closing date and ending on the later of (i) the maturity date, or (ii) the date on which the Notes, is fully satisfied and cancelled (the “True-Up Period”), the then lowest traded price of the Company’s common stock (“Common Stock”) for any Trading Day within the True-Up Period (“Subsequent Share Price”), as reported on the Company’s principal market, is less than the closing price of the Company’s common stock on the closing date of each Note, then the Company shall, within three (3) trading days of holder’s provision of written notice in (“True-Up Notice”), issue and deliver to the holder an additional number of duly and validly issued, fully paid and non-assessable shares of Common Stock equal to (X) the quotient of the Commitment Value (as defined below) divided by the Subsequent Share Price, multiplied by 1.5, less (Y) the Commitment Shares. The “Commitment Value” shall mean the product of the Commitment Shares multiplied by the closing price of the Company’s common stock on the Closing Date of each Note. Any additional shares of Common Stock issuable as defined in the Notes (“True-up Shares”), if required to be issued shall be issued provided however, that in no event shall the holder be entitled to receive shares of common stock in excess of the amount that would result in beneficial ownership by the holder and its affiliates of 4.99% of the outstanding shares of Common Stock at that time. For purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder. The Company shall at all times reserve shares of its Common Stock for Holder in an amount equal to 300% multiplied by (X) the quotient of the Commitment Value divided by the lowest traded price of the Common Stock during the five Trading Days immediately preceding the respective date of calculation, multiplied by 1.5, less (Y) the Original Shares. At the inception of the respective Notes, the value of the true-up shares is based on a fixed monetary amount known at inception to be settled with a variable number of shares if triggered which reflects stock settled debt. ~~Therefore,~~During the three months ended January 31, 2022, the Company fully repaid two of its convertible notes payable resulting in the reduction in the accrued True-up Shares amounting to $93,750. As of January 31, 2022 and October 31, 2021, the Commitment Share True-up had an aggregate fixed monetary value of ~~$224,563~~$115,938 and $209,688, respectively, which is reflected as liability to be settled with common stock in the accompanying ~~condensed~~ consolidated balance sheets.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
Derivative Liabilities Pursuant to Convertible Notes

In connection with the issuance of the ~~January 2021 Financings,~~ March 2021 Financings, April 2021 Financing and May 2021 Financings, , and September 2021 Financings (collectively referred to as “Notes”), the Company determined that the terms of the Notes contain an embedded conversion option to be accounted for as derivative liabilities due to the holder having the potential to gain value upon an event of default, which includes events not within the control of the Company. Accordingly, under the provisions of ASC 815-40 –Derivatives and Hedging – Contracts in an Entity’s Own Stock, the embedded conversion option contained in the convertible instruments were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. The fair value of the embedded conversion options was determined using the Monte Carlo valuation model. At the end of each period and on note conversion date or repayment, the Company revalues the derivative liabilities resulting from the embedded option.

During the nine months ended September 30, 2021, in connection with the issuance of the Notes, on the initial measurement date, the fair values of the embedded conversion option of $223,358 was recorded as derivative liabilities and debt discount.
Additionally, in connection with the Notes, the Company issued an aggregate of 853,385 shares of common stock and an aggregate of 824,000 warrants as commitment fees (see Note 10). The Company also issued additional 133,250 warrants as commitment fees (see Note 10), in connection with a debt modification of the December Note II andAt January Note I. The common shares and warrants issued during the nine months ended September 30, 2021 were valued, in aggregate, at $575,480 using the relative fair value method and recorded as debt discount to be amortized over the term of the Notes.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
~~At September 30, 2021,~~31, 2022, the Company revalued the embedded conversion option derivative liabilities. In connection with these revaluations, the Company recorded a gain from the change in the derivative liabilities fair value of ~~$232,641~~$59,178 for the ~~nine~~three months ended ~~September 30, 2021.~~January 31, 2022.

During the ~~nine~~three months ended ~~September 30, 2021,~~January 31, 2022, the fair value of the derivative liabilities ~~was~~were estimated ~~at issuance and at the September 30, 2021,~~ using the Monte Carlo Valuation Model with the following ~~assumptions:~~assumptions (see Note 2):

~~September 30,~~January 31,
~~2021~~2022
Dividend rate — %
Term (in years) ~~0.33~~  0.09 to ~~0.84~~0.50
Volatility 90 %
Risk—free interest rate 0.04 to ~~0.11~~0.49 %
Default probability 2512.5 %

For the three ~~and nine~~ months ended ~~September 30,~~January 31, 2022 and 2021, amortization of debt discounts related to the convertible notes amounted to ~~$328,068~~$174,929 and ~~$1,042,694, respectively,~~$7,983, included as interest expense on the accompanying ~~condensed~~unaudited consolidated statements of operations. At ~~September 30,~~January 31, 2022 and October 31, 2021 ~~and December 31, 2020~~ the unamortized debt discount was ~~$537,916~~$241,759 and ~~$305,524,~~$510,438, respectively.

NOTE 56 – NOTES PAYABLE

Notes payable is summarized below:
September 30,
2021
(Unaudited)
Principal amount $ 306,900
Less: current portion (11,028 )
Notes payable - long term portion $ 295,872
January 31,
2022 October 31,
2021
Principal amount $ 306,900 $ 306,900
Less: current portion (16,409 ) (15,361 )
Notes payable - long term portion $ 290,491 $ 291,539

Minimum principal payments under notes payable are as follows:
Remaining in December 31, 2021 $ 7,988
Year ended December 31, 2022 6,170
Year ended December 31, 2023 6,405
Year ended December 31, 2024 6,649
Year ended December 31, 2025 6,902
Thereafter 272,786
Total principal payments $ 306,900
~~Paycheck Protection Program Loan~~
On April 8, 2020, the Company received federal funding in the amount of $14,612 through the Paycheck Protection Program (the “PPP”) of the CARES Act, administered by the U.S. Small Business Administration (“SBA”). The PPP note bears an interest rate 0.98% per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days. Commencing six months after the effective date of the PPP note, the Company is required to pay the lender equal monthly payments of principal and interest as required to fully amortize any unforgiven principal balance of the loan by the two-year anniversary of the effective date of the PPP note (the “Maturity Date”). The Maturity Date can be extended to five years if mutually agreed upon by both the lender and the Company. The PPP note contains customary events of default relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the lender, or breaching the terms of the PPP note. The occurrence of an event of default may result in the repayment of all amounts outstanding under the PPP note, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. Recent modifications to the PPP by the U.S. Treasury and Congress have extended the time period for loan forgiveness beyond the original eight-week period, making it possible for the Company to apply for forgiveness of its PPP note. No assurance can be given that the Company will be successful in obtaining forgiveness of the loan in whole or in part. On April 28, 2021, the SBA authorized forgiveness of the outstanding principal balance of $14,612 and $142 of accrued interest payable of the Company’s PPP loan which has been recorded as a gain on debt forgiveness in the accompanying condensed consolidated statements of operations. As of September 30, 2021, the PPP note had no outstanding balance.
Year ended October 31, 2022 (remaining) $ 15,620
Year ended October 31, 2023 6,369
Year ended October 31, 2024 6,608
Year ended October 31, 2025 6,859
Thereafter 271,444
Total principal payments $ 306,900

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

Economic Injury Disaster Loan

On May 20, 2020, the Company entered into a Loan Authorization and Agreement (“SBA Loan Agreement”) with the SBA, under the SBA’s Economic Injury Disaster Loan assistance program in light of the impact of the COVID-19 pandemic. Pursuant to the SBA Loan Agreement, the Company received an advanced of $149,900, net of $100 processing fee, to be used for working capital purposes only. Pursuant to the SBA Loan Agreement, the Company executed; (i) a note for the benefit of the SBA (“SBA Note”), which contains customary events of default; and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of the Company, which also contains customary events of default. The SBA Note bears an interest rate of 3.75% per annum which accrue from the date of the advance. ~~Installment~~Instalment payments in the amount of $731, including principal and interest, are due monthly beginning May 20, 2021 (twelve months from the date of the SBA Note). The balance of principal and interest is payable thirty years from the date of the SBA Note. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the SBA Note had an outstanding principal balance of ~~$149,900~~$149,900. As of January 31, 2022 and ~~$7,675~~October 31, 2021, the SBA Note had an accrued interest of ~~accrued interest,~~$9,570 and $8,152, respectively, reflected in the accompanying ~~condensed~~unaudited consolidated balance ~~sheet as long-term note payable and~~sheets under accrued expense and other ~~liabilities, respectively.~~liabilities.

On June 17, 2020, the Company entered into a Loan Authorization and Agreement (“SBA Loan Agreement”) with the SBA, under the SBA’s Economic Injury Disaster Loan assistance program in light of the impact of the COVID-19 pandemic. Pursuant to the SBA Loan Agreement, the Company received an advanced of $150,000, to be used for working capital purposes only. Pursuant to the SBA Loan Agreement, the Company executed; (i) a note for the benefit of the SBA (“SBA Note”), which contains customary events of default; and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of the Company, which also contains customary events of default. The SBA Note bears an interest rate of 3.75% per annum which accrue from the date of the advance. Instalment payments, including principal and interest, are due monthly beginning June 17, 2021 (twelve months from the date of the SBA Note) in the amount of $731. The balance of principal and interest is payable thirty years from the date of the SBA Note. As of ~~September 30,~~January 31, 2022 and October 31, 2021, the SBA Note had an outstanding principal balance of ~~$150,000~~$150,000. As of January 31, 2022 and October 31, 2021, the SBA Note had an accrued interest of ~~$7,243,~~$9,139 and $7,721, respectively, reflected in the accompanying ~~condensed~~unaudited consolidated balance sheets under accrued expense and other liabilities.
On June 26, 2020, in connection SBA Loan Agreement, the Company received a grant that does not have to be repaid, in the amount of $5,000 which was recorded as other income in the accompanying condensed consolidated statements of operations.

November Note Payable

On November 12, 2020, the Company entered into a Note Agreement with an investor for the sale of the Company’s note (the “Note”). Pursuant to the terms provided for in the Note Agreement, the Company issued to the investor a Note and the Company received proceeds in the amount of $7,000. The Note bears an interest of 5% per annum and matures on November 12, 2021. The Company may prepay all or any portion of the interest and the unpaid principal balance of this Note at any time, or from time to time, without penalty or premium. As of ~~September 30,~~October 31, 2021, the Note had an outstanding principal balance of $7,000 and accrued interest of ~~$308,~~$338 and as of January 31, 2022, the Note had an outstanding principal balance of $7,000 and accrued interest of $633, reflected in the accompanying ~~condensed~~unaudited consolidated balance sheets under accrued expense and other liabilities.

NOTE 67 – ADVANCE PAYABLE
On August 5, 2020, the Company entered into a capital advance agreement (the “Third Advance Agreement”) with Shopify. Under the terms of the Third Advance Agreement, the Company has received $49,000 of principal and will repay $55,370 by remitting 17% of the total customer payments processed daily by the e-commerce platform provider until the advance is repaid in full. In 2020, the Company paid $47,328 of the principal balance and the advance had an outstanding balance $1,672. During the nine months ended September 30, 2021, the Company paid the advance in full and there was no balance outstanding as of September 30, 2021.
On November 17, 2020, the Company entered into a capital advance agreement (the “Fourth Advance Agreement”) with Shopify. Under the terms of the Fourth Advance Agreement, the Company has received $63,000 of principal and will repay $71,190 by remitting 17% of the total customer payments processed daily by the e-commerce platform provider until the advance is repaid in full. As of December 31, 2020, the advance had outstanding principal balance of $63,000. During the nine months ended September 30, 2021, the Company paid the advance in full and there was no balance outstanding as of September 30, 2021.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
On December 10, 2020, the Company entered into a working capital agreement (the “First PayPal Advance Agreement”) with PayPal. Under the terms of the Fifth Advance Agreement, the Company received net proceeds of $17,000, net of $1,840 loan fee for a total principal amount of $18,840. and will repay the principal and by remitting The Company shall pay a minimum payment every 90-days beginning at the end of the Cancellation Period and ending when the Total Payment Amount has been delivered to Lender. The minimum payment is due in each 90-day period, irrespective of the amount paid in any previous 90-day period. The minimum payment is 5% of the principal amount for loans expected to be repaid in 12 months or more and 10% of the principal amount for loans expected to be repaid in less than 12 months (based on the Company’s account history). In 2020, the Company paid $5,015 of principal balance and the advance had an outstanding balance of $13,825 as of December 31, 2020. During the nine months ended September 30, 2021, the Company paid the advance in full and there was no balance outstanding as of September 30, 2021.
On March 29, 2021, the Company entered into a capital advance agreement (the “Fifth Advance Agreement”) with Shopify. Under the terms of the Fifth Advance Agreement, the Company has received $23,000 of principal and will repay $25,990 by remitting 17% of the total customer payments processed daily by the e-commerce platform provider until the advance is repaid in full. During the 9 months ended September 30, 2021, the Company paid the advance in full and there was no balance outstanding as of September 30, 2021.
On March 30, 2021, the Company closed a Revenue Share Agreement (“Agreement”) with a lender pursuant to which the Company agreed to sell, assign and transfer to the lender and the lender agreed to purchase from the Company, all of the Company’s right, title and interest in its future receivables amounting to $74,200 (“Specified Amount”) and $70,000 (“Purchase Price” or “Advance”) of this amount shall be made available to the Company. Pursuant to the Agreement, prior to the lender making the amount of the Advance available for use (even if the Company choose not to spend any or all of the Advance); (a) the Company will deliver, and will cause to be delivered, on each day to the lender, 20% of future receivables and 25% of future receivables after the 121^st day from and including the closing date (“Applicable Percentage”) until the lender receive the specified Amount and; (b) the Company acknowledge that good, sufficient and valuable consideration has been received. The Company will only use the Advance for the purchase of products or services necessary to operate its business as defined in the Agreement. On April 1, 2021, an advance of $74,200 of which $70,000 was made available to the Company and $4,200 OID was charged to interest expense. During the nine months ended September 30, 2021, the Company paid the advance in full and there was no balance outstanding as of September 30, 2021.

On July 9, 2021, the Company entered into a capital advance agreement ~~(the “Sixth~~(“July Advance Agreement”) with Shopify. Under the terms of the ~~Sixth~~July Advance Agreement, the Company has received $95,000 of principal and will repay $107,350 by remitting 17% of the total customer payments processed daily by the e-commerce platform provider until the advance is repaid in full. During the ~~nine months ended September 30,~~transition period ending October 31, 2021, the Company paid ~~$11,825~~$27,056 of the outstanding balance. During the three months ended January 31, 2022, the Company paid $50,797 of the outstanding balance. The advance had ~~$83,175~~$17,147 of outstanding balance as of ~~September 30, 2021,~~January 31, 2022, reflected as advance payable on the accompanying ~~condensed~~unaudited consolidated balance ~~sheets.~~sheet.

On August 31, 2021, the Company entered into a capital advance agreement ~~(the “Seventh~~(“August Advance Agreement”) with Shopify. Under the terms of the ~~Seventh~~August Advance Agreement, the Company has received $34,000 of principal and will repay $38,420 by remitting 17% of the total customer payments processed daily by the e-commerce platform provider until the advance is repaid in full. The advance has an outstanding balance of $34,000 as of ~~September 30, 2021,~~January 31, 2022, reflected as advance payable on the accompanying ~~condensed~~unaudited consolidated balance ~~sheets.~~
On September 1, 2021, the Company entered into a capital advance agreement (the “First Advance Agreement”) with Liberty Funding. Under the terms of the First Advance Agreement, the Company has received $110,000 of principal and will repay $132,000 by making weekly installments of $5,500 until the advance is repaid in full. During the three months ended September 30, 2021, the Company paid the advance in full and there was no balance outstanding as of September 30, 2021.sheet.

NOTE 78 – UNREDEEMED GIFT CARDS

Unredeemed gift cards activities as of ~~September 30,~~January 31, 2022 and October 31, 2021 ~~and December 31, 2020~~ are summarized as follows:

September 30,
2021 December 31,
2020 January 31,
2022 October 31,
2021
(Unaudited) (Unaudited)
Beginning balance $ 48,311 $ 10,365 $ 164,912 $ 48,311
Acquired gift card liability (see Note 3) 87,260 — — 87,260
Sale of gift cards 104,950 99,322
Sale and issuance of gift cards 115,497 186,749
Revenue from breakage — (17,114 ) — (60,515 )
Total gift card redemptions (80,649 ) (44,262 ) (63,507 ) (96,893 )
Ending balance $ 159,872 $ 48,311 $ 216,902 $ 164,912

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

NOTE 89 – LEASE LIABILITIES

Operating Lease Right-of-Use (“ROU”) Asset and Operating Lease Liabilities

On July 6, 2021, the Company acquired Model Meals (see Note 3), which had a lease agreement for its facility in Santa Ana, ~~California. On July 06, 2021, the lease expires~~California which expired in December 2021 (see Note 12) and had remaining operating right-of-use asset and liability of $76,136 and $79,054, respectively. Pursuant to the lease agreement, the lease requires the Company to pay a monthly base rent of $14,140 for the remainder of the lease ~~term~~term.

June 1, 2021, the Company entered into a lease agreement, effective July 13, 2021, for its facility in Pembroke Pine, Florida. The lease is for a period of 36 months commencing in July 2021 and expiring in July 2024. Pursuant to the lease agreement, the Company shall pay a monthly base rent of; (i) $8,062 in the first year; (ii) $8,465 in the second year and; (iii) $8,888 in the third year.

