EDGAR 10-K Filing

Company CIK: 1693690
Filing Year: 2021
Filename: 1693690_10-K_2021_0001493152-21-025072.json

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ITEM 1. BUSINESS
Item 1. Business.
Corporate History and General Information
Veroni Brands Corp. (“Veroni” or the “Company”) was incorporated as “Echo Sound Acquisition Corporation” on December 7, 2016 under the laws of the State of Delaware. In September 2017, the Company implemented a change of control by issuing shares to new stockholders, redeeming shares of existing stockholders, electing a new officer and director and accepting the resignations of its then existing officers and directors.
In connection with the change in control, the stockholders of the Company and its board of directors unanimously approved the change of the Company’s name from Echo Sound Acquisition Corporation to European CPG Acquisition Corporation. In November 2017, the stockholders of the Company and its board of directors unanimously approved the change of the Company’s name to Veroni Brands Corp.
The Company is located at 2275 Half Day Road, Suite 346, Bannockburn, Illinois 60015. The Company’s main phone number is 888-794-2999. The Company’s fiscal year end is December 31. Neither the Company nor its predecessors have filed for bankruptcy, receivership or any similar proceedings nor are in the process of filing for bankruptcy, receivership or any similar proceedings.
Summary
The Company is an importer, seller and distributor of premium chocolate and snack products produced in Europe, engaging with both domestic and international well-known retailers so that its products are sold in thousands of stores in the United States. Veroni is also a supplier of confectionery products for major U.S. retailers under private label brands. Since adopting its current business plan in late 2017, the Company has been able to obtain and grow a distribution network, as well as contract with reliable suppliers. Veroni prides itself on its extensive market research with premium products, superior customer service, steady relationships with suppliers and retailers, and its success in developing private label collaborations and co-branded chocolate products.
The Company handles the product design and development phases in-house, while manufacturing is outsourced in Europe, with the whole cycle being strictly supervised by the Company in order to guarantee the highest quality products.
The business of the Company in 2018 focused on the import, sales and distribution of premium beverage products, primarily produced in Europe. Within this strategy, Veroni secured a long-term exclusive import and distribution agreement with a major European supplier, FoodCare Sp. z o,o., a company organized under the laws of Poland (“FoodCare”). Under that agreement, FoodCare made Veroni the sole and exclusive importer and distributor of Iron Energy in the U.S., an energy drink sponsored by celebrity boxer Mike Tyson, with access to numerous other beverage brands through this partnership. From the summer of 2018 to the end of 2019, the Company introduced the Iron Energy beverage to various retailers and distributors nationwide and worked with many retailers and distributors to bring the product to market. In 2020, Veroni decided to exit the highly competitive energy drink market and focus on its chocolate and confectionery products due to the lack of marketing support of Iron Energy by the supplier.
In January 2019, the Company expanded its product offerings and established a relationship with another manufacturer, Millano Group, to import chocolate products, as well as snacks, for distribution to major retailers throughout the United States. The Company became the vendor of record and successfully delivered these products to several well-known national and international retailers. Veroni’s current marketing strategy for its chocolate segment centers on supplying customers premium European chocolate products, in both private label and various branded products.
In February 2019, the Company engaged Tyler Distribution Center, Inc. and Continental Logistics, two operating companies of Port Jersey Logistics, to better serve its customers throughout the United States. Management believes that this partnership will give the Company a tremendous opportunity to support its growth, as it will be able to store and ship products and fulfill its purchase orders received from its customers.
The Company has also established relationships with other European manufacturers that can provide a wide range of “panned” products, meaning those that are coated with a sugar syrup, chocolate, or both, such as nuts, raisins, pretzels, and fruit, as well as healthy snack items, and specialty confection goods.
In June 2021, the Company engaged Roadtex Transportation Corporation with 31 facilities nationwide that handles less than truckload (LTL) logistics to better serve its customers throughout the United States. Management believes that this partnership will give the Company a tremendous opportunity to support its growth, as it will be able to store and ship products and fulfill its purchase orders received from its customers.
Growth Strategy
The Company plans to implement a multi-layered growth strategy, focusing on product enhancement and operational expansion. Veroni proposes to enhance its product offering by partnering with reputable suppliers. It also plans to scale the import, sale, and distribution of premium European chocolate and confectionery items to operate efficiently within key U.S. markets. The strategy focuses on:
● Widening the product portfolio by introducing a healthy snack segment comprised of items such as fruit and nut bars, and protein and grain bars. These products will have no GMOs, zero trans-fat, no artificial colors or flavors, and will be Halal and Kosher certified. The Company is approved and licensed by Rainforest Alliance to sell its chocolate products nationwide to its customers.
● Expanding distribution by developing further relationships with national distributors and retailers. The Company has established partnerships with Roadtex Transportation Corporation with 31 facilities nationwide and WCS Distribution to service its customer distribution centers in the Western United States.
● Attracting new customers by growing its network of retailers to drive direct sales. The Company plans to adopt and integrate technologies, specifically e-commerce and direct to consumer platforms, to facilitate customer acquisition, customer retention, and sales growth. Also, Veroni plans to continue to use its business development and sales professionals, as well as contract with third party brokers, to attract new customers, increase product sales, and spur growth. Veroni partnered with CA Fortune, a consumer brands agency, to design, build, and sell branded products that Veroni plans to introduce to its customers nationally.
● Maintaining existing customers by offering products that expand and complement its traditional product line. Veroni plans to introduce fresh and innovative food items to address changes in consumers’ tastes and preferences, as well as grow revenues on a per customer basis. Also, the Company plans to retain existing customers by ensuring that product quality continues to satisfy customer expectations.
