Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Oct. 05, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Veroni Brands Corp. | ||
Entity Central Index Key | 0001693690 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 27,112,028 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash & equivalents | $ 116,730 | $ 99,010 |
Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively | 14,303 | 129,565 |
Contract Receivables with recourse | 793,904 | 1,554,510 |
Inventory | 550,657 | 610,647 |
Prepaid expenses and other current assets | 5,524 | 56,014 |
Total Current Assets | 1,481,118 | 2,449,746 |
Other Assets | ||
Deposits | 9,310 | 9,310 |
Right-of-use asset-operating, net | 74,721 | 122,856 |
Total Other Assets | 84,031 | 132,166 |
Total Assets | 1,565,149 | 2,581,912 |
Current Liabilities | ||
Accounts payable | 68,869 | 184,561 |
Accounts payable related party | 783,417 | 546,612 |
Notes payable | 215,000 | |
Notes payable - related parties including interest | 43,370 | |
Contract receivables liability with recourse | 649,502 | 1,414,639 |
Accrued liabilities | 134,137 | 214,816 |
Paycheck protection loans (PPP) | 56,250 | |
Contract liabilities | 74,800 | 143,033 |
Short-Term lease liability-operating | 56,939 | 52,499 |
Total Current Liabilities | 1,823,914 | 2,814,530 |
Long-term Liabilities | ||
Economic injury disaster loan (EIDL) | 149,900 | |
Long-Term lease liability-operating | 15,134 | 72,073 |
Total Long-Term Liabilities | 165,034 | 72,073 |
Total Liabilities | 1,988,948 | 2,886,603 |
STOCKHOLDERS' DEFICIT | ||
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019 | ||
Common Stock, $0.0001 par value; 100,000,000 shares authorized;27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 2,709 | 2,674 |
Additional paid-in capital | 959,600 | 699,635 |
ACCUMULATED DEFICIT | (1,386,108) | (1,007,000) |
Total Stockholders' Deficit | (423,799) | (304,691) |
Total Liabilities and Stockholders' Deficit | $ 1,565,149 | $ 2,581,912 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 0 | $ 2,125 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,085,029 | 26,738,362 |
Common stock, shares outstanding | 27,085,029 | 26,738,362 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue, net | $ 5,581,764 | $ 6,678,790 |
Cost of sales, related party | 3,961,711 | 5,197,938 |
Cost of sales | 464,722 | 620,500 |
Total cost of sales | 4,426,433 | 5,818,438 |
Gross profit | 1,155,331 | 860,352 |
Warehouse and selling expenses | 359,399 | 646,249 |
General and administrative expenses | 1,175,040 | 773,557 |
Total operating expenses | 1,534,439 | 1,419,806 |
Net loss from operations | (379,108) | (559,454) |
Other expense | ||
Interest expense | 140,359 | |
Interest expense - related party | 1,000 | |
Total interest expense | 141,359 | |
Loss before income taxes | (379,108) | (700,813) |
Income taxes | ||
Net Loss | $ (379,108) | $ (700,813) |
Net loss per share: | ||
Basic and diluted | $ (0.01) | $ (0.03) |
Weighted average shares outstanding: | ||
Basic and diluted | 27,062,042 | 26,739,853 |
Statement of Changes in Stockho
Statement of Changes in Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 2,656 | $ 409,683 | $ (306,187) | $ 106,152 | |
Balance, shares at Dec. 31, 2018 | 26,568,400 | ||||
Issuance of common stock for services | $ 3 | 22,494 | 22,497 | ||
Issuance of common stock for services, shares | 29,997 | ||||
Issuance of common stock for cash | $ 21 | 152,229 | 152,250 | ||
Issuance of common stock for cash, shares | 203,000 | ||||
Issuance of common stock, in lieu of interest | $ 18 | 140,205 | 140,223 | ||
Issuance of common stock, in lieu of interest, Shares | 186,965 | ||||
Redemption and cancellation of shares | $ (12) | (24,988) | (25,000) | ||
Redemption and cancellation of shares, shares | (125,000) | ||||
Cancellation of shares | $ (12) | 12 | |||
Cancellation of shares, shares | (125,000) | ||||
Net Loss for the year | (700,813) | (700,813) | |||
Balance at Dec. 31, 2019 | $ 2,674 | 699,635 | (1,007,000) | (304,691) | |
Balance, shares at Dec. 31, 2019 | 26,738,362 | ||||
Issuance of common stock for services | $ 6 | 44,994 | 45,000 | ||
Issuance of common stock for services, shares | 60,000 | ||||
Conversion of promissory note to common stock | $ 29 | 214,971 | 215,000 | ||
Conversion of promissory note to common stock, shares | 286,667 | ||||
Net Loss for the year | (379,108) | (379,108) | |||
Balance at Dec. 31, 2020 | $ 2,709 | $ 959,600 | $ (1,386,108) | $ (423,799) | |
Balance, shares at Dec. 31, 2020 | 27,085,029 |
Statements of Cash Flow
Statements of Cash Flow - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flow from operating activities: | ||
Net Loss | $ (379,108) | $ (700,813) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Common stock issued for service | 22,496 | |
Amortization of debt discount | 112,500 | |
Changes in: | ||
Trade accounts receivable | 117,387 | (108,582) |
Allowance for doubtful accounts | (2,125) | (7,823) |
Contract Receivables | 760,606 | (1,554,510) |
Prepaid expenses and other current assets | 50,490 | 50,303 |
Inventory | 59,990 | (402,278) |
Deposits | (9,310) | |
Accounts payable | (115,792) | 140,981 |
Accounts payable related party | 235,806 | 546,612 |
Accrued liabilities | (80,679) | 165,895 |
Contract liabilities | (68,233) | 143,033 |
ROU asset/liability | (4,364) | 1,716 |
Net cash used in operating activities | 573,978 | (1,599,780) |
Cash flows from financing activities: | ||
Repayment of shareholders loans | (140,000) | |
Repayment of notes payable | (215,000) | |
Repayment of notes payable-related party | (62,371) | |
Proceeds of notes payable-related party | 20,000 | 26,311 |
Proceeds from issuance of notes payable | 457,591 | |
Proceeds from issuance of common stock | 45,000 | 152,250 |
Proceeds from (repayment of) contract receivables with recourse | (765,137) | 1,414,639 |
Proceeds from issuance of PPP loan | 56,250 | |
Proceeds from issuance of Economic Injury Disaster loan | 150,000 | |
Net cash provided by financing activities | (556,258) | 1,695,791 |
Net change in cash | 17,720 | 96,011 |
Cash at the beginning of the year | 99,010 | 2,999 |
Cash at the end of the year | 116,730 | 99,010 |
Supplemental disclosure of cash flow information: | ||
Interest | 1,000 | |
Non-cash investing and financing activities | ||
Conversion of promissory note debt discount | 215,000 | 112,500 |
Redemption and cancellation of shares | 25,000 | |
Interest converted to common stock | 27,591 | |
Adoption of ASC 842 | $ 169,655 |
Nature of Operations and Financ
Nature of Operations and Financial Condition | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Financial Condition | Note 1 - Nature of Operations and Financial Condition Veroni Brands Corp. (the “Company”) was incorporated on December 7, 2016 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisition. The Company has been formed to acquire, operate, develop, grow and import premium European products into the U.S. market. Veroni Brands was created to search out desirable premium products across Europe and make them accessible to discerning consumers in the U.S. Veroni Brands strives to import the extraordinary and delight its consumers with experiences that had previously only been attainable in Europe. In January 2018, the Company became an exclusive importer and distributor of “Iron Energy” by Mike Tyson. The beverage became available to consumers in select Chicago area markets in May 2018 in three different flavors such as “Mojito,” “Zero Sugar” and “Original.” During 2019, the Company built the distribution of the Iron Energy product nationwide. Beginning in February 2019, the Company expanded its import and distribution network with the distribution of chocolate products and significantly grew its sales and distribution volumes. The Company entered into long term supply agreements with major U.S national retailers to import chocolate products under “Private Label Brands” that are currently being sold in over 20,000 retail locations across the U.S. The Company takes pride in the variety of consumer products it imports and is proud to share them with its consumers nationwide. The Company’s recent expansion of the import and distribution of snacks, chocolate and chocolate related products that are currently being sold to U.S. national retailers presents the Company with a substantial growth opportunity to introduce to its retail partners to many other consumer products and to increase its network of retailers. Going Concern The Company has generated revenue this year of approximately $5.6 million and incurred a net loss of $379,108 for the year ending December 31, 2020 and has an accumulated deficit of $1,386,108 since its inception. As of December 31, 2020, the Company had a cash balance available of approximately $116,730 and working capital of ($342,796) which is not sufficient to meet its operating requirements for the next twelve months. Therefore, the Company’s ability to continue as a going concern is dependent on its ability to grow its revenue and generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required. The Company failed to meet its minimum annual purchase requirements under the FoodCare Sp. z.o.o. (“FoodCare”) agreement, in part due to FoodCare’s failure to provide promised marketing support. In 2020, the Company terminated the agreement and relationship with FoodCare and no longer had exclusive rights to distribute FoodCare’s Iron Energy drinks. The Company has found greater success with the distribution of chocolate and snack products instead of beverages. In addition to importing products from ZWC Millano, the Company has recently established relationships with other European manufacturers that can manufacture wide range of “panned” products, meaning those that are coated with a sugar syrup and/or chocolate, such as nuts, raisin, pretzels, fruits and many other “panned” and healthy snacks items as well as chocolate bars, multi-flavor truffles, sticks, chocolate cups, 5-bites, chocolate covered gummies, chocolate Easter eggs, custom Christmas chocolate figures as well as Advent calendars and many other products to support demand of the Company’s national retailers. The Company is continuing to evaluate various financing options in order to continue the funding of the expansion of its operations, the products being offered and its customer base. The Company is also focusing on broadening its customer base. As disclosed below in Accounts Receivable and Concentration of Credit Risk The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Reclassifications Certain reclassifications have been made in the 2019 financial statements to conform to the 2020 presentation. These reclassifications have no effect on net loss for 2019. Advertising The Company’s policy is to expense advertising costs as incurred. Advertising expense for the year ending December 31, 2020 and 2019 is $30,935 and $50,117, respectively. Use of Estimates The preparation of financial statements in conformity with 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 financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying amount of inventory and associated reserves, and allowances and reserves in regards to receivables and revenue. Actual results could differ from those estimates. Revenue Recognition The Company’s significant accounting policy for revenue was updated as a result of the adoption of ASU Topic 606. The Company has adopted the new standard on January 1, 2019 and has used the modified retrospective method. The majority of the Company’s business is ship and bill. Based on our analysis, the Company did not identify a cumulative effect adjustment to retained earnings at December 31, 2018. The Company recognizes revenue in accordance with the five-step model as prescribed by ASU 606 in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASU 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 12 for revenue disaggregated by product line. The Company recognizes revenue from the sale of products when title and risk of loss passes and the customer accepts the goods, which generally occurs at the time of delivery to a customer warehouse. Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of sales at the time the sale is recognized. Shipping and handling costs are treated as fulfillment costs and presented in warehouse and selling expenses. Payments that are received before performance obligations are recorded are shown as current liabilities. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. Shipping Costs Costs associated with shipping product to customers aggregating approximately $206,052 and $201,561 for the years ended December 31, 2020 and 2019, respectively, is included in warehouse and selling expenses. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of December 31, 2020 and 2019, respectively. Accounts Receivable and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amounts less an allowance for doubtful accounts. The allowance for doubtful accounts is based on the Company’s estimate of the amount of probable credit losses in its accounts receivable. The Company determines the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Accounts receivable balances are periodically reviewed for collectability, and balances are charged off against the allowance when the Company determines that the potential for recovery is remote. An allowance for doubtful accounts of approximately $-0- and $2,125 is reserved as of December 31, 2020 and 2019, respectively. We are exposed to credit risk in the normal course of business, primarily related to accounts receivable. To limit credit risk, management periodically reviews and evaluates the financial condition of its customers and maintains an allowance for doubtful accounts. For the year ended December 31, 2020, we had one customer who comprised approximately 57% or $617,272 of our contract receivables with recourse and two customers who comprised approximately 100% or $14,303 of our accounts receivable. For the year ended December 31, 2019, we had one customer who comprised approximately 86% or $1,453,432 of our contract receivables with recourse and one customer who comprised approximately 57% or $74,544 of our accounts receivable. For the year ended December 31, 2020, we had two customers with sales in excess of 10% of our revenue and they represented 77% of our revenue. For the year ended December 31, 2019, we had two customers with sales in excess of 10% of our revenue and they represented 72% of our revenue. One of these customers had sales of approximately $2,405,000 and $3,887,000 in 2020 and 2019, respectively. Per Note 15, the Company was not selected as a vendor for 2021 for this customer. Distribution Agreements and Supplier Concentration In January 2018, the Company entered into a distributor agreement with FoodCare, which was amended and restated on January 30, 2018. FoodCare is a company organized under the laws of Poland. FoodCare is a manufacturer and supplier of desserts, cereals, energy drinks and other beverage products. FoodCare manufactures the “Iron Energy” drink, a product sponsored by celebrity Mike Tyson. Under the terms of the distribution agreement, the Company became the exclusive distributor of FoodCare products in the United States, Puerto Rico and the U.S. Virgin Islands. FoodCare is the sole supplier of Iron Energy to the Company. The term of the agreement was for ten years and gave the Company exclusive rights to distribute FoodCare products within the U.S. market, so long as the Company purchased the required quantity of product from FoodCare. The Company failed to meet its minimum purchases in 2018, due in part to FoodCare’s failure to provide marketing support as promised. The Company terminated the agreement and relationship with FoodCare in 2020. Sales of Iron Energy were only $33,475 in 2020. The termination of the “Iron Energy” drink distribution agreement did not significantly affect the company or its revenue, as the Company has found greater success with the distribution of chocolate and snack products instead of beverages. At the beginning of 2019, the Company established relationships with other European manufacturers that can manufacture a wide range of “panned” products such as nuts, raisin, pretzels, fruits and many other “panned” and healthy snacks items, as well as chocolate bars, multi-flavor truffles, sticks, chocolate cups, 5-bites, chocolate covered gummies, chocolate Easter eggs, custom Christmas chocolate figures as well as Advent calendars and many other products to support demand from the Company’s national retailers. Vendor Concentration Currently, the Company is sourcing all its chocolate products and snacks from the Millano Group, a related party. The Company has not entered into a distributor agreement but is currently negotiating an agreement with Millano Group. The Company, due to relationships with other European manufacturers could find other sources to replace its chocolate and snack products if the Company were to terminate Millano Group as its suppler for chocolate products. Total purchases in 2020 and 2019 were approximately $3,961,711 and $5,102,224, respectively which represents 100% and 99% of product purchases, respectively. Income Taxes Under ASC 740, Income Taxes, Loss Per Common Share Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of December 31, 2020 and 2019, there are no outstanding dilutive securities. Fair Value of Financial Instruments The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents and accounts payable approximate their fair values at December 31, 2020 and 2019 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. Share-Based Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity–Based Payments to Non-Employees Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. In that update, ASC 505 has been rescinded in its entirety and share based compensation issued to nonemployees will now fall under ASC 718 and its associated fair value measurements. Due to the Emerging Growth Company (see below) status of the Company, the Company has adopted the update on January 1, 2020. Emerging Growth Company The Company has elected to be an emerging growth company as defined under the Jumpstart Our Business Startups Act of 2012 (“Jobs Act”). Included with this election, the Company has also elected to use the provisions within the Jobs Act that allow companies that go public to continue to use the private company adoption date rules for new accounting policies. Should the Company obtain revenues in excess of $1 billion on an annual basis, have its non-affiliated market capitalization increase to over $700 million as of the last day of its second quarter, or raise in excess of $1 billion in public offerings of its equity or instruments directly convertible into its equity, it will forfeit its status under the Jobs Act as an emerging growth company. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other Simplifying the Test for Goodwill Impairment. On June 20, 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. For emerging growth companies, the amendments in ASU 2018-07 are effective for fiscal years beginning after December 15, 2018. The Company is in the process of reviewing the potential impact of ASU 2018-07. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 – Inventory Finished Goods inventory consist of “Iron Energy” energy drinks, chocolates, and related products imported from Poland and is stated at the lower of actual cost (first-in, first-out method) or net realizable value. Inventory cost includes all freight (ocean, air and truck) costs to the warehouse, import duties, regulatory and miscellaneous fees. Inventory is as follows: December 31, 2020 December 31, 2019 Finished goods – in transit to warehouse $ - $ 399,043 Finished goods – in warehouse 550,657 211,604 Finished goods - consignment - - $ 550,657 $ 610,647 During 2019, the Company removed beverage product totaling approximately $245,000 from inventory due to reaching the end of its shelf life and became unsaleable. A proprietary label problem on some chocolate products of approximately $207,900 was identified and removed from inventory as the product was unsaleable. The labeling problem was corrected for future products. |
Prepaid Expenses
Prepaid Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expenses | |
Prepaid Expenses | Note 4 – Prepaid Expenses Prepaid inventory The Company’s foreign suppliers will generally require that the Company pay in advance of an inventory shipment to it from Europe. The Company’s current agreement with FoodCare includes provisions in which title for the inventory passes upon FoodCare loading the product onto truck transport for delivery to the seaport in Poland. Amounts transferred to the Company’s suppliers to secure future delivery, but prior to transfer of title of those shipments, are recorded as prepaid inventory and are included in prepaid expenses and other current assets. December 31, 2020 December 31, 2019 Prepaid services $ 5,524 $ 1,049 Prepaid Rent - 4,655 Prepaid inventory - 50,310 $ 5,524 $ 56,014 |
Notes Payable Other