On November 11, 2021, the Company renewed its lease agreement (“Renewed Lease Agreement”) for their California kitchen facility, effective on January 1, 2022. The Renewed Lease Agreement provides for (i) a term of six months from the effective date ending on June 30, 2022; (ii) a monthly base rent of $9,960 and; (iii) a monthly storage fee of $2,340. The Renewed Lease Agreement can be terminated with two months’ notice. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for short-term leases that have a term of 12 months or less (see Note 2).
For the ~~nine~~three months ended ~~September~~January 31, ~~2021,~~2022, total rent expense amounted to ~~$58,542~~$64,801 which is included in general and administrative expenses on the accompanying ~~condensed~~unaudited consolidated statements of operations.

The significant assumption used to determine the present value of the operating lease liabilities was a discount rate of 10% which was based on the Company’s estimated incremental borrowing rate.

~~Operating right-of-use (“Operating ROU”) asset is summarized below:~~

September 30,
2021

January 31,
2022
October 31,
2021
(Unaudited) (Unaudited)
Operating ROU assets $ 336,614 $ 336,614 $ 336,614
Less accumulated reductions (48,971 ) (113,409 ) (68,105 )
Balance of Operating ROU assets, net $ 287,643 $ 223,205 $ 268,509

Operating lease liabilities related to the Operating ROU assets is summarized below:

September 30,
2021 January 31,
2022 October 31,
2021
(Unaudited) (Unaudited)
Operating lease liabilities $ 339,532 $ 339,532 $ 339,532
Total operating lease liabilities 339,532 339,532 339,532
Reduction of operating lease liabilities (51,377 ) (113,870 ) (71,178 )
Total 288,155 225,662 268,354
Less: short term portion (114,216 ) (80,138 ) (101,431 )
Long term portion $ 173,939 $ 145,524 $ 166,923

Future minimum operating lease payments under the operating lease agreements at ~~September 30, 2021~~January 31, 2022 are as follows:
Year Amount
Ending October 31, 2022 (remaining) $ 73,764
Ending October 31, 2023 102,849
Ending October 31, 2024 79,991
Total minimum non-cancellable operating lease payments 256,604
Less: discount to fair value (30,942 )
Total operating lease liabilities at January 31, 2022 $ 225,662

Year ending December 31, Amount
2021 $ 62,459
2022 98,755
2023 103,692
2024 62,215
Total minimum non-cancelable operating lease payments 327,121
Less: discount to fair value (38,967 )
Total operating lease payable at September 30, 2021 $ 288,154

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
Financing Lease Right-of-Use (“ROU”) Assets and Financing Lease Liability

On July 13, 2021, the Company entered into a financing agreement with a lessor for the purchase of equipment. Pursuant to the financing agreement, the Company shall make a monthly payment of $6,500 for a period of 36 months commencing in August 2021 through August 2024. The monthly payment shall consist of $6,000 cash and $500 in gift card allowance, reflected in the accompanying unaudited consolidated balance sheet under accrued ~~liabilities.~~expense and other liabilities. At the effective date of the financing agreement, the Company recorded a financing lease payable of $200,509.

The significant assumption used to determine the present value of the financing lease liability was a discount rate of 10% which was based on the Company’s estimated incremental borrowing rate.


HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
Financing right-of-use (“Financing ROU”) asset is summarized below:

September 30,
2021

January 31,
2022
October 31,
2021
(Unaudited) (Unaudited)
Financing ROU assets $ 200,509 $ 200,509 $ 200,509
Less accumulated depreciation (13,924 ) (36,203 ) (19,494 )
Balance of financing ROU assets, net $ 186,585 $ 164,306 $ 181,015

For the three months ended ~~September 30, 2021,~~January 31, 2022, depreciation expense related to Financing ROU assets amounted to ~~$13,924.~~$16,709.

Financing lease liability related to the Financing ROU assets is summarized below:

September 30,
2021

(Unaudited)
Financing lease payables for equipment $ 200,509
Total financing lease payables 200,509
Reduction of financing lease liability (8,748 )
Total 191,761
Less: short term portion (61,596 )
Long term portion $ 130,164

January 31,
2022
October 31,
2021
(Unaudited)
Financing lease payables for equipment $ 200,509 $ 200,509
Total financing lease payables 200,509 200,509
Reduction of financing lease liability (28,603 ) (13,650 )
Total 171,906 186,859
Less: short term portion (63,675 ) (62,210 )
Long term portion $ 108,231 $ 124,649

Future minimum lease payments under the financing lease agreement at ~~September 30, 2021~~January 31, 2022 are as follows:

Year ending December 31, Amount
2021 $ 19,500
2022 78,000
2023 78,000
2024 45,500
Total minimum non-cancelable financing lease payments 221,000
Less: discount to fair value (29,239 )
Total financing lease payable at September 30, 2021 $ 191,761
Year Amount
Year ending October 31, 2022 (remaining) $ 58,500
Year ending October 31, 2023 78,000
Year ending October 31, 2024 58,500
Total minimum non-cancellable financing lease payments 195,000
Less: discount to fair value (23,094 )
Total financing lease liabilities at January 31, 2022 $ 171,906

NOTE 910 – RELATED PARTY ~~TRANSACTION~~BALANCES AND TRANSACTIONS

The Company utilizes the shipping carrier account of a related entity, owned 50% by the Company’s current chief executive officer and principal stockholder for its inbound and outbound shipping needs. The related entity bills the Company for the direct cost of the shipping charges plus a 10% fee. The total amount incurred and paid to the related entity during the ~~nine~~three months ended ~~September 30,~~January 31, 2022 and 2021 was $78,377 and ~~2020 were $120,778 and $75,832,~~$42,983, respectively, which is included in cost of goods sold onin the accompanying unaudited consolidated statement of operations.
~~See also disposal of the RTD Business with~~ There were no amounts due to this related party in ~~Note 3 –~~ ~~Acquisition~~for these services as of ~~Home Bistro Holdings~~January 31, 2022 and ~~Disposal of the Discontinued Operations of the RTD Business.~~October 31, 2021.

See also related party convertible note in Note 45 – March 2021 Note III – Related Party.
See consulting agreement in Note 12 – Consulting Agreement – Related Party

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
NOTE 1011 – STOCKHOLDERS’ DEFICIT

On September 14, 2020, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to its Articles of Incorporation ~~with the Nevada Secretary of State~~ to effect a 1 for 31.993 reverse stock split of its common stock. Proportional adjustments for the reverse stock split were made to the Company’s outstanding stock options, stock warrants and equity incentive plans. All share and per-share data and amounts have been retroactively adjusted as of the earliest period presented in the ~~condensed~~ consolidated financial statements to reflect the reverse stock ~~split (see Note 1 and Note 3).~~split.

Shares Authorized

On April 7, 2020, the Board of Directors of the Company approved the increase of the authorized shares of the common stock to 1,000,000,000 from ~~600,000,000 (see Note 1).~~600,000,000.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
Preferred Stock

As of ~~September 30,~~January 31, 2022 and October 31, 2021, there were no outstanding shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred ~~Stock (see above~~ ~~Stocks Issued Pursuant to Recapitalization~~).Stock.
~~On September 25, 2020, in connection with the Asset Purchase Agreement between the Company and Gratitude Keto, the Company repurchased the 250,000 shares of Series B Preferred Stock (see above~~ ~~Stocks Issued Pursuant to Recapitalization~~~~) held by a stockholder (see Note 3).~~
~~Common Stock and Warrants Issued Pursuant to Recapitalization~~
~~On April 20, 2020, in connection with the Exchange Agreement and Merger (see Note 3):~~
● 519,000 shares of Series A Preferred stock, were exchanged for aggregate of 42,395,542 shares of common stock and 87,354,458 of stock warrants. The 87,354,458 stock warrants issued are exercisable at $0.001 and expire on April 20, 2030. As of September 30, 2020, there were no outstanding shares of Series A Preferred stock.
● 250,000 shares of Series B Convertible Preferred stock owned by a former officer were cancelled on April 9, 2020 pursuant to a General Release Agreement and the remaining 250,000 shares of Series B Convertible Preferred stock remain issued and outstanding as of September 30, 2020.
● 2,250 and 250 of the Company’s shares of Series C Preferred stock, were exchanged for 11,250,000 of stock warrants and 1,250,000 shares of common stock, respectively, for an aggregate of 2,500 shares of Series C Preferred exchanged. The 11,250,000 stock warrants are exercisable at $0.001 and expire on April 20, 2030. As of September 30, 2020, there were no outstanding shares of Series C Preferred stock.
● ~~a lender converted $1,127,500 of outstanding convertible note balance into 28,187,500 of stock warrants, exercisable at $0.001 and expire on April 20, 2030.~~
● ~~2,500,000 shares of commons stock held by a stockholder were exchanged for 2,500,000 of stock warrants, exercisable at $0.001 and expire on April 20, 2030.~~
As a result, in connection with the Exchange Agreement and Merger (see Note 3), Gratitude Health, Inc is deemed to have issued a total of 250,000 shares of Series B Convertible Preferred stock, 60,727,607 shares of common stock, 1,940,000 stock options, 129,291,958 stock warrants which represent the outstanding preferred stock, common stock (issued and issuable), stock options and stock warrants of the Company on the date of the Merger.
● ~~On April 20, 2020, pursuant to the Merger (see Note 3), the Company issued 129,291,958 stock warrants with exercise price of $0.001 and expiration date of April 20, 2030 (see above~~ ~~Stocks Issued Pursuant to Recapitalization~~~~), in exchange for certain outstanding shares of the Company’s common stock on the date of the Merger.~~
● On April 20, 2020, pursuant to the Exchange Agreement (see Note 3), the Company issued 221,593,553 stock warrants with exercise price of $0.001 and expiration date of April 20, 2030 in exchange for certain outstanding common stock shares of Home Bistro on the date of the Merger.

Common Stock

Common ~~stock issued~~Stock Issued for ~~cash:~~Cash

● During the ~~nine~~three months ended ~~September 30, 2021,~~January 31, 2022, the Company issued an aggregate of ~~3,815,527~~1,378,399 shares of common stock, to non-affiliate investors for aggregate net cash proceeds of ~~$2,713,238.~~
● ~~During the nine months ended September 30, 2020, the Company issued an aggregate of 47,749~~$991,168. There were no shares of common stock ~~to a related party for aggregate cash proceeds of $100,006.~~sold during the three months ended January 31, 2021.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
Common ~~stock issued~~Stock Issued for ~~services:~~Services and Prepaid Services

● On ~~April 20,~~November 8, 2021, the Company issued an aggregate of ~~2,000,000~~600,000 shares of common stock with ~~an aggregate~~ grant date fair value of ~~$1,530,000~~$726,000 or $0.765 per share based on the market price of common stock on grant date, to two consultants pursuant to a consulting agreement. The fair value of the common stock was recorded in equity as deferred compensation which will be amortized over the twelve-month service period. During the nine months ended September 30, 2021, $382,500 of the deferred compensation was amortized which was charged to professional and consulting fee in the accompanying condensed consolidated statements of operations.
● ~~On September 29, 2021, the Company issued 100,000 shares of common stock with fair value of $135,000 of $1.35~~$1.21 per share based on the market price of common stock on grant date, to a consultant pursuant to a consulting agreement. The fair value of the common stock was recorded in equity as deferred compensation which will be amortized over the six-month service period. During the three months ended January 31, 2022, the Company amortized $363,000 of the deferred compensation which was charged to professional and consulting fee in the accompanying unaudited consolidated statements of operations. As of January 31, 2022, the deferred compensation related to this consulting agreement was $363,000 which will be amortized over a period of three months.
~~Stock-based compensation:~~

● ~~On April 29, 2021,~~During the three months ended January 31, 2022, the Company amortized $450,000 of deferred compensation, related to common stock issued ~~25,000~~in April 2021 pursuant to a consulting agreement, which was charged to professional and consulting fee in the accompanying unaudited consolidated statements of operations. As of January 31, 2022, the deferred compensation related to this consulting agreement was $300,000 which will be amortized over a period of three months.
● During the three months ended January 31, 2022, the Company granted 60,000 shares of common stock with ~~an aggregate~~ grant date fair value of ~~$24,750~~$60,600 or ~~$0.99~~$1.01 per share based on the market price of common stock on grant date, to a ~~board member~~consultant for ~~services rendered and~~services. The grant fair value of the common stock of $60,600 was charged to ~~compensation~~professional and ~~related expenses~~consulting fee in the accompanying ~~condensed~~unaudited consolidated statements of operations.

● During the nine months ended September 30, 2020, the Company recorded stock-based compensation of $213,841, related to common stock issued to an executive pursuant to an employment agreement and was charged as compensation and related expenses in the accompanying statements of operations. As of September 30, 2020, there was no unamortized compensation expense related to these common shares.
Common Stock for Commitment Fee with Convertible Notes Payable

● ~~During the nine months ended September 30,~~In December 2020, the Company ~~recorded stock-based compensation of $238,268 related to~~issued an aggregate of ~~127,942,741~~119,535 shares of common stock ~~issued~~valued at $38,263 using the relative fair value method to ~~employees and various consultants,~~two non-affiliate investors as commitment fee in connection with the December 2020 Financings which was recorded as debt discount which will be amortized over the life of ~~which $102,332 was charged as compensation and related expenses, $124,219 as professional and consulting expenses and $11,717 as selling and marketing expenses in~~ the ~~accompanying condensed consolidated statements of operations.~~notes.
~~Common stock issued for commitment fee with convertible notes payable:~~

● On January 12, 2021, the Company issued 29,385 shares of common stock to a non-affiliate investor as commitment fee, pursuant to a securities purchase agreement, ~~(see Note 4),~~ valued at ~~$17,297~~$23,470 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.

Common Stock Issued Pursuant to Lock-Up & Leak Out Agreements
● OnDuring the three months ended January ~~27,~~31, 2022, the Company issued as consideration, to several stockholders, an aggregate of 272,541 shares of common stock with grant date fair value of $276,896 or an average per share price of $1.02, based on the market price of common stock on grant date, for the stockholders’ execution of a Lock-Up & Leak Out Agreement. The grant date fair value of the common stock was initially recorded in equity as deferred compensation and is being amortized over the lock up period of three-to-four-month period. During the three months ended January 31, 2022, the Company amortized $278,937 of the deferred compensation and was recorded as professional and consulting expenses in the accompanying unaudited consolidated statement of operations. As of January 31, 2022, the deferred compensation related to the Lock-Up & Leak Out Agreements was $113,897 which will be amortized over a period of three months.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
Common Stock Issued Pursuant to Product Development Agreements
● During the three months ended January 31, 2022, the Company issued 100,000 shares of common stock with grant date fair value of $100,000 based on the fair value of common stock on the date of grant, pursuant to an agreement which was recorded as deferred compensation and is being amortized over the 2-year term of the agreement. During the three months ended January 31, 2022, $146,614 of the deferred compensation was expensed as product development expense in the accompanying unaudited consolidated statements of operations related to shares issued in connection with joint product development agreements. As of January 31, 2022, there was $461,667 of deferred compensation related to the product development agreements.
Stock Warrants
Warrants Issued for Professional Services
● During the three months ended January 31, 2021, the Company issued ~~150,000~~fully vested warrants to purchase up to 10,640 shares of the Company’s common stock to a ~~non-affiliate investor as commitment fee, pursuant to~~third-party entity in connection with a ~~securities purchase agreement (see Note 4), valued~~consulting agreement. This warrant is exercisable, in whole or in part, upon issuance at ~~$85,981 using the relative~~$1.27 per share, and expires on December 8, 2025. These warrants have a grant date fair value ~~method and was~~of $11,471, recorded as ~~debt discount to be amortized over~~professional and consulting expenses in the ~~life~~accompanying unaudited consolidated statements of ~~the note.~~operations.

● ~~On March 22, 2021,~~During the three months ended January 31, 2022, the Company issued ~~25,000~~fully vested warrants to purchase up to 100,000 shares of the Company’s common stock to a ~~non-affiliate investor as commitment fee pursuant to~~third-party entity in connection with a ~~securities purchase agreement (see Note 4), valued~~consulting agreement. This warrant is exercisable, in whole or in part, upon issuance at ~~$6,949 using the relative~~$1.50 per share, and expires on May 18, 2025. These warrants have a grant date fair value ~~method and was~~of $36,777, recorded as ~~debt discount to be amortized over~~professional and consulting expenses in the ~~life~~accompanying unaudited consolidated statements of ~~the note.~~operations.
The Company used the Binomial pricing model to determine the fair value of its common stock warrants which requires the Company to make several key judgments including:

● ~~On March 29, 2021,~~ the ~~Company~~expected life of issued ~~50,000 shares~~stock warrants;
● the expected volatility of ~~common~~the Company’s stock ~~to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $24,504 using~~ price;
● the ~~relative fair value method and was recorded as debt discount~~expected dividend yields to be ~~amortized~~realized over the life of the ~~note.~~stock warrants; and
● the risk-free interest rate over the expected life of the stock warrants.

● On March 30, 2021, the Company issued 50,000 shares of common stock to a related party investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $23,718 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
The Company’s computation of the expected life of issued stock warrants was based on the simplified method as the Company does not have adequate exercise experience to determine the expected term and was estimated to be 2 years. The interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The computation of volatility was based on the historical volatility of the Company’s common stock and the Company’s expected divided yield was estimated to be zero.

