UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

~~[X]~~☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, ~~2019~~2020

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

Commission file number: 000-55735

VERONI BRANDS CORP.

(Exact name of registrant as specified in its charter)

Delaware

81-4664596

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2275 Half Day Rd. Suite 346, Bannockburn, IL		60015
2275 Half Day Rd. Suite 346,Bannockburn, IL		60015
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (888)794-2999

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

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.0001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ~~[ ] No~~☐ ~~[X]~~No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ~~[ ] No~~☐ ~~[X]~~No ☒

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ~~[X]~~ ☒ No ~~[ ]~~☐

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

Large accelerated filer [☐ ] Accelerated filer [☐ ] Non-accelerated filer [☐ ] Smaller reporting company ~~[X]~~☒ Emerging growth company ~~[X]~~☒

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $-0- as of June 30, ~~2019~~2020.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 27,~~085~~112,028 shares as of ~~April~~October 145, ~~2020~~2021.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains, in addition to historical information, certain information, assumptions and discussions that may constitute forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially than those projected or anticipated. Actual results could differ materially from those projected in the forward-looking statements. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, the Company cannot assure a reader that the forward-looking statements set out in this report will prove to be accurate. The Company’s business can be affected by, without limitation, such things as natural disasters, economic trends, international strife or upheavals, consumer demand patterns, labor relations, existing and new competition, consolidation, and growth patterns within the industries in which the Company competes and any deterioration in the economy may individually or in combination impact future results.

VERONI BRANDS CORP.

ANNUAL REPORT ON

FORM 10-K

FOR THE YEAR ENDED

DECEMBER 31, ~~2019~~2020

INDEX

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	87
Item 1B.	Unresolved Staff Comments	87
Item 2.	Properties	87
Item 3.	Legal Proceedings	8
Item 4.	Mine Safety Disclosures	8
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	98
Item 6.	Selected Financial Data	98
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	12
Item 8.	Financial Statements and Supplementary Data	13
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	14
Item 9A.	Controls and Procedures	14
Item 9B.	Other Information	1516
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	1516
Item 11.	Executive Compensation	17
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	1718
Item 13.	Certain Relationships and Related Transactions, and Director Independence	1819
Item 14.	Principal Accounting Fees and Services	1920
PART IV
Item 15.	Exhibits, Financial Statement Schedules	2021
Item 16	Form 10-K Summary	2021
SIGNATURES		2122

PART I

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 ~~beverage,~~ 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 ~~and beverage~~ 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. InFrom the summer of 2018 to the end of 2019, the Company introduced the Iron Energy beverage to various retailers and distributors nationwide and ~~since~~worked ~~then has been working~~ 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 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 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~~ proposes to enhance its product offering by partnering with reputable suppliers. It also plans to scale the import, sale, and distribution of premium European ~~confectionery~~chocolate ~~items~~ and ~~beverage~~confectionery ~~products~~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 ~~bars, performance drinks, fruit drinks,~~ and ~~cereals~~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 ~~and beverage~~ 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 ~~food~~perishable and ~~beverage~~non-perishable goods within its national market.

Products

The Company’s product mix is comprised of the following:

CHOCOLATE ~~ENERGY DRINKS PERFORMANCE DRINKS FRUIT DRINKS HEALTHY~~ SNACKS Bars Muesli Bites Nuts Truffles Oatmeal Sticks ~~Candies~~Cereal ~~Cups~~bars ~~Iron~~Candies ~~Energy~~Dry ~~N-gine~~fruits ~~Energy~~Cups ~~Isotonic~~Pretzels ~~drinks~~Gummies ~~Vitamin water Protein powder drinks Vitamin drinks Fruit sodas Fruit flavored water Fruit juices Muesli Breakfast cereal Oatmeal Cereal bars Smoothies Iced tea~~Cookies

For ~~2019~~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 ~~cups~~5bites. The Company’s chocolate products are GMO free and Kosher and Halal certified, and ~~contain~~ 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.

Iron Energy Drink Product sponsored by Mike Tyson. The Company believes that its Iron Energy drink, sponsored by celebrity and former boxer Mike Tyson, appeals to consumers that are active, edgy, aggressive, adventurous, fans of MMA, extreme sports, music, sporting events, surfing and fitness. Iron Energy’s target consumers are college students, young transitional adults coming out of college, independent singles in their 20’s and 30’s, athletes and the “party-goers” population.

The Company’s Iron Energy drink product line is available in three flavors, in 8.4oz and 11.2oz quantities:

● Iron Energy Classic ● Iron Energy Zero Sugar ● Iron Energy Mojito

The Company’s sales imperatives are to grow Iron Energy’s profitable volume, increase Iron Energy brand distribution, and create Iron Energy network excitement and enthusiasm for the Iron Energy portfolio. The Company will align Iron Energy Frontline and Promoted Price to Consumer (PTC) at the premium level; slightly lower to Red Bull. The Company’s price promotional schedule strategy will be designed to promote during key high-volume periods, and create excitement, trial and increased sales.

Other Products. In addition to the Iron Energy drink and chocolate products, the Company has ability to import and distribute the following products:

● N-Gine energy drinks in classic, cranberry and mojito flavors; ● Frugo fruit drinks and snacks; ● 4Move isotonic and vitamin drinks; ● Fitella healthy snacks, such as muesli, breakfast cereal, oatmeal, cereal bars, smoothies and iced tea; and ● Gellwe products, which consist of cake, jelly and pudding mixes, baking and cake additives, cakes, and coffee, creamer and hot chocolate items

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 iswas for a period of 10 years during which Veroni ~~will~~was to have the exclusive right to distribute FoodCare products within the U.S. market, so long as Veroni ~~purchases~~purchased the required quantity of product from FoodCare. The Distribution Agreement iswas terminable upon (1) mutual consent of the parties, (2) by either party in writing without justification, if an issue iswas 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 ~~Sp. z o.o., a company organized under the laws of Poland,~~ 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 ~~meets~~meet the minimum purchase requirements under the agreement, due in part to FoodCare’s failure to provide promised marketing support. The Company isterminated ~~currently re-evaluating~~ 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 ~~Millano~~the ~~currently~~fiscal ~~supplies~~year ~~approximately~~ended ~~85%~~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.~~

AtAs ~~December~~of ~~31,~~the ~~2019,~~date ~~Veroni~~of ~~has~~this ~~three~~report, ~~employees.~~the ~~The~~current ~~Company’s~~COVID-19 ~~corporate~~crisis ~~office~~has isresulted ~~located~~ in ~~Bannockburn,~~the ~~Illinois~~Company ~~and~~experiencing ~~it has~~longer anlead ~~arrangement~~times ~~with~~in ~~Port~~obtaining ~~Jersey~~product from ~~Logistics,~~its amanufacturers ~~third-party~~and ~~logistics~~shipping ~~company~~to ~~that~~its ~~provides warehousing, fulfillment and transportation services~~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 7050% of sales. As between sales of branded items versus private label products, ~~private~~ private label currently accounts for approximately 7060% of sales. During the year ended December 31, ~~2019~~2020, the Company had two customers whose sales accounted for approximately 7377% 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 86 91% or $1,~~453~~527,~~432~~976 of ~~the~~its ~~Company’s~~ combined accounts ~~receivable~~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.

Energy Drink Market Overview. According to Statista, The U.S. energy drinks market size is expected to grow to $26.9 million by 2025, with a compound annual growth rate of 7.2% during the forecast period. Energy drinks offer a convenient way to boost energy as an alternative for coffee and tea, and new natural ingredients for consumers’ growing health consciousness have been driving the market. Energy beverage consumption has turned into a status symbol, especially for youth. Such consumer behavior is expected to further drive the overall market demand. In 2017, energy drink dollar sales in the U.S. comprised 30.1% of all packaged beverage sales, exceeding sales of carbonated soft drinks, which accounted for 28.5% of the market.

