~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~To the Board of Directors and~~

~~Stockholders of Iconic Brands, Inc.~~

~~We have reviewed the consolidated balance sheets of Iconic Brands, Inc. (a development stage company) as of~~

ICONIC BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, ~~2013,~~2019 and the related consolidated statements of operations and cash flows for the three-month period then ended, and for the development stage period from January 1, 2011 to March 31, 2013. These consolidated financial statements are the responsibility of the company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Iconic Brands, Inc. as of December 31, 2012, and the related consolidated statements of operations, stockholders’ deficiency, and cash flows for the year then ended (not presented herein); and in our report dated May 17, 2013, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2012, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

The accompanying consolidated financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 2 of the consolidated financial statements, the company has limited operations and resources, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~ZBS Group, LLP~~

~~Melville, NY~~

~~June 10, 2013~~

~~115 Broad Hollow Road, Suite 350 Melville, New York 11747~~

~~Tel: (516) 394-3344 Fax: (516) 908-7867~~

~~www.zbscpas.com~~

2018

CONTENTS

~~Iconic Brands, Inc. and Subsidiary~~
FINANCIAL STATEMENTS
Page(s)
~~(a development stage company)~~
Consolidated Balance Sheets

March 31, December 31,
2013 2012
(Unaudited)
Assets

Current assets:
Cash and cash equivalents $ - $ -
Current assets of discontinued operations (see Note 8) - -

Total current assets - -

Total assets $ - $ -

Liabilities and Stockholders' Deficiency

Current liabilities:
Current portion of debt $ 259,304 $ 294,040
Accounts payable 91,637 92,009
Accrued interest on Iconic Brands, Inc. debt 30,379 77,233
Current liabilities of discontinued operations (see Note 8) - 3,690,823

Total current liabilities 381,320 4,154,105

Long term debt - 71,869

Long term debt of discontinued operations (see Note 8) - 1,477,338

Series B preferred stock, $2.00 per share stated value; designated 1,000,000 shares,
issued and outstanding 916,603 and 916,603 shares, respectively 1,833,206 1,833,206

Total liabilities 2,214,526 7,536,518

Stockholders' deficiency:
Preferred stock, $.00001 par value; authorized 100,000,000 shares,
Series A, designated 1 share, issued and outstanding 1 and 1 shares, respectively 1 1
Common stock, $.00001 par value; authorized 100,000,000 shares,
issued and committed to be issued and outstanding 54,361,412 and 54,361,412 shares, respectively 544 544
Additional paid-in capital 8,955,666 8,955,666
Accumulated deficit prior to development stage period (16,124,330 ) (16,124,330 )
Retained earnings (accumulated losses) during the development stage period January 1, 2011 to March 31, 2013 4,953,593 (368,399 )

Total stockholders' deficiency (2,214,526 ) (7,536,518 )

Total liabilities and stockholders' deficiency $ - $ -

~~Iconic Brands, Inc.~~ as of March 31, 2019 and ~~Subsidiary~~December 31, 2018		F-1
~~(a development stage company)~~
Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018	F-2
~~(Unaudited)~~

Three Months Ended
March 31,

Development Stage
Period January 1, 2011
to March 31,

2013 2012 2013

Sales $ - $ - $ -

Expenses:
   Professional fees 21,500 - 99,620
   Other general and administrative expenses (including stock-based compensation of $0, $4,535 and $36,282, respectively) - 2,881 42,629
   Interest expense on Iconic Brands, Inc. debt (including amortization of debt discounts of $3,490, $4,122 and $36,466, respectively) 10,009 11,509 101,514

   Total expenses 31,509 14,390 243,763

   Loss from continuing operations (31,509 ) (14,390 ) (243,763 )

Income (loss) from discontinued operations (see Note 8) 5,353,501 (19,746 ) 5,197,356

Net income (loss) $ 5,321,992 $ (34,136 ) $ 4,953,593

Basic income (loss) per common share:
   Continuing operations $ (0.00 ) $ (0.00 )
   Discontinued operations 0.10 (0.00 )
   Total $ 0.10 $ (0.00 )

Diluted income (loss) per common share:
   Continuing operations $ (0.00 ) $ (0.00 )
   Discontinued operations 0.00 (0.00 )
   Total $ 0.00 $ (0.00 )

Weighted average number of common shares outstanding:
    Basic 54,361,412 54,361,412
    Diluted 13,126,483,801 54,361,412

~~Iconic Brands, Inc. and Subsidiary~~
~~(a development stage company)~~
Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018		F-3
~~(Unaudited)~~
Notes to Consolidated Financial Statements	F-4 to F-18

Three Months Ended
March 31,

Development Stage
Period January 1, 2011
to March 31,

2013 2012 2013

Cash flows from operating activities
Net income (loss) $ 5,321,992 $ (34,136 ) $ 4,953,593
Loss (income) from discontinued operations (5,353,501 ) 19,746 (5,197,356 )
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discounts charged to interest expense 3,490 4,122 36,466
Stock -based compensation - 4,535 36,282
Legal, audit and accounting, and consulting fees paid by two lenders on behalf of the Company 6,872 - 81,162
Changes in operating assets and liabilities:
Accounts payable (372 ) (1,654 ) 8,796
Accrued expenses and other current liabilities 6,519 7,387 65,048
Net cash used in operating activities - continuing operations (15,000 ) - (16,009 )
Net cash provided by operating activities - discontinued operations - - 784
Net cash used in operating activities (15,000 ) - (15,225 )

Cash flows from investing activities
Loans from continuing operations to discontinued operations - - -
Net cash provided by (used in) investing activities - continuing operations - - -
Net cash provided by (used in) investing activities - discontinued operations - - -
Net cash provided by (used in) investing activities - - -

Cash flows from financing activities:
Increases in debt 15,000 - 15,000
Repayment of debt - - -
Net cash provided by (used in) financing activities - continuing operations 15,000 - 15,000
Net cash provided by (used in) financing activities - discontinued operations - - -
Net cash provided by (used in) financing activities 15,000 - 15,000

Decrease in cash and cash equivalents - - (225 )
Cash and cash equivalents, beginning of period - - 225
Cash and cash equivalents, end of period - - -
Less cash and cash equivalents of discontinued operations at end of period - - -
Cash and cash equivalents of continuing operations at end of period $ - $ - $ -

Supplemental disclosures of cash flow information:

Interest paid $ - $ - $ -

Income taxes paid $ - $ - $ -

Non-cash, operating, investing and financing activities:

Legal, audit and accounting, and consulting fees paid by two lenders on behalf of the Company $ 6,872 $ - $ 81,162
Shares of common stock issued to noteholders in satisfaction of debt and accrued interest $ - $ - $ 3,500

4
Table of Contents

Iconic Brands, Inc. and ~~Subsidiary~~

~~(a development stage company)~~

Subsidiaries

Consolidated Balance Sheets

March 31,

December 31,

2019

2018

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$ 162,517

$ 191,463

Accounts receivable

103,940

113,506

Inventory

216,502

258,270

Total current assets

482,959

563,239

Right-of-use asset

89,673

-

Total assets

$ 572,632

$ 563,239

Liabilities and Stockholders' Deficiency

Current liabilities:

Current portion of operating lease liability

$ 46,879

$ -

Accounts payable and accrued expenses

1,531,972

1,311,475

Loans payable to officer and affiliated entity-noninterest bearing and due on demand