Notes Payable Other | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable Other | Note 5 – Notes Payable Other On February 6, 2019 the Company issued a promissory note in the amount of $150,000, bearing interest at 4 percent monthly or the equivalent of 48 percent per annum rate. The note was repaid in full June 2019. The Company issued to the lender 26,965 shares of the Company’s common stock value at $20,224 lieu of a cash payment of interest. The shares were valued at $0.75 per share, being the last price at which shares had been sold. On February 22, 2019, the Company entered into a promissory note in the amount of $215,000. The note matured on December 31, 2019 and can be converted in shares of the Company’s common stock at $0.75 per share during the term of the note. The Company agreed to issue to the lender 150,000 shares of the Company’s common stock on or before December 31, 2019 as a one-time consideration for making the loan in lieu of a cash payment of interest. The common stock issuable under the term of the promissory note was valued at $112,500 with an effective interest rate of 88.5% and was amortized over the term of the note. Through December 31, 2019 approximately $112,500 has been amortized and recorded as Interest Expense. The lender in 2020 converted the promissory note into 286,667 shares of the Company’s common stock at the conversion price of $0.75 per share. On March 11, 2019, the Company issued a promissory note in the amount of $65,000. The note accrued interest at 5% every 45 days on the unpaid principal balance or the equivalent of 40.6% per annum rate. The promissory note was repaid in full on June 11, 2019. The Company issued to the lender 10,000 shares of the Company’s common stock valued at $7,500 in lieu of a cash payment of interest. Under the Small Business Administration (“SBA”), the Company applied for the Paycheck Protection Program (“PPP”) loan. These loans are forgiven if used for payroll, payroll benefits, including health insurance and retirement plans, as well as certain rent payments, leases, and utility payments, which are limited to 40% of the loan proceeds, all of which if paid within either 8 weeks or 24 weeks of the receipt of the loan proceeds. At the time of this filing, we anticipate a significant amount of this loan will be forgiven; however, the forgiveness application process is not yet complete. The Company has elected to record these advances under the debt treatment for these loans, under GAAP guidance. Unforgiven portions of these loans will be repaid over 5 years, accruing interest at 1% per annum. The PPP loan has a loan balance of $56,250 as December 31, 2020. |
Contract Receivables Liability
Contract Receivables Liability with Recourse | 12 Months Ended |
Dec. 31, 2020 | |
Contract Receivables Liability With Recourse | |
Contract Receivables Liability with Recourse | Note 6 – Contract Receivables Liability with Recourse On February 21, 2019, the Company entered into a factoring agreement with Advance Business Capital d/b/a Interstate Capital for a term of one year. On September 11, 2019, the lender (now doing business as Triumph Business Capital), entered into an amended agreement with the Company which lowered the interest rate charged by the lender from 0.49% for every 10 days to Prime Rate (floor of 5.5%) plus 3% |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Note 7 – Long Term Debt On August 27, 2020 the Company received an Economic Injury Disaster Loan (EIDL) from the U.S. Small Business Administration SBA) in the amount of $150,000. The interest rate is 3.75% with payments of $731 beginning twelve month from the date of the loan. Interest is accrued monthly and payments are first applied to interest accrued to the date of receipt of payment and the balance, if any, will be applied to the principal. The balance of principal and interest is due 8/27/2050. As of December 31, 2020 the Company owes $149,900. The maturity of the EIDL loan as of December 31, 2020 is as follows: 2021 $ - 2022 - 2023 2,181 2024 3,285 2025 3,410 Thereafter 141,024 $ 149,900 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8 – Stockholders’ Equity The Board of Directors is authorized to issue preferred stock by series that will establish the number of shares to be included and fix the designation, powers, preferences and rights of the shares each such series and the qualifications, limitations or restrictions thereof. At December 31, 2020, the Company has not established any series of preferred stock. The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. From January 1 to December 31, 2019 the Company issued 203,000 shares of common stock in consideration of cash proceeds of $152,250. The Company also issued 29,997 shares of common stock for services rendered with a value of $22,497 and issued 186,965 shares valued at $140,223 in lieu of a cash payment of interest. During 2019, the Company redeemed 250,000 shares of common stock for $25,000 from two of the original founders of the Company. These shares were cancelled and restored to the status of authorized but unissued shares of common stock. From January 1 to December 31, 2020 the Company issued 60,000 shares of common stock in consideration of cash proceeds of $45,000. The Company also issued 286,667 shares of common stock for conversion of promissory note with a value of $215,000. At December 31, 2020, the Company has no outstanding options or warrants. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 –Related Party Transactions During 2018, two significant shareholders of the Company advanced the Company $157,059. The advance was evidenced by two individual notes totaling $155,000 which were due on or before August 1, 2019 and a payable of $2,059. The two notes have a fixed interest fee of $1,000 for each of the notes. One shareholder was repaid in June 2019 on his promissory note and accrued interest, which totaled $61,000. In December 2019 that shareholder paid $6,276 of Company expenses and $14,726 of Company liabilities. In January 2020 the Company reimbursed the shareholder these amounts. The due date for the second shareholder note was extended to be due on or before August 1, 2020, and as of December 31, 2019, $78,000 has been repaid leaving an outstanding loan balance of $17,000 and a payable of $4,370. Unpaid interest of $1,000 has been accrued as of December 31, 2019 for the remaining balance of the promissory note. The Company repaid the remaining principal and accrued interest in February 2020 and paid $2,311 of the outstanding payable in March 2020. At December 31, 2020 the related party balances were as follows: December 31, 2020 December 31, 2019 Loans $ - $ 18,000 Accounts payable - 25,370 Total related party $ - $ 43,370 During the year ended December 31, 2020, one of the significant shareholders paid certain expenses on behalf of the Company from time to time. These amounts were repaid during the year and no amount was owed to the shareholder at December 31, 2020. The Company is purchasing all of its chocolate products from Millano Group, a related party (controlled by the father of a major shareholder), and owed $783,417 and $546,612 at December 31, 2020 and 2019, respectively. The balance is reflected in accounts payable related party. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 – Income Taxes The Company follows the guidance of FASB ASC 740-10 which relates to the Accounting for Uncertainty in Income Taxes Significant components of the Company’s deferred tax assets were as follows for the year ended December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Deferred tax assets: Net operating loss carryforward $ 321,981 $ 214,359 Total deferred tax assets $ 321,981 $ 214,359 Deferred tax liabilities - - Total deferred tax liabilities - - Net deferred tax assets (liabilities) 321,981 214,359 Less valuation allowance (321,981 ) (214,359 ) Net deferred tax assets (liabilities) $ - $ - At December 31, 2020 the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $1,264,558. The federal and state net operating loss carryforwards will expire beginning in 2037. The income tax expense (benefit) consisted of the following for the years ended December 31, 2020 and 2019: 2020 2019 Total current $ - $ - Total deferred $ - $ - Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following is a reconciliation of the expected statutory federal income tax provision (21 percent) to the actual income tax benefit for the years ended December 31, 2020 and 2019: 2020 2019 Federal statutory rate (benefit) $ (80,000 ) $ (147,000 ) State tax (benefit), net of federal benefits (28,000 ) (53,000 ) Permanent differences - - Change in valuation allowance 108,000 200,000 $ - $ - Under ASC 740, Income Taxes, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2020 and 2019, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration. |
Office Lease
Office Lease | 12 Months Ended |
Dec. 31, 2020 | |
Lease, Cost [Abstract] | |
Office Lease | Note 11– Office Lease On February 4, 2019, the Company entered into a sublease for office space located in Bannockburn, Illinois, with an unrelated third party. The sublease terminates on May 31, 2022. The sublease requires annual rent of $55,860 for the first year of the sublease, $57,536 for the second year, $59,262 for the third year, and $61,040 for the last year. Rent for the years ending December 31, 2020 and 2019 was $53,031 and $52,256, respectively. The Company also paid a security deposit of $9,310, which is reflected in Other Assets - Deposits As of December 31, 2020, our right of use asset and related liability was $74,721 and $72,073, respectively. In determining the present value of our operating lease right-of-use asset and liability, we used a discount rate of 5% (which approximates our borrowing rate). The remaining term on the lease is 1.42 years. The annual rent per the sublease is as follows: 2021 $ 59,107 2022 15,110 $ 74,217 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 12– Revenue During the year ended December 31, 2020, the Company had two customers whose sales accounted for approximately 77% of revenue. The following table presents revenues by product line for the years ended December 31: 2020 2019 Chocolate $ 5,581,645 $ 6,570,709 Energy drinks $ 119 $ 108,081 Totals $ 5,581,764 $ 6,678,790 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13– Commitments and Contingencies The Company’s operations are subject to the Federal Food, Drug and Cosmetic Act; the Bioterrorism Act; and regulations created by the U.S. Food and Drug Administration (“FDA”). The FDA regulates manufacturing and holding requirements for foods, specifies the standards of identity for certain foods and prescribes the format and content of certain information that must appear on food product labels. In addition, the published