According to IBISWorld, the energy drink industry is extremely concentrated, with the four biggest companies accounting for an estimated 80.8% of the revenue in 2018. This level of concentration has been consistent over the last five years to 2018, and it is mainly due to the strong brand recognition of the largest companies – Red Bull, Monster and Rockstar.

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 ~~and beverage~~ 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 ~~does~~has ~~not~~a ~~possess~~pending ~~any~~trademark ~~intellectual~~application ~~property~~for ~~protection~~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.

Item 1A.

Risk Factors.

Not applicable to smaller reporting companies.

Item 1B.

Unresolved Staff Comments.

Not applicable to smaller reporting companies.

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 ~~March 31~~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 ~~Tyler~~Roadtex ~~Distribution~~Transportation ~~Center,~~Corporation ~~Inc.~~ located at ~~200~~ ~~Liberty~~13 ~~Way~~Jensen Drive, ~~Cranbury~~Somerset, NJ ~~08512~~08873 to store the chocolate ~~and beverage~~ products, as well as fulfill the purchase orders from the Company’s customers.

Item 3.

Legal Proceedings.

WeOn ~~are~~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 ~~currently~~pay ~~involved~~for shipping and logistics services in ~~any~~the ~~pending~~amount orof ~~threatened~~$277,233, ~~legal~~plus ~~proceedings~~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.

Item 4.

Mine Safety Disclosures.

Not applicable.

PART II

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 ~~March~~August 26, ~~2020~~2021, was 5455 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, ~~2019~~2020, ~~pursuant~~there ~~to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, we issued 323,632 shares of common stock, of which 186,965 shares~~ were ~~issued~~no insales ~~lieu~~ of ~~$140,223~~unregistered of interest and 286,667 shares were issued upon conversion of a promissory note in the principal amount of $215,000 and interest. All of the investors were deemed to be sophisticated with respect to the investment in the securities ~~due to their financial condition and involvement in the registrant’s business and had access to the kind of information which registration would disclose~~.

Item 6.

Selected Financial Data.

Not applicable to smaller reporting companies.

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~~ 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 ~~and beverage~~ 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.

9On 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.

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 is for a period of 10 years during which Veroni will have the exclusive right to distribute FoodCare products within the U.S. market, so long as Veroni purchases the required quantity of product from FoodCare. The Distribution Agreement is terminable upon (1) mutual consent of the parties, (2) by either party in writing without justification, if an issue is 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 Sp. z o.o., a company organized under the laws of Poland, 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.

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~~For the fiscal year ended December 31, 2020, the Company’s ~~failed~~independent auditors issued a report raising substantial doubt about the Company’s ability to ~~meet~~continue ~~its~~as ~~minimum~~a ~~purchase~~going ~~requirements~~concern. ~~under~~For the ~~FoodCare~~year ~~agreement~~ending December 31, in2020, ~~part~~the ~~due~~Company tohas ~~FoodCare’s~~an ~~failure~~accumulated deficit toof ~~provide~~$1,386,108 ~~promised~~since ~~marketing~~its ~~support~~inception. ~~The~~As ~~Company~~of isDecember ~~currently~~31, ~~re-evaluating~~2020, the ~~agreement~~Company had a cash balance available of approximately $116,730 and ~~relationship~~a working ~~with~~capital ~~FoodCare~~deficit of $342,796, which is not sufficient to meet its operating requirements for the next twelve months. IfTherefore, the ~~FoodCare~~Company’s ~~agreement~~ability to continue as a going concern is ~~terminated,~~dependent ~~the~~on ~~Company~~its ~~would~~ability noto ~~longer~~grow ~~have~~its ~~exclusive~~revenue ~~rights~~and generate sufficient cash flows from operations to ~~distribute~~meet ~~FoodCare’s~~its ~~Iron~~obligations ~~Energy~~and/or obtaining additional financing from its shareholders or other sources, as may be ~~drinks~~required. ~~However,~~The ~~during~~accompanying ~~2019,~~financial statements have been prepared assuming that the Company ~~found~~will ~~greater~~continue ~~success~~as ~~with~~a going concern; however, the ~~distribution~~above ofcondition ~~chocolate~~raises ~~and~~substantial ~~snack~~doubt ~~products~~about ~~instead of~~the ~~beverages~~Company’s ability to continue as a going concern.

For the fiscal year ended December 31, 2019, 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, 2019, the Company has an accumulated deficit of $907,000 since its inception. As of December 31, 2019, the Company had a cash balance available of approximately $99,010 and working capital of $2,715, 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.9

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. ~~Accordingly~~During 2020, the Company’s ~~generated~~ revenues ofwere ~~$6,678,790~~impacted ~~for~~by the ~~year ended~~effects ~~December~~of ~~31,~~COVID-19 ~~2019,~~ as the ~~compared~~pandemic toaffected ~~only~~transportation ~~$61,333~~logistics. ofRevenues ~~revenues~~were ~~during~~$5,581,764 ~~the~~for ~~year~~2020, ~~ended~~as ~~December~~compared 31to $6,678,790 ~~2018~~for 2019.

The ~~2019~~2020 gross profit of $~~860~~1,~~352~~155,331 was not sufficient to cover the Company’s operating expenses of $1,~~117~~534,~~522~~439, consisting of $~~646~~359,~~249~~ 399 in warehouse and selling expenses and $~~471~~1,~~273~~175,040 in general and administrative expenses, resulting in a net loss from operations of $~~257~~379,~~170~~108. In ~~During~~comparison, ~~the~~a ~~year~~gross ~~ended~~profit ~~December~~of 31$860,352 ~~2018,~~was ~~the~~generated ~~Company’s~~in ~~gross~~2019. ~~profit~~Due ~~and~~to operating expenses ~~were~~of $381,~~682 and $296~~419,~~512~~806, ~~respectively~~consisting of $646,249 ~~resulting~~in warehouse and selling expenses and $773,557 in general and administrative expenses, a net loss from operations of $~~257~~559,~~830~~454 resulted.

10The 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.

~~Other~~The ~~expenses~~Company inincurred ~~2019~~no ~~reflected~~interest ~~the~~expense ~~Company’s~~in ~~increased~~2020, ~~volume~~as ofcompared ~~business and need~~ to ~~finance~~$141,359 ~~the purchase~~ of ~~inventory. Other expenses consisted of factoring fees and~~ interest expense on various promissory notes ~~and totaled $343,643, resulting~~ in ~~a net loss of $600,813 for the~~ 2019 ~~fiscal year. In comparison~~, ~~the Company incurred only $1,000 of other expenses in 2018,~~ resulting in a net loss of $~~258~~700,~~830~~813.

Liquidity and Capital Resources

At December 31, ~~2019~~2020, the Company had cash and a working capital deficit of $99116,~~010~~730 and $2342,~~715~~796, respectively, as compared to $299,~~999~~ 010 and $~~106~~364,~~152~~ 784, respectively, at December 31, ~~2018, respectively~~2019. During the year ended December 31, ~~2019~~2020, ~~the~~operating ~~Company~~activities ~~used~~provided ~~net~~ cash of $1573,~~545~~978,~~878 in its operating~~ ~~activities,~~ and ~~net cash provided by~~ financing activities ~~totaled~~used cash of $1556,~~641,889~~258. In comparison, during fiscal ~~2018~~2019, ~~the~~operating ~~Company~~activities used ~~$446,946~~ of cash inof ~~its~~$1,599,780 ~~operating activities and~~ with $~~449~~1,~~350~~695,791 ~~was~~being provided by financing activities.