● Scaling through mergers and acquisitions, particularly vertical integration to improve operating profit and margins. If distribution channels can be consolidated, operations can be streamlined and cost inefficiencies can be reduced to achieve economies of scale. Also, a horizontal integration strategy would allow the Company to progressively consolidate the perishable and non-perishable goods within its national market.
Products
The Company’s product mix is comprised of the following:
CHOCOLATE SNACKS
Bars Muesli
Bites Nuts
Truffles Oatmeal
Sticks Cereal bars
Candies Dry fruits
Cups Pretzels
Gummies Cookies
For 2020, the sale of chocolate products accounted for approximately 98% of the revenues.
Chocolate Products. Veroni currently distributes its chocolate products under the Sweet Desire and Baron Chocolatier brands, as well as private label chocolate bars, cups and 5bites. The Company’s chocolate products are GMO free and Kosher and Halal certified, and contain all natural ingredients with zero trans-fat, no artificial flavors or colors. The Company believes that its key competitive advantage is that it can provide premium chocolate products at mainstream prices.
Veroni plans to gradually increase chocolate sales by offering products made with all natural ingredients priced at a slight discount to premium brand chocolates offered by competitors such as Godiva, Russell Stover, Lindt, and Ghirardelli. It also plans to incrementally grow chocolate sales by cross-merchandising chocolate products with its retail partners’ wine products.
Certifications. The Company’s distributed products are certified according to the ISO 22000 standards, and are in line with BRC and IFS food safety requirements. ISO 22000 is a food safety management system that can be applied to any organization in the food chain. IFS is a Global Food Safety Initiative recognized standard for certifying the safety and quality of food products and production processes. The BRC Global Standard for Food Safety began in the U.K. to help the food industry meet legislative requirements of the European Union General Product Safety Directive and the U.K. Food Safety Act.
Suppliers
On January 30, 2018, the Company entered into a distribution agreement with FoodCare. Under the terms of the Distribution Agreement, the Company became the exclusive importer and distributor of FoodCare’s products in the United States, Puerto Rico and the U.S. Virgin Islands (the “U.S. market”). The term of the Distribution Agreement was for a period of 10 years during which Veroni was to have the exclusive right to distribute FoodCare products within the U.S. market, so long as Veroni purchased the required quantity of product from FoodCare. The Distribution Agreement was terminable upon (1) mutual consent of the parties, (2) by either party in writing without justification, if an issue was not amicably resolved in 30 days of such issue, by providing 180 days’ notice (in which case the Company would lose its exclusivity rights), or (3) immediately in the event of notice of an uncured breach in the terms of the Distribution Agreement. FoodCare is a manufacturer and supplier of desserts, cereals, energy drinks and other beverage products. Notably, FoodCare manufactures the “Iron Energy” drink, a product sponsored by celebrity and former boxer Mike Tyson. Other brands are N-Gine, 4Move, Frugo, Gellwe, and Fitella. Veroni failed to meet the minimum purchase requirements under the agreement, due in part to FoodCare’s failure to provide promised marketing support. The Company terminated the agreement and relationship with FoodCare due to the lack of its ability to support Veroni’s brand marketing initiatives.
In January 2019, the Company established a relationship with another manufacturer, Millano Group, a related party (controlled by the father of a major shareholder), to import various snacks and chocolate products for distribution to major retailers throughout the United States. For the fiscal year ended December 31, 2020, Millano supplied all of the Company’s product purchases.
Operations
Veroni begins its product development process by generating new ideas for products. Product and packaging samples are then commissioned to the suppliers for testing and quality assurance. When a product design is finalized and a price is confirmed with suppliers and manufacturers, a purchase order is placed. Products are manufactured through suppliers in Europe that procure their own raw materials for finished and packaged products. Typically, the manufacturing process takes 4 to 6 weeks. After manufacturing is completed, the Company organizes shipment and/or storage, depending on agreements with retailers and third-party distributors. On average, the lead time from order processing to product delivery is approximately 13 weeks.
As of the date of this report, the current COVID-19 crisis has resulted in the Company experiencing longer lead times in obtaining product from its manufacturers and shipping to its customers.
At December 31, 2020, Veroni has six employees. The Company’s corporate office is located in Bannockburn, Illinois and it has arrangements with Port Jersey Logistics, a third-party logistics company that provides warehousing, fulfillment and transportation services, and WCS Distribution.
Key Markets and Market Overview
Veroni’s primary markets include dollar stores, multi-outlets, grocery stores, convenience stores, distributors, and retailers across the U.S., with dollar stores accounting for approximately 50% of sales. As between sales of branded items versus private label products, private label currently accounts for approximately 60% of sales. During the year ended December 31, 2020, the Company had two customers whose sales accounted for approximately 77% of revenue. As of December 31, 2020, the Company had three customers that comprised approximately 78% or $631,575 of its combined accounts receivables and contract receivables with recourse. As of December 31, 2019, the Company had one customer who comprised approximately 91% or $1,527,976 of its combined accounts receivables and contract receivables with recourse.
Confectionery Market Overview. According to IBISWorld, the revenue of the U.S. confectionery market for 2018 was $51.9 billion, and annual revenue growth for the past five years was around 0.7%. Revenue is forecast to grow at an annualized rate of 1.0% over the next four years to 2023. The major segments purchasing confectionery products include wholesalers, grocery stores and markets, mass merchandisers and convenience stores. The next five years are expected to maintain a positive outlook for the U.S. confectionery industry. Continued economic recovery will further boost consumer spending on confectionery and snacks, especially on gourmet, premium dark chocolate and gummy candy products.
