Our Business

The Company operates in the consumer packaged goods industry and it is focused on the import, sale and distribution of premium chocolate and snack products produced in Europe. The Company also serves as a supplier of confectionery products for major U.S. retailers under private label brands. The Company has established itself as a vendor of record with national retail chains across the United States and other well-known international retailers allowing its products to be sold in thousands of stores in the United States.

Our goal is to develop multiple brands of consumer packaged goods and become one of the leading suppliers and distributors in the United States of premium chocolate, snacks and beverage products from Europe. Our wide range of premium chocolate, snacks and beverage items allowed us to establish strong relationships with national retail chains across the United States and international retailers.

The Company is also seeking opportunities to merge with emerging brand companies that established themselves and their respective brand portfolio of items and are in need to access our national distribution network. We believe that a potential merger would give Veroni much bigger presence within national retailers in the United States and add variety of other products that Veroni can sell to its retailers and wholesalers in the consumer package goods space.

Products

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



CHOCOLATE
  Bars
 5Bites
Truffles
 Sticks
 Candies
  Cups
 Gummies



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 bites.

The Company is also in the process of developing its own brand and line of products:

? The Company hired CA Fortune to analyze and develop the brand and create a

portfolio of new products. The Company's chocolate products are GMO free and

Kosher and Halal certified, and contain all natural ingredients with zero

trans-fat, no artificial flavors or colors.

? The Company is approved and licensed by Rainforest Alliance to sell its

chocolate products nationwide to its customers The Company believes that its

key competitive advantage is that it can provide premium chocolate products at

mainstream prices. The product is manufactured in Europe and imported via port

in Germany into a warehouse near port of New Jersey and from there its being

shipped across the country to its costumers' distribution centers.

? The Company handles the product design and development phases in-house, in

collaboration with leading product design and development teams who

traditionally serve major retailers in the United States.





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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 and coffee products.

Results of Operations

Three Months Ended March 31, 2022 Compared to March 31, 2021.

Revenues

Revenues for the three months ended March 31, 2022 were $148,664 as compared with $898,176 for the comparable prior year period, a change of $749,512, or 84.5%. In 2022, the Company's revenues were impacted by discontinue sales of private label Chocolate products. Therefore, the Company experience significant reduction in revenue in the three months ended March 31, 2022.

Cost of Sales

Cost of sales for the three months ended March 31, 2022 was $95,142 as compared with $630,051 for the comparable prior year period, a change of $534,909 or 84.9%. The decrease was primarily due to discontinue sales of private label Chocolate products.

Gross Profit

Gross profit for the three months ended March 31, 2022 was $53,522 as compared with $268,125 for the comparable prior year period, a change of $214,603 or 80%. The decrease was primarily due to discontinue sales of private label Chocolate products.

Operating Expenses

Operating expenses for the three months ended March 31, 2022 were $583,547 as compared with $353,005 for the comparable prior year period, a change of $230,542 or 65.3%. The increase was primarily due to the issuance of common stock for executive compensation.

Net Loss

Our net loss for the three months ended March 31, 2022 was $533,215 as compared with a net loss of $84,380 for the comparable prior year period, a change of $448,835 or 531.9%. The increase was primarily due to the issuance of common stock for executive compensation.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2022 was $563,035 as compared with a $293,217 for the comparable prior year period, a change of $269,818 or 92%. The increase was primarily due to the issuance of common stock for executive compensation.

Liquidity and Capital Resources

During the three months ended March 31, 2022, the Company's operating activities used net cash of $7,288, due primarily to the net loss of $486,595, increase in accounts payable related party of $0.00, and decrease in trade accounts receivable of $2,958 offset by decrease of $32,545 in contract receivables and $5,072 in inventory, and an decrease in accrued liabilities of $17,026. In comparison, the Company's operating activities used net cash of $187,641 during the comparable 2021 period, due primarily to the net loss of $84,380, decrease in accounts payable related party of $210,882, and increase in trade accounts receivable of $60,253, offset by decreases of $89,849 in contract receivables and $26,284 in inventory, and an increase in accrued liabilities of $30,089.

Net cash provided by financing activities was $(11,366), from proceeds of note payable - related party and repayment of contract receivables with recourse. For the comparable 2021 period, net cash provided by financing activities totaled $193,640, from the proceeds of the Company's contract receivables financing,



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The Company had a cash balance of $13 and a working capital deficit of $884,212 as of March 31, 2022, as compared to a cash balance of $4,091 and a working capital deficit of $759,088, as of December 31, 2021.

