Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 17, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Kisses From Italy, Inc. | |
Entity Central Index Key | 0001608092 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | No | |
Is Entity Emerging Growth Company? | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 81,780,170 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 31,694 | $ 22,877 |
Total current assets | 31,694 | 22,877 |
Property and equipment, net | 81,820 | 90,348 |
Other Assets | 1,092 | 1,093 |
Total assets | 114,606 | 114,318 |
Current liabilities: | ||
Accounts payable | 65,691 | 50,374 |
Accrued liabilities | 152,163 | 158,089 |
Loans payable | 4,066 | 5,643 |
Total current liabilities | 221,920 | 214,106 |
Convertible Notes | 378,650 | 277,650 |
Total liabilities | 600,570 | 491,756 |
Stockholders' Equity: | ||
Preferred stock, $0.001 par value. 25,000,000 shares authorized; zero shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value,200,000,000 shares authorized; 81,780,170 and 81,780,170 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 81,780 | 81,780 |
Additional paid-in capital | 1,671,886 | 1,638,253 |
Retained earnings deficit | (2,260,593) | (2,124,631) |
Total Kisses From Italy Stockholders' Equity | (506,927) | (404,598) |
Non-controlling interest | 20,963 | 27,160 |
Total stockholders' equity | (485,964) | (377,438) |
Total liabilities and equity | $ 114,606 | $ 114,318 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 81,780,170 | 81,780,170 |
Common stock, shares outstanding | 81,780,170 | 81,780,170 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Sales | $ 115,572 | $ 105,404 |
Cost of goods sold | 48,144 | 46,379 |
Gross margin | 67,428 | 59,025 |
Operating expenses: | ||
Depreciation and amortization | 10,528 | 9,938 |
Executive compensation | 0 | 16,953 |
Payroll and other expenses | 70,386 | 23,508 |
Rent | 31,455 | 20,783 |
Consulting and professional fees | 21,372 | 18,670 |
General and administrative | 28,165 | 25,509 |
Total operating expenses | 161,906 | 115,361 |
Income (loss) from operations | (94,478) | (56,336) |
Other income (expense) | ||
Interest income (expense), net | (47,681) | (6,840) |
Total other income (expense) | (47,681) | (6,840) |
Income (loss) before income taxes | (142,159) | (63,176) |
Provision for income taxes (benefit) | 0 | 0 |
Net loss | (142,159) | (63,176) |
Less: net gain(loss) attributable to non-controlling interests | (6,197) | (1,028) |
Net loss attributable to Kisses From Italy, Inc. | $ (135,962) | $ (62,148) |
Basic and diluted earnings (loss) per common share | $ 0 | $ 0 |
Weighted-average number of common shares outsanding: | ||
Basic and diluted | 81,780,170 | 81,780,170 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Noncontrolling Interest | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2017 | 0 | 81,780,170 | ||||
Beginning balance, value at Dec. 31, 2017 | $ 0 | $ 81,780 | $ 1,545,796 | $ 52,734 | $ (1,679,183) | $ 1,127 |
Net income (loss) | (1,029) | (63,176) | (63,176) | |||
Ending balance, shares at Mar. 31, 2018 | 0 | 81,780,170 | ||||
Ending balance, value at Mar. 31, 2018 | $ 0 | $ 81,780 | 1,545,796 | 51,705 | (1,742,359) | (63,078) |
Beginning balance, shares at Dec. 31, 2018 | 0 | 81,780,170 | ||||
Beginning balance, value at Dec. 31, 2018 | $ 0 | $ 81,780 | 1,638,253 | 27,160 | (2,124,631) | (377,438) |
Beneficial conversion feature of convertible notes | 33,633 | 33,633 | ||||
Net income (loss) | (6,197) | (135,962) | (142,159) | |||
Ending balance, shares at Mar. 31, 2019 | 0 | 81,780,170 | ||||
Ending balance, value at Mar. 31, 2019 | $ 0 | $ 81,780 | $ 1,671,886 | $ 20,963 | $ (2,260,593) | $ (485,964) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities of continuing operations: | ||
Net income (loss) | $ (135,962) | $ (63,176) |
Net income loss attributable to non-controlling interest | (6,197) | (1,028) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 10,528 | 9,938 |
Amortization of debt discount | 33,633 | 0 |
Changes in operating assets and liabilities: | ||
Accounts payable | 15,319 | 8,314 |
Loan payable | 0 | (4,408) |
Accrued liabilities | (5,927) | 0 |
Net cash provided by (used in) operating activities | (88,606) | (50,360) |
Cash flows from investing activities: | ||
Purchase of fixed assets | (2,000) | 0 |
Net cash provided by (used in) investing activities | (2,000) | 0 |
Cash flows from financing activities: | ||
Loans payable, net | (1,577) | 0 |
Proceeds from private placements | 101,000 | 0 |
Net cash provided by (used in) financing activities | 99,423 | 0 |
Net increase (decrease) in cash and cash equivalents | 8,817 | (50,360) |
Cash and cash equivalents at beginning of period | 22,877 | 51,955 |
Cash and cash equivalents at end of period | 31,694 | 1,595 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | $ 0 | $ 0 |
1. Organization and Description
1. Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Kisses From Italy Inc. (the “Company”) was incorporated in Florida on March 7, 2013. The Company’s main focus is to develop a fast, casual food dining chain restaurant business of corporate-owned restaurants and expanding through a nationwide/international franchise and territory sales program. The Company commenced operations in May 2015 by opening its first location in Ft. Lauderdale, Florida. Three additional restaurants, which were located in various Wyndham Hotel properties in the Pompano Beach, Florida area, were then opened within the following ten months. All locations, which were in leased facilities, were fully operational by April 2016. In December 2017, the Company was forced to temporarily cease operations of its restaurants for approximately six months due to hurricane damage. As a further result, the Company vacated one of its restaurants due to hurricane incurred damage and permanently closed that location in 2018. The Company’s accounting year end is December 31. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the unaudited financial statements and notes have been prepared on the same basis as the audited financial statements for the year ended December 31, 2018 and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with GAAP. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses or recognized when incurred. For the three month period ended March 31, 2019, the consolidated financials include the accounts of the Company and its wholly-owned subsidiaries; Kisses from Italy 9 th All intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Revenue Recognition Sales, as presented in the Company’s consolidated statement of operations, represents food and beverage product sold and is presented net of discounts, coupons, employee meals, and complimentary meals. Revenue from restaurant sales is recognized when food and beverage products are sold. On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As of March 31, 2019, and for the year ended December 31, 2018, the consolidated financial statements were not materially impacted as a result of the application of Topic 606. Non-controlling interest Non-controlling interest represents third-party ownership in the net assets of one of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority-owned subsidiary consolidated with those of the Company’s Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2019 and December 31, 2018, the Company’s cash equivalents totaled $31,694 and $22,877, respectively. Property and equipment Property and equipment are stated at cost or fair value. During 2018 the Company permanently closed one of its locations and removed all property and detachable leaseholds. The Company believes that this equipment and leaseholds which are in excellent condition can be used at existing and new locations and that the undepreciated book value is equivalent to its fair market value, thus no impairment was recorded. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows: Computers, software, and office equipment 1 – 6 years Machinery and equipment 3 – 5 years Leasehold improvements Lesser of the lease term or estimated useful life Income taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit. Stock-based Compensation The Company accounts for stock-based compensation using the fair value method following the guidance set forth in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Leases The Company follows the guidance in ASC 840 “ Leases Net Loss per Share Net loss per Common Share is computed by dividing net loss by the weighted average Common Shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings per Common Share calculations are determined by dividing net income by the weighted average number of Common Shares and dilutive Common Share equivalents outstanding. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Codification Improvements Codification Improvements to Topic 842, Leases (Topic 842) Targeted Improvements, As an emerging growth company the Company has until December 15, 2019 to adopt ASC 842. While the Company continues to evaluate the impact of the new standard, the Company expects the adoption of this guidance will not have any impact on its financial statements. |
3. Going Concern and Liquidity
3. Going Concern and Liquidity | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Liquidity | NOTE 3 – GOING CONCERN AND LIQUIDITY As of March 31, 2019, and December 31, 2018, the Company had $31,694 and $22,877 in cash on hand respectively, and revenues of $115,572 and $105,404, respectively. Additionally, as of March 31, 2019, the Company had outstanding liabilities totaling $600,570 and $31,694 in short term liquid assets. In the Company’s financial statements for the fiscal years ended December 31, 2018, and 2017, the Reports of the Independent Registered Public Accounting Firm include an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. These 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. Based on the Company’s current financial projections, it believes it does not have sufficient existing cash resources to fund its current operations. It is the Company’s current intention to raise debt and/or equity financing to fund ongoing operating expenses. There is no assurance that these events will be satisfactorily completed or at terms acceptable to the Company. Any issuance of equity securities, if accomplished, could cause substantial dilution to existing stockholders. Any failure by the Company to successfully implement these plans would have a material adverse effect on its business, including the possible inability to continue operations. |