28,091

28,091

Note payable to consultant due December 31, 2019 (Note 10)

50,000

-

Total current liabilities

1,656,942

1,339,566

Non-current portion of operating lease liability

42,794

-

Derivative liability on warrants

-

2,261,039

Total liabilities

1,699,736

3,600,605

Commitments and contingencies (Note 12)

Stockholders' deficiency:

Preferred stock, $.001 par value; authorized 100,000,000 shares:

Series A, 1 and 1 share issued and outstanding, respectively

1

1

Series C, 0 and 1,000 shares issued and outstanding, respectively

-

1

Series D, 0 and 10 shares issued and outstanding, respectively

-

-

Series E, 7,965,514 and 6,602,994 shares issued and outstanding, respectively

7,966

6,603

Common stock, $.001 par value; authorized 2,000,000,000 shares, 8,244,515 and 5,440,312 shares issued and outstanding respectively

8,244

5,440

Common stock to be issued to Escrow Agent, $.001 par value; 0 and 534,203 shares, respectively

-

534

Additional paid-in capital

19,426,135

18,798,438

Accumulated deficit

(19,644,453 )

(21,233,083 )

Total Iconic Brands, Inc. stockholders’ deficiency

(202,107 )

(2,422,066 )

Noncontrolling interests in subsidiaries and variable interest

(924,997 )

(615,300 )

Total stockholders' deficiency

(1,127,104 )

(3,037,366 )

Total liabilities and stockholders' deficiency

$ 572,632

$ 563,239

See notes to consolidated financial statements.

F-1
Table of Contents

Iconic Brands, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

Three Months
Ended
March 31,
2019

Three Months
Ended
March 31,
2018

Sales

$ 121,913

$ 61,719

Cost of Sales

81,435

37,409

Gross profit

40,478

24,310

Operating expenses:

Officers compensation

185,750

-

Professional and consulting fees

448,519

12,286

Royalties

75,188

6,590

Special promotion program with customer

-

597,138

Marketing and advertising

46,467

59,315

Occupancy costs

27,623

43,798

Travel and entertainment

64,269

40,315

Other

175,026

30,252

Total operating expenses

1,022,842

789,694

Income (loss) from operations

(982,364 )

(765,384 )

Other income (expense):

Income (expense) from derivative liability

-

827,197

Interest expense

-

(9,421 )
Amortization of debt discounts

-

(51,656 )
Other income

-

1,119

Total other income (expense) - net

-

767,239

Net income (loss)

(982,364 )

1,855

Net loss (income) attributable to noncontrolling interests in subsidiaries and variable interest entity

309,697

347,747

Net income (loss) attributable to Iconic Brands, Inc.

$ (672,667 )

$ 349,602

Net income (loss) per common share:

Basic and diluted

$ (0.10 )

$ 0.06

Weighted average common shares outstanding and to be issued to Escrow Agent:

Basic and diluted

6,159,404

6,331,457

See notes to consolidated financial statements.

F-2
Table of Contents

Iconic Brands, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended
March 31,

2019

2018

Operating Activities:

Net income (loss) attributable to Iconic Brands, Inc.

$ (672,667 )

$ 349,602

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income (loss) attributable to noncontrolling interests in subsidiaries and variable interest entity

(309,697 )

(347,747 )
Note payable to consultant issued February 7, 2019 and charged to consulting fees

50,000

-

Stock-based compensation

290,700

-

Expense (income) from derivative liability

-

(827,197 )
Amortization of debt discounts

-

51,656

Changes in operating assets and liabilities:

Accounts receivable

9,566

223,237

Inventory

41,768

4,741

Prepaid expenses

-

(96,275 )
Accounts payable and accrued expenses

220,754

(255,211 )
Accrued interest payable

-

9,421

Net cash used in operating activities

(369,576 )

(887,573 )

Financing Activities:

Proceeds from sale of Series E Preferred Stock and warrants

340,630

-

Loans payable to officer and affiliated entity

-

9,700

Net cash provided by financing activities

340,630

9,700

Increase (decrease) in cash and cash equivalents

(28,946 )

(877,873 )

Cash and cash equivalents, beginning of period

191,463

1,237,432

Cash and cash equivalents, end of period

$ 162,517

$ 359,559

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid

$ -

$ -

Interest paid

$ -

$ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of common stock to Escrow Agent in connection with Settlement Agreement and Amended Settlement Agreement

$ 534

$ 111,560

Issuance of common stock in exchange for surrender of Series C and Series D Preferred Stock

$ 2,000

$ -

See notes to consolidated financial statements

F-3
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2013~~

2019 and 2018

(Unaudited)

1. ORGANIZATION AND NATURE OF BUSINESS

Iconic Brands, Inc., formerly Paw Spa, Inc. (“Iconic Brands” or “Iconic”), was incorporated in the State of Nevada on October 21, 2005. ~~Our plan was~~Effective December 31, 2016, Iconic closed on a May 15, 2015 agreement to provide mobile grooming and spa services for cats and dogs. Our services were going to include bathing, hair cutting and styling, brushing/combing, flea and tick treatments, nail maintenance and beautification, ear cleaning, teeth cleaning, hot oil treatments, and massage. We did not have any business operations and failed to generate any revenues. We abandoned this business, as we lacked sufficient capital resources. On June 10, 2009, the Company acquired Harbrew Imports, Ltd.acquire a 51% interest in BiVi LLC (“~~Harbrew New York”~~BiVi”), a New York corporation incorporated on September 8, 1999 which was a wholly owned subsidiary of Harbrew Imports, Ltd. Corp. (“Harbrew Florida”), a Florida corporation incorporated on January 4, 2007. On the Closing Date, pursuant to the terms of the Merger Agreement, the Company issued to the designees of Harbrew New York 27,352,301 shares of our Common Stock at the Closing, or approximately 64% of the 42,510,301 shares outstanding subsequent to the merger. After the merger, Harbrew New York continued as the surviving company under the laws of the state of New York and became the wholly owned subsidiary of the Company.

In anticipation of the merger between Iconic Brands, Inc. and Harbrew New York, on May 1, 2009 the Board of Directors and a majority of shareholders of Harbrew New York approved the amendment of its Articles of Incorporation changing its name to Iconic Imports, Inc. (“Iconic Imports”). On June 22, 2009, this action was filed with the New York State Department of State.

Prior to the merger on June 10, 2009, Iconic Brands had no assets, liabilities, or business operations. Accordingly, the merger has been treated for accounting purposes as a recapitalization by the accounting acquirer Harbrew New York/Iconic Imports and the financial statements reflect the assets, liabilities, and operations of Harbrew New York/Iconic Imports from its inception on September 8, 1999 to June 10, 2009 and are combined with Iconic Brands thereafter. Iconic Brands and its wholly-owned subsidiary Harbrew New York/Iconic Imports are hereafter referred to as the “Company”.

~~The Company was a~~ brand owner of ~~self-developed alcoholic beverages. Furthermore,~~“BiVi 100 percent Sicilian Vodka,” and closed on a December 13, 2016 agreement to acquire a 51% interest in Bellissima Spirits LLC (“Bellissima”), the brand owner of Bellissima sparkling wines. These transactions involved entities under common control of the Company’s chief executive officer and represented a change in reporting entity. The financial statements of the Company ~~imported, marketed~~have been retrospectively adjusted to reflect the operations at BiVi and ~~sold these beverages throughout~~Bellissima from their inception.