applicable rules under the Food Safety Modernization Act (“FSMA”) regulates food products imported into the United States and provides the FDA with mandatory recall authority. For the purchase of products harvested or manufactured outside the United States, and for the shipment of products to customers located outside of the United States, the Company is subject to customs laws regarding the import and export of shipments. The Company’s activities, including working with customs brokers and freight forwarders, are subject to regulation by U.S. Customs and Border Protection, part of the Homeland Security. On June 17, 2019, The Scale Effect Company d/b/a Mant Logistics filed an amended complaint in the United States District Court for the Northern District of Illinois naming as defendants the Company, Baron Chocolatier, Inc. and two significant shareholders of the Company. The action was originally against Baron Chocolatier only, alleging that Baron did not pay for shipping and logistics services in the amount of $277,233, plus accrued interest. The complaint was amended to allege that the Company is a successor corporation and continuation of Baron Chocolatier, thereby making the Company liable for the debts and liabilities of Baron, and that Baron is an alter ego for the Company and the Company’s two significant shareholders. No trial date has been scheduled. The parties are still in the discovery stage, as the pandemic and a reassignment of the case to a new judge caused delays. The Company intends to vigorously defend in this lawsuit. In March 2021, Crossmark Inc. initial a lawsuit in the Circuit Court of Cook County, Illinois, against the Company, seeking to collect payment for services rendered. The Company had entered into an agreement with Crossmark to promote the sale of the Iron Energy products which the Company had distributed. Crossmark alleges that $100,000 plus costs and attorneys’ fees are owed by the Company. The default judgment entered in this case has been vacated and the Company intends to defend in this lawsuit. The Company has accrued $100,000 in 2019 as a reserve for this liability. |
Explanation of our Restatement
Explanation of our Restatement | 12 Months Ended |
Dec. 31, 2020 | |
Explanation Of Our Restatement | |
Explanation of our Restatement | Note 14 – Explanation of our Restatement The Company restating its Annual Report for the Annual period ended December 31, 2019, which was filed with the Securities and Exchange Commission (“SEC”) on April 14, 2020 (the “Original Report”). The financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019 require restatement in order to correct the presentation of a note payable that was incorrectly classified as equity, record the right-of-use asset to comply with ASC 842 and accrue $100,000 for the Crossmark lawsuit to comply with ASC 450 as stated in Note 13. The changes in our consolidated financial statements are summarized, below. Veroni Brands Corp. BALANCE SHEETS December 31, 2019 As Originally Reported Adjusted As Restated ASSETS Current Assets Cash & equivalents $ 99,010 $ - $ 99,010 Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively 129,565 129,565 Contract Receivables with recourse 1,554,510 1,554,510 Inventory 610,647 610,647 Prepaid expenses and other current assets 56,014 56,014 Total Current Assets 2,449,746 - 2,449,746 Other Assets Deposits 9,310 9,310 Right-of-use asset-operating, net 0 122,856 122,856 Total Other Assets 9,310 122,856 132,166 Total Assets $ 2,459,056 $ 122,856 $ 2,581,912 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable $ 184,561 $ - $ 184,561 Accounts payable related party 546,612 546,612 Notes payable - 215,000 215,000 Notes payable - related parties including interest 43,370 43,370 Contract receivables liability with recourse 1,414,639 1,414,639 Accrued liabilities 114,816 100,000 214,816 Contract liabilities 143,033 143,033 Short-Term lease liability-operating - 52,499 52,499 Total Current Liabilities 2,447,031 367,499 2,814,530 Long-term Liabilities Deferred Rent 1,716 (1,716 ) Economic injury disaster loan (EIDL) - - - Long-Term lease liability-operating - 72,073 72,073 Total Long-Term Liabilities 1,716 70,357 72,073 Total Liabilities 2,448,747 437,856 2,886,603 STOCKHOLDERS’ DEFICIT Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019 - - Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively 2,703 (29 ) 2,674 Additional paid-in capital 914,606 (214,971 ) 699,635 ACCUMULATED DEFICIT (907,000 ) (100,000 ) (1,007,000 ) Total Stockholders’ Deficit 10,309 (315,000 ) (304,691 ) Total Liabilities and Stockholders’ Deficit $ 2,459,056 $ 122,856 $ 2,581,912 The accompanying notes are an integral part of these financial statements Veroni Brands Corp. STATEMENTS OF OPERATIONS For the year ended December 31, 2019 As Originally Reported Adjusted As Restated Revenue, net $ 6,678,790 $ - $ 6,678,790 Cost of sales, related party 5,197,938 5,197,938 Cost of sales 620,500 620,500 Total cost of sales 5,818,438 - 5,818,438 Gross profit 860,352 - 860,352 Warehouse and selling expenses 646,249 646,249 General and administrative expenses 673,557 100,000 773,557 Total operating expenses 1,319,806 100,000 1,419,806 Net loss from operations (459,454 ) (100,000 ) (559,454 ) Other expense Interest expense 140,359 140,359 Interest expense - related party 1,000 1,000 Total interest expense 141,359 - 141,359 Loss before income taxes (600,813 ) (100,000 ) (700,813 ) Income taxes - - - Net Loss $ (600,813 ) $ (100,000 ) $ (700,813 ) Net loss per share: Basic and diluted $ (0.02 ) $ 1.66 $ (0.03 ) Weighted average shares outstanding: Basic and diluted 26,799,927 (60,074 ) 26,739,853 The accompanying notes are an integral part of these financial statements Veroni Brands Corp. STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) December 31, 2020 and 2019 Additional Total Preferred Stock Common Stock Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Capital Deficit Deficit Balance, December 31, 2018 - - 26,568,400 $ 2,656 $ 409,683 $ (306,187 ) $ 106,152 Issuance of common stock for services - - 29,997 3 22,494 22,497 Issuance of common stock for cash - - 203,000 21 152,229 - 152,250 Issuance of common stock, in lieu of interest - - 186,965 18 140,205 - 140,223 Conversion of promissary note to common stock - - 286,667 29 214,971 215,000 Redemption and cancellation of shares - - (125,000 ) (12 ) (24,988 ) (25,000 ) Cancellation of shares - - (125,000 ) (12 ) 12 - Net Loss for the year - - - - - (700,813 ) (700,813 ) Balance, December 31 2019 (Original) - - 27,025,029 2,703 914,606 (1,007,000 ) (89,691 ) Reverse conversion of promissory note to common stock - - (286,667 ) (29 ) (214,971 ) - (215,000 ) Balance, December 31, 2020 (Restated) - $ - 26,738,362 $ 2,674 $ 699,635 $ (1,007,000 ) $ (304,691 ) The accompanying notes are an integral part of these financial statements Veroni Brands Corp. STATEMENTS OF CASH FLOW December 31, 2019 As Originally Reported Adjusted As Restated Cash flow from operating activities: Net Loss $ (600,813 ) $ (100,000 ) $ (700,813 ) Adjustments to reconcile net loss to net cash used in operating activities: Common stock issued for service 22,496 22,496 Amortization of debt discount 140,224 (27,724 ) 112,500 Expenses paid by shareholder 11,586 (11,586 ) - Changes in: Trade accounts receivable (108,582 ) (108,582 ) Allowance for doubtful accounts (7,823 ) (7,823 ) Contract Receivables (1,554,510 ) (1,554,510 ) Prepaid expenses and other current assets 50,303 50,303 Inventory (402,278 ) (402,278 ) Deposits (9,310 ) (9,310 ) Accounts payable 155,574 (14,593 ) 140,981 Accounts payable related party 546,612 546,612 Accrued liabilities 65,894 100,001 165,895 Contract liabilities 143,033 143,033 ROU asset/liability 1,716 1,716 Net cash used in operating activities (1,545,878 ) (53,902 ) (1,599,780 ) Cash flows from financing activities: Repayment of shareholders loans (140,000 ) - (140,000 ) Repayment of notes payable (65,000 ) (150,000 ) (215,000 ) Proceeds from issuance of notes payable 280,000 203,902 483,902 Proceeds from issuance of common stock 152,250 - 152,250 Proceeds from (repayment of) contract receivables with recourse 1,414,639 - 1,414,639 Net cash provided by financing activities 1,641,889 53,902 1,695,791 Net change in cash 96,011 96,011 Cash at the beginning of the year 2,999 2,999 Cash at the end of the year $ 99,010 $ - $ 99,010 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 1,000 $ - $ 1,000 Non-cash investing and financing activities Conversion of promissory note debt discount $ 112,500 $ - $ 112,500 Redemption and cancellation of shares $ 25,000 $ - $ 25,000 Interest converted to common stock $ 27,591 $ - $ 27,591 Adoption of ASC 842 $ 169,655 $ - $ 169,655 The accompanying notes are an integral part of these financial statements |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 – Subsequent Events In February 2021, the Company entered into a consulting agreement with a firm to provide strategic business planning services for a period of six months in consideration for the issuance of 27,000 restricted shares of common stock. In April 2021, the Company received a letter from one of its significant customers stating that the Company was not selected as a vendor for 2021. In June 2021, the Company entered into storage and procurement distribution agreement with a transportation company to store the chocolate products, as well as fulfill the purchase orders from the Company’s customers. The agreement is for a term of two years from the date of first inbound receipt and may be terminated at the option of the Company upon 60 days’ notice. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made in the 2019 financial statements to conform to the 2020 presentation. These reclassifications have no effect on net loss for 2019. |