Chocolate Market Overview. According to Statista, chocolate and confectionery consumption in the U.S. is expected to continue its upward trend (from $139.9 billion in 2019 to $165.2 billion by 2023), supported by population growth and rising purchasing power. Consumers are becoming more aware of the health effects associated with consuming excessive sugar and fat. As a response to changing preferences, low-calorie, reduced-sugar and more nutritious types of chocolate are becoming more popular. Premium, dark and organic chocolates are key products benefitting from this trend.
The chocolate production industry is moderately concentrated with the top four players (Hershey, Mars, Ferrero and Lindt) accounting for 60.6% of market share in 2019, according to IBIS World. The industry has consolidated over the past five years through acquisitions. In the past five years, industry producers have experienced stable competition from foreign chocolate producers. Although brand recognition is important in this industry, as many brands have been in the market for decades, producers of chocolate compete based on the quality of their products, as determined by taste, quality of ingredients and more recently, nutritional value.
Healthy Snacks Market Overview. According to Statista, the global healthy snacks market size is expected to grow to $32.9 billion by 2025, with a compound annual growth rate of 5.2% during the forecast period. Increasing awareness regarding health and wellness benefits offered by the products among consumers is likely to be a key trend driving the market. The consumption of healthy snacks is growing, as such snacks meet various dietary requirements, such as being sugar-free and having low salt and cholesterol content. However, the high cost of production, due to volatile prices of raw materials is expected to negatively influence the growth of the market over the forecast period.
Within the food industry, the global health and wellness sector is witnessing a “healthy” boom that shapes the ever-growing market as never before. Increasingly, consumers are developing food sensitivities and adopting healthier and more active lifestyles, leading them to seek healthier nutritional alternatives and consume fresh and organic food.
Effect of Existing or Probable Governmental Regulation
For the purchase of products harvested or manufactured outside the United States, and for the shipment of products to customers located outside the United States, the Company is subject to customs laws regarding the import and export of shipments. Its activities, including working with customs brokers and freight forwarders, are subject to regulation by the U.S. Customs and Border Protection, part of the Department of Homeland Security.
The FDA Food Safety Modernization Act (FSMA), enacted on January 4, 2011, amended section 415 of the Federal Food, Drug, and Cosmetic Act (FD&C Act), in relevant part, to require that facilities engaged in manufacturing, processing, packing, or holding food for consumption in the United States submit additional registration information to FDA, including an assurance that FDA will be permitted to inspect the facility at the times and in the manner permitted by the FD&C Act. Section 415 of the FD&C Act, as amended by FSMA, also requires food facilities required to register with FDA to renew such registrations every other year, and provides FDA with authority to suspend the registration of a food facility in certain circumstances. Specifically, if FDA determines that food manufactured, processed, packed, received, or held by a registered food facility has a reasonable probability of causing serious adverse health consequences or death to humans or animals, FDA may by order suspend the registration of a facility that:
● Created, caused, or was otherwise responsible for such reasonable probability; or
● Knew of, or had reason to know of, such reasonable probability; and packed, received, or held such food.
The Company’s operations may be subject to these registration requirements. Compliance with these regulations has not had a material impact on the Company’s earnings, expenditures, or competitive positioning.
Intellectual Property
At present, the Company has a pending trademark application for its new brand, “This and That” chocolate. The Company may decide in the future to pursue efforts to protect its other intellectual property, trade secrets and proprietary methods and processes.
Research and Development
The Company has not to date undertaken, and does not currently plan to undertake, any material research and development activities.
Subsidiaries
The Company has no subsidiaries.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
Not applicable to smaller reporting companies.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
Not applicable to smaller reporting companies.

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ITEM 2. PROPERTIES
Item 2. Properties.
The Company entered into a sublease for office space of approximately 2,800 square feet located at 2275 Half Day Road, Suite 346, Bannockburn, Illinois 60015 with Kinsale Holdings, Inc. dba Validant, an unrelated party. The sublease commenced February 5, 2019 and expires April 5, 2022. Rent for the first year is $4,655 per month and escalates by 3% each year.
The Company also entered into storage and procurement distribution agreement with Roadtex Transportation Corporation located at 13 Jensen Drive, Somerset, NJ 08873 to store the chocolate products, as well as fulfill the purchase orders from the Company’s customers.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
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, Igor Gabal, Tomasz Kotas, and Baron Chocolatier, Inc. 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, Igor Gabal and Tomasz Kotas. No trial date has been scheduled. The parties are still in the discovery stage. 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.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Currently, there is no trading market for the securities of the Company. The Company has applied for admission to quotation of its securities on the OTCQB platform and anticipates that the common stock will trade under the symbol “VONI”.
Holders
The number of record holders of our common stock, as of August 26, 2021, was 55 according to our transfer agent.
Dividends
Holders of shares of common stock are entitled to dividends when, and if, declared by the board of directors out of legally available funds. To date, we have not declared or paid any dividends on our common stock. We do not intend to declare or pay any dividends on our common stock in the foreseeable future, but rather to retain any earnings to finance the growth of our business. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual and legal restrictions and other factors the board of directors deems relevant.
Recent Sales of Unregistered Securities
During the fourth quarter ended December 31, 2020, there were no sales of unregistered securities.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data.
Not applicable to smaller reporting companies.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
Veroni Brands Corp. (formerly “Echo Sound Acquisition Corporation”) (“Veroni” or the “Company”) was incorporated on December 7, 2016, under the laws of the state of Delaware. The business purpose of the Company is to facilitate the sales and distribution of premium food products from Europe.
Prior to 2018, the Company’s operations were limited to issuing shares to its original stockholders and effecting a change in control of the Company. In 2018, the Company commenced its principal operations. The Company originated as a blank check company and qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act which became law in April 2012.