BiVi was organized in Nevada on May 4, 2015. Bellissima was organized in Nevada on November 23, 2015.

Reverse Stock Split

Effective January 18, 2019, the ~~United States and globally.~~

~~Effective June 10, 2009, prior to the merger, Harbrew Florida affected~~Company effectuated a ~~1-for-1,000~~1 share for 250 shares reverse stock split ~~of its common stock, reducing~~which reduced the issued and outstanding shares of common stock at December 31, 2018 from ~~24,592,160~~1,359,941,153 shares to ~~24,909, which includes a total of 317 shares resulting from the rounding of fractional~~5,440,312 shares. ~~All share information has~~The accompanying financial statements have been ~~retroactively~~retrospectively adjusted to reflect this reverse stock split.

On August 20, 2010, the Company and Seven Cellos LLC terminated a License Agreement relating to the distribution of an alcoholic beverage known as “Danny DeVito’s Premium Limoncello”. In the year ended December 31, 2010, this brand accounted for approximately 96% of total sales.

On August 20, 2010, Capstone Capital Group I, LLC, a holder of a Promissory Note with a then remaining balance of approximately $233,000, delivered a Formal Notice of Default to the Company demanding payment of the balance on or before September 1, 2010. On September 16, 2010, Capstone delivered a Notification of Disposition of Collateral to the Company notifying the Company of its attachment of the Collateral (including cash, accounts receivable, inventories, equipment, and contract rights) and its intent to sell the Collateral to the highest qualified bidder in a public sale on September 28, 2010. On September 28, 2010, Capstone acquired the Collateral in exchange for the Promissory Note at the public auction sale; there were no other bidders.

On September 14, 2010, the Second District Court of Suffolk County New York issued a Warrant of Eviction removing the Company from its Lindenhurst, New York office and the Company ceased its business operations.

On September 23, 2011, Iconic Imports, Inc. (“Imports”), a wholly owned subsidiary of Iconic Brands, Inc., filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of New York. On March 28, 2013, the Company was advised by counsel that the case (Case No. 8-11-76814) was closed March 13, 2013 and that the claims scheduled were discharged. See Notes 6 and 8.

~~Iconic Brands, Inc. and Subsidiary~~

~~(a development stage company)~~

~~Notes to Consolidated Financial Statements~~

~~March 31, 2013~~

~~(Unaudited)~~

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) ~~Basis~~Principles of ~~Presentation~~

Consolidation

The consolidated financial statements include the accounts of Iconic, its two 51% owned subsidiaries BiVi and Bellissima, and United Spirits, Inc., a variable interest entity of Iconic (see Note 5) (collectively, the “Company”). All inter-company balances and transactions have been ~~prepared on a “going concern” basis, which contemplates the realization~~eliminated in consolidation.

(b) Use of ~~assets and liquidation~~Estimates

The preparation of liabilities in the normal course of business. However, as of March 31, 2013, the Company had negative working capital of $381,320 and a stockholders’ deficiency of $2,214,526. Further, from inception to March 31, 2013, the Company incurred losses of $11,170,737. These factors create substantial doubt as to the Company’s ability to continue as a going concern. The Company plans to improve its financial condition by reorganizing and acquiring a new business. However, there is no assurance that the Company will be successful in accomplishing this objective. The consolidated financial statements ~~do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.~~

~~(b) Interim Financial Statements~~

~~The unaudited financial statements as of March 31, 2013 and for the three months ended March 31, 2013 and 2012 have been prepared~~ in ~~accordance~~conformity with accounting principles generally accepted in the United States ~~for interim financial information~~requires management to make estimates and ~~with instructions to Form 10-Q. In~~assumptions that affect the ~~opinion~~reported amounts of ~~management,~~assets and liabilities and disclosure of contingent assets and liabilities at the ~~unaudited financial statements have been prepared on~~dates of the ~~same basis as the annual~~ financial statements and ~~reflect all adjustments necessary~~the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Generally accepted accounting principles require disclosing the fair value of financial instruments to ~~present fairly~~the extent practicable for financial instruments which are recognized or unrecognized in the balance sheet. The fair value of the financial ~~position as~~instruments disclosed herein is not necessarily representative of ~~March 31, 2013~~the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the ~~results of operations~~time. For certain instruments, including cash and cash ~~flows for~~equivalents, accounts receivable, accounts payable and accrued expenses, it was estimated that the ~~periods~~carrying amount approximated fair value because of the short maturities of these instruments. All debt is carried at face value less any unamortized debt discounts.

F-4
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2013~~2019 and ~~2012.~~ 2018

(Unaudited)

(d) Cash and Cash Equivalents

The Company considers all liquid investments purchased with original maturities of ninety days or less to be cash equivalents.

(e) Accounts Receivable, Net of Allowance for Doubtful Accounts

The Company extends unsecured credit to customers in the ordinary course of business but mitigates risk by performing credit checks and by actively pursuing past due accounts. The allowance for doubtful accounts is based on customer historical experience and the aging of the related accounts receivable. At March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $0.

(f) Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or market, with due consideration given to obsolescence and to slow moving items. Inventory at March 31, 2019 and December 31, 2018 consists of cases of BiVi Vodka and cases of Bellissima sparkling wines purchased from our Italian suppliers.

(g) Revenue Recognition

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) which establishes revenue recognition standards. ASU 2014-19 was effective for annual reporting periods beginning after December 15, 2017. We adopted ASU 2014-09 effective January 1, 2018. ASU 2014-09 has not had a significant effect on the Company’s financial ~~data~~position and ~~other information disclosed in these notes~~results of operations.

Revenue from product sales is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred. Persuasive evidence of an arrangement and fixed price criteria are satisfied through purchase orders. Collectability criteria are satisfied through credit approvals. Delivery criteria are satisfied when the products are shipped to a customer and title and risk of loss passes to the ~~interim financial~~customer in accordance with the terms of sale. The Company has no obligation to accept the return of products sold other than for replacement of damaged products. Other than quantity price discounts negotiated with customers prior to billing and delivery (which are reflected as a reduction in sales), the Company does not offer any sales incentives or other rebate arrangements to customers.

(h) Shipping and Handling Costs

Shipping and handling costs to deliver product to customers are reported as operating expenses in the accompanying statements ~~related~~of operations. Shipping and handling costs to ~~these periods~~purchase inventory are ~~unaudited. The results~~capitalized and expensed to cost of sales when revenue is recognized on the sale of product to customers.

F-5
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(Unaudited)

(i) Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation-Stock Compensation”. For the three months ended March 31, ~~2013~~2019 and 2018, stock-based compensation was $290,700 and $0, respectively.

(j) Income Taxes

Income taxes are ~~not necessarily indicative of~~accounted for under the results to be expected for any subsequent quarter of the entire year ending December 31, 2013. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date.

~~Certain information~~assets and ~~footnote disclosures normally included in financial statements prepared~~liability method. Current income taxes are provided in accordance with ~~accounting principles generally accepted~~the laws of the respective taxing authorities. Deferred income taxes are provided for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes theretoeffect for the year ~~ended December 31, 2012 included~~ in ~~our Form 10-K filed May 20, 2013.~~

~~(c)~~which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.

(k) Net Income (Loss) per Share

Basic net income (loss) per common share is computed on the basis of the weighted average number of common shares outstanding and to be issued to Escrow Agent (see Note 10) during the ~~period.~~

period of the financial statements.