~~The~~Under the Small Business Administration (“SBA”), the Company’s ~~proposed~~applied ~~activities~~for ~~will~~the ~~necessitate~~Paycheck ~~significant~~Protection ~~uses~~Program of(“PPP”) ~~capital~~loan. These ~~into~~loans are forgiven if used for payroll, payroll benefits, including health insurance and ~~beyond~~retirement ~~2020~~plans, ~~particularly~~as ~~for~~well ~~the~~as ~~financing~~certain rent ofpayments, ~~inventory.~~leases, ~~While~~and ~~the~~utility ~~Company~~payments, ~~has~~which ~~recently~~are ~~entered~~limited ~~into~~to a40% ~~factoring~~of ~~arrangement~~the loan proceeds, ~~sales~~all of ~~equity~~which ~~securities~~if inpaid ~~the~~within ~~Company~~either ~~would result~~8 inweeks ~~reduced~~or 24 ~~financing~~weeks ~~costs.~~of ~~Since~~ the ~~beginning~~receipt of ~~2018~~the ~~and~~loan ~~through~~proceeds. At the ~~date~~time of this ~~report~~filing, ~~the~~we ~~Company~~anticipate ~~has~~a ~~engaged~~significant ~~in sales~~amount of ~~its~~this ~~equity~~loan ~~securities~~will inbe ~~private~~forgiven; however, ~~placements.~~the ~~Through~~forgiveness ~~December~~application ~~31,~~process ~~2019,~~is ~~10,471,400~~not ~~shares~~yet ~~have~~complete. ~~been~~The ~~sold~~Company ~~for~~has ~~total~~elected ~~gross proceeds~~to ofrecord ~~$473,533,~~these ~~29,997~~advances ~~shares~~under ~~have~~the ~~been~~debt ~~issued~~ treatment for ~~services~~these ~~rendered~~loans, ~~valued~~under atGAAP ~~$22,497,~~guidance. ~~186,965~~Unforgiven ~~shares~~portions ~~valued~~of atthese ~~$140,223 have~~loans ~~been~~will ~~issued~~be inrepaid ~~lieu~~over of5 ~~interest~~years, ~~286,667~~accruing ~~shares~~interest ~~have~~at ~~been~~1% ~~issued~~per ~~upon~~annum. The ~~conversion~~PPP ofloan has a ~~$215,000~~loan ~~promissory~~balance ~~note, and a total~~ of 2$56,~~270,000~~250 ~~shares~~as ~~were~~December ~~redeemed for $45~~31,~~200~~ 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

~~For~~During ~~the~~2019 ~~next~~and ~~few years~~2020, ~~the~~sales ~~Company~~were ~~will~~concentrated ~~continue~~in totwo ~~focus~~customers. onOne ~~obtaining~~of ~~visibility~~these ~~for~~customers notified the ~~products~~Company bythat ~~contacting~~it ~~convenience~~was ~~store~~not selected as a vendor ~~locations~~for ~~and~~2021. ~~small~~Sales ~~distributors~~in 2021 are expected to ~~those~~decrease ~~types~~by ofmore ~~locations~~than 50%. ~~The~~As ~~Company~~vendor selection is ~~targeting~~an ~~metropolitan~~annual ~~areas,~~process ~~such~~with asthis ~~Chicago~~customer, ~~Los~~the Company ~~Angeles,~~is ~~Las~~planning ~~Vegas~~to reapply as a vendor for 2022 and ~~cities~~broaden inits ~~New~~customer ~~Jersey~~base. For the next few years, ~~New~~the ~~York~~Company will continue to focus on obtaining visibility for the products by contacting convenience store locations and ~~Miami.~~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.

~~The~~Management ~~Company~~believes isthat ~~also~~while ~~implementing~~the ~~strategies~~current ~~for long~~COVID-~~term~~19 ~~operational~~crisis ~~improvements~~has ~~that~~not ~~should~~affected ~~positively~~the ~~impact~~volume ~~working~~of ~~capital~~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 Itdecreasing ~~plans~~the amount of product and/or services to ~~invest~~the aCompany, ~~total~~thereby making it more difficult to meet the terms of ~~$500,000~~contracts ~~into~~with retailers. ~~shelf~~Management ~~space~~believes that for ~~various~~the ~~products~~current fiscal year, sothe asCompany towill ~~reach~~experience areduced ~~sustained~~profit ~~reduction~~margins inas ~~handling costs,~~a ~~improved~~result. ~~service~~It ~~levels,~~is not ~~faster~~known ~~order~~whether ~~fulfillment,~~the supply chain and ~~fewer~~transportation ~~write-offs~~logistics ofissues ~~excess~~will orcontinue ~~obsolete~~into ~~inventory~~the future.

~~Currently~~There is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, ~~these~~or ~~efforts~~if ~~are~~additional ~~being~~capital ~~funded~~is ~~through~~needed, that such funds, if available, will be obtainable on terms satisfactory to the ~~proceeds~~Company. ofAccordingly, given the Company’s ~~private~~limited ~~placements,~~cash asand ~~discussed~~cash ~~above~~equivalents on hand, asthe ~~well~~Company aswill be unable to implement its business plans and proposed ~~short-term~~operations ~~borrowing~~unless ~~from~~it obtains additional financing or otherwise is able to generate revenues and profits. In 2019, the Company’s ~~shareholders~~entered into ~~and~~a ~~third~~factoring ~~parties~~agreement covering its accounts receivable (see below). AsThe ~~part~~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 ~~efforts~~continuing tooperating ~~gain~~requirements. ~~visibility~~The Company will require ~~and~~a minimum of $600,000 for the next 12 months to ~~raise~~fund ~~capital~~its operations, itwhich ~~proposes~~will be used to ~~establish~~fund aexpenses ~~trading~~related ~~market~~to ~~for~~operations, ~~its~~office supplies, ~~shares.~~travel, ~~Management~~salaries ofand ~~Veroni~~other incidental expenses. Management believes that ~~having~~this acapital ~~trading~~would allow the Company to meet its operating ~~market~~cash ~~for~~requirements, and would facilitate the Company’s ~~common~~business ~~stock~~of ~~will~~selling ~~make~~and ~~other~~distributing ~~sources~~its products. Management also believes that the acquisition of ~~financing~~such ~~available~~assets would generate revenue to cover overhead cost and ~~assist~~general itliabilities inof ~~engaging~~the ~~with~~Company, ~~larger~~and allow the ~~distributors~~Company to achieve overall sustainable profitability.

~~There~~Due ~~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,~~above-described ~~given the Company’s limited cash and cash equivalents on hand~~difficulties, ~~the~~management ~~Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise~~ is ~~able~~seeking 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~~opportunities ~~financial~~outside plans. In the near term, the Company plans to rely on its primary stockholder to continue his commitment to fund the Company’s continuing operating requirements. Management anticipates a total capital raise of ~~up to $5,000,000 over~~ the ~~course~~import/distribution ofbusiness ~~the~~in ~~following~~order ~~four consecutive quarters; provided, however, that the Company will require a minimum of $600,000 for the next 12 months~~ to ~~fund its~~ ~~operations,~~bring ~~which~~value ~~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~~stockholders. 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.

Management believes that while the current COVID-19 crisis has not affected the volume of sales, it has resulted in the Company experiencing longer lead times in obtaining product from its manufacturers. Since most of Veroni’s retailer base is comprised of national and international retailers, the collection of receivables is not expected to be negatively impacted. Efforts to raise additional capital, however, may be negatively impacted due to volatility and uncertainty in the domestic and global economy. This may delay the Company’s planned implementation of strategies to improve its working capital situation and reduce its borrowing costs.

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 ~~its~~is receivables.