Dividend rate ● On March 30, 2021, the Company issued 25,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $11,845 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
● On March 31, 2021, the Company granted 75,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $36,499 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.— %
Term (in years) 5 years
Volatility 61 %
Risk-free interest rate 0.83 %

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

● On April 7, 2021, the Company granted 75,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $30,947 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
● On May 17, 2021, the Company granted 60,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $26,824 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
● On May 28, 2021, the Company granted 150,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $67,645 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
● On September 1, 2021, the Company granted 50,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $26,877 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
● On September 8, 2021, the Company granted 114,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $59,468 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
~~Cancellation of common stock issuable:~~
● On April 20, 2020, in connection with the Exchange Agreement and Merger (see Note 3), 2,600,000 shares of common stock issuable at the closing of the acquisition were cancelled during the nine months ended September 30, 2020. As of September 30, 2020, the Company did not have any common stock issuable.
~~Common stock issued for acquisition of subsidiary:~~
●
~~On July 6, 2021, the Company granted an aggregate of 2,008,310 shares of common stock on a~~ ~~pro rata~~ basis, equal to $2,000,000 divided by the 30-day volume weighted average price (“VWAP”) immediately prior to closing of the Acquisition, to members of Model Meals, LLC in exchange for 100% membership of Model Meals, pursuant to the Agreement and Plan of Merger (see Note 1 and Note 3).
~~Stock Options~~
A summary of the Company’s outstanding stock ~~options~~warrants as of ~~September 30, 2021~~January 31, 2022 and changes during the period ended are presented below:

Number of
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual Life
(Years) Aggregate
Intrinsic
Value
Balance at December 31, 2020 60,638 $ 3.20 0.03 $ —
Expired (60,368 ) $ — — —
Balance at September 30, 2021 — $ —                       — $              —
~~Stock Warrants~~
~~Warrants issued pursuant to an agreement (see Note 11):~~
On September 22, 2020, the Company issued a warrant to purchase up to 300,000 shares of the Company’s common stock to a third-party entity in connection with the Joint Product Development and Distribution Agreement (see Note 11). This warrant is exercisable, in whole or in part, upon issuance at $0.001 per share, and expires on September 22, 2030. This warrant has a grant date fair value of $360,000 recorded as product development expense on the condensed consolidated statements of operations.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
~~Warrants issued for commitment fee with convertible notes payable (see Note 4):~~
● On January 27, 2021, the Company issued a warrant to purchase up to 150,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $31,821 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On March 22, 2021, the Company issued a warrant to purchase up to 25,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $1,346 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On March 25, 2021, the Company issued warrant to purchase up to 78,250 shares of common to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $4,744 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
●
On March 29, 2021, the Company issued a warrant to purchase up to 50,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $8,350 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On March 29, 2021, the Company issued a warrant to purchase up to 50,000 shares of common stock to a related party investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $7,924 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On March 30, 2021, the Company issued a warrant to purchase up to 25,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $3,957 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On March 31, 2021, the Company issued a warrant to purchase up to 75,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $12,352 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On March 31, 2021, the Company issued a warrant to purchase up to 55,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $6,173 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On April 7, 2021, the Company issued a warrant to purchase up to 75,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $9,669 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On May 17, 2021, the Company issued a warrant to purchase up to 60,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $9,767 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On May 28, 2021, the Company issued a warrant to purchase up to 150,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $30,326 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $1.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.

HOME BISTRO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~SEPTEMBER 30, 2021~~
● On September 1, 2021, the Company issued a warrant to purchase up to 50,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $9,493 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
● On September 8, 2021, the Company issued a warrant to purchase up to 114,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment (see Note 4). The warrant; (i) was valued at $21,004 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
~~A summary of the Company’s outstanding stock warrants as of September 30, 2021 and changes during the period ended are presented below:~~
Number of
Stock
Warrants Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual Life
(Years)
Balance on December 31, 2020 11,278,212 $ 0.03 9.3
Issued pursuant to convertible debt (see Note 4) 957,250 2.34 4.6
Balance on September 30, 2021 12,235,462 $ 0.21 8.3
Stock warrants exercisable on September 30, 2021 12,235,462 $ 0.21 8.3
Number of
Stock
Warrants Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual Life
(Years)
Balance on October 31, 2021 15,745,076 $ 0.17 7.4
Issued for services 100,000 1.50 4.3
Balance on January 31, 2022 15,845,076 $ 0.18 7.2

Stock warrants exercisable on January 31, 2022 15,845,076 $ 0.18 6.8

Certain exercisable stock warrants had per share intrinsic value of ~~$1.20~~$1.08 at ~~September 30, 2021,~~January 31, 2022, totaling ~~$13,507,927.~~$15,594,292.

NOTE 1112 – COMMITMENTS AND CONTINGENCIES
Employment Agreement
On October 1, 2021, the Company entered into an employment agreement (the “Employment Agreement”) with Zalmi Scher Duchman to serve as the Company’s Chief Executive Officer. The Employment Agreement has a term of three years (“Term”) from the effective date and provides for (i) an annual salary of $120,000 and (ii) a one-time warrant grant of 2,000,000 shares of common stock, with grant a date fair value of $2,714,971 (see Note 12), which vested upon issuance, exercisable at $0.001 and expires on October 1, 2026. Mr. Duchman is entitled to vacation, sick and holiday pay and other benefits, in accordance with the Company’s policies established and in effect from time to time. The Company may terminate the Mr. Duchman for cause (as defined in Employment Agreement) by giving Mr. Duchman written notice approved by the Board of Directors (“Board”) of such termination, such notice (i) to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for cause is based and (ii) to be given within six months of the Board learning of such act or acts or failure or failures to act. The Employment Agreement may be terminated at Board’s discretion during the Term, provided that if Mr. Duchman is terminated without cause, the Company shall pay to Mr. Duchman an amount calculated by multiplying Mr. Duchman monthly salary, at the time of such termination, times the number of months remaining in the Term.

Lease Obligation Settlement

On February 22, 2018, the Company entered into a Surrender Agreement with a former landlord for rental obligations dating back to the year ended December 31, 2017 until the space was vacated by the Company on March 31, 2017. Upon executing the Surrender Agreement, the former landlord and the Company agreed that the total rental obligation due was $109,235. The former landlord agreed to $50,000 as full satisfaction of all obligations owed at the time of the Surrender Agreement. The Company agreed to make regular payments on the outstanding rental obligation until paid in full through September 2019; however, there is no penalty if the obligation is not fully paid by such date. As of ~~September 30,~~January 31, 2022 and October 31, 2021, ~~and December 31, 2020,~~ the balance remaining due on this obligation were ~~$22,900~~$21,400 and ~~$26,400,~~$22,900, respectively, included in accounts payable on the accompanying ~~condensed~~unaudited consolidated balance sheets.

Put Option Agreement

On April 20, 2020, the Company and a stockholder entered into a Put Option Agreement (see Note 3), pursuant to which, among other things, the Company agreed, at the election of the stockholder, to purchase certain shares of common stock from such stockholder no sooner than two years from the date of the Put Option Agreement also referred to herein as Market Period. Pursuant to the Put Option Agreement, in the event that the stockholder does not generate $1.3 million dollars also referred to herein as Total Investment in gross proceeds from the sale of its shares of common stock by the second anniversary of the Put Option Agreement, then the stockholder has the right to cause the Company to purchase shares held by the stockholder at a price equal to the difference between the Total Investment and the net proceeds actually realized by the stockholder from shares of common stock sold during the Market Period and the number of shares of common stock held by the stockholder on the date the put right is exercised. The put right expires fourteen (14) days from end of the Market Period. In connection with the Put Option Agreement, the Company recorded a common stock repurchase obligation in the amount of $1.3 million, reflected in the accompanying ~~condensed~~ consolidated balance sheets as ~~a long-term liability,~~ ~~Common~~common stock repurchase obligation,, and reduction of additional paid in capital upon entering the Put Option Agreement. The repurchase obligation is re-assessed by the Company each reporting period and adjusted for the proceeds received by the stockholder from sale of common stock. During the ~~nine~~ten months ended ~~September 30,~~October 31, 2021, the Company ~~re-assessed the repurchase obligation and pursuant to the agreement~~ recorded a reduction of ~~$588,725~~$681,726. During the three months ended January 31, 2022, the Company recorded a reduction of $93,498. As of January 31, 2022, the Company has recorded an aggregate reduction of $775,225 for net proceeds realized by the stockholder on sale of Company common stock which was reclassified to additional paid in capital. As of ~~September 30,~~January 31, 2022 and October 31, 2021, ~~and December 31, 2020,~~ the Company had ~~$0.7~~$0.5 and ~~$1.3~~$0.6 million of common stock repurchase obligation outstanding, respectively.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

Joint Product Development and Distribution Agreement

Corlich Enterprises, Inc

On September 22, 2020, the Company and Corlich Enterprises, Inc., a New Jersey corporation (“Corlich”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”), effective the same date, pursuant to which, among other things, Corlich agreed to provide certain commercial services (the “Services”) of Cat Cora, an American professional chef, in order for the Company and Corlich to collaboratively develop a brand of meals (the “Cat Cora Meals”). In consideration for the Services, the Company agreed to (i) pay Corlich a royalty on net revenues generated from (A) the Cat Cora Meals, and (B) Home Bistro and Prime Chop brand orders where a dedicated code is used at purchase, and (ii) issue a warrant to purchase up to 300,000 shares of common stock. The Development Agreement has a three-year term, unless sooner terminated pursuant to its terms.

During the first year of the Development Agreement’s term, Corlich is guaranteed a minimum royalty payment of $109,210. For the second and third year of the Development Agreement’s term, the Development Agreement estimates that Corlich will be guaranteed a minimum royalty payment of $218,380 and $436,770, respectively, subject to the achievement of the prior year’s guaranteed minimum royalty (“GMR”) payment and the parties’ agreement to negotiate in good faith a lower guaranteed minimum royalty if such guaranteed minimum royalty payment is not achieved or to otherwise terminate the Development Agreement. Royalties above the guaranteed minimum royalty are based on an increasing percentage of net revenues generated from the sale of Cat Cora Meals as certain revenue milestones are met as defined in the Distribution Agreement. ~~Royalties will be accrued~~The GMR is expensed to cost of sales over the term of the Development ~~Agreement, to be included in cost of sale. In 2020,~~Agreement. During the ten months ended October 31, 2021, the Company paid an aggregate of $78,260 of accrued ~~$36,403 of~~ royalty fee. During the ~~nine~~three months ended ~~September 30, 2021,~~January 31, 2022, the Company ~~accrued $93,284 of royalty fee and~~ paid an aggregate of ~~$72,800.~~$26,581 of accrued royalty fee. During the three months ended January 31, 2022, the Development Agreement was amended by both parties whereby the minimal royalty payment of $109,210 was extended through December 31, 2021 and the increased GMR of $218,380 would begin January 1, 2022 and the $436,770 GMR January 1, 2023. This resulted in a $22,747 reduction of the accrued royalty fee. As of ~~September 30,~~January 31, 2022 and October 31, 2021, ~~and December 31, 2020,~~ a total of ~~$56,887~~$22,568 and ~~$36,403~~$71,896 of accrued royalty fee, respectively, was reflected asunder accrued expense and other liabilities in the accompanying ~~condensed~~unaudited consolidated balance sheets.
Hungry Fan Brand, LLC
On February 18, 2021, the Company and Hungry Fan Brand, LLC (“Hungry Fan”) (collectively as “Parties”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”), effective the same date. The Development Agreement shall remain in effect for twelve months from the effective. Pursuant to the Development Agreement, the Parties shall jointly contribute and be responsible for the development of the Hungry Fan Meals, under the terms and conditions of the Development Agreement.
For the use of Hungry Fan Meals and all associated intellectual property for the benefit of the Hungry Fan Meals, the Company shall pay to Hungry Fan the following: (i) 10% of all Net Revenue generated from the sale of the Hungry Fan Meals (the “Hungry Fan Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Hungry Fan Meals less discounts and returns. The Hungry Fan Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the Hungry Fan Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a Hungry Fan dedicated code was used at the time of purchase (“Hungry Fan Commission”). Upon execution of the Development Agreement, the Company shall provide Hungry Fan with a dedicated code to publicly share for a mutually agreed upon percent off any purchase of Home Bistro and Prime Chop brand orders. The Company shall ensure that the code is valid and in effect for the entire Term. The Hungry Fan Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the Hungry Fan Commission was earned.
In addition, subject to the terms and conditions of this Development Agreement, the Company shall pay to Hungry Fan a guaranteed minimum compensation of $24,000 over twelve months (the “GMC”), to be paid in instalments of $2,000 per month, by the 10^th business day of the following month in which the Hungry Fan Commission was earned. The Parties agree that the Hungry Fan Royalty shall be credited against the Guarantee received to date. During the transitional period ending October 31, 2021, the Company paid $14,000 of GMC. As of January 31, 2022 and October 31, 2021, $8,000 and $1,000 of accrued royalty fee, respectively, was reflected under accrued expense and other liabilities in the accompanying unaudited consolidated balance sheet.

Red Velvet XOXO, LLC

On March 19, 2021, the Company and Red Velvet XOXO LLC, a New York corporation (“Red Velvet”) (collectively as “Parties”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”), effective the same date. The Development Agreement shall remain in effect for twelve months from the effective date unless sooner terminated as ~~hereinafter provided,~~defined in the Development Agreement, or unless extended by mutual agreement of the Parties. Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of desserts, marketed and sold exclusively utilizing Red Velvet’s recipes (the “Red Velvet Desserts”) under the Home Bistro label, under the terms and conditions of the Development Agreement.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
For the use of Red Velvet Desserts and all associated intellectual property for the benefit of the Red Velvet Desserts, Bistro shall pay to Red Velvet the following: (i) 10% of all Net Revenue generated from the sale of the Red Velvet Desserts (the “Velvet Desserts Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Red Velvet Desserts less discounts and returns. The Velvet Desserts Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10th business day of the following month in which the Velvet Desserts Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a Red Velvet Desserts dedicated code was used at the time of purchase (“Velvet Desserts Commission”). The Velvet Desserts Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10th business day of the following month in which the Velvet Desserts Commission was earned. AsDuring the ten months ended October 31, 2021, Red Velvet earned $198 of ~~September 30, 2021, there were no payments accrued or paid under~~royalty fees pursuant to terms of the Development Agreement. As of January 31, 2022 and October 31, 2021, $198 of accrued royalty fee was reflected under accrued expense and other liabilities in the accompanying consolidated balance sheet.

Chef Roblé & Co.

On April 13, 2021, the Company and Roblé Ali (“Roblé”), celebrity chef and reality TV personality “Chef Roblé & Co.” (collectively as “Parties”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”), effective the same date. The Development Agreement shall remain in effect for two years from the effective ~~date unless sooner terminated as defined in the agreement.~~date. Pursuant to the Development Agreement, the Parties shall jointly contribute and be responsible for the development of the Roblé Meals, under the terms and conditions of the Development Agreement.

For the use of Roblé Meals and all associated intellectual property for the benefit of the Roblé Meals, the Company shall pay to Roblé the following: (i) 10% of all Net Revenue generated from the sale of the Roblé Meals (the “Roblé Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Roblé Meals less discounts and returns. The Roblé Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10th business day of the following month in which the Roblé Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a Roblé dedicated code was used at the time of purchase (“Roblé Commission”). Upon execution of the Development Agreement, the Company shall provide Roblé with a dedicated code to publicly share for a mutually agreed upon percent off any purchase of Home Bistro and Prime Chop brand orders. The Company shall ensure that the code is valid and in effect for the entire ~~Term.~~term. The Roblé Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the Roblé Commission was earned.