Diluted net income (loss) per common share is computed on the basis of the weighted average number of common shares and to be issued to Escrow Agent (see Note 10) and dilutive securities (such as stock options, warrants, and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation.

~~The following table provides a reconciliation of the basic and diluted net income per common share computation for the three months ended March 31, 2013:~~

Numerator:
Net income – basic $ 5,321,992
Add: Interest expense on convertible notes 10,069
Net income – diluted $ 5,332,061

Denominator:
Weighted average shares outstanding – basic 54,361,412
6% convertible notes and accrued interest 3,533,200,000
12% convertible notes and accrued interest 9,487,000,000
Series B preferred stock owned by Capstone Capital Group I, LLC 50,922,389
Warrants 1,000,000
Weighted average shares outstanding - diluted 13,126,483,801

~~(d)~~

(l) Recently Issued Accounting Pronouncements

Effective January 1, 2019, we adopted ASU 2016-2 (Topic 842) which establishes a new lease accounting model for lessees. Under the new guidance, lessees are required to recognize right of use assets and liabilities for most leases having terms of 12 months or more. We adopted this new accounting guidance using the effective date transition method, which permits entities to apply the new lease standards using a modified retrospective transition approach at the date of adoption. As such, historical periods will continue to be measured and presented under the previous guidance while current and future periods are subject to this new accounting guidance. Upon adoption we recorded a $100,681 right-of-use asset related to our one operating lease (see Note 12 F) and a $100,681 lease liability.

On July 13, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance is effective for annual periods beginning after December 15, 2018; early adoption is permitted. Accordingly, effective January 1, 2019, the Company has reflected a $2,261,039 reduction of the derivative liability on warrants (see Note 9) and a $2,261,039 cumulative effect adjustment reduction of accumulated deficit.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

~~(e) Reclassifications~~

~~Certain prior year amounts have been reclassified to conform to the current year presentation.~~

F-6
Table of Contents

Iconic Brands, Inc. ~~and Subsidiary~~

~~(a development stage company)~~

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2013~~

2019 and 2018

(Unaudited)

~~3. DEBT~~

~~Debt~~

(m) Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has sustained significant net losses which have resulted in an accumulated deficit at March 31, 2019 of $19,644,453 and has experienced periodic cash flow difficulties, all of which raise substantial doubt regarding the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon obtaining additional working capital. The management of the Company has developed a strategy which it believes will accomplish this objective through additional equity investments which will enable the Company to continue operations for the coming year. However, there is no assurance that these objectives will be met. These financial statements do not include any adjustments relating to ~~continuing operations:~~

~~Debt relating~~the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from the outcome of this uncertainty.

3. INVESTMENT IN BIVI LLC

On May 15, 2015, Iconic entered into a Securities Exchange Agreement by and among the members of BiVi LLC, a Nevada limited liability company (“BiVi”), under which Iconic acquired a 51% majority interest in BiVi in exchange for the issuance of (a) 4,000 shares of restricted common stock and (b) 1,000 shares of newly created Series C Convertible Preferred Stock.

Prior to May 15, 2015, BiVi was beneficially owned and controlled by Richard DeCicco, the controlling shareholder, President, CEO and Director of Iconic Brands, Inc. ~~consisted~~

4. INVESTMENT IN BELLISSIMA SPIRITS LLC

On December 13, 2016, Iconic entered into a Securities Purchase Agreement with Bellissima Spirits LLC (“Bellissima”) and Bellissima’s members under which Iconic acquired a 51% Majority Interest in Bellissima in exchange for the issuance of ~~the following at March 31, 2013 and December 31, 2012:~~

March 31,
2013

December 31,
2012

Convertible promissory note, interest at 7%, due September 13, 2014, net of
unamortized discount of $0 and $28,131, respectively (A) $ - $ 71,869

Loans payable, interest at 0%, due on demand (C) 144,112 137,540

Convertible promissory note, interest at 6%, due June 30, 2010 (B) 30,000 30,000

Convertible promissory notes, interest at 12%, due June 30, 2010 (B) 70,000 70,000

Convertible promissory note, interest at 8% (default rate of 22%), due
February 7, 2011 (in default) (A) - 56,500

Convertible promissory note, interest at 9%, due January 31, 2014, net of
unamortized discount of $1,308 at March 31, 2013 (D) 15,192 -

Total 259,304 365,909

Less current portion of debt (259,304 ) (294,040 )

Long term debt $ - $ 71,869

~~(A) The $100,000 face value~~a total of ~~the 7% convertible note outstanding at December 31, 2012~~10 shares of newly designated Iconic Series D Convertible Preferred Stock. Each share of Iconic Series D Convertible Preferred Stock was convertible into the equivalent of 5.1% of Iconic common stock issued and outstanding at the time of conversion.

Prior to December 13, 2016, Bellissima was controlled by Richard DeCicco, the controlling shareholder, President, CEO and Director of Iconic.

F-7
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(Unaudited)

5. UNITED SPIRITS, INC.

United Spirits, Inc. (“United”) is owned and managed by Richard DeCicco, the controlling shareholder, President, CEO, and Director of Iconic. United provides distribution services for BiVi and Bellissima (see Note 12) and is considered a variable interest entity (“VIE”) of Iconic. Since Iconic has been determined to be the primary beneficiary of United, we have included United’s assets, liabilities, and operations in the accompanying consolidated financial statements of Iconic. Summarized financial information of United follows:

March 31,

December 31,

2019

2018

Balance Sheets:

Cash and cash equivalents

$ 43,506

$ 38,793

Intercompany receivable from Iconic (A)

129,932

204,461

Right-of-use asset

89,673

-

Total assets

$ 263,111

$ 243,254

Accounts payable and accrued expense

$ 148,199

$ 11,338

Loans payable to officer and affiliated entity

71,036

71,037

Intercompany payable to Bellissima (A)

283,817

335,257

Intercompany payable to BiVi (A)

54,322

56,854

Operating lease liability

89,673

-

Total Liabilities

647,047

474,487

Noncontrolling interest in VIE

(383,936 )

(231,333 )
Total liabilities and stockholders deficiency

$ 263,111

$ 243,254

	Three months ended March 31,
Statements of operations:	2019			2018

Intercompany distribution income (A)	$	2,075		$	1,119

Royalty expense		63,750			-
Officers compensation		82,000			-
Other operating expenses net		9,028			4,276
Total operating expenses		154,778			4,276
Net income (loss)	$	(152,703	)	$	(3,157	)

(A) Eliminated in consolidation

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	March 31, 2019		December 31, 2018
Accounts payable	$	167,451	$	175,405
Accrued officers compensation		915,000		811,250
Accrued royalties		249,684		174,985
Other		199,837		149,835
Total	$	1,531,972	$	1,311,475

F-8
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(Unaudited)

7. DEBT

Effective October 4, 2018, the remaining debt and accrued interest thereon was satisfied through (1) the issuance of a total of 2,077,994 shares of our Series E convertible preferred stock (which are convertible into a total of 831,198 shares of common stock) plus warrants to acquire 831,198 shares of our common stock (for $519,499 debt and accrued interest), (2) the ~~Company’s~~issuance of a total of 122,510 shares of our common stock (for $76,569 debt and accrued interest), and (3) cash (for $90,296 debt and accrued interest).