Under the Small Business Administration ("SBA"), the Company applied for the Paycheck Protection Program ("PPP") and received a loan from the SBA in the amount of $56,250 (the "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. On October 14, 2021 we received notice from the SBA that $38,550.50 of the balance of the PPP Loan has been forgiven. The Company has elected to record these advances under the debt treatment for these loans, under GAAP guidance. The remainder of the PPP Loan will accrue interest at 1% per annum and be paid in monthly payments of $3,003.05. As of March 31, 2022, a balance of $3,965 was outstanding under the PPP Loan.

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 $731. The balance of principal and interest is payable thirty years from the date of the EIDL Loan.

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 2022, 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 March 31, 2022, the Company has engaged in sales of its equity securities in private placements. Through March 31, 2022, 0 shares have been sold for total gross proceeds of $0.00, 900,000 shares have been issued for services rendered valued at $1,575,000, of which $393,750 is expensed in this quarter.

Plan of Operations

During 2022 and 2021, sales were concentrated in two customers. One of these customers notified the Company that they decided to terminate the private label program going forward. Sales in 2022 are expected to decrease by 63%. As vendor selection is an annual process with this customer, the Company is planning to reapply as a vendor for 2023 season and broaden its customer base. For the next few years, the Company will continue to focus on obtaining visibility for the products by contacting convenience store locations and small distributors to those types of locations. In addition, the Company will also continue to expand the number of products to be imported from Europe and distributed throughout the United States.

Management believes that while the current COVID-19 crisis has not affected the volume of sales, it has resulted in the Company experiencing supply chain and transportation logistics issues. Manufacturers and those providing shipping and logistics services are increasing prices and/or decreasing the amount of product and/or services to the Company, thereby making it more difficult to meet the terms of contracts with retailers. Management believes that for the current fiscal year, the Company will experience reduced profit margins as a result. It is not known whether the supply chain and transportation logistics issues will continue into the future.

There is no assurance that the Company's activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company's limited cash and cash equivalents on hand, the Company will be unable to implement its business plans and proposed operations unless it obtains additional financing or otherwise is able to generate revenues and profits. In 2019, the Company entered into a factoring agreement covering its accounts receivable (see below). The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans. In the near term, the Company plans to rely on its primary stockholders to continue to fund the Company's continuing operating requirements. The Company will require a minimum of $600,000 for the next 12 months to fund its operations, which will be used to fund expenses related to operations, office supplies, travel, salaries and other incidental expenses. Management believes that this capital would allow the Company to meet its operating cash requirements, and would facilitate the Company's business of selling and distributing its products. Management also believes that the acquisition of such assets would generate revenue to cover overhead cost and general liabilities of the Company, and allow the Company to achieve overall sustainable profitability.



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Due to the above-described difficulties, management is seeking other opportunities outside of the import/distribution business in order to bring value to the stockholders.

Accounts Receivable Financing

On February 21, 2019, the Company entered into a factoring agreement with an unrelated third party, Advance Business Capital LLC, dba Interstate Capital ("ICC"), pursuant to which the Company sells the majority of its accounts receivable to ICC for 85% of the value of the receivable. The term of the agreement is for 12 months and automatically renews for additional 12-month periods. The accounts receivable are sold with recourse back to the Company, meaning that the Company bears the risk of non-payment by the account debtor. To secure its obligations to ICC, the Company has granted a blanket security interest in its other assets, such as inventory, equipment, machinery, furniture, fixtures, contract rights, and general intangibles. The loan is guaranteed by two major shareholders of the Company. On September 11, 2019, the lender (which now does business as Triumph Business Capital) entered into an amended agreement with the Company which lowered the interest charged by the lender from 0.49% for every 10 days to prime rate (with a floor of 5.5%) plus 3%. On January 27, 2021, the agreement was further amended to include the factoring of purchase orders at the Wall Street Journal Prime Rate. As of March 31, 2022 and December 31, 2021, the Company owes $13,531 and $39,897, respectively for advances on their receivables.

Alternative Financial Planning

The Company has no alternative financial plans at the moment. If the Company is not able to successfully raise monies as needed through a private placement or other securities offering (including, but not limited to, a primary public offering of securities), the Company's ability to survive as a going concern and implement any part of its business plan or strategy will be severely jeopardized.

Critical Accounting Policies

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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