4. Property and Equipment
4. Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT The following table sets forth the components of the Company’s property and equipment at March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Cost Accumulated Depreciation Net Book Cost Accumulated Depreciation Net Book Capital assets subject to depreciation: Furniture and equipment $ 54,868 (37,488 ) 17,380 $ 52,868 (35,200 ) 17,668 Leasehold improvements 175,716 (111,276 ) 64,440 175,716 (103,036 ) 72,680 Total fixed assets $ 230,584 (148,764 ) 81,820 $ 228,584 (138,236 ) 90,348 For the three months ended March 31, 2019, and 2018, the Company recorded depreciation and amortization of $10,528 and $9,938 respectively. |
5. Accrued and Other Liabilitie
5. Accrued and Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | NOTE 5 – ACCRUED AND OTHER LIABILITIES The following table sets forth the components of the Company’s accrued liabilities at March 31, 2019, and December 31, 2018. March 31, December 31, Sales tax payable $ 20,699 $ 12,605 Accrued interest payable 19,266 21,728 Accrued rent – 12,114 Payroll tax liabilities 112,198 109,642 Accrued other – 2,000 Total accrued liabilities $ 152,163 $ 158,089 The Company is in arrears on its payroll tax payments as of March 31, 2019. Included in the “payroll tax liabilities” as of December 31, 2018, is approximately $27,251 in interest and penalties. |
6. Loans Payable
6. Loans Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Loans Payable | NOTE 6 – LOANS PAYABLE The Company has one asset-based line of credit of $10,725. The amount of credit available to be accessed is dependent on the amount of documented credit receipts received by the Company’s restaurants. The due dates on these credit advances are typically between 90 and 180 days. The interest rate on the facility is approximately 32%, plus additional processing fees of approximately 5%. As of March 31, 2019, and December 31, 2018, loan payable balances were $4,066 and $5,643 respectively. The amount of loans outstanding was significantly reduced due to proceeds from less expensive (in terms of the interest rate) convertible debt that was applied against loan balances. |
7. Convertible Notes
7. Convertible Notes | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes | NOTE 7 – CONVERTIBLE NOTES As of March 31, 2019, and December 31, 2018, the balance of convertible notes was $378,650 and $277,650 respectively. In April 2018, the Company commenced a private offering of up to $250,000 in convertible debenture (the “Debentures”), to non-residents of the US. These notes accrue interest at the rate of 8% per annum and are convertible into shares of the Company’s Common Stock but are only convertible until such time as the Company’s Common Stock is approved for trading, of which there is no assurance, at a conversion rate of $0.0667 per share. Interest is payable annually, on or before February 15 of each year. The Debentures mature three years after the issuance date. None of the convertible debentures have been converted. Since the Company’s shares were previously sold in a private placement at a price of $0.10 per share, the difference in price is considered a beneficial conversion feature. Since the holders of the Notes have the right to convert immediately, the beneficial conversion feature of $126,090 has been immediately expensed and recorded as interest expense. |
8. Stockholders Equity
8. Stockholders Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders Equity | NOTE 8 – STOCKHOLDERS EQUITY Capital Stock At March 31, 2019, and December 31, 2018, there were 81,780,170 shares of Common Stock issued and outstanding, with a $0.001 par value. 25,000,000 shares of Preferred Stock, with a par value $0.01 per share, are authorized, none of which have been issued or were outstanding as of March 31, 2019, or December 31, 2018. In May 2018, the Company’s Board of Directors and Shareholders approved an amendment to the Company’s Articles of Incorporation, increasing the number of authorized Common Shares to 200,000,000, par value $0.01 per share. Common Stock Issued in Private Placements During the three months ended March 31, 2019, the Company did not issue any of its Common Stock in any private offering, or otherwise. During the year ended December 31, 2018, the Company did not issue any of its Common Stock in any private offering, or otherwise. Common Stock Issued in Exchange for Services During the three months ended March 31, 2019, the Company did not issue any shares of its Common Stock for services. During the year ended December 31, 2018, the Company did not issue any shares of its Common Stock for services. |
9. Commitments and Contingencie
9. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES As of March 31, 2019, and December 31, 2018, the Company had three operating store locations. The Company leases these spaces based upon the following schedules: · Kisses From Italy 9 th · Kisses From Italy-Palm Aire based in Pompano Beach, Florida leases approximately 2,300 square feet of space at a cost of $3,600 per month. The Company has a one-year automatic renewal provision for this lease on May 1st of each year under the same terms. · Kisses From Italy -Sea Gardens based in Pompano Beach, Florida leases approximately 600 square feet of space at a cost of $546 per month. The lease ended on August 1, 2018 and was renewed on the same terms. The Company has a one-year automatic renewal provision for this lease but is not obligated to exercise this renewal provision. The Company also rents professional and furnished space on a month to month basis in Miami, Florida at a cost of $223 per month, which has been designated the Company’s principal place of business. |
10. Subsequent Events
10. Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 – SUBSEQUENT EVENTS During the period from April 11 through May 8, 2019, the Company received $15,300 in proceeds from the sale of convertible notes to four accredited investors. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Management's Representation of Interim Financial Statements | Management’s Representation of Interim Financial Statements The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the unaudited financial statements and notes have been prepared on the same basis as the audited financial statements for the year ended December 31, 2018 and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with GAAP. This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses or recognized when incurred. For the three month period ended March 31, 2019, the consolidated financials include the accounts of the Company and its wholly-owned subsidiaries; Kisses from Italy 9 th All intercompany accounts and transactions are eliminated in consolidation. |
Going Concern | NOTE 3 – GOING CONCERN AND LIQUIDITY As of March 31, 2019, and December 31, 2018, the Company had $31,694 and $22,877 in cash on hand respectively, and revenues of $115,572 and $105,404, respectively. Additionally, as of March 31, 2019, the Company had outstanding liabilities totaling $600,570 and $31,694 in short term liquid assets. In the Company’s financial statements for the fiscal years ended December 31, 2018, and 2017, the Reports of the Independent Registered Public Accounting Firm include an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. These 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. Based on the Company’s current financial projections, it believes it does not have sufficient existing cash resources to fund its current operations. It is the Company’s current intention to raise debt and/or equity financing to fund ongoing operating expenses. There is no assurance that these events will be satisfactorily completed or at terms acceptable to the Company. Any issuance of equity securities, if accomplished, could cause substantial dilution to existing stockholders. Any failure by the Company to successfully implement these plans would have a material adverse effect on its business, including the possible inability to continue operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition Sales, as presented in the Company’s consolidated statement of operations, represents food and beverage product sold and is presented net of discounts, coupons, employee meals, and complimentary meals. Revenue from restaurant sales is recognized when food and beverage products are sold. On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As of March 31, 2019, and for the year ended December 31, 2018, the consolidated financial statements were not materially impacted as a result of the application of Topic 606. |
Non-controlling interest | Non-controlling interest Non-controlling interest represents third-party ownership in the net assets of one of our consolidated subsidiaries. For financial reporting purposes, the assets and liabilities of our majority-owned subsidiary consolidated with those of the Company’s |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2019 and December 31, 2018, the Company’s cash equivalents totaled $31,694 and $22,877, respectively. |
Property and equipment | Property and equipment Property and equipment are stated at cost or fair value. During 2018 the Company permanently closed one of its locations and removed all property and detachable leaseholds. The Company believes that this equipment and leaseholds which are in excellent condition can be used at existing and new locations and that the undepreciated book value is equivalent to its fair market value, thus no impairment was recorded. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount and accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss is included in results of operations. The estimated useful lives of property and equipment are as follows: Computers, software, and office equipment 1 – 6 years Machinery and equipment 3 – 5 years Leasehold improvements Lesser of the lease term or estimated useful life |
Income taxes | Income taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes” “Accounting for Uncertainty in Income Taxes” The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation using the fair value method following the guidance set forth in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. |