~~Potential Revenue~~11

The Company expects to generate revenue from selling its products. Further, depending on the market environment, the Company plans on acquiring the rights to sell and distribute other food and beverage products.

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.

Item 7A.

Quantitative and Qualitative Disclosure About Market Risk.

Not applicable to smaller reporting companies

Item 8.

Financial Statements and Supplementary Data.

VERONI BRANDS CORP.

Financial Statements

December 31, ~~2019~~2020 and ~~2018~~2019

Financial Statements

Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of December 31, 2019 and 2018	F-2
Balance Sheets as of December 31, 2020 and 2019 (restated)	F-3
Statements of Operations for years ended December 31, 2019 and 2018	F-3
Statements of Operations for years ended December 31, 2020 and 2019 (restated)	F-4
Statement of Changes in Stockholders’ Equity for years ended December 31, 2019 and 2018	F-4
Statement of Changes in Stockholders’ Equity (Deficit) for years ended December 31, 2020 and 2019 (restated)	F-5
Statements of Cash Flows for years ended December 31, 2019 and 2018	F-5
Statements of Cash Flows for years ended December 31, 2020 and 2019 (restated)	F-6
Notes to Financial Statements	F-6
Notes to Restated Financial Statements	F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Stockholders and the~~ Board of Directors and Stockholders

of Veroni Brands Corp.

~~OPINION~~Opinion ONon ~~THE~~the ~~FINANCIAL~~Financial ~~STATEMENTS~~Statements

We have audited the accompanying balance sheets of Veroni Brands Corp. (the “Company”) as of December 31, ~~2019~~2020 and ~~December 31~~2019, ~~2018,~~and the related statements of operations, ~~statement of~~ changes in stockholders’ equity (deficit), and cash flows for the years ~~ended~~then ~~December 31~~ended, ~~2019~~ and ~~December 31, 2018, 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, ~~2019~~2020 and ~~December 31~~2019, ~~2018,~~ 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.

~~EXPLANATORY~~Going ~~PARAGRAPH – GOING CONCERN~~Concern

The accompanying financial statements have been prepared assuming ~~that~~ the Company will continue as a going concern. As ~~more~~discussed ~~fully explained~~ in Note 1, to the ~~Company~~financial ~~has~~statements, ~~incurred~~the ~~losses~~Company ~~since inception,~~ has an accumulated deficit ofsince ~~approximately~~inception ~~$907,000~~ and ainsufficient ~~cash balance of approximately $99,000 and~~ working capital ofto ~~$2,715~~meet asits ~~of December 31~~operating requirements, ~~2019.~~which ~~The~~raises ~~Company needs~~substantial todoubt ~~raise~~about ~~capital~~its orability ~~debt~~ to ~~fund~~continue ~~its~~as ~~obligations~~a ~~and~~going ~~develop its operations and become profitable~~concern. ~~These conditions raise substantial doubt as to the Company~~Management’s ~~ability~~plans toregarding ~~continue~~these matters asare aalso ~~going~~described ~~concern~~in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~BASIS~~Restatement ~~FOR~~of ~~OPINION~~the 2019 Financial Statements

~~These~~As ~~financial~~discussed ~~statements~~in ~~are~~Note ~~the~~14 ~~responsibility of the Company’s management. Our responsibility is~~ to ~~express an opinion on~~ the ~~Company’s~~consolidated financial statements, ~~based on our audit. We are a public accounting firm registered with~~ the ~~Public~~accompanying ~~Company Accounting~~2019 ~~Oversight~~financial ~~Board~~statements ~~(United~~have ~~States)~~been ~~(“PCAOB”)~~restated ~~and are required~~ to ~~be independent with respect to the Company~~correct ina ~~accordance with the U~~misstatement.~~S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.~~

WeBasis conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit 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.~~Opinion

~~Our~~These ~~audits~~financial ~~included~~statements ~~performing~~are ~~procedures~~the toresponsibility ~~assess~~of the ~~risks~~Company’s ofmanagement. ~~material~~Our ~~misstatement~~responsibility ofis ~~the~~to ~~financial~~express ~~statements,~~an ~~whether~~opinion ~~due~~on tothe Company’s ~~error~~financial orstatements ~~fraud,~~based ~~and~~on ~~performing~~our ~~procedures~~audits. ~~that~~We ~~respond~~are toa ~~those~~public ~~risks.~~accounting ~~Such~~firm ~~procedures~~registered ~~included~~with ~~examining,~~the onPublic aCompany ~~test~~Accounting ~~basis,~~Oversight ~~evidence~~Board ~~regarding~~(United ~~the~~States) ~~amounts~~(PCAOB) and ~~disclosures~~are inrequired ~~the~~to ~~financial~~be ~~statements.~~independent ~~Our~~with ~~audits~~respect ~~also~~to ~~included evaluating~~ the ~~accounting~~Company ~~principles used~~in ~~and~~accordance ~~significant~~with ~~estimates~~the ~~made~~U.S. byfederal ~~management,~~securities laws asand ~~well~~the asapplicable ~~evaluating~~rules ~~the~~and ~~overall~~regulations ~~presentation~~ of the ~~financial~~Securities ~~statements. We~~and ~~believe~~Exchange ~~that~~Commission ~~our~~and ~~audits~~the ~~provide~~PCAOB ~~a reasonable basis for our opinion~~.

~~/s/~~We Lconducted Jour ~~Soldinger~~audits ~~Associates~~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, ~~LLC~~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.

~~Deer~~Our ~~Park~~audits included performing procedures to assess the risks of material misstatement of the financial statements, ~~Illinois~~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.

April 14, 2020

We have served as the Company’s auditor since 2018.

F-1

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

F-2

Veroni Brands Corp.

BALANCE SHEETS

December 31, ~~2019~~2020 and ~~2018~~2019

	2019			2018
	2020			2019
					(Restated)
ASSETS
Current Assets
Cash & equivalents	$	99116,~~010~~730		$	299,~~999~~010
Accounts Receivable, net allowance for doubtful accounts of $2,125 and $9,948 respectively		129,565			13,160
Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively		14,303			129,565
Contract Receivables with recourse		1793,~~554,510~~904			-1,554,510
Inventory		~~610~~550,~~647~~657			~~208~~610,~~369~~647
Prepaid expenses and other current assets		565,~~014~~524			~~106~~56,~~317~~014
Total Current Assets		21,~~449~~481,~~746~~118			~~330~~2,~~845~~449,746
Deposits		9,310			-
Other Assets
Total Assets	$	2,459,056		$	330,845
Deposits		9,310			9,310
LIABILITIES AND STOCKHOLDERS’ EQUITY
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	$	~~184~~68,~~561~~869		$	43184,~~713~~561
Accounts payable related party		~~546~~783,~~612~~417			-546,612
Notes payable - related parties including accrued interest		43,370			157,059
Notes payable		-			215,000
Contract receivables liability with recourse		1,414,639			-
Notes payable - related parties including interest		-			43,370
Accrued liabilities		114,816			23,921
Contract receivables liability with recourse		649,502			1,414,639
Contract liabilities		143,033			-
Accrued liabilities		134,137			214,816
Total Current Liabilities		2,447,031			224,693
Paycheck protection loans (PPP)		56,250			-
Deferred Rent		1,716			-
Contract liabilities		74,800			143,033
Total Liabilities		2,448,747			224,693
Short-Term lease liability-operating		56,939			52,499
Commitments and contingencies
Total Current Liabilities		1,823,914			2,814,530
		-			-
Long-term Liabilities
STOCKHOLDERS’ EQUITY
Economic injury disaster loan (EIDL)		149,900			-
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2019 and 2018		-			-
Long-Term lease liability-operating		15,134			72,073
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,025,029 and 26,538,401 shares issued, issuable and outstanding as of December 31, 2019 and 2018, respectively		2,703			2,656
Total Long-Term Liabilities		165,034			72,073
Additional paid-in capital		914,606			409,683
Total Liabilities		1,988,948			2,886,603
Accumulated deficit		(907,000	)		(306,187	)
STOCKHOLDERS’ DEFICIT
Total Stockholders’ Equity		10,309			106,152
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019		-			-
Total Liabilities and Stockholders’ Equity	$	2,459,056		$	330,845
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.