8. DERIVATIVE LIABILITY ON CONVERTIBLE DEBT

In September 2018, the Company entered into Securities Exchange Agreements and other agreements with holders of all convertible debt then outstanding to have such debt satisfied (which occurred effective October 4, 2018 – see Note 7). Accordingly, the Company reduced the then derivative liability from $255,294 at September 30, 2018 to $0.

9. DERIVATIVE LIABILITY ON WARRANTS

From September 2017 to November 2017, in connection with the sale of a total of 480,000 shares of common stock (see Note 10), the Company issued a total of 480,000 Common Stock Purchase Warrants (the “Warrants”) to the respective investors. The Warrants are exercisable into ICNB common stock at a price of $0.50 per share. The $56,500 face value of the 8% convertible note outstanding at December 31, 2012 was convertible into shares of the Company’s common stock at a variable conversion price equal to 60% of the Market Price, as defined. As a result of the discharge of the claims scheduled in the voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code on March 13, 2013 (see Notes 6 and 8), we have reversed this debt and recognized a gain from the United States Bankruptcy Court Discharge of Indebtedness (included in income from discontinued operations).

(B) These promissory notes were issued to the same entity lender on April 15, 2010. The notes provide that upon an event of default that is not cured within the allotted time, the holder shall have the option to convert the outstanding principal and interest into shares of common stock at a conversion price of $0.00001 per share. The Company has defaulted on all three notes and has failed to cure the defaults within the time allotted specified in the note default provisions.

While the Company has not received any notice or indication from the lender of its intention to convert the $100,000 debt (or a portion thereof), if the lender does elect to convert the $100,000 of debt and related accrued interest at March 31, 2013 at the $0.00001$2.50 per share, ~~conversion rate it would require~~expire five years from date of issuance, and contain “down round” price protection.

Effective May 21, 2018, in connection with the Company to issue 13,020,200,000 common shares to this lender (or over 99% of the 13,074,561,412 shares of Company Common Stock outstanding after this lender’s conversion). However, by virtue of his ownership of the 1 share of Series A Preferred Stock, Mr. DeCicco would retain voting control of the Company.

~~Also, the notes provided for the grant~~sale of a total of ~~1,200,000 warrants exercisable at an exercise price~~120,000 shares of $0.20 per share for 3 years. The $51,600 fair value of the warrants (valued using the Black-Scholes option pricing model and the following assumptions: stock price of $0.092 per share, exercise price of $0.20 per share, term of 3 years, risk-free interest rate of 1.62%Series E Preferred Stock (see Note 10), and expected volatility of 100%) and the remaining $45,400 intrinsic value of the beneficial conversion feature arising from the default provisions in the three promissory notes due to this lender described in the two preceding paragraphs (the total debt discounts are limited to the amount of proceeds allocated to the convertible instrument) were recorded initially as a debt discount and amortized as interest expense over the term of the notes ended June 30, 2010.

~~Iconic Brands, Inc. and Subsidiary~~

~~(a development stage company)~~

~~Notes to Consolidated Financial Statements~~

~~March 31, 2013~~

~~(Unaudited)~~

(C) For the periods presented, two entity lenders (one holding $134,112 of the 0% loans payable aggregating $144,112 and one holding $10,000 of the 0% loans payable aggregating $144,112, the $30,000 6% convertible promissory note and the $70,000 12% convertible promissory notes at March 31, 2013) paid legal, audit and accounting, and consulting fees on behalf of the Company as follows:

Three Months ended March 31, Year Ended December 31,
2013 2012 2011
Legal fees $ 2,500 $ 5,270 $ 27,500
Audit and accounting fees 2,500 7,500 17,500
Company’s stock transfer agent 1,872 10,432 -
Consulting fees - 2,038 4,050

Total $ 6,872 $ 25,240 $ 49,050

~~The amounts advanced bear no interest and are due on demand, but are not evidenced by a promissory note.~~

~~(D) On February 14, 2013,~~ the Company issued a Convertible Promissory Note in the amount of $15,000 in exchange for the lender's payment of legal and audit and accounting fees totaling $15,000 on behalf of the Company. The Note bears interest at 9%, is due January 31, 2014, and is convertible at the holder's option into Company common stock at a conversion price of $.02 per share (or a total of ~~750,000 shares of common stock). Additionally, in consideration for making this loan, the Company shall pay~~480,000 Warrants to the holder a Lender Fee equal to 10% of the original principal amount ($1,500) of this Note on the Maturity Date, which is also convertible at a conversion price of $.02 per share (or a total of 75,000 shares of common stock).

~~At March 31, 2013, the debt relating to Iconic Brands, Inc. is due as follows:~~

Past due $ 100,000
Year ending March 31, 2014 160,612

Total 260,612
Less debt discounts (1,308 )
Net $ 259,304

~~Accrued interest payable on debt relating to Iconic Brands, Inc. consisted of:~~

March 31,
2013

December 31,
2012

Convertible note, interest at 7% $ - $ 23,088
Convertible note, interest at 6% 5,332 4,889
Convertible notes, interest at 12% 24,877 22,805
Convertible note, interest at 8% (default rate of 22%) - 26,451
Convertible note, interest at 9% 170 -

Total $ 30,379 $ 77,233

~~Debt relating to discontinued operations:~~

~~Iconic Brands, Inc. and Subsidiary~~

~~(a development stage company)~~

~~Notes to Consolidated Financial Statements~~

~~March 31, 2013~~

~~(Unaudited)~~

~~Debt relating to the Company’s wholly-owned subsidiary Iconic Imports consisted of the following at March 31, 2013 and December 31, 2012:~~

March 31,
2013

December 31,
2012

Promissory note, interest at 20%, due January 29, 2009 (in default) $ - $ 100,000

Convertible promissory notes, interest at 10%, due October 25, 2007
to November 27, 2007 (in default) (A) - 75,000

Promissory notes, interest at 13%, due May 31, 2010 (in default) (B) - 220,000

Due Donald Chadwell (5% stockholder at December 31, 2012), interest at 0%,
no repayment terms - 763,000

Due Richard DeCicco (officer, director and 29% stockholder at December 31,
2012) and affiliates, interest at 0%, no repayment terms - 714,338

Convertible notes, interest at 7% (default rate of 14%), due August 27, 2012
to November 27, 2012 (in default) (A) - 150,000

Total - 2,022,338

Less current portion of debt - (545,000 )

Long term debt $ - $ 1,477,338

~~(A) $225,000 total face value of convertible notes outstanding at December 31, 2012 was convertible~~four investors. These warrants are exercisable into ~~shares of the Company’s~~ICNB common stock at a price of ~~$0.50~~$2.50 per ~~share.~~

~~(B)~~ share, expire five years from date of issuance, and contain “down round” price protection.

The 13% promissory notes specify that the loan proceeds were for the purpose of purchasing containers of Danny DeVito’s Premium Limoncello and that the holder would have been repaid the principal from the receivablesdown round provision of the ~~sales~~above Warrants requires a reduction in the exercise price if there are future issuances of common stock equivalents at a lower price than the $2.50 exercise price of the ~~Danny DeVito Premium Limoncello product~~Warrants. Accordingly, we recorded the $2,261,039 fair value of the Warrants at December 31, 2018 as ~~they were collected by~~a derivative liability. The $1,565,039 increase in the ~~Company.~~

fair value of the derivative liability from $696,000 at December 31, 2017 to $2,261,039 at December 31, 2018 was charged to expense from derivative liability.