In addition, subject to the terms and conditions of this Development Agreement, the Company shall pay to Roblé a guaranteed minimum compensation of $36,000 for twelve months (the “GMC”) as follows: (i) $9,000 upon the Company’s receipt and approval of all recipes submitted by Roblé; (ii) $9,000 upon the commencement of selling of the Roblé Meals (“Selling Date”); (iii) $3,000 per month for a period of six months, commencing the month immediately following the Selling Date. The total aggregate compensation paid to Roblé shall be reduced by the GMC. ~~As of September 30,~~During the transitional period ending October 31, 2021, the first condition ~~of the GMC~~ has been satisfied by both ~~parties.~~parties and the Company paid $9,000 the GMC. As of January 31, 2022 and October 31, 2021, there were no accrued GMC as the Selling Date has not yet occurred.
Claudia Cocina LLC
On June 22, 2021, the Company and Claudia Cocina LLC (f/s/o Claudia Sandoval), a California limited liability company (“Claudia Cocina”) (collectively as “Parties”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”). Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of meals, marketed and sold utilizing the Property (“CS Meals”) jointly with the Home Bistro label, under the terms and conditions of the Development Agreement. The Development Agreement is effective upon signature and shall remain in effect from the first date on which the CS Meals are commercially launched (the “Launch Date”) until the last day of the month that is one year from the Launch Date (the “Initial Term”). The Parties shall have the right to renew the Development Agreement for an additional one-year term (“Renewal Term”) (the Initial Term and the Renewal Term, individually and together, (the “Term”) upon mutual written consent, which consent must be provided no later than sixty days prior to the end of the current Term. The Renewal Term shall be on the same terms and conditions as provided herein for the Initial Term, except that the Guaranteed Minimum Sales and the Guaranteed Minimum Royalties (“GMR”) payable during the Renewal Term shall be mutually agreed to between the Parties. The Company issued 150,000 shares of common stock with grant date fair value of $150,000 based on the market price of common stock on grant date, that was deemed to be fully earned, non-assessable and irrevocable upon the execution of the Development Agreement and subject to a Lock-Up Leak-Out Agreement. The Company recorded the $150,000 as deferred compensation in the accompanying consolidated balance sheet to be amortized over the term of the Development Agreement. During the three months ended January 31, 2022, the Company expensed $65,625 of the deferred compensation as product development expense in the accompanying unaudited consolidated statement of operations. As of January 31, 2022 and October 31, 2021, there were $56,250 and $121,875 of deferred compensation, respectively, related to this Development Agreement.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
~~SEPTEMBER 30, 2021~~

Claudia Cocina shall receive 10% royalties on all Net Revenues (“Royalty”) generated from the sale of: (i) CS Meals; and (ii) Home Bistro and Prime Chop brand orders in which a CS dedicated code was used at the time of purchase, in accordance with the Royalty Schedule set forth in the Development Agreement. For the purpose of this Development Agreement “Net Revenue” shall be defined as gross sales of products less actual returns and refunds, which returns and refunds shall not exceed eight percent (8%) of such gross sales. In addition, the GMR for the Term shall be at least $36,000 per year in the aggregate, payable monthly at the rate of $3,000 per month or 10% of gross sales, whichever is higher for the month. The Company agrees that Royalty payments may only be credited to the year to which such payments apply (i.e., Royalty payments paid to Claudia Cocina during the first twelve months of the Agreement can only offset the GMR of the first twelve months, and not the subsequent 12-month period GMR). Payments made during any year during the Term, which are in excess of the GMR payments for the applicable year may not be credited towards another year. All GMR payments hereunder are non-refundable and are due upon the first CS Meals being launched which occurred in November 2021. During the three months ended January 31, 2022, the Company recorded $3,000 of royalty expense related to the GMR. As January 31, 2022 and October 31, 2021, there $9,000 and $0 accrued royalty fee, respectively, was reflected under accrued expense and other liabilities in the accompanying unaudited consolidated balance sheet.
~~Hungry Fan Brand, LLC~~Chef Richard Blais

On ~~February 18,~~July 22, 2021 (“Effective Date”), the Company and ~~Hungry Fan Brand,~~Trail Blais, LLC (f/s/o Chef Richard Blais), celebrity chef and reality TV personality (“~~Hungry Fan”~~Chef Richard Blais”) (collectively as “Parties”), entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”)~~, effective the same date. The Development Agreement shall remain in effect for twelve months form the effective date unless sooner terminated as defined in the agreement.~~. Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of meals, marketed and sold utilizing the Property (“Blais Meals”) jointly ~~contribute and be responsible for~~with the ~~development of the Hungry Fan Meals,~~Home Bistro label, under the terms and conditions of the Development Agreement. The Development Agreement shall remain in effect from the Effective Date until the last day of the month that is one-year from the Effective Date (“Term”), ending no later than July 30, 2022. The first twelve-month anniversary of the Development Agreement shall be deemed “Year One”. The Company shall only distribute the Blais Meals within the Term and any Renewal Term (defined below), as mutually agreed. The Company agrees that following the Term, The Company shall use best efforts to cease the distribution of all Blais Meals. The Parties shall have the right to renew the Development Agreement for an additional one-year term (“Renewal Term”) upon mutual written consent. The Renewal Term shall be negotiated in good faith within ninety days of the end of the Term. The Company issued 150,000 shares of common stock with grant date fair value of $172,500 based on the market price of common stock on grant date, that was deemed to be fully earned, non-assessable and irrevocable upon the execution of the Development Agreement (see Note 12) and subject to a Lock-Up Leak-Out Agreement. The Company recorded the $172,500 as deferred compensation in the accompanying consolidated balance sheet to be amortized over the term of the Development Agreement. During the three months ended January 31, 2022, the Company expensed $68,281 of the deferred compensation as product development expense in the accompanying unaudited consolidated statement of operations. As of October 31, 2021, there were $79,063 and $147,344 of deferred compensation, respectively, related to this Development Agreement.

For the use of ~~Hungry Fan Meals~~Chef Richard Blais and all associated intellectual property for the benefit of the ~~Hungry Fan~~Blais Meals, the Company shall pay to ~~Hungry Fan~~Blais the following: (i) 10% of all ~~Net Revenue~~net revenue generated from the sale of ~~the Hungry Fan~~Blais Meals (the ~~“Hungry Fan~~“Blais Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on ~~Hungry Fan~~Blais Meals less discounts and returns. The ~~Hungry Fan~~Blais Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the ~~10th~~10^th business day of the following month in which the ~~Hungry Fan~~Blais Royalty was ~~earned and;~~earned; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a ~~Hungry Fan dedicated code~~Blais Dedicated Code was used at the time of purchase (“~~Hungry Fan~~Blais Commission”). Upon execution of the Development Agreement, the Company shall provide Hungry Fan with a dedicated code to publicly share for a mutually agreed upon percent off any purchase of Home Bistro and Prime Chop brand orders. The ~~Company shall ensure that the code is valid and in effect for the entire Term. The Hungry Fan~~Blais Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the ~~Hungry Fan~~Blais Commission was ~~earned.~~
~~In addition, subject~~earned and; (iii) Guaranteed Minimum Royalty. Subject to the terms and conditions of ~~this~~the Development Agreement, the Company shall pay to ~~Hungry Fan~~Chef Richard Blais a guaranteed minimum compensation of ~~$24,000 over twelve~~$75,000 for each twelve-month period the Development Agreement is in effect (“GMC”) payable monthly at the rate of $6,250 per month, beginning on the earlier of the launch of Blais Meals or ninety days after the execution of this Development Agreement. During the three months ended January 31, 2022, the Company recorded $18,750 of royalty expense related to the GMR. As January 31, 2022 and October 31, 2021, there $20,565 and $1,815 accrued royalty fee, respectively, were reflected under accrued expense and other liabilities in the accompanying unaudited consolidated balance sheet.
Perfect Athlete LLC
On September 15, 2021 (“Effective Date”), the Company and Perfecting Athletes, LLC (“PA” or “Perfecting Athletes”) (collectively as “Parties”), entered into a Joint Product Development and Distribution Agreement (the ~~“GMC”~~“Development Agreement”). Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of meals, marketed and sold utilizing the Property (“PA Meals”) jointly with the Home Bistro label, under the terms and conditions of the Development Agreement. The Development Agreement shall remain in effect from the Effective Date until the last day of the month that is two-years from the Effective Date (“Term”). The first twelve-month anniversary of the Development Agreement shall be deemed “Year One”. The Company shall only distribute the PA Meals within the Term and any Renewal Term (defined below), as mutually agreed. The Company agrees that following the Term, The Company shall use best efforts to cease the distribution of all PA Meals. The Parties shall have the right to renew the Development Agreement for an additional one-year term (“Renewal Term”) upon mutual written consent. The Company issued 150,000 shares of common stock with grant date fair value of $172,500 based on the market price of common stock on grant date, that was deemed to be ~~paid~~fully earned, non-assessable and irrevocable upon the execution of the Development Agreement and subject to a Lock-Up Leak-Out Agreement. The Company recorded the $255,000 as deferred compensation in ~~installments~~the accompanying consolidated balance sheet to be amortized over the term of ~~$2,000 per~~the Development Agreement. During the three months ended January 31, 2022, the Company expensed $10,625 of the deferred compensation as product development expense in the accompanying unaudited consolidated statement of operations. As of January 31, 2022 and October 31, 2021, there were $228,438 and $239,063 of deferred compensation, respectively, related to this Development Agreement.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
For the use of Perfecting Athletes and all associated intellectual property for the benefit of the PA Meals, the Company shall pay to Perfecting Athletes the following: (i) 10% of all net revenue generated from the sale of PA Meals (the “PA Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on PA Meals less discounts and returns. The PA Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the ~~Hungry Fan~~PA Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a PA Dedicated Code was used at the time of purchase (“PA Commission”). The PA Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the PA Commission was earned. ~~The Parties agree that~~During the ~~Hungry Fan Royalty shall be credited against~~three months ended January 31, 2022, there were no payments made under the ~~Guarantee received to date. As of September 30, 2021, the Company is current with the GMC.~~Development Agreement.

~~License Intellectual Agreement~~Spicy Mango Foodies LLC

On ~~April 25, 2021,~~January 19, 2022 (“Effective Date”), the Company and Spicy Mango Foodies LLC (f/s/o Chef Priyanka Naik (“CPN”)) (collectively as “Parties”), entered into a ~~nonexclusive~~Joint Product Development and ~~nontransferable License Intellectual~~Distribution Agreement (“License”) with Homemade Meals, LL C (“Homemade Meals”) to sublicense or use in design, promotion, production, marketing, selling, and distribution of meal kits, and other similar and related goods and products, the trade name “Homemade Meals” (“Licensed Intellectual Property”(the “Development Agreement”). Pursuant to the ~~License~~Development Agreement, the Parties shall collaboratively develop a brand of meals, marketed and sold utilizing the Property (“CPN Meals”) jointly with the Home Bistro label, under the terms and conditions of the Development Agreement. The Development Agreement shall remain in effect from the Effective Date until the last day of the month that is two-year from the Effective Date (“Term”). The first twelve-month anniversary of the Development Agreement shall be deemed “Year One”. The Company shall only distribute the CPN Meals within the Term and any Renewal Term (defined below), as mutually agreed. The Company agrees that following the Term, the Company shall ~~pay Homemade Meals a license fee equal~~use best efforts to 4%cease the distribution of all CPN Meals. The Parties shall have the ~~Company’s total revenue generated from~~right to renew the ~~use and/or sublicense of the Licensed Intellectual Property and the license shall be perpetual, commencing~~Development Agreement for an additional one-year term (“Renewal Term”) upon ~~the Effective Date unless terminated in accordance the provisions of the License Agreement. As of September 30, 2021, there were no payments accrued or paid under the License.~~
~~Membership Interest Purchase Agreement~~
~~On July 12, 2021, the~~mutual written consent. The Company entered into a Membership Interest Purchase Agreement (“Agreement”) with the members of Homemade Meals, LLC (“Homemade Meals”), a, Delaware limited liability company, whereby the Company agreed to issue to 4,266,666issued 100,000 shares of ~~the Company’s~~ common stock ~~which shall be valued~~with grant date fair value of $100,000 based on the market price of common stock on grant date, that was deemed to be fully earned, non-assessable and irrevocable upon the ~~acquisition date, in exchange for 100%~~execution of the ~~membership interests~~Development Agreement. The Company shall record it as deferred compensation to be amortized over the Term of ~~Homemade Meals.~~the Development Agreement. The Company recorded the $100,000 as deferred compensation in the accompanying unaudited consolidated balance sheet and is being amortized over the two-year term of the Development Agreement. During the three months ended January 31, 2022, the Company expensed $2,083 of the deferred compensation as product development expense in the accompanying unaudited consolidated statement of operations. As of ~~September 30, 2021, no consideration has been transferred and the Company does not consider the Agreement closed as~~January 31, 2022, there was $97,917 of ~~September 30, 2021.~~ deferred compensation related to this Development Agreement.

~~Registration Rights~~For the use of Spicy Mango Foodies, LLC (“SMF”) and all associated intellectual property for the benefit of the CPN Meals, the Company shall pay to SMF the following: (i) 10% of all Net Revenue generated from the sale of CPN Meals (“SMF Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on CPN Meals less discounts and returns. The SMF Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the SMF Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a SMF Dedicated Code was used at the time of purchase (“SMF Commission”) and all sales derived from that account thereafter. The SMF Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the SMF Commission was earned. During the three months ended January 31, 2022, there were no payments made under the Development Agreement.
Consulting Agreements
On April 1, 2021, the Company and Redstone Communications, LLC (“Redstone”) (collectively as “Parties”) entered into an agreement to provide strategic consulting services (“Agreement”). The Agreement shall remain in effect for twelve months from the effective date of April 1, 2021 until March 31, 2022. Pursuant to the Agreement, Redstone shall be paid, in cash, a monthly fee of $10,000 over the twelve months service period and received 2,000,000 shares of common stock with grant date fair value of $1,800,000 as compensation, which was recorded as deferred compensation in the accompanying consolidated balance sheet and amortized over the twelve months service period. In 2021, the Company amortized $1,050,000 of the deferred compensation. During the three months ended January 31, 2022, the Company amortized $450,000 of the deferred compensation and was recorded as professional and consulting expense in the accompanying unaudited consolidated statement of operations. As of January 31, 2022 and October 31, 2021, the deferred compensation related to this Agreement was $300,000 and $750,000, respectively.

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
On September 10, 2021, the Company and Bench International, LLC (“Bench International”) (collectively as “Parties”) entered into an agreement to marketing consulting services (“Agreement”). The Agreement shall remain in effect for twelve months from the effective date of September 10, 2021. Pursuant to the Agreement, Bench International shall be paid, in cash, and aggregate amount of $350,000 to be paid in seven monthly instalments of $50,000 beginning September 2021 until March 2022. In 2021, the Company paid an aggregate amount of $100,000. During the three months ended January 31, 2022, the Company paid an aggregate amount of $125,000. During the three months ended January 31, 2022, the Company recognized $87,500 of expense related to this Agreement and recorded as selling and marketing expenses in the accompanying unaudited consolidated statement of operations. As of January 31, 2022 and October 31, 2021, the prepaid expense related to this Agreement were $79,167 and $41,667, respectively.
On October 1, 2021, the Company and a consultant (collectively as “Parties”) entered into a consulting agreement which shall remain in effect until April 1, 2022, unless sooner terminated as provided in the agreement, or unless extended by agreement of the Parties. Pursuant to the agreement, the Company issued warrants to purchase 500,000 of common stock (“Warrant”) with a grant date fair value of $678,253 for services rendered and was recorded as professional and consulting expenses in the accompanying consolidated statement of operations in 2021. The Warrant vested upon issuance, has an exercise price of $0.001 and expiration date of October 1, 2026. In addition, the consultant shall receive $3,000 per month, payable in cash on the first of each month commencing on the effective date.
Consulting Agreement – Related Party
On October 1, 2021, the Company and Michael Novielli through Dutchess Capital Partners, LLC (“Dutchess Capital”) (collectively as “Parties”) entered into a consulting agreement which shall remain in effect until April 1, 2022 unless sooner terminated as provided in the agreement, or unless extended by agreement of the Parties. Michael Novielli currently serves as a member of the Board of Directors and is considered a related party. Pursuant to the agreement, Dutchess Capital received warrants to purchase 1,000,000 of common stock (“Warrant”) with a grant date fair value of $1,356,507, for services rendered and was recorded as professional and consulting expenses – related party in the accompanying consolidated statement of operations. The Warrant vested upon issuance, had exercise price of $0.001 and expiration date of October 1, 2026. In addition, Dutchess Capital shall receive $10,000 per month, payable in cash on the first of each month commencing on the effective date.
Lock-Up and Leak Out Agreements
In 2021 and during the three months ended January 31, 2022, the Company and various stockholders (collectively as “Parties”) entered into a Lock-Up and Leak Out Agreement (“Lock-Up Agreements”). Pursuant to the Lock-Up Agreements, stockholders, including the stockholders’ affiliated entities, agreed that for the period beginning on the respective effective dates of their Lock-Up Agreements and ending in the period between October 2021 to June 2023 (the “Lock-Up Period”), the stockholders will not offer, sell, contract to sell, pledge, give, donate, transfer or otherwise dispose of, directly or indirectly, any shares of Company’s common stock or securities convertible into or exercisable for common stock or securities or rights convertible into or exchangeable or exercisable for any common stock, whether owned by the stockholders as the date hereof or acquired subsequent to the date hereof (collectively, the “Lock-Up Shares”), enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic or voting consequences of ownership of such securities, whether any such aforementioned transaction is to be settled by delivery of the Lock-Up Shares or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement. During the ten-months ended October 31, 2021, as consideration for the stockholders’ execution of the Lock-Up Agreements, the Company issued an aggregate of 112,500 shares of common stock with grant date fair value of $152,626 which was recorded as deferred compensation and amortized over the Lock-Up Period. During the three months ended January 31, 2022, as consideration for the stockholders’ execution of the Lock-Up Agreements, the Company issued an aggregate of 272,541 shares of common stock with grant date fair value of $276,896 which was recorded as deferred compensation and amortized over the Lock-Up Period (see Note 11). During the three months ended January 31, 2022, the Company amortized $279,937 of the deferred compensation (see Note 11) and was recorded as professional and consulting expense in the accompanying unaudited consolidated statement of operations. As of January 31, 2022 and October 31, 2021, the deferred compensation related to this Agreement were $113,897 and $115,938, respectively, which will be amortized over the remaining Lock-Up Period of three months.
License Agreement

~~The~~On June 24, 2021, the Company ~~also~~ entered into a ~~Registration Rights Agreement~~licensing agreement (“~~Registration~~License Agreement”) ~~in connection~~ with ~~the December 2020 Agreements II~~Ayesha Curry (see Note 4). The License Agreement has a term of three years and renewable under the terms and conditions specified in the License Agreement. Pursuant to ~~which~~the License Agreement the Company ~~is required to prepare and file with~~shall pay Ayesha Curry a 10% royalty fee of the ~~SEC a Registration Statement or Registration Statements (as is necessary) covering the resale~~net sales of all licensed products sold (“Royalties”). For purposes of this License Agreement, licensed product shall be considered sold on the Registrable Securities, which Registration Statement(s) shall state that, in accordance with Rule 415 promulgated under the Securities Act, such Registration Statement also covers such indeterminate number of additional shares of Securities as may become issuabledate upon ~~stock splits, stock dividends~~its billed, invoiced, shipped, or ~~similar transactions. The Company shall initially register~~paid for, ~~resale all of the Registerable Securities,~~ or ~~an amount equal~~when title passes to the maximum amount allowed under Rule 415 (a)(1)(i) as interpreted by the SEC. In the event the Company cannot register sufficient shares of Securities, due to the remaining number of authorized shares of Securities being insufficient, the Company will use its best efforts to register the maximum number of shares it can base on the remaining balance of authorized shares and will use its best efforts to increase the number of its authorized shares as soon as reasonably practicable.buyer, whichever occurs first.