On January 30, 2018, the Company entered into a distribution agreement with FoodCare. Under the terms of the Distribution Agreement, the Company became the exclusive importer and distributor of FoodCare’s products in the United States, Puerto Rico and the U.S. Virgin Islands (the “U.S. market”). FoodCare is a manufacturer and supplier of desserts, cereals, energy drinks and other beverage products. Notably, FoodCare manufactures the “Iron Energy” drink, a product sponsored by celebrity and former boxer Mike Tyson. The term of the Distribution Agreement was for a period of 10 years during which Veroni was to have the exclusive right to distribute FoodCare products within the U.S. market, so long as Veroni purchased the required quantity of product from FoodCare. The Company failed to meet its minimum purchase requirements under the FoodCare agreement in 2018 in part due to FoodCare’s failure to provide promised marketing support. The Company terminated the agreement and relationship with FoodCare in 2020 due to the lack of its ability to support Veroni’s brand marketing initiatives.
In summer 2018, the Company introduced the Iron Energy beverage to various retailers and distributors nationwide and since then has been working with many retailers and distributors to bring the product to market.
In January 2019, the Company expanded its product offerings and established a relationship with another manufacturer, Millano Group, a related party, to import chocolate products, as well as snacks, for distribution to major retailers throughout the United States. The Company recently became the vendor of record and successfully delivered these products to several national retailers.
In February 2019, the Company engaged Tyler Distribution and Continental Logistics, two operating companies of Port Jersey Logistics, to better serve its customers throughout the United States. Management believes that this partnership will give the Company a tremendous opportunity to support its growth, as it will be able to store and ship products and fulfill its purchase orders received from its customers.
In June 2021, the Company engaged Roadtex Transportation Corporation with 31 facilities nationwide that handles LTL logistics to better serve its customers throughout the United States. Management believes that this partnership will give the Company a tremendous opportunity to support its growth, as it will be able to store and ship products and fulfill its purchase orders received from its customers.
The Company has also established relationships with other European manufacturers that can provide a wide range of “panned” products, meaning those that are coated with a sugar syrup, chocolate, or both, such as nuts, raisins, pretzels, and fruit, as well as healthy snack items, and specialty confection goods.
For the fiscal year ended December 31, 2020, the Company’s independent auditors issued a report raising substantial doubt about the Company’s ability to continue as a going concern. For the year ending December 31, 2020, the Company 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 a working capital deficit 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 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.
Results of Operations
Prior to 2018, the Company had focused its efforts on identifying business opportunities, and devoted little attention or resources to sales and marketing or generating near-term revenues and profits. During 2018, the Company began distribution of various products and then increased its distribution network during 2019. During 2020, the Company’s revenues were impacted by the effects of COVID-19 as the pandemic affected transportation logistics. Revenues were $5,581,764 for 2020, as compared to $6,678,790 for 2019.
The 2020 gross profit of $1,155,331 was not sufficient to cover the Company’s operating expenses of $1,534,439, consisting of $359,399 in warehouse and selling expenses and $1,175,040 in general and administrative expenses, resulting in a net loss from operations of $379,108. In comparison, a gross profit of $860,352 was generated in 2019. Due to operating expenses of $1,419,806, consisting of $646,249 in warehouse and selling expenses and $773,557 in general and administrative expenses, a net loss from operations of $559,454 resulted.
The increase in general and administrative expenses from $773,557 in 2019 to $1,175,040 in 2020 was due primarily to an increase in officers’ salaries from $62,500 in 2019 to $552,656 in 2020.
The Company incurred no interest expense in 2020, as compared to $141,359 of interest expense on various promissory notes in 2019, resulting in a net loss of $700,813.
Liquidity and Capital Resources
At December 31, 2020, the Company had cash and a working capital deficit of $116,730 and $342,796, respectively, as compared to $99,010 and $364,784, respectively, at December 31, 2019. During the year ended December 31, 2020, operating activities provided cash of $573,978, and financing activities used cash of $556,258. In comparison, during fiscal 2019, operating activities used cash of $1,599,780 with $1,695,791 being provided by financing activities.
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.
On August 27, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Pursuant to that certain Loan Authorization and Agreement (the “SBA Loan Agreement”), the principal amount of the EIDL Loan is up to $150,000, with proceeds to be used for working capital purposes. On September 2, 2020, the Company received $149,900. Interest accrues at the rate of 3.75% per annum. Installment payments, including principal and interest, are due monthly beginning August 27, 2021 (twelve months from the date of the SBA Note (defined below)) in the amount of $720. The balance of principal and interest is payable thirty years from the date of the SBA Note.
In connection therewith, the Company executed (i) a note for the benefit of the SBA (the “SBA Note”), which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of the Company, which also contains customary events of default (the “SBA Security Agreement”).
The Company’s proposed activities will necessitate significant uses of capital into and beyond 2021, particularly for the financing of inventory. While the Company has a factoring arrangement, sales of equity securities in the Company would result in reduced financing costs. Since the beginning of 2018 and through December 31, 2020, the Company has engaged in sales of its equity securities in private placements. Through December 31, 2020, 10,531,400 shares have been sold for total gross proceeds of $518,533, 29,997 shares have been issued for services rendered valued at $22,497, 186,965 shares valued at $140,223 have been issued in lieu of interest, 286,667 shares have been issued upon conversion of a $215,000 promissory note, and a total of 2,270,000 shares were redeemed for $45,200.
Plan of Operations
During 2019 and 2020, sales were concentrated in two customers. One of these customers notified the Company that it was not selected as a vendor for 2021. Sales in 2021 are expected to decrease by more than 50%. As vendor selection is an annual process with this customer, the Company is planning to reapply as a vendor for 2022 and broaden its customer base. For the next few years, the Company will continue to focus on obtaining visibility for the products by contacting convenience store locations and small distributors to those types of locations. In addition, the Company will also continue to expand the number of products to be imported from Europe and distributed throughout the United States.