F-23

Veroni Brands Corp.

STATEMENTS OF OPERATIONS

For the years ended December 31, ~~2019~~2020 and ~~2018~~2019

	2019			2018
	2020			2019
Revenue, net	$	6,678,790		$	61,333
				(Restated)
Cost of sales, related party		5,197,938			-
Revenue, net	$	5,581,764		$	6,678,790
Cost of sales		620,500			22,651
Cost of sales, related party		3,961,711			5,197,938
Total cost of sales		5,818,438			22,651
Cost of sales		464,722			620,500
Gross profit		860,352			38,682
Total cost of sales		4,426,433			5,818,438
Warehouse and selling expenses		646,249			151,474
Gross profit		1,155,331			860,352
General and administrative expenses		471,273			145,038
Warehouse and selling expenses		359,399			646,249
Total operating expenses		1,117,522			296,512
General and administrative expenses		1,175,040			773,557
Net loss from operations		(257,170	)		(257,830	)
Total operating expenses		1,534,439			1,419,806
Net loss from operations		(379,108	)		(559,454	)
Other expense
Factoring Fees		202,284			-
Interest expense		-			140,359
Interest Expense		140,359			-
Interest expense - related party		-			1,000
Interest expense - related party		1,000			1,000
Total interest expense		-			141,359
Interest expense		343,643			1,000
Loss before income taxes		(379,108	)		(700,813	)
Loss before tax benefit		(600,813	)		(258,830	)
Income taxes		-			-
Income tax benefit		-			-
Net Loss	$	(379,108	)	$	(700,813	)
Net Loss	$	(600,813	)	$	(258,830	)
Net loss per share:
Basic and diluted	$	(0.0201	)	$	(0.0103	)
Weighted average shares outstanding:
Basic and diluted		2627,~~799~~062,~~927~~042			2726,~~179~~739,~~634~~853

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

F-34

Veroni Brands Corp.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

December 31, ~~2019~~2020 and ~~2018~~2019

											Additional						Total
	Preferred Stock				Common Stock						Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount			Capital			Deficit			~~Equity~~Deficit
Balance, December 31, 2017		-		-		18,300,000		$	1,830		$	83,826		$	(47,357	)	$	38,299
Balance, December 31, 2018		-		-		26,568,400		$	2,656		$	409,683		$	(306,187	)	$	106,152
Redeemed shares		-		-		(2,020,000	)		(202	)		(19,998	)				$	(20,200	)
Issuance of common stock for services		-		-		20,000			2			14,998			-			15,000
Issuance of common stock for cash		-		-		10,268,400			1,026			320,257			-			321,283
Warehouse services provided by shareholder contributed as capital		-		-								10,600						10,600
Net Loss for the year		-		-		-			-			-			(258,830	)		(258,830	)
Balance, December 31, 2018		-		-		26,568,400			2,656			409,683			(306,187	)		106,152
Issuance of common stock for services		-		-		29,997			3			22,494						22,497
Issuance of common stock for cash		-		-		203,000			21			152,229			-			152,250
Issuance of common stock, in lieu of interest		-		-		186,965			18			140,205			-			140,223
Conversion of promissory note to common stock		-		-		286,667			29			214,971			-			215,000
Redemption and cancellation of shares		-		-		(125,000	)		(12	)		(24,988	)					(25,000	)
Cancellation of shares		-		-		(125,000	)		(12	)		12						-
Net Loss for the year		-		-		-			-			-			(~~600~~700,813	)		(~~600~~700,813	)
Balance, December 31, 2019		-		-		27,025,029		$	2,703		$	914,606		$	(907,000	)	$	10,309
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			6			44,994			-			45,000
Conversion of promissory note to common stock		-		-		286,667			29			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.

F-4

VERONI BRANDS CORP.

STATEMENTS OF CASH FLOW

December 31, 2019 and 2018

	2019			2018
Cash flow from operating activities:
Net Loss	$	(600,813	)	$	(258,830	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for service		22,496			15,000
Stock issued in lieu of cash payment of interest		140,224			-
Expenses paid by stockholder and contributed as capital		-			10,600
Expenses paid by shareholder		11,586			-
Changes in:
Trade accounts receivable		(108,582	)		(13,160	)
Allowance for doubtful accounts		(7,823	)		-
Contract Receivables		(1,554,510	)		-
Prepaid expenses and other current assets		50,303			(49,484	)
Inventory		(402,278	)		(208,369	)
Deposits		(9,310	)		-
Accounts payable		155,574			57,297
Accounts payable related party		546,612			-
Accrued liabilities		65,894			-
Contract liabilities		143,033			-
Deferred rent		1,716
Net cash used in operating activities		(1,545,878	)		(446,946	)
Cash flows from financing activities:
Repayment of stockholders loans		(140,000	)		-
Repayment of notes payable		(65,000	)		(8,000	)
Collection of subscription receivable		-			210
Proceeds from advance from related party		-			156,059
Proceeds from issuance of notes payable		280,000			-
Proceeds from issuance of common stock		152,250			301,081
Proceeds from contract receivables with recourse		1,414,639			-
Net cash provided by financing activities		1,641,889			449,350
Net change in cash		96,011			2,404
Cash at the beginning of the year		2,999			595
Cash at the end of the year	$	99,010		$	2,999
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,000		$	-
Non-cash investing and financing activities
Conversion of promissory note	$	215,000		$	-
Redemption and cancelation of shares	$	25,000		$	-
Liabilities paid by shareholder	$	14,726		$	-
Financing of insurance premiums	$	-		$	8,000

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

F-5

Veroni Brands Corp.

STATEMENTS OF CASH FLOW

December 31, 2020 and 2019

	2020			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

F-6

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~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 $65.76 million and incurred a net loss of $~~600~~379,~~813~~108 for the year ending ~~December~~ December 31, ~~2019~~2020 and has an accumulated deficit of $~~907~~1,~~000~~386,108 since its inception. As of December 31, ~~2019~~2020, the Company had a cash balance available of approximately $99116,~~010~~730 and working capital of ($2342,~~715~~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 in part due to FoodCare’s failure to provide promised marketing support. ~~The~~In ~~Company~~2020, isthe ~~currently~~Company ~~re-evaluating~~terminated the agreement and relationship with FoodCare. Ifand ~~the FoodCare agreement is terminated, the Company would~~ no longer ~~have~~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 ~~Millano~~ZWC ~~Group~~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~~ 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~~ 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.

F-67

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~2019 (Restated)

Note 2 – Summary of Significant Accounting Policies

Reclassifications

Certain reclassifications have been made in the ~~2018~~2019 financial statements to conform to the ~~2019~~2020 presentation. These reclassifications have no effect on net loss for ~~2018~~2019.

Advertising

The Company’s policy is to expense advertising costs as incurred. Advertising expense for the year ending December 31, ~~2019~~ 2020 and ~~2018~~ 2019 is $5030,~~117~~935 and $4650,~~564~~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 11 12 for revenue disaggregated by product line.