Leases
On November 11, 2021, the Company renewed its lease agreement (“Renewed Lease Agreement”) for their California kitchen facility, effective on January 1, 2022. The Renewed Lease Agreement provides for (i) a term of six months from the effective date ending on June 30, 2022; (ii) a monthly base rent of $9,960 and; (iii) a monthly storage fee of $2,340 (see Note 9). The Renewed Lease Agreement can be terminated with two months’ notice. The Company ~~shall use its best efforts~~has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for short-term leases that have ~~the Registration Statement filed with the SEC within 60~~a term of 12 months or 120 days following the closing date of the December 2020 Agreements II (collectively as “Filing Deadline”). The Company shall pay the holder the sum of 1% of the purchase amount of the December 2020less (see Note II as liquidated damages, and not as a penalty for each time it fails to meet the Filing Deadline. The liquidated damages set forth in the Registration Agreement shall be paid, at the holder’s option, in cash or securities priced at the share price, or portion thereof. Failure of the Company to make payment within five business days of the Filing Date shall be considered a breach of the Registration Agreement. On March 18, 2021, the December 2020 Note I was paid in full; the lender did not exercise any of its rights relating to any potential default that may have occurred after the issue date of the December 2020 Note. As of September 30, 2021, the December 2020 Note I had no outstanding balance. 2).

HOME BISTRO, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2021
NOTE 1213 – SUBSEQUENT EVENTS

Sale of Common Stock

Subsequent to ~~September 30, 2021,~~January 31, 2022, the Company issued and aggregate of ~~2,731,016~~282,750 common stock in exchange for ~~$1,973,510~~$200,448 of net proceeds.
Convertible Notes Payments
Subsequent to January 31, 2022, the Company paid an aggregate of $300,800 of outstanding principal and interest (see Note 5).
Joint Product Development and Distribution Agreement
On February 22, 2022 (“Effective Date”), the Company and Mini Melanie, LLC (f/s/o Chef Melanie Moss (“MM”)) (collectively as “Parties”), entered into a Joint Product Development and Distribution Agreement (“Development Agreement”). Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of desserts (“Moss Deserts”) jointly with the Home Bistro label, under the terms and conditions of the Development Agreement. The Development Agreement shall remain in effect from the Effective Date until the last day of the month that is one-year from the Effective Date.
For the use of MM and all associated intellectual property for the benefit of the Moss Deserts, the Company shall pay to MM 5% of all Net Revenue generated from the sale of Moss Deserts (“MM Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Moss Deserts less discounts and returns. The MM Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the MM Royalty was earned.
Lock-Up and Leak Out Agreements
Subsequent to January 31, 2022, the Company and various stockholders (collectively as “Parties”) entered into a Lock-Up Agreements (“Lock-Up Agreements”). Pursuant to the Lock-Up Agreements, stockholders, including the stockholders’ affiliated entities, agreed that for the period beginning on the respective effective dates of their Lock-Up Agreements and ending in the period between February 2022 to May 2022 (the “Lock-Up Period”), the stockholders will not offer, sell, contract to sell, pledge, give, donate, transfer or otherwise dispose of, directly or indirectly, any shares of Company’s common stock or securities convertible into or exercisable for common stock or securities or rights convertible into or exchangeable or exercisable for any common stock, whether owned by the stockholders as the date hereof or acquired subsequent to the date hereof (collectively, the “Lock-Up Shares”), enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic or voting consequences of ownership of such securities, whether any such aforementioned transaction is to be settled by delivery of the Lock-Up Shares or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement. As consideration for the stockholders’ execution of with the Lock-Up Agreements, the Company issued an aggregate of 244,207 shares of common stock with grant date fair value of $277,377 which shall be recorded as deferred compensation and amortized over the Lock-Up Period.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this Report. Our actual results or actions may differ materially from these forward-looking statements for many reasons. Our discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes and with the understanding that our actual future results may be materially different from what we currently expect. See “CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION” above. As used herein, the terms “we,” “us,” “our” and the “Company” refers to Home Bistro, Inc., a Nevada corporation and its subsidiaries unless otherwise stated.
Overview
~~The Company~~Home Bistro, Inc. (formerly known as Gratitude Health, Inc.) (the “Company”) was incorporated in the State of Nevada on December 17, 2009. Effective March 23, 2018, the Company changed its name from Vapir Enterprises Inc. to Gratitude Health, Inc. ~~from Vapir Enterprises Inc. Effective September 14, 2019, the Company changed its name to Home Bistro, Inc. from Gratitude Health, Inc.~~
On May 20, 2020, the Company, Fresh Market Merger Sub, Inc., a Delaware corporation and a newly created wholly-owned subsidiary of the Company (“Merger Sub”), and Home Bistro, Inc., a privately-held Delaware corporation engaged in the food preparation and home-delivery business (presently known as Home Bistro Holdings, Inc., a Nevada corporation) (“Home Bistro Holdings”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, among other things, Merger Sub agreed to merge with and into Home Bistro Holdings, with Home Bistro Holdings becoming a wholly-owned subsidiary of the Company and the surviving corporation in the merger (the “Merger”). Pursuant to the terms of the Merger Agreement, Home Bistro Holdings filed a Certificate of Merger with the Nevada Secretary of State on May 20, 2020.
The Merger constituted a change of control and the majority of the Board of Directors changed with the consummation of the Merger. The Company issued to Home Bistro Holdings stockholders shares of common stock and stock warrants which represented approximately 80% of the combined company on a fully converted basis after the closing of the Merger. As a result of the above transactions and the Company’s intent to dispose or divest of the assets and liabilities associated with the RTD Business, in the subsequent period, this transaction was accounted for as a reverse recapitalization effected by a share exchange of Home Bistro Holdings.
On May 20, 2020, Mr. Zalmi Duchman was appointed the Chief Executive Officer of Home Bistro Holdings and a member of the Board of Directors, and Michael Finkelstein and Michael Novielli were appointed as directors of the Company, replacing Roy G. Warren, Jr., Mike Edwards and Bruce Zanca, who resigned as directors of the Company subsequent to the Merger.
On September 14, 2020, the Company ~~filed~~changed its name from Gratitude Health, Inc. to Home Bistro, Inc. The Company is in the business of providing pre-packaged and prepared meals to consumers focused on offering a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to effect (i) a 31.993-for-1 reverse stock split of its common stock, par value $0.001 per share, with fractional shares rounding up to the nearest whole share (the “Reverse Stock Split”), and (ii) the changebroad array of the highest quality meal delivery, and preparation services. The Company’s ~~name from “Gratitude Health, Inc.” to “Home Bistro, Inc.”. The new CUSIP number for the Common Stock following the Reverse Stock Split is 43706U100.~~
On September 25, 2020, the Company entered into, and closed the transactions contemplated by, that certain Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, Gratitude Keto Holdings, Inc., a Florida corporation (the “Buyer” or “Gratitude Keto”), and the holder of 250,000 of the Company’s issued and outstanding shares of Series B Preferred Stock, $0.001 par value per share (such stock, the “Series B Preferred Stock”, and such stockholder, the “Stockholder”). Pursuant to the Asset Purchase Agreement, among other things, the Company agreed to sell to the Buyer all of the Company’s business, assets and properties used, or held or developed for use, in its functional RTD Business, and the Buyer agreed to assume certain debts, obligations and liabilities related to the RTD Business. Furthermore, in connection with the Asset Purchase Agreement, the Buyer returned the 250,000 shares of Series B Preferred Stock held by the Stockholder which was then cancelled by the Company upon return. As a result, the Company has no outstanding shares of preferred stock. Additionally, the RTD Business activitiesprimary former operations were reclassified and reported as part of “discontinued operations” for all periods presented on the consolidated statements of operations. In addition, the Company assumed an accounts payable liability in the ~~amount~~business of $14,000 related to accounting expenses of the RTD Business for a period prior to the Merger. Pursuant to the Asset Purchase Agreement, the Buyer reimbursed the Company for the accounting expenses in amount of $14,000, of which $7,000 was payable in cash and the balance in form of a promissory note dated September 25, 2020 in the amount of $7,000. The promissory note bears an interest rate of 5% per annum, matures on May 25, 2021 and is payable in monthly instalments of $1,000 commencing on Prior the Merger, the Company was solely engaged in manufacturing, selling, and marketing functional RTD ~~Business~~(Ready to Drink) beverages sold under the Company’s ~~trademarks. Following~~trademark (the “RTD Business”). The RTD Business was disposed on September 25, 2020 as discussed below.
The ongoing COVID-19 global and national health emergency has caused significant disruption in the ~~Merger~~international and ~~prior~~United States economies and financial markets. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The COVID-19 pandemic has the potential to significantly impact the ~~Divestiture (as defined below),~~Company’s supply chain, food manufacturers, distribution centers, or logistics and other service providers. Additionally, the Company’s service providers and their operations may be disrupted, temporarily closed or experience worker or meat or other food shortages, which could result in additional disruptions or delays in shipments of Home Bistro’s products. To date, the Company ~~provided high quality, direct-to-consumer, ready-made meals at www.homebistro.com,~~has been able to avoid layoffs and ~~restaurant quality meats and seafood through its Colorado Prime brand. Following~~furloughs of employees. The Company is not able to estimate the ~~Divestiture, this became the sole business~~duration of the ~~Company. Home Bistro Holdings is uniquely positioned to take advantage~~pandemic and potential impact on the business if disruptions or delays in shipments of ~~the developing market opportunity generated by consumers’ growing demand for prepared meals ordered online and delivered to their homes.~~

~~On September 22, 2020, the Company implemented its strategy to produce and market celebrity chef inspired gourmet meals with the signing of a joint~~ product development and distribution agreement with Corlich Enterprises, Inc. to collaboratively develop a brand of meals created by Iron Chef, Cat Cora. In furtherance of its celebrity chef inspired meal strategy, on March 15, 2021, the Company entered into partnership with celebrity chef Daina Falk, the author of “The Hungry Fan’s Game Day Cookbook” whereby Home Bistro will collaborate with Ms. Falk to create a line of meals inspired by her unique tailgate food technique. On March 30, 2021, the Company announced its partnership with Red Velvet NYC, a provider of do-it-yourself gourmet banking kits through which Home Bistro will offer fully prepared desserts from recipes created and developed by Red Velvet NYC.
On April 13, 2021, the Company and Roblé Ali (“Roblé”), celebrity chef and reality TV personality “Chef Roblé & Co.” (collectively as “Parties”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”), effective the same date. The Development Agreement shall remain in effect for two years from the effectiveoccur. To date, unless sooner terminated as defined in the agreement. Pursuant to the Development Agreement, the Parties shall jointly contribute and be responsible for the development of the Roblé Meals, under the terms and conditions of the Development Agreement.
For the use of Roblé Meals and all associated intellectual property for the benefit of the Roblé Meals, the Company shall pay to Roblé the following: (i) 10% of all Net Revenue generated from the sale of the Roblé Meals (the “Roblé Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Roblé Meals less discounts and returns. The Roblé Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10th business day of the following month in which the Roblé Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a Roblé dedicated code was used at the time of purchase (“Roblé Commission”). Upon execution of the Development Agreement, the Company shall provide Roblé with a dedicated code to publicly share for a mutually agreed upon percent off any purchase of Home Bistro and Prime Chop brand orders. The Company shall ensure that the code is valid and in effect for the entire Term. The Roblé Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th ~~business day of the following month in which the Roblé Commission was earned.~~
In addition, subject to the terms and conditions of this Development Agreement, The Company shall pay to Roblé a guaranteed minimum compensation of $36,0000 for twelve months (the “GMC”) as follows: (i) $9,000 upon Bistro’s receipt and approval of all recipes submitted by Roblé; (ii) $9,000 upon the commencement of selling of the Roblé Meals (“Selling Date”); (iii) $3,000 per month for a period of six months, commencing the month immediately following the Selling Date. The total aggregate compensation paid to Roblé shall be reduced by the GMC. As of September 30, 2021, the first condition of the GMC has been satisfied by both parties.
On April 25, 2021, the Company entered into a nonexclusive and nontransferable License Intellectual Agreement (“License”) with Homemade Meals, LL C (“Homemade Meals”) to sublicense or use in design, promotion, production, marketing, selling, and distribution of meal kits, and other similar and related goods and products, the trade name “Homemade Meals” (“Licensed Intellectual Property”). Pursuant to the License the Company shall pay Homemade Meals a license fee equal to 4% of the Company’s total revenue generated from the use and/or sublicense of the Licensed Intellectual Property and the license shall be perpetual, commencing upon the Effective Date unless terminated in accordance the provisions of the License Agreement. As of September 30, 2021, there were no payments accrued or paid under the License.
On February 18, 2021, the Company and Hungry Fan Brand, LLC (“Hungry Fan”) (collectively as “Parties”) entered into a Joint Product Development and Distribution Agreement (the “Development Agreement”), effective the same date. The Development Agreement shall remain in effect for twelve months form the effective date unless sooner terminated as defined in the agreement. Pursuant to the Development Agreement, the Parties shall jointly contribute and be responsible for the development of the Hungry Fan Meals, under the terms and conditions of the Development Agreement.
For the use of Hungry Fan Meals and all associated intellectual property for the benefit of the Hungry Fan Meals, the Company shall pay to Hungry Fan the following: (i) 10% of all Net Revenue generated from the sale of the Hungry Fan Meals (the “Hungry Fan Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Hungry Fan Meals less discounts and returns. The Hungry Fan Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10th business day of the following month in which the Hungry Fan Royalty was earned and; (ii) 10% of all Net Revenue generated from the sale of Home Bistro and Prime Chop brand orders in which a Hungry Fan dedicated code was used at the time of purchase (“Hungry Fan Commission”). Upon execution of the Development Agreement, the Company shall provide Hungry Fan with a dedicated code to publicly share for a mutually agreed upon percent off any purchase of Home Bistro and Prime Chop brand orders. The Company shall ensure that the code is valid and in effect for the entire Term. The Hungry Fan Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th ~~business day of the following month in which the Hungry Fan Commission was earned.~~
In addition, subject to the terms and conditions of this Development Agreement, the Company shall pay to Hungry Fan a guaranteed minimum compensation of $24,000 over twelve months (the “GMC”), to be paid in installments of $2,000 per month, by the 10^th business day of the following month in which the Hungry Fan Commission was earned. The Parties agree that the Hungry Fan Royalty shall be credited against the Guarantee received to date. As of September 30, 2021, the Company is ~~current with~~not aware of any such disruptions. In addition, a severe prolonged economic downturn could result in a variety of risks to the ~~GMC.~~business, including weakened demand for product and a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly. The Company has applied for and received certain financial assistance under the Coronavirus, Aid, Relief, and Economic Security Act (“CARES Act”) enacted in March 2020 by the U.S. Government in response to COVID-19.

