Kisses From Italy Inc.

What they do

The Company develops a fast-casual Italian dining concept, operating corporate-owned restaurants and franchising. As of the latest filings, only the Fort Lauderdale, Florida location remains operating; all other company and franchise locations have closed. It also sells Kisses From Italy branded products in about 90 retail stores across Ontario and Quebec, Canada.

Revenue drivers

• Restaurant operations — Revenue from food and beverage sales at the sole operating Fort Lauderdale restaurant; this is the primary revenue source, with annual revenue declining to $225,953 in 2023.
• Retail product sales (Canada) — Branded products sold in grocery and retail stores in Ontario and Quebec; product launched in 2020 and expanded to 90 stores by the time of the 10-K.
• Franchising fees — The Company has a franchise program but generated no franchising fees from its two former franchise locations (Chino, CA and Montreal, Canada), both of which have closed or been sold.

Recent performance

Annual revenue fell from $391,447 in 2022 to $225,953 in 2023, with net loss of $4.9M in 2023. Quarterly revenue declined sharply from $33,119 (March 2024) to $15,493 (June 2024) and $715 (September 2024). Operating cash flow was negative $835,051 in 2023. At September 30, 2024, the company had $810 in cash, total assets of $5,405, and total liabilities of $979,922, resulting in negative equity of $941,532.

Strategy

Management is actively evaluating relocation of both operating divisions to other areas within South Florida, citing market dynamics, operational efficiency, and infrastructure. The company previously sought to expand through a nationwide/international franchise program, guided by a consulting agreement with Fransmart, but has terminated a strategic alliance with SC Culinary and dissolved the related subsidiary. Franchise development in Canada remains under a multi-unit agreement with Demasar Management, requiring a minimum of 20 restaurants by June 2025.

Risks

• Going concern risk — The company has minimal cash ($810) and negative shareholder equity, raising substantial doubt about its ability to continue as a going concern.
• Revenue collapse — Quarterly revenue fell to just $715 in the September 2024 quarter, reflecting the closure of the last company-operated restaurants outside Fort Lauderdale.
• Franchise underperformance — No franchising fees were ever generated; both initial franchise locations closed or were sold, indicating the franchise model has not yet proven viable.
• OTCQB delisting — The company received notification that its bid price closed below $0.01 for more than 30 days, failing OTCQB continued eligibility standards; a cure period extended to July 12, 2024.

Outlook

Management is exploring relocation of both divisions to other South Florida areas but has not disclosed a definitive timeline. The company has terminated its alliance with Scott Conant and dissolved the associated subsidiary, reducing growth avenues. Canadian retail distribution continues, but no specific expansion plans or revenue targets have been stated.