Management believes that while the current COVID-19 crisis has not affected the volume of sales, it has resulted in the Company experiencing supply chain and transportation logistics issues. Manufacturers and those providing shipping and logistics services are increasing prices and/or decreasing the amount of product and/or services to the Company, thereby making it more difficult to meet the terms of contracts with retailers. Management believes that for the current fiscal year, the Company will experience reduced profit margins as a result. It is not known whether the supply chain and transportation logistics issues will continue into the future.
There is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. In 2019, the Company entered into a factoring agreement covering its accounts receivable (see below). The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans. In the near term, the Company plans to rely on its primary stockholders to continue to fund the Company’s continuing operating requirements. The Company will require a minimum of $600,000 for the next 12 months to fund its operations, which will be used to fund expenses related to operations, office supplies, travel, salaries and other incidental expenses. Management believes that this capital would allow the Company to meet its operating cash requirements, and would facilitate the Company’s business of selling and distributing its products. Management also believes that the acquisition of such assets would generate revenue to cover overhead cost and general liabilities of the Company, and allow the Company to achieve overall sustainable profitability.
Due to the above-described difficulties, management is seeking other opportunities outside of the import/distribution business in order to bring value to the stockholders.
Accounts Receivable Financing
On February 21, 2019, the Company entered into a factoring agreement with an unrelated third party, Advance Business Capital LLC, dba Interstate Capital (“ICC”), pursuant to which the Company sells the majority of its accounts receivable to ICC for 85% of the value of the receivable. The term of the agreement is for 12 months and automatically renews for additional 12-month periods. The accounts receivable are sold with recourse back to the Company, meaning that the Company bears the risk of non-payment by the account debtor. To secure its obligations to ICC, the Company has granted a blanket security interest in its other assets, such as inventory, equipment, machinery, furniture, fixtures, contract rights, and general intangibles. The loan is guaranteed by two major shareholders of the Company. On September 11, 2019, the lender (which now does business as Triumph Business Capital) entered into an amended agreement with the Company which lowered the interest charged by the lender from 0.49% for every 10 days to prime rate (with a floor of 5.5%) plus 3%. As of December 31, 2020 and 2019, the Company owed $649,502 and $1,414,639, respectively, for advances on is receivables.
Alternative Financial Planning
The Company has no alternative financial plans at the moment. If the Company is not able to successfully raise monies as needed through a private placement or other securities offering (including, but not limited to, a primary public offering of securities), the Company’s ability to survive as a going concern and implement any part of its business plan or strategy will be severely jeopardized.
Critical Accounting Policies
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosure About Market Risk.
Not applicable to smaller reporting companies

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
VERONI BRANDS CORP.
Financial Statements
December 31, 2020 and 2019
Financial Statements
Report of Independent Registered Public Accounting Firm
Balance Sheets as of December 31, 2020 and 2019 (restated)
Statements of Operations for years ended December 31, 2020 and 2019 (restated)
Statement of Changes in Stockholders’ Equity (Deficit) for years ended December 31, 2020 and 2019 (restated)
Statements of Cash Flows for years ended December 31, 2020 and 2019 (restated)
Notes to Restated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Veroni Brands Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Veroni Brands Corp. (the Company) as of December 31, 2020 and 2019, and the related statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has an accumulated deficit since inception and insufficient working capital to meet its operating requirements, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Restatement of the 2019 Financial Statements
As discussed in Note 14 to the consolidated financial statements, the accompanying 2019 financial statements have been restated to correct a misstatement.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB .
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Stock-Based Compensation
As discussed in Note 2 to the financial statements, the Company issues stock-based compensation to non-employees.
Auditing management’s calculation of the fair value of stock-based compensation can be a significant judgment given the fact that the Company uses management’s estimates on various inputs to the calculation.
To evaluate the appropriateness of the fair value determined by management, we examined and evaluated the inputs management used in calculating the fair value of the stock-based compensation.
/s/ M&K CPAS, PLLC
M&K CPAS, PLLC
We have served as the Company’s auditor since 2021
Houston, TX
October 8, 2021
Veroni Brands Corp.
BALANCE SHEETS
December 31, 2020 and 2019
(Restated)
ASSETS
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
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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
The accompanying notes are an integral part of these financial statements
Veroni Brands Corp.
STATEMENTS OF OPERATIONS
For the years ended December 31, 2020 and 2019
(Restated)
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
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 22,494
22,497
Issuance of common stock for cash - - 203,000 152,229 - 152,250
Issuance of common stock, in lieu of interest - - 186,965 140,205 - 140,223
Redemption and cancellation of shares - - (125,000 ) (12 ) (24,988 )
(25,000 )
Cancellation of shares - - (125,000 ) (12 )
-
Net Loss for the year - - - - - (700,813 ) (700,813 )
Balance, December 31 2019 (Restated) - - 26,738,362 2,674 699,635 (1,007,000 ) (304,691 )
Issuance of common stock for cash - - 60,000 44,994 - 45,000
Conversion of promissory note to common stock - - 286,667 214,971
215,000
Net Loss for the year - - - - - (379,108 ) (379,108 )
Balance, December 31, 2020 - $ - 27,085,029 $ 2,709 $ 959,600 $ (1,386,108 ) $ (423,799 )
The accompanying notes are an integral part of these financial statements
Veroni Brands Corp.
STATEMENTS OF CASH FLOW
December 31, 2020 and 2019
(Restated)
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:
Cash paid for:
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
The accompanying notes are an integral part of these financial statements
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
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, a significant customer did not select the Company as a vendor for 2021.