Advertising | Advertising The Company’s policy is to expense advertising costs as incurred. Advertising expense for the year ending December 31, 2020 and 2019 is $30,935 and $50,117, respectively. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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 financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying amount of inventory and associated reserves, and allowances and reserves in regards to receivables and revenue. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company’s significant accounting policy for revenue was updated as a result of the adoption of ASU Topic 606. The Company has adopted the new standard on January 1, 2019 and has used the modified retrospective method. The majority of the Company’s business is ship and bill. Based on our analysis, the Company did not identify a cumulative effect adjustment to retained earnings at December 31, 2018. The Company recognizes revenue in accordance with the five-step model as prescribed by ASU 606 in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASU 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 12 for revenue disaggregated by product line. The Company recognizes revenue from the sale of products when title and risk of loss passes and the customer accepts the goods, which generally occurs at the time of delivery to a customer warehouse. Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of sales at the time the sale is recognized. Shipping and handling costs are treated as fulfillment costs and presented in warehouse and selling expenses. Payments that are received before performance obligations are recorded are shown as current liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. |
Shipping Costs | Shipping Costs Costs associated with shipping product to customers aggregating approximately $206,052 and $201,561 for the years ended December 31, 2020 and 2019, respectively, is included in warehouse and selling expenses. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of December 31, 2020 and 2019, respectively. |
Accounts Receivable and Concentration of Credit Risk | Accounts Receivable and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amounts less an allowance for doubtful accounts. The allowance for doubtful accounts is based on the Company’s estimate of the amount of probable credit losses in its accounts receivable. The Company determines the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Accounts receivable balances are periodically reviewed for collectability, and balances are charged off against the allowance when the Company determines that the potential for recovery is remote. An allowance for doubtful accounts of approximately $-0- and $2,125 is reserved as of December 31, 2020 and 2019, respectively. We are exposed to credit risk in the normal course of business, primarily related to accounts receivable. To limit credit risk, management periodically reviews and evaluates the financial condition of its customers and maintains an allowance for doubtful accounts. For the year ended December 31, 2020, we had one customer who comprised approximately 57% or $617,272 of our contract receivables with recourse and two customers who comprised approximately 100% or $14,303 of our accounts receivable. For the year ended December 31, 2019, we had one customer who comprised approximately 86% or $1,453,432 of our contract receivables with recourse and one customer who comprised approximately 57% or $74,544 of our accounts receivable. For the year ended December 31, 2020, we had two customers with sales in excess of 10% of our revenue and they represented 77% of our revenue. For the year ended December 31, 2019, we had two customers with sales in excess of 10% of our revenue and they represented 72% of our revenue. One of these customers had sales of approximately $2,405,000 and $3,887,000 in 2020 and 2019, respectively. Per Note 15, the Company was not selected as a vendor for 2021 for this customer. |
Distribution Agreements and Supplier Concentration | Distribution Agreements and Supplier Concentration In January 2018, the Company entered into a distributor agreement with FoodCare, which was amended and restated on January 30, 2018. FoodCare is a company organized under the laws of Poland. FoodCare is a manufacturer and supplier of desserts, cereals, energy drinks and other beverage products. FoodCare manufactures the “Iron Energy” drink, a product sponsored by celebrity Mike Tyson. Under the terms of the distribution agreement, the Company became the exclusive distributor of FoodCare products in the United States, Puerto Rico and the U.S. Virgin Islands. FoodCare is the sole supplier of Iron Energy to the Company. The term of the agreement was for ten years and gave the Company exclusive rights to distribute FoodCare products within the U.S. market, so long as the Company purchased the required quantity of product from FoodCare. The Company failed to meet its minimum purchases in 2018, due in part to FoodCare’s failure to provide marketing support as promised. The Company terminated the agreement and relationship with FoodCare in 2020. Sales of Iron Energy were only $33,475 in 2020. The termination of the “Iron Energy” drink distribution agreement did not significantly affect the company or its revenue, as the Company has found greater success with the distribution of chocolate and snack products instead of beverages. At the beginning of 2019, the Company established relationships with other European manufacturers that can manufacture a wide range of “panned” products such as nuts, raisin, pretzels, fruits and many other “panned” and healthy snacks items, as well as chocolate bars, multi-flavor truffles, sticks, chocolate cups, 5-bites, chocolate covered gummies, chocolate Easter eggs, custom Christmas chocolate figures as well as Advent calendars and many other products to support demand from the Company’s national retailers. |
Vendor Concentration | Vendor Concentration Currently, the Company is sourcing all its chocolate products and snacks from the Millano Group, a related party. The Company has not entered into a distributor agreement but is currently negotiating an agreement with Millano Group. The Company, due to relationships with other European manufacturers could find other sources to replace its chocolate and snack products if the Company were to terminate Millano Group as its suppler for chocolate products. Total purchases in 2020 and 2019 were approximately $3,961,711 and $5,102,224, respectively which represents 100% and 99% of product purchases, respectively. |
Income Taxes | Income Taxes Under ASC 740, Income Taxes, |
Loss Per Common Share | Loss Per Common Share Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of December 31, 2020 and 2019, there are no outstanding dilutive securities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents and accounts payable approximate their fair values at December 31, 2020 and 2019 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. |
Share-Based Compensation | Share-Based Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity–Based Payments to Non-Employees Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. In that update, ASC 505 has been rescinded in its entirety and share based compensation issued to nonemployees will now fall under ASC 718 and its associated fair value measurements. Due to the Emerging Growth Company (see below) status of the Company, the Company has adopted the update on January 1, 2020. |
Emerging Growth Company | Emerging Growth Company The Company has elected to be an emerging growth company as defined under the Jumpstart Our Business Startups Act of 2012 (“Jobs Act”). Included with this election, the Company has also elected to use the provisions within the Jobs Act that allow companies that go public to continue to use the private company adoption date rules for new accounting policies. Should the Company obtain revenues in excess of $1 billion on an annual basis, have its non-affiliated market capitalization increase to over $700 million as of the last day of its second quarter, or raise in excess of $1 billion in public offerings of its equity or instruments directly convertible into its equity, it will forfeit its status under the Jobs Act as an emerging growth company. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other Simplifying the Test for Goodwill Impairment. On June 20, 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. For emerging growth companies, the amendments in ASU 2018-07 are effective for fiscal years beginning after December 15, 2018. The Company is in the process of reviewing the potential impact of ASU 2018-07. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory cost includes all freight (ocean, air and truck) costs to the warehouse, import duties, regulatory and miscellaneous fees. Inventory is as follows: December 31, 2020 December 31, 2019 Finished goods – in transit to warehouse $ - $ 399,043 Finished goods – in warehouse 550,657 211,604 Finished goods - consignment - - $ 550,657 $ 610,647 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expenses | |
Schedule of Prepaid Expenses | Amounts transferred to the Company’s suppliers to secure future delivery, but prior to transfer of title of those shipments, are recorded as prepaid inventory and are included in prepaid expenses and other current assets. December 31, 2020 December 31, 2019 Prepaid services $ 5,524 $ 1,049 Prepaid Rent - 4,655 Prepaid inventory - 50,310 $ 5,524 $ 56,014 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long Term Debt | The maturity of the EIDL loan as of December 31, 2020 is as follows: 2021 $ - 2022 - 2023 2,181 2024 3,285 2025 3,410 Thereafter 141,024 $ 149,900 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transaction | At December 31, 2020 the related party balances were as follows: December 31, 2020 December 31, 2019 Loans $ - $ 18,000 Accounts payable - 25,370 Total related party $ - $ 43,370 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | Significant components of the Company’s deferred tax assets were as follows for the year ended December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Deferred tax assets: Net operating loss carryforward $ 321,981 $ 214,359 Total deferred tax assets $ 321,981 $ 214,359 Deferred tax liabilities - - Total deferred tax liabilities - - Net deferred tax assets (liabilities) 321,981 214,359 Less valuation allowance (321,981 ) (214,359 ) Net deferred tax assets (liabilities) $ - $ - |
Schedule of Income Tax Expense (Benefit) | The income tax expense (benefit) consisted of the following for the years ended December 31, 2020 and 2019: 2020 2019 Total current $ - $ - Total deferred $ - $ - |
Schedule of Reconciliation of Income Tax Provision | The following is a reconciliation of the expected statutory federal income tax provision (21 percent) to the actual income tax benefit for the years ended December 31, 2020 and 2019: 2020 2019 Federal statutory rate (benefit) $ (80,000 ) $ (147,000 ) State tax (benefit), net of federal benefits (28,000 ) (53,000 ) Permanent differences - - Change in valuation allowance 108,000 200,000 $ - $ - |
Office Lease (Tables)
Office Lease (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lease, Cost [Abstract] | |