Assumptions used to calculate the fair value of the Warrants at December 31, 2018 include (1) stock price of $0.95 per share, (2) exercise prices from $0.625 to $2.50 per share, (3) terms ranging from 2.25 years to 4.5 years, (4) expected volatility of 148%, and (5) risk free interest rates range from 2.46% to 2.51%.

Effective January 1, 2019 (see Note 2), the Company adopted ASU 2017-11 and reduced the $2,261,039 derivative liability on warrants at December 31, 2018 to $0 and recognized a $2,261,039 cummulative effect adjustment reduction of accumulated deficit.

F-9
Table of Contents

Iconic Brands, Inc. ~~and Subsidiary~~

~~(a development stage company)~~

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2013~~

2019 and 2018

(Unaudited)

~~Accrued interest payable on debt relating to Iconic Imports, Inc (included in current liabilities of discontinued operations in the accompanying consolidated balance sheets) consisted of:~~

March 31,
2013

December 31,
2012

Convertible note, interest at 7% $ - $ 69,877
Promissory note, interest at 20% - 70,080
Promissory notes, interest at 13% - 87,736
Convertible promissory notes, interest at 10% - 47,270

Total $ - $ 274,963

~~4. STOCKHOLDERS’ EQUITY~~

~~On June 10, 2009, pursuant to the terms of the Merger Agreement, the Company issued to the designees of Harbrew New York 27,352,301 shares of Common Stock at the Closing. Of this amount:~~

1)	~~24,909 shares were issued to Harbrew Florida stockholders,~~

2)	19,634,112 shares valued at $1,963,411 were issued to Company management and employees for services, including 15,972,359 shares to the Company’s Chief Executive Officer, 100,000 shares to the Company’s Chief Financial Officer, and 2,586,753 shares to Donald Chadwell,

3)	~~2,086,973 shares valued at $208,697 were issued to Danny DeVito and affiliates for services,~~

4)	~~4,606,307 shares were issued to noteholders in satisfaction of $2,125,625 of debt and $177,529 of accrued interest, and~~

5)	~~1,000,000 shares were issued to Capstone as part of the Termination Agreement.~~

~~Also, pursuant to the terms of the Merger Agreement, the Company issued 1 share of Series A~~

10. CAPITAL STOCK

Preferred Stock ~~valued at $100,000 to the Company’s Chief Executive Officer for services and 916,603 shares of Series B Preferred Stock valued at $1,833,206 to Capstone as part of the Termination Agreement.~~

The one share of Series A Preferred Stock, which was issued to Richard DeCicco on June 10, 2009, entitles the holder to two votes for every share of Common Stock Deemed Outstanding and has no conversion or dividend rights.

The 1000 shares of Series C Preferred Stock, which were issued to Richard DeCicco on May 15, 2015 pursuant to the Securities Exchange Agreement (see Note 3) for the Company’s 51% investment in BiVi, entitled the holder in the event of a Sale (as defined) to receive out of the proceeds of such Sale (in whatever form, be it cash, securities, or other assets), a distribution from the Company equal to 76.93% of all such proceeds received by the Company prior to any distribution of such proceeds to all other classes of equity securities, including any series of preferred stock designated subsequent to this Series C Preferred Stock. Effective March 27, 2019, pursuant to a Preferred Stock Exchange Agreement, Mr. DeCicco exchanged the 1000 shares of Series C Preferred Stock for 1,000,000 shares of Company common stock.

The 10 shares of Series D Preferred Stock, which were issued to Richard DeCicco and Roseann Faltings (5 shares each) on December 13, 2016 pursuant to the Securities Purchase Agreement (See Note 4) for the Company’s 51% investment in Bellissima, entitled the holders to convert each share of Series D Preferred Stock to the equivalent of 5.1% of the common stock issued and outstanding at the time of conversion. Effective March 27, 2019, pursuant to a Preferred Stock Exchange Agreement, Mr. DeCicco and Ms. Faltings exchanged the 10 shares of Series D Preferred Stock for 1,000,000 shares of Company common stock (500,000 shares each).

Effective May 21, 2018, the Company entered into a Share Purchase Agreement with the four investors who purchased 480,000 shares of common stock pursuant to a Securities Purchase Agreement dated October 27, 2017. The Exchange Agreement provided for the exchange of the 480,000 shares of common stock for 1,200,000 shares of Series E Preferred stock. Each share of ~~the~~ Series BE Preferred Stock ~~has a liquidation preference of $2.00 per share, has no voting rights, and~~ is convertible into ~~Common~~0.4 shares of common stock, is entitled to 0.4 votes on all matters to come before the common stockholders or shareholders generally, is entitled to dividends on an as-converted-to-common stock basis, is entitled to a distribution preference of $0.25 upon liquidation, and is not redeemable.

Also effective May 21, 2018, the Company sold a total of 1,200,000 shares of Series E Preferred Stock and 480,000 warrants to the four investors referred to in the preceding paragraph for $300,000 cash pursuant to an Amendment No. 1 to Securities Purchase Agreement.

Effective October 4, 2018, the Company closed on the first tranche of the Securities Purchase Agreement dated September 27, 2018 with nine (9) accredited investors for the sale of an aggregate of 4,650,000 shares of our Series E convertible preferred stock and warrants to acquire 1,860,000 shares of our common stock (at an exercise price of $1.25 per share for a period of five years) for gross proceeds of $1,162,500. The first tranche sale was for 1,550,000 shares of our Series E convertible preferred stock and warrants to acquire 620,000 shares of our common stock for gross proceeds of $387,500.

As a condition to the closing at the lower of (1) $2.00 per share or, (2) the volume weighted average price per share (“VWAP”) for the 20 trading days immediately prior to the Conversion Date. The Series B Preferred Stock has been classified as a liability (pursuant to ASC 480-10-25-14(a)) since it embodies a conditional obligation thatfirst tranche, the Company ~~may settle by issuing a variable number~~entered into Securities Exchange Agreements with holders of ~~equity~~convertible notes totaling $519,499 who exchanged their convertible notes for an aggregate of 2,077,994 shares of our Series E convertible preferred stock plus warrants to acquire 831,198 shares of our common stock. Also, holders of convertible notes totaling $76,569 exchanged their notes for an aggregate of 122,510 shares of our common stock and ~~the monetary value~~holders of ~~the obligation is based on a fixed monetary amount known at inception.~~

convertible notes totaling $90,296 were paid off with cash.

F-10
Table of Contents

Iconic Brands, Inc. ~~and Subsidiary~~

~~(a development stage company)~~

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2013~~

2019 and 2018

(Unaudited)

On ~~January~~November 30, 2018 and December 20, 2018, the Company received two payments of $71,875 and $71,875 respectively (totaling $143,750) in exchange for 287,500 and 287,500 shares of Series E Preferred Stock (totaling 575,000 shares) respectively at $0.25 per share. These payments represented advance payments in connection with the second tranche of the Securities Purchase Agreement dated September 27, 2018 which closed February 7, 2019.

Effective February 7, 2019, the Company closed on the second tranche of the Securities Purchase Agreement dated September 27, 2018. The Company received the remaining $243,750 (of the $387,500 total second tranche proceeds) and issued the investors the remaining total of 975,000 shares of Series E Preferred Stock (of the 1,550,000 total second tranche shares) and warrants to acquire 620,000 shares of our common stock.