Leases | Leases The Company follows the guidance in ASC 840 “ Leases |
Net Loss per Share | Net Loss per Share Net loss per Common Share is computed by dividing net loss by the weighted average Common Shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share." Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of Common Stock outstanding during the year. Diluted earnings per Common Share calculations are determined by dividing net income by the weighted average number of Common Shares and dilutive Common Share equivalents outstanding. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Codification Improvements Codification Improvements to Topic 842, Leases (Topic 842) Targeted Improvements, As an emerging growth company the Company has until December 15, 2019 to adopt ASC 842. While the Company continues to evaluate the impact of the new standard, the Company expects the adoption of this guidance will not have any impact on its financial statements. |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Estimated useful lives of property | Computers, software, and office equipment 1 – 6 years Machinery and equipment 3 – 5 years Leasehold improvements Lesser of the lease term or estimated useful life |
4. Property and Equipment (Tabl
4. Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, 2019 December 31, 2018 Cost Accumulated Depreciation Net Book Cost Accumulated Depreciation Net Book Capital assets subject to depreciation: Furniture and equipment $ 54,868 (37,488 ) 17,380 $ 52,868 (35,200 ) 17,668 Leasehold improvements 175,716 (111,276 ) 64,440 175,716 (103,036 ) 72,680 Total fixed assets $ 230,584 (148,764 ) 81,820 $ 228,584 (138,236 ) 90,348 |
5. Accrued and Other Liabilit_2
5. Accrued and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued and other liabilities | March 31, December 31, Sales tax payable $ 20,699 $ 12,605 Accrued interest payable 19,266 21,728 Accrued rent – 12,114 Payroll tax liabilities 112,198 109,642 Accrued other – 2,000 Total accrued liabilities $ 152,163 $ 158,089 |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Computers, software and office equipment [Member] | |
Property and equipment useful life | 1-6 years |
Machinery and Equipment [Member] | |
Property and equipment useful life | 3-5 years |
Leasehold Improvements [Member] | |
Property and equipment useful life | Lesser of lease term or estimated useful life |
2. Summary of Significant Acc_5
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 31,694 | $ 22,877 | $ 1,595 | $ 51,955 |
3. Going Concern and Liquidity
3. Going Concern and Liquidity (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash | $ 31,694 | $ 22,877 | |
Revenues | 115,572 | $ 105,404 | |
Liabilities | $ 600,570 | $ 491,756 |
4. Property and Equipment (Deta
4. Property and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property and equipment, gross | $ 230,584 | $ 228,584 |
Accumulated depreciation | (148,764) | (138,236) |
Property and equipment, net | 81,820 | 90,348 |
Furniture and equipment [Member] | ||
Property and equipment, gross | 54,868 | 52,868 |
Accumulated depreciation | (37,488) | (35,200) |
Property and equipment, net | 17,380 | 17,668 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 175,716 | 175,716 |
Accumulated depreciation | (111,276) | (103,036) |
Property and equipment, net | $ 64,440 | $ 72,680 |
4. Property and Equipment (De_2
4. Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 10,528 | $ 9,938 |
5. Accrued and Other Liabilit_3
5. Accrued and Other Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Sales tax payable | $ 20,699 | $ 12,605 |
Accrued interest payable | 19,266 | 21,728 |
Accrued Rent | 0 | 12,114 |
Payroll tax liabilities | 112,198 | 109,642 |
Accrued Other | 0 | 2,000 |
Total accrued liabilities | $ 152,163 | $ 158,089 |
5. Accrued and Other Liabilit_4
5. Accrued and Other Liabilities (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payroll tax liabilities | $ 112,198 | $ 109,642 |
Interest and Penalties [Member] | ||
Payroll tax liabilities | $ 27,251 |
6. Loans Payable (Details Narra
6. Loans Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Line of credit balance | $ 4,066 | $ 5,643 |
Credit Line 1 [Member] | ||
Credit line maximum amount | $ 10,725 | |
Credit line interest rates | 32.00% |
7. Convertible Notes (Details N
7. Convertible Notes (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Convertible notes payable | $ 378,650 | $ 277,650 |
Notes payable face value | $ 250,000 | |
Debt interest rate | 8.00% | |
Debt term | 3 years | |
Conversion rate | 0.0667% | |
Beneficial conversion feature | $ 126,090 |
9. Commitments and Contingenc_2
9. Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2019USD ($)ft² | |
Fort Lauderdale, FL [Member] | |
Rental space in sq. ft. | ft² | 990 |
Lease payment frequency | monthly |
Lease periodic payment | $ 5,773 |
Palm Aire [Member] | |
Rental space in sq. ft. | ft² | 2,300 |
Lease payment frequency | monthly |
Lease periodic payment | $ 3,600 |
Sea Gardens [Member] | |
Rental space in sq. ft. | ft² | 600 |
Lease payment frequency | monthly |
Lease periodic payment | $ 546 |
Miami, FL [Member] | |
Lease payment frequency | monthly |
Lease periodic payment | $ 223 |