Schedule of Annual Rent Sublease | The annual rent per the sublease is as follows: 2021 $ 59,107 2022 15,110 $ 74,217 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Product Line | The following table presents revenues by product line for the years ended December 31: 2020 2019 Chocolate $ 5,581,645 $ 6,570,709 Energy drinks $ 119 $ 108,081 Totals $ 5,581,764 $ 6,678,790 |
Explanation of our Restatement
Explanation of our Restatement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Explanation Of Our Restatement | |
Schedule of Restatement | The changes in our consolidated financial statements are summarized, below. Veroni Brands Corp. BALANCE SHEETS December 31, 2019 As Originally Reported Adjusted As Restated ASSETS Current Assets Cash & equivalents $ 99,010 $ - $ 99,010 Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively 129,565 129,565 Contract Receivables with recourse 1,554,510 1,554,510 Inventory 610,647 610,647 Prepaid expenses and other current assets 56,014 56,014 Total Current Assets 2,449,746 - 2,449,746 Other Assets Deposits 9,310 9,310 Right-of-use asset-operating, net 0 122,856 122,856 Total Other Assets 9,310 122,856 132,166 Total Assets $ 2,459,056 $ 122,856 $ 2,581,912 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable $ 184,561 $ - $ 184,561 Accounts payable related party 546,612 546,612 Notes payable - 215,000 215,000 Notes payable - related parties including interest 43,370 43,370 Contract receivables liability with recourse 1,414,639 1,414,639 Accrued liabilities 114,816 100,000 214,816 Contract liabilities 143,033 143,033 Short-Term lease liability-operating - 52,499 52,499 Total Current Liabilities 2,447,031 367,499 2,814,530 Long-term Liabilities Deferred Rent 1,716 (1,716 ) Economic injury disaster loan (EIDL) - - - Long-Term lease liability-operating - 72,073 72,073 Total Long-Term Liabilities 1,716 70,357 72,073 Total Liabilities 2,448,747 437,856 2,886,603 STOCKHOLDERS’ DEFICIT Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019 - - Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively 2,703 (29 ) 2,674 Additional paid-in capital 914,606 (214,971 ) 699,635 ACCUMULATED DEFICIT (907,000 ) (100,000 ) (1,007,000 ) Total Stockholders’ Deficit 10,309 (315,000 ) (304,691 ) Total Liabilities and Stockholders’ Deficit $ 2,459,056 $ 122,856 $ 2,581,912 The accompanying notes are an integral part of these financial statements Veroni Brands Corp. STATEMENTS OF OPERATIONS For the year ended December 31, 2019 As Originally Reported Adjusted As Restated Revenue, net $ 6,678,790 $ - $ 6,678,790 Cost of sales, related party 5,197,938 5,197,938 Cost of sales 620,500 620,500 Total cost of sales 5,818,438 - 5,818,438 Gross profit 860,352 - 860,352 Warehouse and selling expenses 646,249 646,249 General and administrative expenses 673,557 100,000 773,557 Total operating expenses 1,319,806 100,000 1,419,806 Net loss from operations (459,454 ) (100,000 ) (559,454 ) Other expense Interest expense 140,359 140,359 Interest expense - related party 1,000 1,000 Total interest expense 141,359 - 141,359 Loss before income taxes (600,813 ) (100,000 ) (700,813 ) Income taxes - - - Net Loss $ (600,813 ) $ (100,000 ) $ (700,813 ) Net loss per share: Basic and diluted $ (0.02 ) $ 1.66 $ (0.03 ) Weighted average shares outstanding: Basic and diluted 26,799,927 (60,074 ) 26,739,853 The accompanying notes are an integral part of these financial statements Veroni Brands Corp. STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) December 31, 2020 and 2019 Additional Total Preferred Stock Common Stock Paid-in Accumulated Stockholders’ Shares Amount Shares Amount Capital Deficit Deficit Balance, December 31, 2018 - - 26,568,400 $ 2,656 $ 409,683 $ (306,187 ) $ 106,152 Issuance of common stock for services - - 29,997 3 22,494 22,497 Issuance of common stock for cash - - 203,000 21 152,229 - 152,250 Issuance of common stock, in lieu of interest - - 186,965 18 140,205 - 140,223 Conversion of promissary note to common stock - - 286,667 29 214,971 215,000 Redemption and cancellation of shares - - (125,000 ) (12 ) (24,988 ) (25,000 ) Cancellation of shares - - (125,000 ) (12 ) 12 - Net Loss for the year - - - - - (700,813 ) (700,813 ) Balance, December 31 2019 (Original) - - 27,025,029 2,703 914,606 (1,007,000 ) (89,691 ) Reverse conversion of promissory note to common stock - - (286,667 ) (29 ) (214,971 ) - (215,000 ) Balance, December 31, 2020 (Restated) - $ - 26,738,362 $ 2,674 $ 699,635 $ (1,007,000 ) $ (304,691 ) The accompanying notes are an integral part of these financial statements Veroni Brands Corp. STATEMENTS OF CASH FLOW December 31, 2019 As Originally Reported Adjusted As Restated Cash flow from operating activities: Net Loss $ (600,813 ) $ (100,000 ) $ (700,813 ) Adjustments to reconcile net loss to net cash used in operating activities: Common stock issued for service 22,496 22,496 Amortization of debt discount 140,224 (27,724 ) 112,500 Expenses paid by shareholder 11,586 (11,586 ) - Changes in: Trade accounts receivable (108,582 ) (108,582 ) Allowance for doubtful accounts (7,823 ) (7,823 ) Contract Receivables (1,554,510 ) (1,554,510 ) Prepaid expenses and other current assets 50,303 50,303 Inventory (402,278 ) (402,278 ) Deposits (9,310 ) (9,310 ) Accounts payable 155,574 (14,593 ) 140,981 Accounts payable related party 546,612 546,612 Accrued liabilities 65,894 100,001 165,895 Contract liabilities 143,033 143,033 ROU asset/liability 1,716 1,716 Net cash used in operating activities (1,545,878 ) (53,902 ) (1,599,780 ) Cash flows from financing activities: Repayment of shareholders loans (140,000 ) - (140,000 ) Repayment of notes payable (65,000 ) (150,000 ) (215,000 ) Proceeds from issuance of notes payable 280,000 203,902 483,902 Proceeds from issuance of common stock 152,250 - 152,250 Proceeds from (repayment of) contract receivables with recourse 1,414,639 - 1,414,639 Net cash provided by financing activities 1,641,889 53,902 1,695,791 Net change in cash 96,011 96,011 Cash at the beginning of the year 2,999 2,999 Cash at the end of the year $ 99,010 $ - $ 99,010 Supplemental disclosure of cash flow information: Cash paid for: Interest $ 1,000 $ - $ 1,000 Non-cash investing and financing activities Conversion of promissory note debt discount $ 112,500 $ - $ 112,500 Redemption and cancellation of shares $ 25,000 $ - $ 25,000 Interest converted to common stock $ 27,591 $ - $ 27,591 Adoption of ASC 842 $ 169,655 $ - $ 169,655 The accompanying notes are an integral part of these financial statements |
Nature of Operations and Fina_2
Nature of Operations and Financial Condition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Revenue | $ 5,581,764 | $ 6,678,790 |
Net loss | (379,108) | (700,813) |
Accumulated deficit | (1,386,108) | (1,007,000) |
Cash balance | 116,730 | $ 99,010 |
Working capital | $ 342,796 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Advertising expense | $ 30,935 | $ 50,117 |
Shipping costs | 206,052 | 201,561 |
Cash balances in excess of FDIC | ||
Allowance for doubtful accounts | 0 | 2,125 |
Revenue | 5,581,764 | 6,678,790 |
Deferred tax assets | ||
Valuation allowances description | As of December 31, 2020 and 2019, there were no net deferred tax assets, as the Company established a 100% valuation allowance, due to the uncertainty of the realization of net operating loss carryforwards prior to their expiration. | |
Dilutive securities | ||
Emerging growth company description | The Company has elected to be an emerging growth company as defined under the Jumpstart Our Business Startups Act of 2012 ("Jobs Act"). Included with this election, the Company has also elected to use the provisions within the Jobs Act that allow companies that go public to continue to use the private company adoption date rules for new accounting policies. Should the Company obtain revenues in excess of $1 billion on an annual basis, have its non-affiliated market capitalization increase to over $700 million as of the last day of its second quarter, or raise in excess of $1 billion in public offerings of its equity or instruments directly convertible into its equity, it will forfeit its status under the Jobs Act as an emerging growth company. | |
Iron Energy [Member] | ||
Revenue | $ 33,475 | |
Contract Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Concentration risk percentage | 57.00% | 86.00% |
Contract receivable | $ 617,272 | $ 1,453,432 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Concentration risk percentage | 100.00% | 57.00% |
Accounts receivable | $ 14,303 | $ 74,544 |
Revenue [Member] | ||
Revenue | $ 2,405,000 | $ 3,887,000 |
Revenue [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | ||
Concentration risk percentage | 77.00% | |
Revenue percentage | 77.00% | 72.00% |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor [Member] | ||
Concentration risk percentage | 100.00% | 99.00% |
Revenue | $ 3,961,711 | $ 5,102,224 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory | $ 550,657 | $ 610,647 |
Beverage Product [Member] | ||
Inventory | 245,000 | |
Chocolate Product [Member] | ||
Inventory | $ 207,900 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Inventory | $ 550,657 | $ 610,647 |
Finished Goods - in Transit to Warehouse [Member] | ||
Inventory [Line Items] | ||
Inventory | 399,043 | |
Finished Goods - in Warehouse [Member] | ||
Inventory [Line Items] | ||
Inventory | 550,657 | 211,604 |
Finished Goods - Consignment [Member] | ||
Inventory [Line Items] | ||
Inventory |
Prepaid Expenses - Schedule of
Prepaid Expenses - Schedule of Prepaid Expenses (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expenses | ||
Prepaid services | $ 5,524 | $ 1,049 |
Prepaid Rent | 4,655 | |
Prepaid inventory | 50,310 | |
Total prepaid expenses | $ 5,524 | $ 56,014 |
Notes Payable Other (Details Na
Notes Payable Other (Details Narrative) - USD ($) | Dec. 31, 2020 | Feb. 22, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 11, 2019 | Feb. 06, 2019 |
Issuance of common stock | $ 152,250 | ||||||
Debt maturity date | Aug. 27, 2050 | ||||||
Lender [Member] | |||||||
Issuance of common stock, shares | 26,965 | ||||||
Issuance of common stock | $ 20,224 | ||||||
Promissory Note [Member] | |||||||
Debt face amount | $ 215,000 | $ 65,000 | $ 150,000 | ||||
Debt interest | 5.00% | 4.00% | |||||
Effective interest | 88.50% | 40.60% | 48.00% | ||||
Issuance of common stock, shares | 10,000 | ||||||
Issuance of common stock | $ 7,500 | ||||||
Debt instrument exercise price | $ 0.75 | $ 0.75 | |||||
Debt maturity date | Dec. 31, 2019 | ||||||
Value of shares issued | $ 112,500 | ||||||
Promissory Note [Member] | Lender [Member] | |||||||
Issuance of common stock, shares | 150,000 | ||||||
Debt instrument exercise price | $ 0.75 | $ 0.75 | |||||
Value of shares issued | $ 112,500 | ||||||
Interest Expense | $ 112,500 | ||||||