The ~~majority~~Company ofrecognizes ~~the~~revenue ~~Company’s~~from ~~revenue~~the issale ~~recognized~~of products when ittitle ~~satisfies~~and arisk ~~single~~of ~~performance~~loss ~~obligation~~passes byand ~~transferring~~the ~~control~~customer accepts the goods, which generally ofoccurs ~~its~~at ~~products~~the time of delivery to a customer warehouse. ~~Control~~Customer issales ~~generally~~incentives ~~transferred~~such ~~when~~as ~~the~~volume-based ~~Company’s~~rebates ~~products~~or discounts are ~~either~~treated as ~~picked~~a upreduction orof ~~delivered based~~sales onat the ~~terms~~time ~~contained~~the ~~within~~sale ~~the~~is ~~underlying~~recognized. ~~contracts~~Shipping orand ~~agreements~~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 ~~were~~aggregating approximately $~~201~~206,~~561~~052 and $0201,561 for the years ended December 31, ~~2019~~2020 and ~~2018~~ 2019, respectively, is included in warehouse and selling expenses.

~~Concentration of Risk~~F-8

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, 2019 and 2018, respectively.

F-7

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~2019 (Restated)

Note 2 – Summary of Significant Accounting Policies (Continued)

Concentration of Risk

Accounts Receivable and Concentration of Credit Risk

Accounts receivable are recorded at the invoiced amounts less an allowance for doubtful accounts. The allowance for doubtful accounts is ~~based~~ 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 $~~2,125~~ -0- and $92,~~900~~125 is reserved as of December 31, ~~2019~~2020 and ~~2018~~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, ~~2019~~2020, we had one customer who comprised approximately 8657% or $1617,~~453,432~~272 of our contract receivables with recourse and ~~one~~two ~~customer~~customers who comprised approximately 57100% or $7414,~~544~~ 303 of our accounts receivable. For the year ended December 31, ~~2018~~2019, we had one nocustomer ~~customers~~who ~~whose~~comprised ~~accounts~~approximately ~~receivable~~86% ~~exceeded~~or $1,453,432 of our contract receivables with recourse and one customer who comprised approximately 1057% or $74,544 of our accounts receivable.

For the year ended December 31, ~~2019~~2020, we had two customers with sales in excess of 10% of our revenue and they represented 7277% of our revenue. For the year ended December 31, ~~2018~~2019, we had two customers with sales in excess of 10% of our revenue and they represented 6472% 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~~ Puerto Rico and the U.S. Virgin Islands. FoodCare is the sole supplier of Iron Energy to the Company. The term of the agreement is was for ten years and ~~gives~~gave the Company exclusive rights to distribute FoodCare products within the U.S. market, so long as the Company ~~purchases~~ purchased the required quantity of product from FoodCare. The distribution agreement is terminable: (1) upon mutual consent of the parties; (2) by either party in writing, without justification, if an issue is not amicable resolved within 30 days of such issue by providing 180 days’ notice and, in such case, the distributor shall lose it exclusivity rights; or (3) immediately in the event of notice of an uncured breach in the terms of the agreement.

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 isterminated ~~currently re-evaluating~~ 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.

The Company’s only business line in 2018 was the distribution of “Iron Energy” drink that continues to be part of the Company’s product offering in 2019. The cancelation of the “Iron Energy” drink distribution agreement will not significantly affect the company or its revenue.

At the beginning of 2019, the Company established relationships with other European manufacturers that can manufacture a wide range of “panned” products such as nuts, raisin, pretzels, fruits and many other “panned” and healthy snacks items, as well as chocolate bars, multi-flavor truffles, sticks, chocolate cups, 5-bites, chocolate covered gummies, chocolate Easter eggs, custom Christmas chocolate figures as well as Advent calendars and many other products to support demand from the Company’s national retailers.

~~Vendor Concentration~~F-9

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 it suppler for chocolate products. Total purchases in 2019 were approximately $5,102,224 which represents 99% of product purchases.

F-8

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~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 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, ~~2019~~2020 and ~~2018~~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 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, ~~2019~~2020 and ~~2018~~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, ~~2019~~2020 and ~~2018~~2019 due to their short-term nature and management’s belief that their carrying ~~amounts~~ amounts approximate the amount for which the assets could be sold or the liabilities could be settled.

~~Share~~F-~~Based Compensation~~10

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 expects it will adopt the update on January 1, 2020.

F-9

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~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~~ 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 November 2019, the FASB provided updated guidance that allowed certain entities to delay the adoption of the standard and the provisions of ASU 2016-02 are effective for the fiscal periods beginning after December 15, 2020, and for interim periods within fiscal years beginning after December 15, 2021. Early application is permitted. The Company has not yet elected this accounting guidance and continues to review the effect adoption will have on its financial position and results of operations.

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, ~~2020~~2019. Early adoption is permitted. The Company has ~~not yet~~ 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~~ 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, ~~2019~~2018. The Company is in the process of reviewing the potential impact of ASU 2018-07.

~~Note 3 – Inventory~~F-11

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:

F-10

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~2019 (Restated)

Note 3 – Inventory ~~(Continued)~~

	December 31, 2019		December 31, 2018
Finished goods – in transit to warehouse	$	399,043	$	-
Finished goods – in warehouse		211,604		192,318
Finished goods - consignment		-		16,051
	$	610,647	$	208,369

During 2019, the Company removed beverage product totaling approximately $245,000 from inventory due to reaching the end of its shelf life and becoming 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.

	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~~ loading the product onto truck transport for delivery to the seaport in Poland. Amounts transferred to ~~FoodCare~~the Company’s suppliers to secure ~~future~~ 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, 2019		December 31, 2018
	December 31, 2020		December 31, 2019
Prepaid services	$	15,~~049~~524	$	31,~~674~~049
Prepaid Rent		~~4,655~~-		-4,655
Prepaid inventory		~~50,310~~-		~~102~~50,~~643~~310
	$	565,~~014~~524	$	~~106~~56,~~317~~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~~ equivalent of 48% percent per annum rate. The note was repaid in full in June 2019. The Company issued to the lender 26,965 shares of the Company’s common stock value at $20,224 in 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 ~~at the option of the lender could~~ 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 ~~December~~2020 ~~2019~~ 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.

F-1112

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~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, ~~and~~ a major shareholder, have guaranteed the debt.

Note 7 – ~~Stockholders’~~Long ~~Equity~~Term Debt

~~The~~On ~~Board~~August of27, ~~Directors~~2020 isthe ~~authorized~~Company toreceived ~~issue~~an ~~preferred~~Economic ~~stock~~Injury byDisaster ~~series~~Loan ~~that~~(EIDL) ~~will~~from ~~establish~~ the ~~number~~U.S. ofSmall ~~shares~~Business toAdministration beSBA) ~~included~~in ~~and~~the ~~fix~~amount ~~the~~of ~~designation~~$150,000. ~~powers,~~The ~~preferences~~interest ~~and~~rate ~~rights~~is 3.75% with payments of $731 beginning twelve month from the ~~shares~~date ~~each~~of ~~such~~the ~~series~~loan. Interest is accrued monthly and payments are first applied to interest accrued to the ~~qualifications,~~date ~~limitations~~of orreceipt ~~restrictions thereof.~~of Atpayment ~~December~~and 31the balance, ~~2019~~if any, will be applied to the ~~Company~~principal. ~~has~~The ~~not~~balance ~~established~~of ~~any~~principal ~~series~~and interest is due 8/27/2050. As of ~~preferred~~December ~~stock~~31, 2020 the Company owes $149,900.

The maturity of the EIDL loan as of December 31, 2020 is as follows:

2021	$	-
2022		-
2023		2,181
2024		3,285
2025		3,410
Thereafter		141,024
	$	149,900

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, ~~2018~~2019 the Company issued 10203,~~268,400~~000 shares of common stock in consideration of cash proceeds of $~~321~~152,~~283~~250. ~~and~~The ~~redeemed~~Company also 2issued 29,~~020,000~~997 shares of ~~its~~ common stock ~~and~~for ~~refunded~~services ~~$20,200~~rendered ~~for~~with ~~net~~a ~~proceeds~~value of $~~301~~22,~~083~~497 and ~~collected~~issued a186,965 ~~subscription~~shares valued at $140,223 ~~receivable~~in lieu of ~~$210~~a cash payment of interest.