On February 12, 2019 and March 18, ~~2011,~~2019, the Company received two payments of $71,880 and $25,000 respectively (totaling $96,880) in exchange for 287,520 and 100,000 shares of Series E Preferred Stock (totaling 387,520 shares) respectively at $0.25 per share. These payments represented advance payments in connection with the third tranche of the Securities Purchase Agreement dated September 27, 2018. The third tranche of 387,500 is expected to occur when certain closing conditions are satisfied.

Common Stock

On March 28, 2017, the Company executed a Settlement Agreement and Release (the “Settlement Agreement”) with 4 holders of convertible notes payable. Notes payable and accrued interest totaling $892,721 were satisfied through the Company’s agreement to irrevocably reserve a total of 1,931,707 shares of its common stock and to deliver such shares in separate tranches to the Escrow Agent upon receipt of a conversion notice delivered by the Escrow Agent to the Company.

On May 5, 2017, the Company executed an Amended Settlement Agreement and Release (the “Amended Settlement Agreement”) replacing the Settlement Agreement and Release dated March 28, 2017 (see preceding paragraph). The Amended Settlement Agreement is with 5 holders of convertible notes payable (the 4 holders who were parties to the Settlement Agreement and Release dated March 28, 2017 and one additional holder) and provided for the satisfaction of notes payable and accrued interest totaling $1,099,094 (a $206,373 increase from the $892,721 amount per the Settlement Agreement and Release dated March 28, 2017) through the Company’s agreement to irrevocably reserve a total of 2,452,000 shares of its common stock (a 520,293 shares increase from the 1,931,707 shares per the Settlement Agreement and Release dated March 28, 2017) and deliver such shares in separate tranches to the Escrow Agent upon receipt of a conversion notice delivered by the Escrow Agent to the Company.

In the quarterly period ended June 30, 2017, the Company issued ~~1,842,105~~an aggregate of 284,777 shares of ~~Iconic~~its common stock to ~~Asher Enterprises, Inc. (“Asher”)~~the Escrow Agent pursuant to ~~Asher’s Notice~~the Amended Settlement Agreement. In the quarterly period ended September 30, 2017, the Company issued an aggregate of ~~Conversion~~253,333 shares of its common stock to ~~convert $3,500 debt~~the Escrow Agent pursuant to the Amended Settlement Agreement.

From September 2017 to November 2017, pursuant to a Securities Purchase Agreement dated October 27, 2017 (the “SPA”), the Company issued a total of 480,000 shares of its common stock and 480,000 warrants to four investors for a total of $300,000 cash. The Warrants are exercisable into ICNB common stock at a price of ~~$0.0019~~$2.50 per share, ~~resulting~~expire five years from date of issuance, and contain “down round” price protection (see Note 9).

F-11
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(Unaudited)

On January 2, 2018, the Company issued 103,447 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On January 19, 2018, the Company issued 216,127 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On March 14, 2018, the Company issued 126,667 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On April 5, 2018, the Company issued 172,000 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On April 9, 2018, the Company issued 280,296 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On April 12, 2018, the Company issued 481,151 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On August 14, 2018, the Company issued 51,938 shares of its common stock in settlement of convertible notes payable and accrued interest payable totaling $32,461.

On September 7, 2018, the ~~reduction~~Company issued 70,572 shares of ~~debt due to Asher from $60,000 to $56,500.~~

Ofits common stock in settlement of convertible notes payable and accrued interest payable totaling $44,108.

Effective May 21, 2018, the ~~54,361,412~~Company entered into a Share Purchase Agreement with the four investors who purchased 480,000 shares of common stock pursuant to a Securities Purchase Agreement dated October 27, 2017. The Exchange Agreement provided for the exchange of the 480,000 shares of common stock for 1,200,000 shares of Series E Preferred stock. Each share of Series E Preferred Stock is convertible into 0.4 shares of common stock, is entitled to 0.4 votes on all matters to come before the common stockholders or shareholders generally, is entitled to dividends on an as-converted-to-common stock basis, is entitled to a distribution preference of $0.25 upon liquidation, and is not redeemable.

On January 16, 2019, the Company issued 436,125 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On January 24, 2019, the Company issued 98,078 shares of its common stock to the Escrow Agent pursuant to the Amended Settlement Agreement. This issuance completed the Company’s obligation to deliver shares of our common stock to the Escrow Agent.

On February 7, 2019, the Company agreed to issue 120,000 shares of its common stock (issued April 18, 2019) and ~~committed to be issued at March 31, 2013 and~~a $50,000 note payable due December 31, ~~2012, 4,806,350~~2019 to a former Bellissima consultant pursuant to a Settlement and Release Agreement. The $141,200 total fair value of the note ($50,000) and the 120,000 shares ~~were committed to be issued but not yet issued,~~of common stock ($91,200) was expensed as ~~follows:~~

	~~Number of Shares~~
April 19, 2010 satisfaction of $455,635 debt in exchange for Company commitment to issue to the respective 5 creditors a total of 4,556,350 shares of its common stock and 4,556,350 three year warrants exercisable at $0.20 per share		~~4,556,350~~

April 19, 2010 commitment to issue 250,000 shares of its common stock to a noteholder in consideration of the noteholder’s extension of the due date from March 31, 2010 to May 31, 2010 of a $110,000 promissory note		~~250,000~~

~~Total~~		~~4,806,350~~

~~5. INCOME TAXES~~

~~No provision for income taxes was recorded~~consulting fees in the three months ended March 31, ~~2013~~2019.

F-12
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and ~~2012~~2018

(Unaudited)

On March 15, 2019, the Company agreed to issue 150,000 shares of its common stock (issued April 8, 2019) to a consulting firm entity pursuant to a Business Development Agreement. The $199,500 fair value of the 150,000 shares of common stock was expensed as consulting fees in the three months ended March 31, 2019.

On March 27, 2019, the Company issued 1,000,000 shares of its common stock to Chief Executive Officer Richard DeCicco in exchange for the surrender of the 1,000 shares of Series C Preferred Stock owned by Mr. DeCicco.

On March 27, 2019, the Company issued a total of 1,000,000 shares of its common stock (500,000 shares to Chief Executive Officer Richard DeCicco; 500,000 shares to Vice President Roseann Faltings) in exchange for the surrender of the 5 shares each of Series D Preferred Stock owned by Mr. DeCicco and Ms. Faltings.

Warrants

A summary of warrants activity for the period January 1, 2017 to March 31, 2019 follows:

Common shares Equivalent
Balance, January 1, 2017
-
Issued in year ended December 31, 2017
534,000
Balance, December 31, 2017
534,000
Issued in year ended December 31, 2018
2,361,198
Balance, December 31, 2018
2,895,198
Issued in the three months ended March 31, 2019
620,000
Balance, March 31, 2019
3,515,198

Issued and outstanding warrants at March 31, 2019 consist of:

Year Granted	Number Common Shares Equivalent		Exercise Price Per Share		Consist of Expiration Date
2017		54,000	$	2.50	June 22, 2022 to June 30, 2022
2017		480,000	$	2.50	September 2022 to November 2022
2018		400,000	$	0.625	March 28, 2021
2018		30,000	$	2.50	May 21, 2023
2018		480,000	$	2.50	May 21, 2023
2018		831,198	$	1.25	September 20, 2023
2018		620,000	$	1.25	September 20, 2023
2019		620,000	$	1.25	February 7, 2024

Total		3,515,198

F-13
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(Unaudited)

In connection with the Company’s issuance of a total of $135,019 convertible notes payable in the three months ended June 30, 2017, the Company issued a total of 54,000 Common Stock Purchase Warrants (the ‘Warrants”) to the respective lenders. The Warrants are exercisable into ICNB common stock at a price of $2.50 per share and expire at dates ranging from June 22, 2022 to June 30, 2022.