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 2 - Summary of Significant Accounting Policies (Continued)
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 2 - Summary of Significant Accounting Policies (Continued)
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, 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 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.
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 2 - Summary of Significant Accounting Policies (Continued)
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. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. In June 2018, the Financial Accounting Standards Board adopted Accounting Standards Update 2018-07 Compensation - Stock
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 (Topic 842). The guidance in ASU 2016-02 provides guidance in GAAP about the recognition of assets and liabilities by lessees for those leases classified as operating leases under GAAP. The guidance requires that a lessee should recognize in the statement of financial position a liability to make lease payments and a right-to-use asset representing the company’s right to use the underlying assets for the term of the lease. The guidance allows a lessee who enter into a lease with a term of 12 months or less to make an accounting policy election to not recognize assets and liabilities.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update simplifies the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The update also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update should be applied on a prospective basis. The provisions of ASU 2017-04 are effective for the fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company has elected this accounting guidance as of January 1, 2020. It has had no effect on the Company’s financial statements.
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
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.
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
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 5 - Notes Payable Other (Continued)
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.
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%. As of December 31, 2020 and 2019 the Company owes $649,502 and $1,414,639, respectively for advances on their receivables. The Company bears all credit risk related to the receivables factored. The Company has given a security interest in substantially all of its assets and the president of the Company, a major shareholder, have guaranteed the 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:
$ -
-
2,181
3,285
3,410
Thereafter 141,024
$ 149,900
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 8 - Stockholders’ Equity (Continued)
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.
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.
Note 10 - Income Taxes
The Company follows the guidance of FASB ASC 740-10 which relates to the Accounting for Uncertainty in Income Taxes, which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions. This interpretation prescribes a comprehensive model for financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 10 - Income Taxes (Continued)
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:
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:
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
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:
$ 59,107
15,110
$ 74,217
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:
Chocolate $ 5,581,645 $ 6,570,709
Energy drinks $ 119 $ 108,081
Totals $ 5,581,764 $ 6,678,790
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.
VERONI BRANDS CORP.
Notes to Financial Statements
December 31, 2020 and 2019 (Restated)
Note 13- Commitments and Contingencies (Continued)
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.
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 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 22,494
22,497
Issuance of common stock for cash - - 203,000 152,229 - 152,250
Issuance of common stock, in lieu of interest - - 186,965 140,205 - 140,223
Conversion of promissary note to common stock - - 286,667 214,971
215,000
Redemption and cancellation of shares - - (125,000 ) (12 ) (24,988 )
(25,000 )
Cancellation of shares - - (125,000 ) (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
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.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On January 18, 2021, the Company dismissed L J Soldinger Associates, LLC (“Soldinger”) as its independent registered public accounting firm. Other than as noted in the paragraph below, the report of Soldinger on the Company’s financial statements for the years ended December 31, 2019 and 2018 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to audit scope, or accounting principles.
The report of Soldinger on the Company’s financial statements as of and for the years ended December 31, 2019 and 2018 contained explanatory paragraphs which noted that there was substantial doubt as to the Company’s ability to continue as a going concern as the Company had recurring losses from operations, and an accumulated deficit, low working capital and cash balances that raised substantial doubt about its ability to continue as a going concern.
During the fiscal years ended December 31, 2019 and 2018 and through the interim period ended January 18, 2021, there were no “disagreements” (as such term is defined in Item 304 of Regulation S-K) with Soldinger on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to Soldinger’s satisfaction, would have caused it to make reference thereto in its reports on the Company’s financial statements for such periods.
On January 20, 2021, the Company engaged M&K CPA, PLLC (“M&K”) as the registered independent public accountant for the fiscal year ended December 31, 2020. The decision to appoint M&K was approved by the Company’s Board of Directors on January 20, 2021.
During the Company’s two most recent fiscal years and the subsequent interim period up through the date of engagement of M&K (January 20, 2021), neither the Company nor anyone on its behalf consulted M&K regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company’s financial statements. Further, M&K has not provided the Company with written or oral advice that was an important factor that the Company considered in reaching a decision as to any accounting, auditing or financial reporting issues.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures and Changes in Internal Controls
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosures. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance the objectives of the control system are met.
As of December 31, 2020, our management carried out an evaluation of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act. Based on this evaluation, the President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2020, because of the identification of the material weakness in internal control over financial reporting described below. Notwithstanding the material weakness that existed as of December 31, 2020, our President and Chief Financial Officer has concluded that the financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, the financial position, results of operations and cash flows of the Company and its subsidiaries in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;
● Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, we conducted an assessment of the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 1992, as of December 31, 2020.
As a result of our material weakness described below, management has concluded that, as of December 31, 2019, our internal control over financial reporting was not effective based on the criteria in “Internal Control-Integrated Framework” issued by COSO.
Material Weakness in Internal Control over Financial Reporting
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility, that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In connection with its assessment, management identified the following material weaknesses at December 31, 2020:
● There is a lack of segregation of duties within the accounting and financial reporting process along with the proper safeguards to prevent the management override of controls, as the Company has only one executive officer.
● Since we use external consultants to prepare our financial statements and provide sufficient documentation of such preparation and review procedures, our officer must rely on such documentation.
● We had only one executive officer at December 31, 2020.