~~Recent Developments~~
On July 6, 2021, the Company entered ~~into~~and closed on an Agreement and Plan of Merger with the members of Model Meals, LLC (“Model Meals”), acquiring Model Meals through a reverse triangular merger, whereby Model Meals merged with Model Meals Acquisition Corp., a wholly owned subsidiary of the Company, with Model Meals being the surviving entity (the “Acquisition”). As a result, Model Meals became a wholly owned subsidiary of the Company, and the members of Model Meals received and aggregate of 2,008,310 shares of common stock and were paid $60,000 in cash. Pursuant to the Acquisition, the Company issued 2,008,310 shares of common stock with grant date fair value of ~~$2,000,000 pursuant to the agreement. The shares are subject to a 24-month Lockup and Leak-Out Agreement and were issued pursuant to Section 4(a)(2) of the Securities Act.~~$ 2,028,393.
~~On August 16, 2021,~~In January 2022, the ~~Company filed, in an amended current report Form 8-K/A, Model Meals’; (i) audited balance sheets~~Company’s board of directors and ~~audited statement of operations as of~~management changed the Company’s fiscal year end from December 31 ~~2020 and 2019 and for the years ended December~~^stto October 31 ~~2020 and 2019, respectively,; (ii) balance sheet and statement of operations as of March 31,~~^st, effective immediately.
Recent Developments
On January 19, 2021 and for the three months ended March 31, 2021, respectively, and; (iii) unaudited pro forma combined financial information derived by the application of pro forma adjustments to the historical consolidated financial statements of(“Effective Date”), the Company and ~~Model Meals which gives effect to the Acquisition between the Company and Model Meals~~Spicy Mango Foodies LLC (f/s/o Chef Priyanka Naik (“CPN”)) (collectively as if the Acquisition had occurred on January 1, 2020 with respect to the unaudited annual pro forma combined statement of operation, and as of January 1, 2021 for the three months ended March 31, 2021 unaudited pro forma combined statement of operation, and as of March 31, 2021 with respect to the unaudited pro forma combined balance sheets. The final purchase price allocation is subject to the final determination of the fair values of acquired assets, assumed liabilities and consideration paid, therefore, the allocation and the resulting effect the financial statements may differ materially from the unaudited pro forma amounts included in the amended current report Form 8-K/A.
~~On July 12, 2021, the Company~~“Parties”), entered into a ~~Membership Interest Purchase~~Joint Product Development and Distribution Agreement (“(the “Development Agreement”). Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of meals, marketed and sold utilizing the Property (“CPN Meals”) jointly with the ~~members~~Home Bistro label, under the terms and conditions of ~~Homemade~~the Development Agreement. The Development Agreement shall remain in effect from the Effective Date until the last day of the month that is two-year from the Effective Date (“Term”). The first twelve-month anniversary of the Development Agreement shall be deemed “Year One”. The Company shall only distribute the CPN Meals ~~LLC (“Homemade Meals”)~~within the Term and any Renewal Term (defined below), ~~a, Delaware limited liability company, whereby~~as mutually agreed. The Company agrees that following the Term, the Company ~~agreed~~shall use best efforts to ~~issue to 4,266,666 shares~~cease the distribution of all CPN Meals. For the use of Spicy Mango Foodies, LLC (“SMF”) and all associated intellectual property for the benefit of the ~~Company’s common stock which~~CPN Meals, the Company shall pay to SMF the following: (i) 10% of all Net Revenue generated from the sale of CPN Meals (“SMF Royalty”). For the purpose of this agreement “Net Revenue” shall be ~~valued based~~defined as gross sales generated on CPN Meals less discounts and returns. The SMF Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the ~~market price of common stock on the acquisition date, in exchange for 100%~~10^th business day of the ~~membership interests~~following month in which the SMF Royalty was earned and; (ii) 10% of ~~Homemade Meals. As~~all Net Revenue generated from the sale of ~~September 30, 2021, no consideration has been transferred~~Home Bistro and Prime Chop brand orders in which a SMF Dedicated Code was used at the ~~Company does not consider Agreement closed as~~time of ~~September 30, 2021.~~
~~Results~~purchase (“SMF Commission”) and all sales derived from that account thereafter. The SMF Commission generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of ~~Operations~~
~~For~~ the ~~Three and Nine Months Ended September 30, 2021 and 2020~~
~~Product Sales~~following month in which the SMF Commission was earned.

On February 22, 2022 (“Effective Date”), the Company and Mini Melanie, LLC (f/s/o Chef Melanie Moss (“MM”)) (collectively as “Parties”), entered into a Joint Product Development and Distribution Agreement (“Development Agreement”). Pursuant to the Development Agreement, the Parties shall collaboratively develop a brand of desserts (“Moss Deserts”) jointly with the Home Bistro label, under the terms and conditions of the Development Agreement. The Development Agreement shall remain in effect from the Effective Date until the last day of the month that is one-year from the Effective Date. For the use of MM and all associated intellectual property for the benefit of the Moss Deserts, the Company shall pay to MM 5% of all Net Revenue generated from the sale of Moss Deserts (“MM Royalty”). For the purpose of this agreement “Net Revenue” shall be defined as gross sales generated on Moss Deserts less discounts and returns. The MM Royalty generated during each calendar month in which an agreement is in effect shall be due and payable by the 10^th business day of the following month in which the MM Royalty was earned.
Results of Operations
For the Three Months Ended January 31, 2022 and 2021
Product Sales
During the three months ended ~~September 30,~~January 31, 2022 and 2021, ~~and 2020,~~ revenues were ~~$703,364~~$801,799 and ~~$299,178,~~$399,027, respectively, an increase of ~~$404,186~~$402,772 or ~~135%~~101%.
~~During the nine months ended September 30, 2021 and 2020, revenues were $1,362,999 and $964,944, respectively, an increase of $398,055 or 41%.~~
Cost of Sales
Since the Company implemented its own kitchen operations in July 2020, its primary components of cost of sales are raw materials and direct kitchen labor and, with the introduction of the Company’s celebrity chef program in the fourth quarter of 2020, it now incurs associated royalty fees.
During the three months ended ~~September 30,~~January 31, 2022 and 2021, ~~and 2020,~~ the Company had total cost of sales of ~~$625,767~~$615,994 and ~~$176,155,~~$288,629, respectively, an increase of ~~$449,612~~$327,365 or ~~255%~~113%. The increase was due to the Company’s decision to conduct a trial test of free shipping ~~and~~an increase in direct kitchen ~~labor. With~~labor and the ~~completion~~acquisition of ~~the test, the Company is assessing its results. In 2021 and 2020, $66,679 and $0, respectively, of royalty fees associated with the Company’s celebrity chef program were included~~Model Meals in ~~cost of sales.~~
During the nine months ended September 30, 2021 and 2020, the Company had total cost of sales of $1,164,694 and $594,875, respectively, an increase of $569,819 or 96%. The increase was due to the Company’s decision to conduct a trial test of free shipping increase in direct kitchen labor. With the completion of the test, the Company is assessing its results. In 2021 and 2020, $121,285 and $0, respectively, of royalty fees associated with the Company’s celebrity chef program were included in cost of sales.

July 2021.
~~Operating Expenses~~
Operating Expenses
For the ~~three~~Three Months Ended January 31, 2022 and ~~nine months ended September 30,~~ 2021, ~~and 2020,~~ operating expenses consisted of the following:
Three Months Ended
September 30, Nine Months Ended
September 30, Three Months Ended
January 31,
2021 2020 2021 2020 2022 2021
Compensation and related expenses $ 238,912 $ 66,581 $ 409,826 $ 477,381 $ 287,579 $ 68,037
Professional and consulting expenses 691,422 157,173 1,660,792 353,670 1,652,054 68,847
Professional and consulting expenses – related party 30,000 —
Product development expense — 360,000 — 360,000 146,614 —
Selling and marketing expenses 324,478 50,638 522,351 135,520 364,584 75,940
General and administrative expenses 196,631 51,596 377,108 124,409 448,401 61,129
Total $ 1,451,443 $ 685,988 $ 2,970,077 $ 1,455,980 $ 2,929,232 $ 273,953

Compensation and ~~related expenses:~~Related Expenses
● During the three months ended ~~September 30,~~January 31, 2022 and 2021, compensation and related expenses amounted to ~~$238,912 as compared to~~$287,579 and $66,581, ~~for the three months ended September 30, 2020,~~respectively, an increase of ~~$172,331~~$219,542 or ~~259%~~323%. The increase was primarily attributable to an increase of ~~$162,528~~$123,237 of compensation related to Model Meals which was acquired in July ~~2021.~~
● ~~During the nine months ended September 30,~~ 2021 ~~compensation~~ and related expenses amounted to $409,826 as compared to $477,381 for the nine months ended September 30, 2020, a decrease of $67,555 or 14%. The decrease was primarily attributable to decrease in stock-based compensation of $311,561 offset by an increase of $162,528 of compensation$52,709 related to ~~Model Meals which was acquired~~increase in ~~July 2021.~~executive salary in 2022.

~~Professional and consulting expenses:~~
Professional and Consulting Expenses:
● During the three months ended ~~September 30,~~January 31, 2022 and 2021, professional and consulting expenses amounted to ~~$691,422 as compared to $157,173 for the three months ended September 30, 2020,~~$1,652,054 and $68,847, respectively, an increase of ~~$534,249~~$1,583,207 or ~~340%~~2,300%. The increase was primarily due an increase ~~in amortization~~stock-based compensation of ~~deferred compensation~~$1,189,314 related to ~~consultants of $382,500,~~commons stock issued for lock up and leak out agreements and common stock issued for services and prepaid services, an increase in investor relations fee of ~~$156,721,~~$155,700, an increase in consulting fees of ~~$54,400,~~$58,796, an increase in accounting fees of ~~$24,887, offset by a decrease~~$93,090 and an increase in legal fees of ~~$113,968.~~
● During the nine months ended September 30, 2021, professional and consulting expenses amounted to $1,660,792 as compared to $353,670 for the nine months ended September 30, 2020, an increase of $1,307,122 or 370%. The increase was primarily due to an increase in amortization of deferred compensation to consultants of $765,000, an increase in investor relations fee of $576,335, an increase in accounting fees of $54,092, offset by a decrease in legal fees of $130,802.$72,861.

~~Product development expense:~~Professional and Consulting Expenses – Related Party:
● During the three months ended ~~September 30,~~January 31, 2022 and 2021, ~~product development~~professional and consulting expenses – related party amounted to $30,000 and $0, ~~as compared to $360,000 for the three months ended September 30, 2020, a decrease~~respectively, an increase of ~~$360,000,~~$30,000 or 100%. The ~~product development expense in the 2020 period~~increase was ~~primarily due to~~ a ~~warrant to purchase up to 300,000 shares~~result of ~~the Company’s common stock~~a consulting agreement with ~~grant date fair value of $360,000 in 2020.~~a related party, dated October 1, 2021 which provides for $10,000 monthly consulting fee.
● During the nine months ended September 30, 2021, product development expenses amounted to $0 as compared to $360,000 for the nine months ended September 30, 2020, a decrease of $360,000, or 100%. The product development expense in the 2020 period was primarily due to a warrant to purchase up to 300,000 shares of the Company’s common stock with grant date fair value of $360,000 in 2020.
~~There were no such expenses incurred during the three and nine months ended September 30, 2021.~~
~~Selling and marketing expenses:~~Product Development Expenses
● During the three months ended ~~September 30,~~January 31, 2022 and 2021, product development expenses amounted to $146,614 and $0, respectively, an increase of $146,614, or 100%. The product development expense in the 2022 period was primarily due to the amortization of the deferred compensation resulting from common stock issued in connection with the product development agreements.
Selling and Marketing Expenses
● During the three months ended January 31, 2022 and 2021, selling and marketing expenses amounted to ~~$324,478 as compared to $50,638 for the three months ended September 30, 2020,~~$364,584 and $75,940, respectively, an increase of ~~$273,840,~~$288,644, or ~~541%~~380%. The increase was primarily due to the expansion of our multi-channel digital marketing strategy ~~and the introduction of~~to further promote our celebrity chef program in ~~2021~~ and acquisition of Model Meals in July 2021.
General and Administrative Expenses
● During the ~~nine~~three months ended ~~September 30,~~January 31, 2022 and 2021, ~~selling~~general and ~~marketing~~administrative expenses amounted to ~~$522,351 as compared to $135,520 for the nine months ended September 30, 2020,~~$448,401 and $61,129, respectively, an increase of ~~$386,831~~$387,272 or ~~285%~~634%. The increase was primarily due to ~~the expansion~~an increase in depreciation and amortization expense of ~~our multi-channel digital marketing strategy~~$299,822, an increase in transfer agent fees of $30,025, an increase in kitchen related expenses of $55,410, and increase from the ~~introduction of our celebrity chef program in 2021 and~~ acquisition of Model Meals in July 2021.

~~General and administrative expenses:~~Loss from Operations
● During the three months ended ~~September 30,~~January 31, 2022 and 2021, ~~general and administrative expenses~~loss from operations amounted to ~~$196,631 as compared to $51,596 for the three months ended September 30, 2020,~~$2,743,427 and $163,555, respectively, an increase of ~~$145,035~~$2,579,872 or 281%. The increase was primarily due to increase in administrative expenses. The increase was primarily due an increase in office expenses of $13,193, an increase in transfer agent fees of $8,404, an increase in depreciation expense of $79,423, an increase in kitchen related expenses of $41,313 resulting from the expansion of our multi-channel digital marketing strategy and the introduction of our celebrity chef program in 2021.

● During the nine months ended September 30, 2021, general and administrative expenses amounted to $377,108 as compared to $129,409 for the nine months ended September 30, 2020, an increase of $247,699 or 191%. The increase was primarily due an increase in transfer agent fees of $31,519, an increase in depreciation expense of $89,549, an increase in kitchen related expenses of $104,820 resulting from the expansion of our multi-channel digital marketing strategy and the introduction of our celebrity chef program in 2021.
~~Operating Loss from Continuing Operations~~
● During the three months ended September 30, 2021, operating loss from continuing operations amounted to $1,373,846 as compared to $562,965 for the three months ended September 30, 2020, an increase of $810,881 or 144%1,577%. The increase was due to the changes discussed above.
Other Income (Expense), net
● During the ~~nine~~three months ended ~~September 30,~~January 31, 2022 and 2021, ~~loss from continuing operations~~other (expense), net amounted to ~~$2,771,772 as compared~~$(152,909) and other income, net amounted to ~~$1,085,911 for~~$20,619, respectively, an increase in other (expense) of $(173,528) or 842%. The change was primarily due to increase in interest expense of $212,087 resulting from an increase in convertible notes in 2022, an increase in gain from change in fair value of derivative liabilities of $26,863 and offset by a decrease in gain on extinguishment of accounts payable of $7,075.
Net Loss
● During the ~~nine~~three months ended ~~September 30, 2020,~~January 31, 2022 and 2021, we had a net loss of $2,896,336 or $(0.08) per common share (basic and diluted) and $142,936 or $(0.01) per common share (basic and diluted), respectively, an increase of ~~$1,685,861~~$2,753,400 or ~~155%~~1,926%. The increase was due to the changes discussed above.

~~Other Income (Expense), net~~
● During the three months ended September 30, 2021, other expense, net amounted to $432,160 as compared to $7,279 for the three months ended September 30, 2020, an increase of $424,881 or 5,837%. The change was primarily due to increase in interest expense in connection with convertible notes issued in 2021 of $426,409 and an increase in gain from change in fair value of derivative liabilities of $1,528.
● During the nine months ended September 30, 2021, other expense, net amounted to $961,718 as compared $3,812 for the nine months ended September 30, 2020, an increase of $957,906 or 25,129%. The change was primarily due to increase in interest expense in connection with convertible notes issued in 2021 of $1,226,930, an increase in gain on forgiveness of debt of $14,754, increase in gain on extinguishment of debt of $26,629 and an increase in gain from change in fair value of derivative liabilities of $232,641 offset by a decrease in other income of $5,000.
~~Income from Discontinued Operations~~
● During the three and nine months ended September 30, 2020, we had income from discontinued operations of $91,750 and $38,203, respectively compared to income from discontinued operations of $0 for both periods of the three and nine months ended September 30, 2019, an increase of $91,750 and $38,203, respectively or 100%. The increase was due to the Merger and disposal of the RTD Business segment.
~~Loss from Continuing Operations~~
● During the three months ended September 30, 2021, we had a loss from continuing operations of $1,806,006 or $(0.07) per common share (basic and diluted), compared to a $570,244 or $(0.03) per common share (basic and diluted), for the three months ended September 30, 2020, an increase of $1,235,762 or 217%. The increase was due to the changes discussed above.
● During the nine months ended September 30, 2021, we had a loss from continuing operations of $3,733,490 or $(0.17) per common share (basic and diluted), compared to $1,089,723 or $(0.06) per common share (basic and diluted) for the nine months ended September 30, 2020, an increase of $2,643,767 or 243%. The increase was due to the changes discussed above.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had a working capital deficit of ~~$652,901~~$533,318 and cash of ~~$1,410,236~~$1,253,844 as of ~~September 30, 2021~~January 31, 2022 and a working capital deficit of ~~$466,178~~$318,797 and cash of ~~$447,354~~$2,275,397 as of ~~December~~October 31, ~~2020.~~ 2021.
September 30,
2021 December 31,
2020 Change Percentage
Change January 31,
2022 October 31,
2021 Change Percentage
Change
Working capital deficit:
Total current assets $ 1,544,934 $ 480,942 $ 1,063,992 221 % $ 1,659,391 $ 2,372,058 $ (712,667 ) 30 %
Total current liabilities (2,197,835 ) (947,120 ) (1,250,715 ) 132 % (2,192,709 ) (2,690,855 ) 498,146 19 %
Working capital deficit: $ (652,901 ) $ (466,178 ) $ (186,723 ) 40 % $ (533,318 ) $ (318,797 ) $ (214,521 ) 67 %
The increase in working capital deficit was primarily attributable to ~~an increase~~a decrease in current assets of ~~$1,063,992 offset by increase~~$712,667 and a decrease in current liabilities of ~~$1,250,715,~~$498,146, due to the ~~issuance~~repayment of convertible notes, reduction in derivative liabilities, repayment advances ~~payables~~payable and reduction in lease liabilities.
Cash Flows

~~Cash Flows~~
The following table provides detailed information about our net cash flows:
Nine Months Ended
September 30,
2021 2020
Net cash used in operating activities $ (2,167,244 ) $ (135,766 )
Net cash (used in) provided by investing activities (197,772 ) 1,749
Net cash provided by financing activities 3,327,898 283,865
Net change in cash $ 962,882 $ 149,848
Three Months Ended
January 31,
2022 2021
Net cash used in operating activities $ (1,432,527 ) $ (140,112 )
Net cash provided by financing activities 410,974 533,820
Net change in cash $ (1,021,553 ) $ 393,708