Converted of promissory note | 286,667 | ||||||
Paycheck Protection Program [Member] | |||||||
Loan accruing interest description | Unforgiven portions of these loans will be repaid over 5 years, accruing interest at 1% per annum. | ||||||
Outstanding loan payable | $ 56,250 | $ 56,250 |
Contract Receivables Liabilit_2
Contract Receivables Liability with Recourse (Details Narrative) - USD ($) | Sep. 11, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Advance Business Capital LLC [Member] | |||
Amount payable on advances against receivables | $ 649,502 | $ 1,414,639 | |
Lender [Member] | Amended Agreement [Member] | |||
Interest rate | 0.49% | ||
Changes in interest rate | 3.00% | ||
Interest rate description | On September 11, 2019, the lender (now doing business as Triumph Business Capital), entered into an amended agreement with the Company which lowered the interest rate charged by the lender from 0.49% for every 10 days to Prime Rate (floor of 5.5%) plus 3%. | ||
Lender [Member] | Amended Agreement [Member] | Prime Rate [Member] | |||
Changes in interest rate | 5.50% |
Long Term Debt (Details Narrati
Long Term Debt (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Aug. 27, 2020 | |
Debt instrument including principal and interest | The interest rate is 3.75% with payments of $731 beginning twelve month from the date of the loan. | |
Debt maturity date | Aug. 27, 2050 | |
Proceeds from company | $ 149,900 | |
SBA Loan Agreement [Member] | ||
Principal amount of loan | $ 150,000 | |
Interest accrues rate per annum | 37.50% |
Long Term Debt - Schedule of Ma
Long Term Debt - Schedule of Maturities of Long Term Debt (Details) | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | |
2022 | |
2023 | 2,181 |
2024 | 3,285 |
2025 | 3,410 |
Thereafter | 141,024 |
Long Term Debt | $ 149,900 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Issuance of common stock for cash | $ 152,250 | |
Issuance of common stock for services | $ 45,000 | $ 22,497 |
Issuance of common stock for conversion of promissory notes | $ 215,000 | |
Outstanding options or warrants | ||
Promissory Note [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock for cash, shares | 10,000 | |
Issuance of common stock for cash | $ 7,500 | |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock for cash, shares | 203,000 | |
Issuance of common stock for cash | $ 21 | |
Issuance of common stock for services, shares | 60,000 | 29,997 |
Issuance of common stock for services | $ 6 | $ 3 |
Issuance of common stock for conversion of promissory notes, shares | 286,667 | |
Issuance of common stock for conversion of promissory notes | $ 29 | |
Common Stock [Member] | Promissory Note [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock for cash, shares | 60,000 | |
Issuance of common stock for cash | $ 45,000 | |
Issuance of common stock for conversion of promissory notes, shares | 286,667 | |
Issuance of common stock for conversion of promissory notes | $ 29 | |
Common Stock [Member] | Two of Original Founders [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock for cash, shares | 250,000 | |
Issuance of common stock for cash | $ 25,000 | |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock for cash, shares | 186,965 | |
Issuance of common stock for cash | $ 140,223 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Repayments of notes payable | $ 215,000 | ||||
Millano Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | $ 783,417 | 546,612 | |||
Two Significant Shareholders [Member] | Two Individual Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | $ 157,059 | ||||
Debt instrument face amount | $ 155,000 | ||||
Debt instrument maturity date, description | Due on or before August 1, 2019 | ||||
Debt instrument, periodic payment | $ 2,059 | ||||
Interest payable | 1,000 | ||||
One Significant Shareholder [Member] | Promissory Note One [Member] | |||||
Related Party Transaction [Line Items] | |||||
Repayments of notes payable | $ 61,000 | ||||
Shareholder [Member] | Paid Expenses of Company [Member]] | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | 6,276 | ||||
Shareholder [Member] | Paid Liabilities of Company [Member]] | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | 14,726 | ||||
Second Shareholder [Member] | Promissory Note Two [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | 17,000 | ||||
Debt instrument maturity date, description | The due date for the second shareholder note has been extended to be due on or before August 1, 2020 | ||||
Repayments of notes payable | $ 2,311 | 78,000 | |||
Loans payable | 4,370 | ||||
Unpaid interest | $ 1,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transaction (Details) - Related Party [Member] - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total related party | $ 43,370 | |
Loans [Member] | ||
Total related party | 18,000 | |
Accounts Payable [Member] | ||
Total related party | $ 25,370 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 1,264,558 | |
Net operating loss carryforwards expiration date | 2037 | |
Deferred tax assets |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 321,981 | $ 214,359 |
Total deferred tax assets | 321,981 | 214,359 |
Deferred tax liabilities | ||
Total deferred tax liabilities | ||
Net deferred tax assets (liabilities) | 321,981 | 214,359 |
Less valuation allowance | (321,981) | (214,359) |
Net deferred tax assets (liabilities) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Total current | ||
Total deferred |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate (benefit) | $ (80,000) | $ (147,000) |
State tax (benefit), net of federal benefits | (28,000) | (53,000) |
Permanent differences | ||
Change in valuation allowance | 108,000 | 200,000 |
Effective tax rates reconciliation |
Office Lease (Details Narrative
Office Lease (Details Narrative) - USD ($) | Feb. 04, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Lease termination date | May 31, 2022 | ||
Rent expenses | $ 53,031 | $ 52,256 | |
Security deposit | 9,310 | ||
Right of use asset and related liability | $ 74,721 | $ 72,073 | |
Operating lease right-of-use asset and liability, discount rate | 5.00% | ||
Operating lease right-of-use asset and liability, remaining term | 1 year 5 months 1 day | ||
First Year [Member] | |||
Rent expenses | $ 55,860 | ||
Second Year [Member] | |||
Rent expenses | 57,536 | ||
Third Year [Member] | |||
Rent expenses | 59,262 | ||
Last Year [Member] | |||
Rent expenses | $ 61,040 |
Office Lease - Schedule of Annu
Office Lease - Schedule of Annual Rent Sublease (Details) | Dec. 31, 2020USD ($) |
Lease, Cost [Abstract] | |
2021 | $ 59,107 |
2022 | 15,110 |
Sublease, annual rental, total | $ 74,217 |
Revenue (Details Narrative)
Revenue (Details Narrative) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | |
Sales revenue percentage | 77.00% |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Product Line (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Totals | $ 5,581,764 | $ 6,678,790 |
Chocolate [Member] | ||
Totals | 5,581,645 | 6,570,709 |
Energy Drinks [Member] | ||
Totals | $ 119 | $ 108,081 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jun. 17, 2019 | Mar. 31, 2021 | Dec. 31, 2019 |
Shipping and logistics services | $ 277,233 | ||
Crossmark Inc [Member] | |||
Attorneys' fees | $ 100,000 | ||
Reserve liability | $ 100,000 |
Explanation of our Restatemen_2
Explanation of our Restatement (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Right-of-use asset | $ 74,721 | $ 122,856 |
Crossmark Inc [Member] | ||
Right-of-use asset | $ 100,000 |
Explanation of our Restatemen_3
Explanation of our Restatement - Schedule of Restatement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash & equivalents | $ 116,730 | $ 99,010 |
Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively | 14,303 | 129,565 |
Contract Receivables with recourse | 793,904 | 1,554,510 |
Inventory | 550,657 | 610,647 |
Prepaid expenses and other current assets | 5,524 | 56,014 |
Total Current Assets | 1,481,118 | 2,449,746 |
Deposits | 9,310 | 9,310 |
Right-of-use asset-operating, net | 74,721 | 122,856 |
Total Other Assets | 84,031 | 132,166 |
Total Assets | 1,565,149 | 2,581,912 |
Accounts payable | 68,869 | 184,561 |
Accounts payable related party | 783,417 | 546,612 |
Notes payable | 215,000 | |
Notes payable - related parties including interest | 43,370 | |
Contract receivables liability with recourse | 649,502 | 1,414,639 |
Accrued liabilities | 134,137 | 214,816 |
Contract liabilities | 74,800 | 143,033 |
Short-Term lease liability-operating | 56,939 | 52,499 |
Total Current Liabilities | 1,823,914 | 2,814,530 |
Deferred Rent | ||
Economic injury disaster loan (EIDL) | 149,900 | |
Long-Term lease liability-operating | 15,134 | 72,073 |
Total Long-Term Liabilities | 165,034 | 72,073 |
Total Liabilities | 1,988,948 | 2,886,603 |
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019 | ||
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 2,709 | 2,674 |
Additional paid-in capital | 959,600 | 699,635 |
ACCUMULATED DEFICIT | (1,386,108) | (1,007,000) |
Total Stockholders' Deficit | (423,799) | (304,691) |
Total Liabilities and Stockholders' Deficit | 1,565,149 | 2,581,912 |
Revenue, net | 5,581,764 | 6,678,790 |
Cost of sales, related party | 3,961,711 | 5,197,938 |
Cost of sales | 464,722 | 620,500 |
Total cost of sales | 4,426,433 | 5,818,438 |
Gross profit | 1,155,331 | 860,352 |
Warehouse and selling expenses | 359,399 | 646,249 |
General and administrative expenses | 1,175,040 | 773,557 |
Total operating expenses | 1,534,439 | 1,419,806 |
Net loss from operations | (379,108) | (559,454) |
Interest expense | 140,359 | |
Interest expense - related party | 1,000 | |
Total interest expense | 141,359 | |
Loss before income taxes | (379,108) | (700,813) |
Income taxes | ||
Net Loss | $ (379,108) | $ (700,813) |
Net loss per share: Basic and diluted | $ (0.01) | $ (0.03) |
Weighted average shares outstanding: Basic and diluted | 27,062,042 | 26,739,853 |
Balance | $ (304,691) | $ 106,152 |
Issuance of common stock for services | 45,000 | 22,497 |
Issuance of common stock for cash | 152,250 | |
Issuance of common stock, in lieu of interest | 140,223 | |
Redemption and cancellation of shares | (25,000) | |
Cancellation of shares | ||
Conversion of promissory note to common stock | 215,000 | |
Balance | (423,799) | (304,691) |
Common stock issued for service | 22,496 | |
Amortization of debt discount | 112,500 | |
Trade accounts receivable | 117,387 | (108,582) |
Allowance for doubtful accounts | (2,125) | (7,823) |
Contract Receivables | 760,606 | (1,554,510) |
Prepaid expenses and other current assets | 50,490 | 50,303 |