Due to our limited resources, we expect these weaknesses in internal control to continue while we implement our business plan.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
During the period covered by this annual report, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth information regarding the members of the Company’s board of directors and its executive officers:
Name
Position
Year Commenced
Igor Gabal
President, Secretary, Chief Financial Officer & Director
Igor Gabal, age 46, serves as President, Secretary, Chief Financial Officer and Director of the Company. Mr. Gabal has over 15 years of middle-market private equity investment experience primarily in real estate, industrial manufacturing, consumer packaged goods distribution or services operating industries. He has initiated and overseen add-on acquisitions, debt capital market issues for various companies and has experience and relationships with middle-market private equity firms, investment banks and debt financing sources. Prior to founding Veroni Brands, Corp. Mr. Gabal served as a board member and managing member for Guterman Partners Companies since 2009. Mr. Gabal was acting as EVP for Baron Chocolatier, Inc. the company that has specialized on the import and distribution of chocolate related products throughout the United States since 2016. Mr. Gabal received his Bachelor of Science in Business Management degree from DeVry Institute in 2000 and also attended Kellogg School of Management 2000-2002.
Committees and Terms
The Board of Directors has not established any committees. Our entire Board of Directors, rather than committees, acts on various items. The Board of Directors has determined that it does not have an audit committee financial expert.
A stockholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President and Director, at the address appearing on the first page of this filing.
Code of Ethics
Our Board of Directors has not adopted a code of ethics. We anticipate that we will adopt a code of ethics when we increase either the number of our Directors or the number of our employees.
Nominees to the Board of Directors
Since our last proxy statement, we have not made any material changes to the procedures by which stockholders may recommend nominees to our board of directors. Our Company does not have any defined policy or procedural requirements for stockholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or stockholders, and make recommendations for election or appointment.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission (“SEC”). Officers, directors and greater than 10% beneficial owners are also required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to us, or written representations that no Form 5 filings were required, we believe that during the fiscal year ended December 31, 2020, there were no instances where officers, directors, or greater than 10% beneficial owners did not comply with Section 16(a) of the Exchange Act.
Risk Oversight
Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight among the full Board of Directors, and fostering an appropriate culture of integrity and compliance with legal responsibilities.
Corporate Governance
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.
In lieu of an Audit Committee, the Company’s Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company’s financial statements and other services provided by the Company’s independent public accountants. The Board of Directors reviews the Company’s internal accounting controls, practices and policies.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
The following table summarizes all compensation recorded by us in the past two fiscal years for our principal executive officer, who is our sole executive officer, during the fiscal years ended December 31, 2020 and 2019.
Summary Compensation Table
Name and
Principal Position
Fiscal Year Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
All Other
Compensation
($)
Total
($)
Igor Gabal, 90,000 361,828 - $ - - 451,828
Chief Executive Officer 31,250 - - $ - - 31,250
Narrative Disclosure to Summary Compensation Table
The Company entered into an employment agreement with Igor Gabal dated January 2, 2019. The agreement specifies a minimum annual base salary of $35,000 for the first year and 450,000 shares of common stock for each of the first two years of his employment. The shares are to be issued within 30 days following his second year of employment. For the second year of his employment, the minimum base salary is $90,000 plus monthly $25,000 bonuses. For the third through fifth years of employment, Mr. Gabal’s minimum annual base salary increases to $450,000 and he is to receive 270,000 shares of common stock per year. The agreement also grants piggy back registration rights with regard to the shares issued as compensation. In the event of termination for any reason other than cause or by Mr. Gabal for good reason after two years of employment, the Company is to provide him with severance in an amount equal to one year of his highest total salary in any prior full year of employment, unused accrued vacation time and reimbursement for any legitimate Company expenses. In the event of a change of control event, Mr. Gabal is to receive payment equal to one and a half times his highest total annual compensation. This summary is qualified in its entirety to the complete Employment Agreement, which is an exhibit to this annual report.
The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.
Outstanding Equity Awards at Fiscal Year-End
There are no current outstanding equity awards to our executive officers as of December 31, 2020.
Executive Compensation Philosophy
Our Board of Directors determines the compensation given to our executive officers in its sole determination. Our Board of Directors also reserves the right to pay our executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock-based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, the Board of Directors reserves the right to grant stock options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.
Incentive Bonus
The Board of Directors may grant incentive bonuses to our executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives. No incentive bonuses had been granted as of December 31, 2020.
Long-term, Stock Based Compensation
In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award certain executives with long-term, stock-based compensation in the future, in the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth certain information regarding beneficial ownership of our common stock on August 26, 2021 by each person who is known by us to own beneficially more than 5% of the outstanding shares of common stock and our current director and executive officer.
Name and Address of Beneficial Owners (1) Amount and Nature of Beneficial Ownership
Percent of Class for Vote (2)
Tomasz Kotas (3) 12,788,399 47.1 %
Igor Gabal (4) 12,100,000 44.6 %
(1) To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, it is anticipated that each person named in the table will have sole voting and investment power with respect to the shares set forth opposite such person’s name.
(2) Based on 27,112,028 shares of common stock outstanding as of 2021.
(3) The address of Mr. Kotas is 1950 Telegraph Road, Lake Forest, IL 60045. Includes 44,000 shares held of record by his wife.
(4) Mr. Gabal is the sole officer and director of the Company. Includes 7,200,000 shares held of record by GP Michigan, LLC, a company controlled by Mr. Gabal. Mr. Gabal’s address is 6715 N. Sauganash Avenue, Lincolnwood, IL 60712.
Changes in Control
There are no agreements known to management that may result in a change of control of our Company.
Equity Compensation Plan Information
The Company does not have any equity compensation plans.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Our officers and directors are now and may in the future become stockholders, officers or directors of other companies that may be engaged in business activities similar to those conducted by us. Accordingly, direct conflicts of interest may arise in the future with respect to such individuals acting on our behalf or other entities. Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise. Although we do not currently have a right of first refusal pertaining to opportunities that come to management’s attention insofar as such opportunities may relate to our business operations, we have established a conflict of interest policy intended to ensure timely disclosure and avoidance of activities and relationships that conflict with the interests of the Company.