Net Cash Used in Operating Activities
Net cash used in operating activities ~~was $2,167,244~~ for the ~~nine~~three months ended ~~September 30,~~January 31, 2022 and 2021, ~~as compared to $135,766 for the nine months ended September 30, 2020,~~were $1,432,527 and $140,112, respectively, an increase of ~~$2,031,478~~$1,292,415 or ~~1,492%~~922%.
●
Net cash used in operating activities for the nine months ended September 30, 2021 primarily reflected our loss from continuing operations of $3,733,490 adjusted for the add-back on non-cash items such as depreciation and amortization expense of $91,085, stock-based compensation of $24,750, common stock issued for services of $765,000, gain on extinguishment of debt of $26,629, gain on forgiveness of debt of $14,754, amortization of debt discount of $1,042,694, gain on change in fair value of derivative liability of $232,641 and changes in operating asset and liabilities consisting of an increase of prepaid expenses and other current assets of $86,990, an increase accounts payable of $47,161, an increase in unredeemed gift cards of $24,301 offset by a decrease in inventory of $6,643 and a decrease in accrued expense and other liabilities of $74,374.
● Net cash used in operating activities for the ~~nine~~three months ended ~~September 30, 2020~~January 31, 2022 primarily reflected our net loss ~~from continuing operations~~ of ~~$1,051,520~~$2,896,336 adjusted for the add-back on non-cash items such as depreciation and amortization expense of $300,086, total stock-based compensation for services of $1,335,928, amortization of debt discount of $174,929, gain on change in fair value of derivative liability of $59,178 and changes in operating assets and liabilities consisting of an increase of inventory of $7,802, an increase in prepaid expenses and other current assets of $301,084, an increase in accounts payable of $64,427, an increase in unredeemed gift cards of $51,990 offset by a decrease in accrued expense and other liabilities of $95,487.
● Net cash used in operating activities for the three months ended January 31, 2021 primarily reflected our net loss of $142,936 adjusted for the add-back on non-cash items such as depreciation expense of ~~$176,~~$264, stock-based compensation for services of ~~$213,841 and stock and warrants issued to consultants~~$11,471, gain on extinguishment of ~~$598,268~~accounts payable of $7,075, amortization of debt discount of $7,983, gain on change in fair value of derivative liability of $32,315 and changes in operating asset and liabilities consisting primarily of an increase ofin prepaid expenses and other current assets of ~~$1,698~~$4,014, an increase in accounts payable of $39,937 and an increase in unredeemed gift cards of ~~$1,386 and an increase~~$25,696 offset by a decrease in ~~accounts payable~~accrued expense and other liabilities of ~~$103,781.~~$39,123.
~~Net Cash (Used in) Provided by Investing Activities~~
Net cash (used by) investing activities was $(197,772) for the nine months ended September 30, 2021 as compared to net cash provided by investing activities $1,749 for the nine months ended September 30, 2020, an increase net cash used of $199,521 or 11,408%.
● Net cash used in investing activities for the nine months ended September 30, 2021 consisted of $60,000 payment for an acquisition of a subsidiary and acquisition of property and equipment in the amount of $137,772.
● Net cash provided by investing activities for the nine months ended September 30, 2020 consisted of $4,917 proceeds from an acquisition of subsidiary offset by acquisition of property and equipment of $3,168.
Net Cash Provided by Financing Activities
Net cash provided by financing activities ~~was $3,327,898 for~~ the ~~nine~~three months ended ~~September 30,~~January 31, 2022 and 2021, ~~as compared to $283,865 for the nine months ended September 30, 2020,~~were $410,974 and $533,820, respectively, a ~~change~~decrease of ~~$3,044,033~~$122,846 or ~~1,072%~~23%.
● Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2021~~January 31, 2022 consisted of net proceeds from sale of common stock of ~~$2,713,328, proceeds from notes payable, net of discount of $1,581,450, proceeds from notes payable – related party, net of discount of $100,000 and proceeds from advance payable of $332,900~~$991,168 offset by repayments of convertible notes payable of ~~$1,067,649,~~$491,850, repayments of ~~advance~~advances payable of ~~$297,522~~$50,798 and ~~repayments~~repayment of convertible ~~notes payable-~~note – related party of ~~$34,609.~~$37,546.
● Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2020~~January 31, 2021 consisted of net proceeds from ~~sale~~note payable of ~~common stock of $100,006,~~$7,000, net proceeds from ~~notes~~convertible note payable of ~~$164,612 and~~$489,100, net proceeds from ~~advance~~advances payable of ~~$59,000~~$80,000 offset by repayments of ~~note~~advances payable ~~– in default and advance payable in total amount~~ of ~~$39,753.~~$42,280.

~~Cash Requirements~~

We currently have no external sources of liquidity, such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital. Notwithstanding the foregoing, the Company received a loan in the aggregate amount of $14,612 under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“PPP Loan”), and a loan in the aggregate amount of $150,000 from the SBA under its Economic Injury Disaster Loan assistance program in light of the impact of the COVID-19 pandemic. In April 2021, the SBA forgave the outstanding principal of $14,612 and all accrued interest payable of the PPP Loan.Cash Requirements
We are dependent on our product sales to fund our operations and may require the sale of additional common ~~stock and preferred~~ stock to maintain operations. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the form of cash advances, loans, and/or financial guarantees.

Going Concern
~~Going Concern~~
The 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. As reflected in the accompanying unaudited ~~condensed~~ consolidated financial statements, for the ~~nine~~three months ended ~~September 30, 2021,~~January 31, 2022, the Company had net loss and cash used in operations of ~~$3,733,490~~$2,896,336 and ~~$2,167,244,~~$1,432,527, respectively. At ~~September 30, 2021,~~January 31, 2022, the Company had an accumulated deficit, stockholders’ equity, and working capital deficit of ~~$10,066,879, $1,018,800~~$22,032,000, $4,247,562 and ~~$652,901,~~$533,318, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. The Company’s primary source of operating funds in ~~2021~~2022 was primarily from the ~~third-party advances and convertible notes payable and~~ sale of common stock through private placements. The Company has experienced net losses from operations since inception but expects these conditions to improve in the near term and beyond as it develops its business model.
Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. Management believes that the Company’s capital resources are not currently adequate to continue operating and maintaining its business strategy for a period of twelve months from the issuance date of this report. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Inflation and Changing Prices
Neither inflation nor changing prices for the ~~nine~~three months ended ~~September 30, 2021~~January 31, 2022 had a material impact on our operations.
Off-Balance Sheet Arrangements
None.
Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires our management to make assumptions, estimates, and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.
We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our unaudited condensed consolidated financial statements. We believe the critical accounting policies in Note 2 to the condensed consolidated financial statements appearing in the consolidated financial statements for the ~~nine~~three months ended ~~September 30, 2021~~January 31, 2022 affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates as of ~~September 30,~~January 31, 2022 and October 31, 2021 ~~and December 31, 2020~~ include the assumptions used in the redemption recognition method for unredeemed gift cards, ~~collectability of receivables and note receivable, value of inventory,~~ useful life of property and equipment and intangible assets, valuation of right-of-use (“ROU”) assets and lease liabilities, estimates of current and deferred income taxes and deferred tax valuation allowances, , fair value of assets acquired and liabilities assumed in a business combination, and the fair value of non-cash equity transactions and derivative liabilities.

Fair Value of Financial Instruments and Fair Value Measurements
FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on ~~September 30, 2021.~~January 31, 2022. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2—Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3—Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The carrying amounts reported in the consolidated balance sheets for cash, due from and to related parties, prepaid expenses, accounts payable and accrued liabilities approximate their fair market value based on the short-term maturity of these instruments.
Goodwill and ~~Other~~Indefinite Lived Intangible Assets
~~In accordance with ASC 350-30-65,~~Goodwill represents the ~~Company assesses~~excess of purchase prices over the fair value of nets assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Goodwill is evaluated for impairment on an annual basis at a level of ~~identifiable intangibles whenever~~reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the ~~carrying value~~asset may ~~not~~ be ~~recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:~~impaired.
1. ~~Significant underperformance relative to expected historical or projected future operating results;~~
2. ~~Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and~~
3. ~~Significant negative industry or economic trends.~~
~~When~~Goodwill and indefinite lived intangible assets are tested for impairment at the ~~Company determines~~reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the ~~carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying~~fair value of the ~~asset cannot be recovered from projected undiscounted cash flows,~~reporting unit is less than its carrying amount. The qualitative assessment considers macroeconomic conditions, industry and market considerations, cost factors and overall company financial performance. If the ~~Company records an~~reporting unit does not pass the qualitative assessment, the carrying amount of the reporting unit, including goodwill, is compared to its fair value. When the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment ~~charge. The Company measures any~~loss is recognized up to a maximum amount of the recorded goodwill related to the reporting unit. Goodwill impairment ~~based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with~~losses are not reversed. There was no impairment loss of goodwill or indefinite lived intangible assets for the ~~risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.~~three months ended January 31, 2022.

Impairment of Long-Lived Assets
In accordance with ASC Topic 360, the Company reviews long-lived assets including intangible assets with finite life, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
Derivative Liabilities
The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10 – Derivative and Hedging – Contract in Entity’s Own Equity. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.
Revenue Recognition
The Company’s revenues consist of high quality, direct-to-consumer, ready-made meals that can be ordered by customers through www.homebistro.com, www.modelmeals.com and restaurant quality meats and seafood through its Colorado Prime Brand. Revenues from the Company’s ready-made meals are recognized when the product is delivered to the customer and title has transferred. It is at this point in time that the Company’s performance obligations have been completed. Product sales are recorded net of any discounts or allowances and include shipping charges.
Customers can purchase gift cards via phone or online through the Company’s e-commerce website. Gift card purchases are initially recorded as unredeemed gift card liabilities and are recognized as product sales upon redemption. Historically, the majority of gift cards are redeemed within two to three years of issuance. The Company does not charge administrative fees on unused gift cards, and its gift cards do not have an expiration date.
Based on historical redemption patterns, a portion of issued gift cards are not expected to be redeemed (breakage). The Company uses the redemption recognition method for recognizing breakage related to unredeemed gift cards for which it has sufficient historical redemption information. Under the redemption recognition method, breakage revenue is recorded in proportion to, and over the time period gift cards are actually redeemed. The estimated breakage rate is based on historical issuance and redemption patterns and is re-assessed by the Company on a regular basis. At least three years of historical data, which is updated annually, is used to estimate redemption patterns. Model meals, the Company’s wholly-owned subsidiary, does not have sufficient historical redemption information to recognize breakage. Therefore, all issued gift cards are recorded as a liability upon issuance and revenue when used.
Leases
~~In February 2016,~~The Company accounts for its leases using the ~~Financial~~method prescribed by ASC 842 – Lease Accounting ~~Standards Board (“FASB”) issued ASU 2016-02,~~ ~~Leases~~ ~~(Topic 842)~~. The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The updated guidance is effective for interim and annual periods beginning after December 15, 2018.

~~On January 1, 2019, the~~ Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessedassess whether the contract is, or contains, a ~~lease. The Company’s assessment~~lease at the inception of a contract which is based ~~on: (1)~~on (i) whether the contract involves the use of a distinct identified asset, ~~(2)~~(ii) whether the Company obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and ~~(3)~~(iii) whether the Company has the right to direct the use of the asset. The Company ~~will allocate~~allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for short-term leases that have a term of 12 months or less.
Operating and financing lease ROU assets represents the right to use the leased asset for the lease term. Operating and financing lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the ~~condensed~~ consolidated statements of operations.

Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and edging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) to simplify the accounting for convertible instruments by removing certain separation models in Subtopic 470- 20, Debt with Conversion and Other Options, for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the interest rate of convertible debt instruments typically will be closer to the coupon interest rate when applying the guidance in Topic 835, Interest. The amendments in ASU 2020-06 provide financial statement users with a simpler and more consistent starting point to perform analyses across entities. The amendments also improve the operability of the guidance and reduce, to a large extent, the complexities in the accounting for convertible instruments and the difficulties with the interpretation and application of the relevant guidance. To further improve the decision usefulness and relevance of the information being provided to users of financial statements, amendments in ASU 2020-06 increased information transparency by making the following amendments to the disclosure for convertible instruments:
1. Add a disclosure objective
2. Add information about events or conditions that occur during the reporting period that cause conversion contingencies to be met or conversion terms to be significantly changed
3. Add information on which party controls the conversion rights
4. Align disclosure requirements for contingently convertible instruments with disclosure requirements for other convertible instruments
5. Require that existing fair value disclosures in Topic 825, Financial Instruments, be provided at the individual convertible instrument level rather than in the aggregate.
Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, amendments in ASU 2020-06 added disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital.
The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of its annual fiscal year and are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. If an entity elects the fully retrospective method of transition, the cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. The Company early adopted ASU 2020-06 during the three months ended January 31, 2022 and did not have a significant impact on its consolidated financial statements.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company does not believe the adoption of this ASU will have a significant impact on its consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide this information.
ITEM 4. CONTROLS AND PROCEDURES
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive and Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also 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.
With respect to the quarterly period ending ~~September 30, 2021,~~January 31, 2022, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our management has concluded that our disclosure controls and procedures were not effective as of ~~September 30, 2021~~January 31, 2022 due to our limited internal resources and lack of ability to have multiple levels of transaction review. In connection with this evaluation, management identified the following control deficiencies that represent material weaknesses as of ~~September 30, 2021:~~January 31, 2022:
(1) ~~Lack~~the lack of ~~an independent audit committee or audit committee~~multiples levels of management review on complex accounting and financial expert. Although our board of directors serves as the audit committee, it has only one independent director. These factors are counter to corporate governance practices as defined by the various stock exchangesreporting issues, and ~~lead to less supervision over management.~~business transactions,

(2) ~~We do not have sufficient experience from~~a lack of adequate segregation of duties and necessary corporate accounting resources in our financial reporting process and accounting ~~personnel with the requisite U.S. GAAP public company reporting experience that is necessary for adequate controls and procedures due to~~function as a result of our limited financial resources ~~with appropriate skills, training~~to support hiring of personnel and ~~experience to perform the review processes to ensure the complete and proper application~~implementation of ~~generally accepted~~ accounting ~~principles.~~ systems,

(3) ~~Need for greater integration, oversight, communication~~a lack of operational controls and ~~financial reporting~~lack of controls over assets by the ~~books~~acquired subsidiaries, and ~~records of our office.~~

(4) ~~Lack~~a lack of ~~sufficient segregation~~adequate controls over the board of ~~duties such that the design over these areas relies primarily on detective controls~~director’s approval and ~~could be strengthened by adding preventative controls to properly safeguard company assets.~~timely distribution and review of material contracts and agreements.

Changes in internal control over financial reporting
There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) for the period ended ~~September 30, 2021~~January 31, 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings. However, from time to time, the Company may be involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company’s management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material effect on our business, results of operations, financial condition or cash flows.
ITEM 1A. RISK FACTORS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Except for provided below, all unregistered sales of our securities during the three months ended ~~September 30, 2021,~~January 31, 2022, were previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
1. ~~On July 6, 2021,~~During the three months ended January 31, 2022, the Company ~~granted~~issued an aggregate of ~~2,008,310~~1,378,399 shares of common stock, to non-affiliate investors for aggregate net cash proceeds of $991,168. There were no shares of common stock sold during the three months ended January 31, 2021.
2. During the three months ended January 31, 2022, the Company issued, to several stockholders as consideration, an aggregate of 272,541 shares of common stock with grant date fair value of ~~$2,000,000~~$276,896 or an average per share price of $1.02, based on the ~~agreement, to members~~market price of ~~Model Meals, LLC~~common stock on grant date, for the stockholders’ execution of a Lock-Up & Leak Out Agreement. The grant date fair value of the common stock was initially recorded in ~~exchange for 100% membership~~equity as deferred compensation and is being amortized over the lock up period of ~~Model Meals, pursuant to~~three-to-four-month period. During the ~~Agreement~~three months ended January 31, 2022, the Company amortized $278,937 of the deferred compensation and ~~Plan~~was recorded as professional and consulting expenses in the accompanying unaudited consolidated statements of ~~Merger.~~operations.

2. On September 1, 2021, the Company granted 50,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement, valued at $26,877 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
3.
~~On September 1, 2021,~~During the Company issued a warrant to purchase up to 50,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment. The warrant; (i) was valued at $9,493 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
4. On September 8, 2021, the Company granted 114,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement, valued at $59,468 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.
5. On September 8, 2021, the Company issued a warrant to purchase up to 114,000 shares of common stock to a non-affiliate investor as additional commitment fee pursuant to a note amendment. The warrant; (i) was valued at $21,004 using the relative fair value method and recorded as a debt discount to be amortized over the life of the note; (ii) has an exercise price of $2.50; (iii) subject to the adjustments and 4.99%, ownership limitation and; (iv) expires on the fifth-year anniversary from the date of issuance.
6. ~~On September 29, 2021,~~three months ended January 31, 2022, the Company issued 100,000 shares of common stock with grant date fair value of ~~$135,000~~$100,000 based on the fair value of ~~$1.35~~common stock on the date of grant, pursuant to an agreement which was recorded as deferred compensation and is being amortized over the 2-year term of the agreement. During the three months ended January 31, 2022, $146,615 of the deferred compensation was expensed as product development expense. As of January 31, 2022, there was $461,667 of deferred compensation related to the product development agreements.
4. During the three months ended January 31, 2022, the Company issued warrants to purchase up to 100,000 shares of the Company’s common stock to a third-party entity in connection with a consulting agreement. This warrant is exercisable, in whole or in part, upon issuance at $1.50 per share, and expires on May 18, 2025. These warrants have a grant date fair value of $36,777, recorded as professional and consulting expenses in the accompanying unaudited consolidated statements of operations.
5. During the three months ended January 31, 2022, the Company granted 60,000 shares of common stock with grant date fair value of $60,600 or $1.01 per share based on the market price of common stock on grant date, to a consultant ~~pursuant to a consulting agreement.~~for services. The grant fair value of the common stock of $60,600 was ~~recorded~~charged to professional and consulting fee in ~~equity as deferred compensation which will be amortized over~~ the ~~six-month service period.~~
7. ~~During the nine months ended September 30, 2021, the Company issued an aggregate~~accompanying unaudited consolidated statements of ~~3,815,527 shares of common stock, to non-affiliate investors for aggregate net cash proceeds of $2,861,667.~~operations.