Inventory | 59,990 | (402,278) |
Deposits | (9,310) | |
Accounts payable | 140,981 | |
Accounts payable related party | 235,806 | 546,612 |
Accrued liabilities | (80,679) | 165,895 |
Contract liabilities | (68,233) | 143,033 |
ROU asset/liability | (4,364) | 1,716 |
Net cash used in operating activities | 573,978 | (1,599,780) |
Repayment of shareholders loans | (140,000) | |
Repayment of notes payable | (215,000) | |
Proceeds from issuance of notes payable | 457,591 | |
Proceeds from issuance of common stock | 45,000 | 152,250 |
Proceeds from (repayment of) contract receivables with recourse | (765,137) | 1,414,639 |
Net cash provided by financing activities | (556,258) | 1,695,791 |
Net change in cash | 17,720 | 96,011 |
Cash at the beginning of the year | 99,010 | 2,999 |
Cash at the end of the year | 116,730 | 99,010 |
Interest | 1,000 | |
Conversion of promissory note debt discount | 215,000 | 112,500 |
Redemption and cancellation of shares | 25,000 | |
Interest converted to common stock | 27,591 | |
Adoption of ASC 842 | 169,655 | |
Preferred Stock [Member] | ||
Total Stockholders' Deficit | ||
Net Loss | ||
Balance | ||
Balance, shares | ||
Issuance of common stock for services | ||
Issuance of common stock for services, shares | ||
Issuance of common stock for cash | ||
Issuance of common stock for cash, shares | ||
Issuance of common stock, in lieu of interest | ||
Issuance of common stock, in lieu of interest, Shares | ||
Redemption and cancellation of shares | ||
Redemption and cancellation of shares, shares | ||
Cancellation of shares | ||
Cancellation of shares, shares | ||
Conversion of promissory note to common stock | ||
Conversion of promissory note to common stock, shares | ||
Balance | ||
Balance, shares | ||
Common Stock [Member] | ||
Total Stockholders' Deficit | $ 2,709 | $ 2,674 |
Net Loss | ||
Balance | $ 2,674 | $ 2,656 |
Balance, shares | 26,738,362 | 26,568,400 |
Issuance of common stock for services | $ 6 | $ 3 |
Issuance of common stock for services, shares | 60,000 | 29,997 |
Issuance of common stock for cash | $ 21 | |
Issuance of common stock for cash, shares | 203,000 | |
Issuance of common stock, in lieu of interest | $ 18 | |
Issuance of common stock, in lieu of interest, Shares | 186,965 | |
Redemption and cancellation of shares | $ (12) | |
Redemption and cancellation of shares, shares | (125,000) | |
Cancellation of shares | $ (12) | |
Cancellation of shares, shares | (125,000) | |
Conversion of promissory note to common stock | $ 29 | |
Conversion of promissory note to common stock, shares | 286,667 | |
Balance | $ 2,709 | $ 2,674 |
Balance, shares | 27,085,029 | 26,738,362 |
Additional Paid-in Capital [Member] | ||
Total Stockholders' Deficit | $ 959,600 | $ 699,635 |
Net Loss | ||
Balance | 699,635 | 409,683 |
Issuance of common stock for services | 44,994 | 22,494 |
Issuance of common stock for cash | 152,229 | |
Issuance of common stock, in lieu of interest | 140,205 | |
Redemption and cancellation of shares | (24,988) | |
Cancellation of shares | 12 | |
Conversion of promissory note to common stock | 214,971 | |
Balance | 959,600 | 699,635 |
Accumulated Deficit [Member] | ||
Total Stockholders' Deficit | (1,386,108) | (1,007,000) |
Net Loss | (379,108) | (700,813) |
Balance | (1,007,000) | (306,187) |
Issuance of common stock for services | ||
Issuance of common stock for cash | ||
Issuance of common stock, in lieu of interest | ||
Redemption and cancellation of shares | ||
Cancellation of shares | ||
Conversion of promissory note to common stock | ||
Balance | (1,386,108) | (1,007,000) |
As Originally Reported [Member] | ||
Cash & equivalents | 99,010 | |
Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively | 129,565 | |
Contract Receivables with recourse | 1,554,510 | |
Inventory | 610,647 | |
Prepaid expenses and other current assets | 56,014 | |
Total Current Assets | 2,449,746 | |
Deposits | 9,310 | |
Right-of-use asset-operating, net | 0 | |
Total Other Assets | 9,310 | |
Total Assets | 2,459,056 | |
Accounts payable | 184,561 | |
Accounts payable related party | 546,612 | |
Notes payable | ||
Notes payable - related parties including interest | 43,370 | |
Contract receivables liability with recourse | 1,414,639 | |
Accrued liabilities | 114,816 | |
Contract liabilities | 143,033 | |
Short-Term lease liability-operating | ||
Total Current Liabilities | 2,447,031 | |
Deferred Rent | 1,716 | |
Economic injury disaster loan (EIDL) | ||
Long-Term lease liability-operating | ||
Total Long-Term Liabilities | 1,716 | |
Total Liabilities | 2,448,747 | |
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019 | ||
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 2,703 | |
Additional paid-in capital | 914,606 | |
ACCUMULATED DEFICIT | (907,000) | |
Total Stockholders' Deficit | (304,691) | 10,309 |
Total Liabilities and Stockholders' Deficit | 2,459,056 | |
Revenue, net | 6,678,790 | |
Cost of sales, related party | 5,197,938 | |
Cost of sales | 620,500 | |
Total cost of sales | 5,818,438 | |
Gross profit | 860,352 | |
Warehouse and selling expenses | 646,249 | |
General and administrative expenses | 673,557 | |
Total operating expenses | 1,319,806 | |
Net loss from operations | (459,454) | |
Interest expense | 140,359 | |
Interest expense - related party | 1,000 | |
Total interest expense | 141,359 | |
Loss before income taxes | (600,813) | |
Income taxes | ||
Net Loss | $ (600,813) | |
Net loss per share: Basic and diluted | $ (0.02) | |
Weighted average shares outstanding: Basic and diluted | 26,799,927 | |
Balance | 10,309 | |
Conversion of promissory note to common stock | (215,000) | |
Balance | (304,691) | $ 10,309 |
Common stock issued for service | 22,496 | |
Amortization of debt discount | 140,224 | |
Expenses paid by shareholder | 11,586 | |
Trade accounts receivable | (108,582) | |
Allowance for doubtful accounts | (7,823) | |
Contract Receivables | (1,554,510) | |
Prepaid expenses and other current assets | 50,303 | |
Inventory | (402,278) | |
Deposits | (9,310) | |
Accounts payable | 155,574 | |
Accounts payable related party | 546,612 | |
Accrued liabilities | 65,894 | |
Contract liabilities | 143,033 | |
ROU asset/liability | 1,716 | |
Net cash used in operating activities | (1,545,878) | |
Repayment of shareholders loans | (140,000) | |
Repayment of notes payable | (65,000) | |
Proceeds from issuance of notes payable | 280,000 | |
Proceeds from issuance of common stock | 152,250 | |
Proceeds from (repayment of) contract receivables with recourse | 1,414,639 | |
Net cash provided by financing activities | 1,641,889 | |
Net change in cash | 96,011 | |
Cash at the beginning of the year | 99,010 | 2,999 |
Cash at the end of the year | 99,010 | |
Interest | 1,000 | |
Conversion of promissory note debt discount | 112,500 | |
Redemption and cancellation of shares | 25,000 | |
Interest converted to common stock | 27,591 | |
Adoption of ASC 842 | 169,655 | |
As Originally Reported [Member] | Preferred Stock [Member] | ||
Total Stockholders' Deficit | ||
Balance | ||
Balance, shares | ||
Conversion of promissory note to common stock | ||
Conversion of promissory note to common stock, shares | ||
Balance | ||
Balance, shares | ||
As Originally Reported [Member] | Common Stock [Member] | ||
Total Stockholders' Deficit | $ 2,674 | $ 2,703 |
Balance | $ 2,703 | |
Balance, shares | 27,025,029 | |
Conversion of promissory note to common stock | $ (29) | |
Conversion of promissory note to common stock, shares | (286,667) | |
Balance | $ 2,674 | $ 2,703 |
Balance, shares | 26,738,362 | 27,025,029 |
As Originally Reported [Member] | Additional Paid-in Capital [Member] | ||
Total Stockholders' Deficit | $ 699,635 | $ 914,606 |
Balance | 914,606 | |
Conversion of promissory note to common stock | (21,497) | |
Balance | 699,635 | 914,606 |
As Originally Reported [Member] | Accumulated Deficit [Member] | ||
Total Stockholders' Deficit | (1,007,000) | (1,007,000) |
Balance | (1,007,000) | |
Conversion of promissory note to common stock | ||
Balance | (1,007,000) | (1,007,000) |
Adjustment [Member] | ||
Cash & equivalents | ||
Total Current Assets | ||
Deposits | ||
Right-of-use asset-operating, net | 122,856 | |
Total Other Assets | 122,856 | |
Total Assets | 122,856 | |
Accounts payable | ||
Notes payable | 215,000 | |
Accrued liabilities | 100,000 | |
Short-Term lease liability-operating | 52,499 | |
Total Current Liabilities | 367,499 | |
Deferred Rent | (1,716) | |
Economic injury disaster loan (EIDL) | ||
Long-Term lease liability-operating | 72,073 | |
Total Long-Term Liabilities | 70,357 | |
Total Liabilities | 437,856 | |
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively | (29) | |
Additional paid-in capital | (214,971) | |
ACCUMULATED DEFICIT | (100,000) | |
Total Stockholders' Deficit | (315,000) | |
Total Liabilities and Stockholders' Deficit | 122,856 | |
Revenue, net | ||
Total cost of sales | ||
Gross profit | ||
General and administrative expenses | 100,000 | |
Total operating expenses | 100,000 | |
Net loss from operations | (100,000) | |
Total interest expense | ||
Loss before income taxes | (100,000) | |
Income taxes | ||
Net Loss | $ (100,000) | |
Net loss per share: Basic and diluted | $ 1.66 | |
Weighted average shares outstanding: Basic and diluted | (60,074) | |
Balance | (315,000) | |
Balance | $ (315,000) | |
Amortization of debt discount | (27,724) | |
Expenses paid by shareholder | (11,586) | |
Accounts payable | (14,593) | |
Accrued liabilities | 100,001 | |
Net cash used in operating activities | (53,902) | |
Repayment of shareholders loans | ||
Repayment of notes payable | (150,000) | |
Proceeds from issuance of notes payable | 203,902 | |
Proceeds from issuance of common stock | ||
Proceeds from (repayment of) contract receivables with recourse | ||
Net cash provided by financing activities | 53,902 | |
Cash at the beginning of the year | ||
Cash at the end of the year | ||
Interest | ||
Conversion of promissory note debt discount | ||
Redemption and cancellation of shares | ||
Interest converted to common stock | ||
Adoption of ASC 842 |
Explanation of our Restatemen_4
Explanation of our Restatement - Schedule of Restatement (Details) (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Explanation Of Our Restatement | ||
Allowance for doubtful accounts receivable | $ 0 | $ 2,125 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,085,029 | 26,738,362 |
Common stock, shares outstanding | 27,085,029 | 26,738,362 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 1 Months Ended |
Feb. 28, 2021shares | |
Subsequent Event [Member] | Consulting Agreement [Member] | |
Number of restriceted shares | 27,000 |