~~From~~During ~~January 1 to December 31~~2019, ~~2019~~ the Company ~~issued~~redeemed ~~203~~250,000 shares of common stock infor ~~consideration of cash proceeds of~~ $~~152~~25,~~250. The~~000 ~~Company~~from ~~also~~two ~~issued 29,997 shares~~ of ~~common~~the ~~stock~~original ~~for~~founders ~~services rendered with a value~~ of ~~$22,497~~the ~~and~~Company. ~~issued~~These ~~186,965~~ shares ~~valued~~were atcancelled ~~$140,223~~and inrestored ~~lieu~~to ofthe astatus ~~cash payment~~ of ~~interest~~authorized ~~and~~but ~~issued~~unissued ~~286,667~~ shares ~~upon the conversion~~ of ~~the~~common ~~$215,000 promissory note~~stock.

~~At December 31, 2019, the Company has no outstanding options or warrants.~~F-13

Note 8 –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 his promissory note and accrued interest which totaled $61,000. In December 2019 the shareholder paid $6,276 of Company expenses and $14,726 of Company liabilities. In January 2020 the Company reimbursed the shareholder. The due date for the second shareholder note has been 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 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, 2019 the related party balances were as follows:

	December 31, 2019		December 31, 2018
Loans	$	17,000	$	155,000
Accounts payable		25,371		2,059
Total related party	$	42,371	$	157,059

The unpaid loan balance of $17,000 at December 31, 2019 was repaid during January and February 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 was owed $546,612 at December 31, 2019. The balance is reflected in accounts payable related party.

F-12

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~2019 (Restated)

Note 98 – ~~Income~~Stockholders’ ~~Taxes~~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

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.

~~Significant components of the Company’s deferred tax assets were as follows for the year ended December 31, 2019 and 2018:~~F-14

	December 31, 2019			December 31, 2018
Deferred tax assets:
Net operating loss carryforward	$	229,000		$	64,000
Total deferred tax assets	$	229,000		$	64,000
Deferred tax liabilities		-			-
Total deferred tax liabilities		-			-
Net deferred tax assets (liabilities)		229,000			64,000
Less valuation allowance		(229,000	)		(64,000	)
Net deferred tax assets (liabilities)	$	-		$	-

At December 31, 2019 and, 2018, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $752,000. 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, 2019 and 2018:

		2019		2018
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 (15%) to the actual income tax benefit for the years ended December 31, 2019 and 2018:

	2019			2018
Federal statutory rate (benefit)	$	(126,000	)	$	(51,200	)
State tax (benefit), net of federal benefits		(39,000	)		(17,800	)
Permanent differences		-			7,400
Change in valuation allowance		165,000			61,600
	$	-		$	-

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, 2019 and 2018, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

F-13

VERONI BRANDS CORP.

Notes to Financial Statements

December 31, ~~2019~~2020 and ~~2018~~2019 (Restated)

Note 10 – ~~Office~~Income ~~Lease~~Taxes (Continued)

OnSignificant ~~February~~components 4,of ~~2019,~~ the Company’s ~~entered~~deferred ~~into~~tax aassets ~~sublease~~were ~~for~~as ~~office~~follows ~~space located in Bannockburn, Illinois. The sublease terminates on September 30, 2022. Rent~~ for the year ~~ending~~ended December 31, ~~2019~~2020 ~~was~~and ~~$52,256. The annual rent per the sublease is as follows~~2019:

2020	$	57,396
	December 31, 2020			December 31, 2019
2021		59,107
Deferred tax assets:
2022		15,110
Net operating loss carryforward	$	321,981		$	214,359
	$	131,613
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)	$	-		$	-

~~The~~At December 31, 2020 the Company ~~also~~had ~~paid~~net aoperating ~~security~~loss ~~deposit~~carryforwards for federal and state income tax purposes of approximately $91,~~310~~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:

Note 11– Revenue

		2020		2019

Total current	$	-	$	-
Total deferred	$	-	$	-

~~The~~Deferred ~~Company~~income ~~has~~taxes ~~included~~reflect inthe ~~current~~net ~~liabilities,~~tax ~~contract~~effects ~~liabilities~~of ~~which~~temporary ~~represent~~differences anbetween ~~estimate~~the ~~for~~carrying ~~customer~~amount ~~chargebacks~~of ~~related to~~assets ~~delivery~~and ~~exceptions~~liabilities for financial reporting purposes and ~~other~~the ~~allowances~~amounts toused ~~customers~~for ~~based~~income ontax ~~their~~purposes. ~~respective~~The ~~contracts~~following oris ~~agreements.~~a Atreconciliation ~~December~~of ~~31,~~the ~~2019,~~expected statutory federal ~~the~~income ~~Company~~tax ~~reduced~~provision ~~revenue~~(21 inpercent) to the ~~amounts~~actual ofincome ~~$131,239~~tax benefit for ~~chargebacks~~the ~~and~~years ~~$338,428~~ended inDecember ~~other~~31, ~~allowances~~2020 toand ~~customers.~~2019:

The Company’s revenue is invoiced when control passes to the customer. Payment terms range from 30 days to 120 days with discounts offered for early payment.

	2020			2019

Federal statutory rate (benefit)	$	(80,000	)	$	(147,000	)
State tax (benefit), net of federal benefits		(28,000	)		(53,000	)
Permanent differences		-			-
Change in valuation allowance		108,000			200,000
	$	-		$	-

Under ASC 740, Income Taxes, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2020 and 2019, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

F-15

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:

2021	$	59,107
2022		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:

	2019		2018
	2020		2019
Chocolate	$	65,~~570~~581,~~709~~645	$	-6,570,709
Energy drinks	$	~~108,081~~119	$	61108,~~333~~081
Totals	$	65,~~678~~581,~~790~~764	$	616,~~333~~678,790

Note 1213– 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.

~~Note~~On 13June –17, ~~Subsequent~~2019, ~~Events~~The Scale Effect Company d/b/a Mant Logistics filed an amended complaint in the United States District Court for the Northern District of Illinois naming as defendants the Company, Baron Chocolatier, Inc. and two significant shareholders of the Company. The action was originally against Baron Chocolatier only, alleging that Baron did not pay for shipping and logistics services in the amount of $277,233, plus accrued interest. The complaint was amended to allege that the Company is a successor corporation and continuation of Baron Chocolatier, thereby making the Company liable for the debts and liabilities of Baron, and that Baron is an alter ego for the Company and the Company’s two significant shareholders. No trial date has been scheduled. The parties are still in the discovery stage, as the pandemic and a reassignment of the case to a new judge caused delays. The Company intends to vigorously defend in this lawsuit.

~~In January 2020 the Company received $45,000 for 60,000 shares of common stock valued at $0.75 per share.~~F-16

~~F-14~~VERONI BRANDS CORP.

Notes to Financial Statements

December 31, 2020 and 2019 (Restated)

Note 13– Commitments and Contingencies (Continued)

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.

F-17

Veroni Brands Corp.