The shares of common stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) of the Securities Act of 1933, as amended, (“Securities Act”).
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 5. OTHER INFORMATION
None

ITEM 6. EXHIBITS
Exhibit No Description
2.1 Agreement and Plan of Merger dated May 20, 2020, by and among Gratitude Health, Inc., Fresh Market Merger Sub, Inc. and Home Bistro, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 22, 2020).

3.1 Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.A.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 28, 2017).

3.2 Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 28, 2018).

3.3 Certificate of Amendment to Articles of Incorporation (incorporated by reference Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 22, 2020).

3.4 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K/A filed with the SEC on March 31, 2015).

4.1 Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 28, 2018).

4.2 Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 28, 2018).

4.3 Certificate of Designation of Series C Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 21, 2018).

4.4 Amendment to Certificate of Designation of Series C Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 24, 2018).

31.1* Section 302 Certification by the Registrant’s Principal Executive Officer and Principal Financial Officer

32.1* Section 906 Certification by the Registrant’s Principal Executive Officer and Principal Financial Officer

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

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101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

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104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herein

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HOME BISTRO, INC.
Date: ~~November 15, 2021~~March 17, 2022 By: /s/ Zalmi Duchman
Zalmi Duchman
Chief Executive Officer
(Principal Executive Officer and
Principal Financial Officer)

5044

~~0001489588 2021-07-01 2021-07-06~~ iso4217:USD xbrli:shares

	September 30, 2021			December 31, 2020
ASSETS	(Unaudited)

CURRENT ASSETS:
Cash	$	1,410,236		$	447,354
Inventory		14,120			-
Prepaid expenses and other current assets		120,578			28,588
Note receivable		-			5,000

Total Current Assets		1,544,934			480,942

OTHER ASSETS:
Property and equipment, net		110,189			2,728
Finance right-of-use assets, net		186,585			-
Operating lease right-of-use assets, net		287,643			-
Intangible assets, net of accumulated amortization $6,628		607,570			-
Deposits		10,000			-
Goodwill		1,780,964			-

Total Assets	$	4,527,885		$	483,670

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable	$	486,074		$	352,466
Accrued expenses and other liabilities		165,368			126,273
Liabilities to be settled with common stock		244,563			-
Convertible notes payable, net of debt discount		657,911			141,476
Convertible notes payable - related party, net of debt discount		35,915			-
Notes payable - current portion		11,028			20,068
Advances payable		117,175			78,497
Derivative liabilities		144,117			180,029
Unredeemed gift cards		159,872			48,311
Financing lease liability - current portion		61,596			-
Operating lease liabilities - current portion		114,216			-

Total Current Liabilities		2,197,835			947,120

LONG-TERM LIABILITIES:
Financing lease liability - long-term portion		130,164			-
Operating lease liability- long-term portion		173,939			-
Notes payable - long-term portion		295,872			151,544
Common stock repurchase obligation		711,275			1,300,000

Total Liabilities		3,509,085			2,398,664

Commitments and contingency (Note 11):

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock: $0.001 par value; 20,000,000 shares authorized;
Convertible Series B Preferred stock: $0.001 Par Value; 500,000 Shares Authorized; nil shares issued and outstanding as of September 30, 2021 and December 31, 2020		-			-
Common stock: $0.001 par value; 1,000,000,000 shares authorized; 27,925,989 and 19,123,768 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		27,925			19,123
Additional paid-in capital		11,057,754			4,399,272
Accumulated deficit		(10,066,879	)		(6,333,389	)

Total Stockholders' Equity (Deficit)		1,018,800			(1,914,994	)

Total Liabilities and Stockholders' Equity (Deficit)	$	4,527,885		$	483,670

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020

Product sales, net	$	703,364		$	299,178		$	1,362,999		$	964,944

Cost of sales		625,767			176,155			1,164,694			594,875

Gross profit		77,597			123,023			198,305			370,069

Operating Expenses:
Compensation and related expenses		238,912			66,581			409,826			477,381
Professional and consulting expenses		691,422			157,173			1,660,792			353,670
Product development expense		-			360,000			-			360,000
Selling and marketing expenses		324,478			50,638			522,351			135,520
General and administrative expenses		196,631			51,596			377,108			129,409

Total Operating Expenses		1,451,443			685,988			2,970,077			1,455,980

Operating Loss from Continuing Operations		(1,373,846	)		(562,965	)		(2,771,772	)		(1,085,911	)

Other Income (Expense):
Interest expense, net		(433,688	)		(7,279	)		(1,235,742	)		(8,812	)
Change in fair value of derivative liabilities		1,528			-			232,641			-
Gain on extinguishment of debt		-			-			26,629			-
Gain on forgiveness of debt		-			-			14,754			-
Other income		-			-			-			5,000

Total Other Expense, net		(432,160	)		(7,279	)		(961,718	)		(3,812	)

Loss from Continuing Operations		(1,806,006	)		(570,244	)		(3,733,490	)		(1,089,723	)

Discontinued Operations:
Income from Disposal of Discontinued Operations Before Provision for Income Taxes		-			91,750			-			38,203

Income from Discontinued Operations		-			91,750			-			38,203

Net Loss	$	(1,806,006	)	$	(478,494	)	$	(3,733,490	)	$	(1,051,520	)

BASIC AND DILUTED LOSS PER COMMON SHARE:
Continuing operations - basic and diluted	$	(0.07	)	$	(0.03	)	$	(0.17	)	$	(0.06	)
Discontinued operations - basic	$	-		$	0.00		$	-		$	0.00
Discontinued operations - diluted	$	-		$	0.00		$	-		$	0.00

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		25,195,498			19,004,233			22,061,952			16,839,250
Diluted		25,195,498			29,957,928			22,061,952			27,762,175

	Nine Months Ended September 30, 2021
		(Unaudited)
Balance at December 31, 2020	$	180,029
Initial valuation of derivative liabilities included in debt discount		223,358
Reclassification of derivative liability to gain on debt extinguishment		(26,629	)
Change in fair value of derivative liabilities		(232,641	)
Balance at September 30, 2021	$	144,117

Cash	$	4,917
Prepaid expense		9,776
Operating right-of-use asset		32,444
Total assets acquired		47,137

Accounts payable and accrued expenses		(209,417	)
Operating right-of-use liability		(32,444	)
Total liabilities assumed	$	(241,861	)

Net liability assumed	$	(194,724	)

	September 24, 2020
Assets:
Other assets:
Operating lease right-of-use assets, net	$	2,417
Total assets	$	2,417

Liabilities:
Current liabilities:
Accounts payable	$	112,212
Accrued expenses and other liabilities		5,009
Operating lease liabilities, current portion		2,417
Total current liabilities		119,638
Total liabilities	$	119,638

Net liabilities	$	117,221
Expense reimbursement by Buyer		14,000
Disposal of net liabilities to a related party	$	131,221

	Total			Total
Assets acquired:
Current assets	$	97,140		$	97,140
Computer software		66,198			66,198
Customer relationships		43,000			43,000
Trademark		505,000			505,000
Goodwill		1,780,964			1,809,357
Total assets acquired at fair value		2,492,302			2,520,695
Less: total liabilities assumed		(432,302	)		(432,302	)
Net asset acquired	$	2,060,000		$	2,088,393

Purchase consideration paid:
Fair value of common shares issued	$	2,000,000		$	2,028,393
Cash consideration		60,000			60,000
Total purchase consideration paid	$	2,060,000		$	2,088,393

	Estimated Life	September 30, 2021
			(Unaudited)
Computer software	3.5 years	$	66,198
Customer relationships	7 years		43,000
Trademark	Indefinite		505,000
Less: Accumulated amortization			(6,628	)
		$	607,570

	Nine Months Ended			Nine Months Ended			Three Months Ended
	September 30, 2021			September 30, 2020			January 31, 2021
Net Revenues	$	2,472,073		$	2,697,311		$	867,660
Net Loss	$	(3,733,490	)	$	(1,079,842	)	$	(275,249	)
Net Loss per Share	$	(0.17	)	$	(0.06	)	$	(0.02	)

Year ending October 31:	Amount
2022	$	674,883
2023		899,845
2024		898,147
2025		6,143
2026		6,143
2027		6,143
2028		4,096
Total	$	2,495,400

	September 30, 2021
	(Unaudited)
Principal amount	$	1,156,351
Less: debt discount		(498,440	)
Convertible notes payable, net	$	657,911

Principal amount – related party	$	75,391
Less: debt discount – related party		(39,479	)
Convertible notes payable - related party, net	$	35,915

Total convertible notes payable balance, net	$	693,826

	●	the value of the Company’s common stock;

	●	the expected life of issued stock warrants;

	●	the expected volatility of the Company’s stock price;

	●	the expected dividend yield to be realized over the life of the stock warrants; and

	●	the risk-free interest rate over the expected life of the stock warrants.

	September 30, 2021
~~Dividend rate~~	—	%
~~Term~~	~~2.5 year~~s
~~Volatility~~	~~60% to 70~~	%
~~Risk—free interest rate~~	~~0.14 to 0.24~~	%

	~~September 30,~~January 31, ~~2021~~2022
Dividend rate		—	%
Term (in years)		~~0.33~~ 0.09 to ~~0.84~~0.50
Volatility		90	%
Risk—free interest rate		0.04 to ~~0.11~~0.49	%
Default probability		2512.5	%

Remaining in December 31, 2021	$	7,988
Year ended December 31, 2022		6,170
Year ended December 31, 2023		6,405
Year ended December 31, 2024		6,649
Year ended December 31, 2025		6,902
Thereafter		272,786
Total principal payments	$	306,900

Year ended October 31, 2022 (remaining)	$	15,620
Year ended October 31, 2023		6,369
Year ended October 31, 2024		6,608
Year ended October 31, 2025		6,859
Thereafter		271,444
Total principal payments	$	306,900

Year	Amount
Ending October 31, 2022 (remaining)	$	73,764
Ending October 31, 2023		102,849
Ending October 31, 2024		79,991
Total minimum non-cancellable operating lease payments		256,604
Less: discount to fair value		(30,942	)
Total operating lease liabilities at January 31, 2022	$	225,662

Year ending December 31,	Amount
2021	$	62,459
2022		98,755
2023		103,692
2024		62,215
Total minimum non-cancelable operating lease payments		327,121
Less: discount to fair value		(38,967	)
Total operating lease payable at September 30, 2021	$	288,154

	September 30, 2021
	(Unaudited)
Financing lease payables for equipment	$	200,509
Total financing lease payables		200,509
Reduction of financing lease liability		(8,748	)
Total		191,761
Less: short term portion		(61,596	)
Long term portion	$	130,164

Year	Amount
Year ending October 31, 2022 (remaining)	$	58,500
Year ending October 31, 2023		78,000
Year ending October 31, 2024		58,500
Total minimum non-cancellable financing lease payments		195,000
Less: discount to fair value		(23,094	)
Total financing lease liabilities at January 31, 2022	$	171,906

	●	2,250 and 250 of the Company’s shares of Series C Preferred stock, were exchanged for 11,250,000 of stock warrants and 1,250,000 shares of common stock, respectively, for an aggregate of 2,500 shares of Series C Preferred exchanged. The 11,250,000 stock warrants are exercisable at $0.001 and expire on April 20, 2030. As of September 30, 2020, there were no outstanding shares of Series C Preferred stock.

	●	~~a lender converted $1,127,500 of outstanding convertible note balance into 28,187,500 of stock warrants, exercisable at $0.001 and expire on April 20, 2030.~~

	●	~~On March 29, 2021,~~ the ~~Company~~expected life of issued ~~50,000 shares~~stock warrants;

	●	the expected volatility of ~~common~~the Company’s stock ~~to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $24,504 using~~ price;

	●	the ~~relative fair value method and was recorded as debt discount~~expected dividend yields to be ~~amortized~~realized over the life of the ~~note.~~stock warrants; and

	●	the risk-free interest rate over the expected life of the stock warrants.

	●	On March 31, 2021, the Company granted 75,000 shares of common stock to a non-affiliate investor as commitment fee pursuant to a securities purchase agreement (see Note 4), valued at $36,499 using the relative fair value method and was recorded as debt discount to be amortized over the life of the note.—	%
Term (in years)			5 years
Volatility			61	%
Risk-free interest rate			0.83	%

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2020		60,638		$	3.20		0.03	$	—
Expired		(60,368	)	$	—		—		—
Balance at September 30, 2021		—		$	—		—	$	—

	Number of Stock Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Balance on December 31, 2020		11,278,212	$	0.03		9.3
Issued pursuant to convertible debt (see Note 4)		957,250		2.34		4.6
Balance on September 30, 2021		12,235,462	$	0.21		8.3
Stock warrants exercisable on September 30, 2021		12,235,462	$	0.21		8.3

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended January 31,
	2021		2020		2021		2020		2022		2021
Compensation and related expenses	$	238,912	$	66,581	$	409,826	$	477,381	$	287,579	$	68,037
Professional and consulting expenses		691,422		157,173		1,660,792		353,670		1,652,054		68,847
Professional and consulting expenses – related party										30,000		—
Product development expense		—		360,000		—		360,000		146,614		—
Selling and marketing expenses		324,478		50,638		522,351		135,520		364,584		75,940
General and administrative expenses		196,631		51,596		377,108		124,409		448,401		61,129
Total	$	1,451,443	$	685,988	$	2,970,077	$	1,455,980	$	2,929,232	$	273,953

	●	During the three months ended ~~September 30,~~January 31, 2022 and 2021, compensation and related expenses amounted to ~~$238,912 as compared to~~$287,579 and $66,581, ~~for the three months ended September 30, 2020,~~respectively, an increase of ~~$172,331~~$219,542 or ~~259%~~323%. The increase was primarily attributable to an increase of ~~$162,528~~$123,237 of compensation related to Model Meals which was acquired in July ~~2021.~~

	●	~~During the nine months ended September 30,~~ 2021 ~~compensation~~ and related expenses amounted to $409,826 as compared to $477,381 for the nine months ended September 30, 2020, a decrease of $67,555 or 14%. The decrease was primarily attributable to decrease in stock-based compensation of $311,561 offset by an increase of $162,528 of compensation$52,709 related to ~~Model Meals which was acquired~~increase in ~~July 2021.~~executive salary in 2022.

	September 30, 2021			December 31, 2020			Change			Percentage Change			January 31, 2022			October 31, 2021			Change			Percentage Change
Working capital deficit:
Total current assets	$	1,544,934		$	480,942		$	1,063,992			221	%	$	1,659,391		$	2,372,058		$	(712,667	)		30	%
Total current liabilities		(2,197,835	)		(947,120	)		(1,250,715	)		132	%		(2,192,709	)		(2,690,855	)		498,146			19	%
Working capital deficit:	$	(652,901	)	$	(466,178	)	$	(186,723	)		40	%	$	(533,318	)	$	(318,797	)	$	(214,521	)		67	%

	(1)	~~Lack~~the lack of ~~an independent audit committee or audit committee~~multiples levels of management review on complex accounting and financial expert. Although our board of directors serves as the audit committee, it has only one independent director. These factors are counter to corporate governance practices as defined by the various stock exchangesreporting issues, and ~~lead to less supervision over management.~~business transactions,

	(2)	~~We do not have sufficient experience from~~a lack of adequate segregation of duties and necessary corporate accounting resources in our financial reporting process and accounting ~~personnel with the requisite U.S. GAAP public company reporting experience that is necessary for adequate controls and procedures due to~~function as a result of our limited financial resources ~~with appropriate skills, training~~to support hiring of personnel and ~~experience to perform the review processes to ensure the complete and proper application~~implementation of ~~generally accepted~~ accounting ~~principles.~~ systems,

	(3)	~~Need for greater integration, oversight, communication~~a lack of operational controls and ~~financial reporting~~lack of controls over assets by the ~~books~~acquired subsidiaries, and ~~records of our office.~~

	(4)	~~Lack~~a lack of ~~sufficient segregation~~adequate controls over the board of ~~duties such that the design over these areas relies primarily on detective controls~~director’s approval and ~~could be strengthened by adding preventative controls to properly safeguard company assets.~~timely distribution and review of material contracts and agreements.

Exhibit No		Description
2.1		Agreement and Plan of Merger dated May 20, 2020, by and among Gratitude Health, Inc., Fresh Market Merger Sub, Inc. and Home Bistro, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 22, 2020).

3.1		Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.A.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 28, 2017).

3.2		Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 28, 2018).

3.3		Certificate of Amendment to Articles of Incorporation (incorporated by reference Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 22, 2020).

3.4		Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K/A filed with the SEC on March 31, 2015).

4.1		Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 28, 2018).

4.2		Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 28, 2018).

4.3		Certificate of Designation of Series C Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 21, 2018).

4.4		Amendment to Certificate of Designation of Series C Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 24, 2018).

31.1*		Section 302 Certification by the Registrant’s Principal Executive Officer and Principal Financial Officer

32.1*		Section 906 Certification by the Registrant’s Principal Executive Officer and Principal Financial Officer

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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)

	HOME BISTRO, INC.

Date: ~~November 15, 2021~~March 17, 2022	By:	/s/ Zalmi Duchman
		Zalmi Duchman
		Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)