Our officers and directors are subject to the restriction that all opportunities contemplated by our business plan which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to our Company. A breach of this requirement will be a breach of the fiduciary duties of the officer or director.
All future affiliated transactions will be made or entered into on terms that are no less favorable to us than those that can be obtained from any unaffiliated third party. To the extent possible, a majority of the independent, disinterested members of our board of directors will approve future affiliated transactions.
On October 2, 2018, the Company borrowed $60,000 from Igor Gabal, the sole officer and director of the Company, and on October 3, 2018, the Company borrowed $95,000 from Tomasz Kotas, the Company’s largest shareholder. Both of the promissory notes evidencing the debts had a maturity date of August 1, 2019 and a flat interest amount of $1,000. The Company repaid Mr. Gabal’s note in June 2019, together with the accrued interest. Mr. Kotas extended the maturity date of his note to August 1, 2020. As of December 31, 2019, $17,000 of the principal and $1,000 of accrued interest remained outstanding. These amounts were paid in January and February 2020.
In December 2019, Mr. Gabal paid $6,276 of Company expenses and $14,726 of Company liabilities. These amounts were reimbursed in January 2020.
On February 21, 2019, the Company entered into a factoring agreement with an unrelated third party, Advance Business Capital LLC, dba Interstate Capital (“ICC”), pursuant to which the Company sells its accounts receivable to ICC for 85% of the value of the receivable. The term of the agreement is for 12 months and automatically renews for additional 12-month periods. The accounts receivable are sold with recourse back to the Company, meaning that the Company bears the risk of non-payment by the account debtor. To secure its obligations to ICC, the Company has granted a blanket security interest in its other assets, such as inventory, equipment, machinery, furniture, fixtures, contract rights, and general intangibles. Igor Gabal, the sole officer and director of the Company, and Tomasz Kotas, the largest shareholder of the Company, have provided their personal guarantees. On September 11, 2019, the lender (which now does business as Triumph Business Capital) entered into an amended agreement with the Company which lowered the interest charged by the lender from 0.49% for every 10 days to prime rate (with a floor of 5.5%) plus 3%. As of December 31, 2020 and 2019, the Company owed $649,502 and $1,414,639, respectively, for advances on its receivables.
The Company is currently purchasing all of its chocolate products from Millano Group, a related party (controlled by the father of Tomasz Kotas). As of December 31, 2020 and 2019, $783,417 and $546,612, respectively, was owed to Millano Group. The balance is reflected in accounts payable related party.
Director Independence
The Board of Directors has determined that it does not have any independent directors as that term is defined by NASDAQ Marketplace Rule 5605(a)(2). In assessing the independence of the directors, the Board considers any transactions, relationships and arrangements between our Company and our independent directors or their affiliated companies. This review is based primarily on responses of the directors to questions in a director and officer questionnaire regarding employment, business, familial, compensation and other relationships with our Company or our management.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services.
Fees paid to our principal accountants, M&K CPAS, PLLC for the 2020 and 2019 audit are $36,500. Fee paid to LJ Soldinger Associates, LLC for the fiscal years ended December 31, 2020 and 2019, were as follows:
Year Ended December 31,
Audit fees (1) $ 36,500 $ 47,810
Audit-related fees - -
Tax fees - -
All other fees - -
Total fees $ 36,500 $ 47,810
(1) The amount billed or to be billed to us for professional services related to the audit of our annual financial statements for the years ended December 31, 2020 and 2019 included reviews of our quarterly reports on Form 10-Q.
The Board of Directors has considered whether the provision of the non-audit services described above by an external auditor is compatible with maintaining the auditor’s independence, and determined that these non-audit services are compatible with the required independence. The Board of Directors pre-approves all services to be provided to our Company by the independent auditors. This includes the pre-approval of (i) all audit services and (ii) any significant (i.e., not de minimis) non-audit services. Before granting any approval, the Board of Directors gives due consideration to whether approval of the proposed service will have a detrimental impact on the auditor’s independence. All services provided by and fees paid to our independent auditors for 2020 and 2019 were pre-approved by the Board of Directors.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules.
Regulation
S-K Number
Document
3.1
Certificate of Incorporation (1)
3.2
Certificate of Amendment to Certificate of Incorporation (2)
3.3
Bylaws (1)
10.1
Contract between FoodCare Sp. z o.o. and Veroni Brands Corp. dated January 30, 2018 (3)
10.2
Promissory note dated October 2, 2018 to Igor Gabal (4)
10.3
Promissory note dated October 3, 2018 to Tomasz Kotas (4)
10.4
Amendment 2 to Factoring and Security Agreement with Triumph Business Capital dated September 11, 2019 (5)
10.5
Employment Agreement of Igor Gabal
16.1
Letter from L J Soldinger Associates, LLC (6)
31.1
Rule 13a-14(a) Certification of Igor Gabal
32.1
Certification of Igor Gabal Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*
Financial statements from the Annual Report on Form 10-K of Veroni Brands Corp. for the fiscal year ended December 31, 2020, formatted in XBRL: (i) the Balance Sheets; (ii) the Statements of Operations; (iii) the Statements of Stockholders’ Deficit; (iv) the Statements of Cash Flows; and (v) the Notes to Financial Statements.
(1) Filed as an exhibit to the registration statement on Form 10, filed January 18, 2017, file number 000-55735.
(2) Filed as an exhibit to the Current Report on Form 8-K dated November 22, 2017, filed November 30, 2017.
(3) Filed as an exhibit to the Current Report on Form 8-K dated February 2, 2018, filed February 2, 2018.
(4) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed April 16, 2019.
(5) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed November 14, 2019.
(6) Filed as an exhibit to the Current Report on Form 8-K dated January 18, 2021, filed January 27, 2021.
*In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.