BALANCE SHEETS

December 31, 2019

	As Originally Reported			Adjusted			As Restated
ASSETS
Current Assets
Cash & equivalents	$	99,010		$	-		$	99,010
Accounts Receivable, net allowance for doubtful accounts of $0 and $2,125 respectively		129,565						129,565
Contract Receivables with recourse		1,554,510						1,554,510
Inventory		610,647						610,647
Prepaid expenses and other current assets		56,014						56,014
Total Current Assets		2,449,746			-			2,449,746

Other Assets
Deposits		9,310						9,310
Right-of-use asset-operating, net		0			122,856			122,856
Total Other Assets		9,310			122,856			132,166

Total Assets	$	2,459,056		$	122,856		$	2,581,912

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	184,561		$	-		$	184,561
Accounts payable related party		546,612						546,612
Notes payable		-			215,000			215,000
Notes payable - related parties including interest		43,370						43,370
Contract receivables liability with recourse		1,414,639						1,414,639
Accrued liabilities		114,816			100,000			214,816
Contract liabilities		143,033						143,033
Short-Term lease liability-operating		-			52,499			52,499
Total Current Liabilities		2,447,031			367,499			2,814,530

Long-term Liabilities
Deferred Rent		1,716			(1,716	)
Economic injury disaster loan (EIDL)		-			-			-
Long-Term lease liability-operating		-			72,073			72,073

Total Long-Term Liabilities		1,716			70,357			72,073

Total Liabilities		2,448,747			437,856			2,886,603

STOCKHOLDERS’ DEFICIT

Preferred Stock, $0.0001 par value; 20,000,000 shares authorized; none outstanding as of December 31, 2020 and 2019		-						-
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 27,085,029 and 26,738,362 shares issued and outstanding as of December 31, 2020 and 2019, respectively		2,703			(29	)		2,674
Additional paid-in capital		914,606			(214,971	)		699,635
ACCUMULATED DEFICIT		(907,000	)		(100,000	)		(1,007,000	)
Total Stockholders’ Deficit		10,309			(315,000	)		(304,691	)

Total Liabilities and Stockholders’ Deficit	$	2,459,056		$	122,856		$	2,581,912

The accompanying notes are an integral part of these financial statements

F-18

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

F-19

Veroni Brands Corp.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

December 31, 2020 and 2019

											Additional						Total
	Preferred Stock				Common Stock						Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount			Capital			Deficit			Deficit

Balance, December 31, 2018		-		-		26,568,400		$	2,656		$	409,683		$	(306,187	)	$	106,152

Issuance of common stock for services		-		-		29,997			3			22,494						22,497

Issuance of common stock for cash		-		-		203,000			21			152,229			-			152,250

Issuance of common stock, in lieu of interest		-		-		186,965			18			140,205			-			140,223

Conversion of promissary note to common stock		-		-		286,667			29			214,971						215,000

Redemption and cancellation of shares		-		-		(125,000	)		(12	)		(24,988	)					(25,000	)

Cancellation of shares		-		-		(125,000	)		(12	)		12						-

Net Loss for the year		-		-		-			-			-			(700,813	)		(700,813	)

Balance, December 31 2019 (Original)		-		-		27,025,029			2,703			914,606			(1,007,000	)		(89,691	)

Reverse conversion of promissory note to common stock		-		-		(286,667	)		(29	)		(214,971	)		-			(215,000	)

Balance, December 31, 2020 (Restated)		-	$	-		26,738,362		$	2,674		$	699,635		$	(1,007,000	)	$	(304,691	)

The accompanying notes are an integral part of these financial statements

F-20

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

F-21

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.

F-22

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

~~None~~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.

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, ~~2019~~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, ~~2019~~ 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, ~~2019~~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~~ 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, ~~2019~~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, ~~2019~~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, ~~2019~~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.

Item 9B.

Other Information.

None.

PART III

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		2017

Igor Gabal, age 4546, 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 we believe that during the fiscal year ended December 31, ~~2019~~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.

Item 11.

Executive Compensation.

ToThe ~~date,~~following ~~the~~table ~~Company~~summarizes ~~has~~all ~~paid $31,250 in~~ compensation torecorded ~~its~~by ~~sole~~us ~~executive officer and director. The Company may choose to pay a salary or fees to its executive management~~ in the ~~future.~~past ~~There~~two ~~have~~fiscal ~~been~~years nofor ~~changes~~our inprincipal ~~the~~executive ~~Company’s~~officer, ~~compensation~~who ~~policy~~is our ~~since~~sole ~~the~~executive ~~end~~officer, ofduring the ~~Company’s last~~ fiscal ~~year,~~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,

2020

90,000

361,828

—

451,828

Chief Executive Officer

2019

31,250

—

31,250

Narrative Disclosure to Summary Compensation Table

~~There~~The ~~are~~Company noentered ~~current~~into an employment ~~agreements~~agreement ~~between~~with Igor Gabal dated January 2, 2019. The agreement specifies a minimum annual base salary of $35,000 for the ~~Company~~first year and ~~its~~450,000 ~~executive~~shares ~~officers~~of common stock for each of the first two years of his employment. The ~~compensation~~shares ~~discussed~~are ~~herein~~to be ~~addresses~~issued within 30 days following his second year of employment. For the second year of his employment, the minimum base salary is $90,000 ~~all~~plus ~~compensation~~monthly ~~awarded~~$25,000 bonuses. For the third through fifth years of employment, Mr. Gabal’s minimum annual base salary increases to $450,000 ~~earned~~and byhe is to receive 270,000 orshares ~~paid~~of common stock per year. The agreement also grants piggy back registration rights with regard to ~~our~~the ~~named~~shares ~~executive~~issued ~~officers~~as compensation. ~~There~~In ~~are~~the noevent of termination for any reason other ~~stock~~than ~~option~~cause ~~plans,~~or ~~retirement~~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 ~~pension~~in any prior full year of employment, orunused ~~profit~~accrued ~~sharing~~vacation ~~plans~~time and reimbursement for any legitimate Company expenses. In the ~~benefit~~event of a change of ~~our~~control ~~officers~~event, Mr. Gabal is to receive payment equal to one and ~~directors~~a ~~other~~half ~~than~~times ashis ~~described~~highest ~~herein~~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, ~~2019~~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~~ 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 atas of December 31, ~~2019~~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.

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 ~~April~~August 1026, ~~2020~~2021 by each person ~~who~~ 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	%

Name and Address of Beneficial Owners (1)		Amount and Nature of Beneficial Ownership		Percent of Class for Vote (2)
(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.
Tomasz Kotas (3)			12,788,399		47.2	%
(2)	Based on 27,112,028 shares of common stock outstanding as of 2021.
Igor Gabal (4)			12,100,000		44.7	%
(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.

(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 27,085,028 shares of common stock outstanding as of April 10, 2020.
(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.

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.

18On 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.

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, 2019, the Company owed $1,414,639 for advances on its receivables.19

The Company is currently purchasing all of its chocolate products from Millano Group, a related party (controlled by the father of ~~Tomasz~~ 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.

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, ~~2019~~2020 and ~~2018~~2019, were as follows:

	Year Ended December 31,
	2019		2018
	2020		2019
Audit fees (1)	$	4736,~~810~~500	$	3047,~~500~~810
Audit-related fees		-		-
Tax fees		-		-
All other fees		-		-
Total fees	$	4736,~~810~~500	$	3047,~~500~~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, ~~2019~~2020 and ~~2018~~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 ~~2019~~ 2020 and ~~2018~~2019 were pre-approved by the Board of Directors.

1920

PART IV

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)
16.1		Letter from KCCW Accountancy Corp. (6)
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, ~~2019~~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 ~~February~~January 2318, ~~2018~~2021, filed ~~February~~January 2627, ~~2018~~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.

Item 16.

Form 10-K Summary.

None.

2021

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VERONI BRANDS CORP.
Dated: April 14, 2020	By:	/s/ Igor Gabal
Dated: October 8, 2021	By:	/s/ Igor Gabal
		Igor Gabal, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Igor Gabal	Principal Executive, Financial and Accounting Officer and Director	~~April~~October 148, ~~2020~~2021
Igor Gabal

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