As discussed in Note 9, the Company issued a total of 480,000 warrants to four investors from September 2017 to November 2017. The Warrants are exercisable into ICNB common stock at a price of $2.50 per share and expire five years from date of issuance.

Effective March 28, 2018, the Company issued 400,000 warrants to a lawyer for services rendered. The warrants are exercisable into ICNB common stock at a price of $0.625 per share and expire three years from date of issuance. The $250,000 fair value of the warrants was expensed in the three months ended June 30, 2018.

Effective May 21, 2018, the Company issued 30,000 warrants to a law firm for services rendered. The warrants are exercisable into ICNB common stock at a price of $2.50 per share and expire five years from date of issuance. The $23,250 fair value of the warrants was expensed in the three months ended June 30, 2018.

As discussed in Preferred Stock above, the Company issued a total of 480,000 warrants to four investors effective May 21, 2018 in connection with the sale of 1,200,000 shares of Series E Preferred stock for $300,000 cash. These warrants are exercisable into ICNB common stock at a price of $2.50 per share and expire five years from date of issuance.

Effective October 4, 2018, the remaining debt (see Note 7) and accrued interest thereon was satisfied through (1) the issuance of a total of 2,077,994 shares of our Series E convertible preferred stock (which are convertible into a total of 831,198 shares of common stock) plus warrants to acquire 831,198 shares of our common stock (for $519,499 debt and accrued interest), (2) the issuance of a total of 122,510 shares of our common stock (for $76,569 debt and accrued interest), and (3) cash (for $90,296 debt and accrued interest).

11. INCOME TAXES

No income taxes were recorded in the periods presented since the Company ~~incurred net~~had taxable losses in these periods.

F-14
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(Unaudited)

The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 21% for the periods presented to income (loss) before income taxes. The sources of the difference are as follows:

Three months ended
March 31,

2019

2018

Expected tax at 21%

$ (141,260 )

$ 73,416

Nondeductible stock-based compensation

61,047

-

Nondeductible expense (nontaxable income) from derivative liability

-

(173,711 )
Nondeductible amortization of debt discount

-

10,848

Increase (decrease) in valuation allowance

80,213

89,447

Income tax provision

$ -

$ -

Significant components of the Company's deferred income tax assets are as follows:

March 31,

December 31,

2019

2018

Net operating loss carryforward

$ 3,838,621

$ 3,758,408

Less valuation allowance

(3,838,621 )

(3,758,408 )

Deferred income tax assets - net

$ -

$ -

Based on management’s present assessment, the Company has not yet determined ~~it to be more likely than not~~ that a deferred tax asset attributable to the future utilization of the net operating loss carryforward as of March 31, ~~2013~~2019 will be realized. Accordingly, the Company has maintained a 100% valuation allowance against the deferred tax asset in the ~~consolidated~~ financial statements at March 31, ~~2013.~~2019. The Company will continue to review this valuation allowance and make adjustments as appropriate.

Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

All tax years remain subject to examination by major taxing jurisdictions.

F-15
Table of Contents

Iconic Brands, Inc. ~~and Subsidiary~~

~~(a development stage company)~~

Notes to Consolidated Financial Statements

~~March 31, 2013~~

~~(Unaudited)~~

~~The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:~~

March 31,
2013

March 31,
2012

Federal income tax benefit attributable to:
Net operating loss carryover $ 3,798,051 $ 5,556,669
Less: variation allowance $ 3,798,051 $ 5,556,669
Net provision for Federal income taxes $ 0 $ 0

The Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination resulting in an uncertain tax position. The Company did not have any material unrecognized tax benefit at March 31, 2013. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the year ended December 31, 2012, the Company recognized no interest and penalties.

The Company is subject to income tax in the U.S., and certain state jurisdictions. The Company has not been audited by the U.S. Internal Revenue Service, or any states in connection with income taxes. The periods from December 31, 2004 to December 31, 2012 remain open to examination by the U.S. Internal Revenue Service, and state authorities. In addition, federal and state tax authorities can generally reduce our net operating loss (but not create taxable income) for a period outside of the statue of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statue of limitations. The Company has not filed its 2011 tax return.

~~6. COMMITMENTS AND CONTINGENCIES~~

~~Litigation~~

The Company is party to a variety of legal proceedings brought by suppliers and creditors. We accrue for these items as losses become probable and can be reasonably estimated. Most of the amounts sought have already been provided for through previous charges to operations and were included in Company liabilities at December 31, 2012.

Most of the amounts sought relate to our subsidiary Iconic Imports, Inc. (“Imports”). We believe that those claims applicable to Imports have been discharged as a result of the closure of Imports’ Petition for Relief under Chapter 7 of the United States Bankruptcy Code on March 13, 2013 (see Notes 1 and 8). As a result, we have reversed those loss accruals (as well as all other liabilities) applicable to Imports (and recognized a Gain from United States Bankruptcy Court Discharge of Indebtedness of $5,366,639) in the three

Three months ended March 31, ~~2013.~~

2019 and 2018

(Unaudited)

12. COMMITMENTS AND CONTINGENCIES

a. Iconic ~~Brands,~~Guarantees

On May 26, 2015, BiVi LLC (“BiVi”) entered into a License Agreement with Neighborhood Licensing, LLC (the “BiVi Licensor”), an entity owned by Chazz Palminteri (“Palminteri”), to use Palminteri’s endorsement, signature and other intellectual property owned by the BiVi Licensor. Iconic has agreed to guarantee and acpt as surety for BiVi’s obligations under certain sections of the License Agreement and to indemnify the BiVi Licensor and Palminteri against third party claims.

On November 12, 2015, Bellissima Spirits LLC (“Bellissima”) entered into a License Agreement with Christie Brinkley, Inc. (the “Bellissima Licensor”), an entity owned by Christie Brinkley (“Brinkley”), to use Brinkley’s endorsement, signature, and ~~Subsidiary~~

(other intellectual property owned by the Bellissima Licensor. Iconic has agreed to guarantee and act as surety for Bellissima’s obligations under certain sections of the License Agreement and to indemnify the Bellissima Licensor and Brinkley against third party claims. Also, Brinkley was granted a ~~development stage company)~~

~~Notes~~24 month option to ~~Consolidated Financial Statements~~

~~March 31, 2013~~

~~(Unaudited)~~

~~7. STOCK OPTIONS AND WARRANTS~~

~~A summary~~purchase 1% of the outstanding shares of Iconic common stock ~~option~~on a fully diluted basis (as of the date of Brinkley’s exercise of the option) at an exercise price of $0.001 per share.

b. Royalty Obligations of BiVi and ~~warrant activity~~Bellissima

Pursuant to the License Agreement with the Bivi Licensor (see Note 12a. above), BiVi is obligated to pay the BiVi Licensor a Royalty Fee equal to 5% of monthly gross sales of BiVi Brand products payable monthly subject to an annual Minimum Royalty Fee of $100,000 in year 1, $150,000 in year 2, $165,000 in year 3, $181,500 in year 4, $199,650 in year 5, and $219,615 in year 6 and each subsequent year.

Pursuant to the License Agreement and Amendment No. 1 to the License Agreement effective June 30, 2017 with the Bellissima Licensor (see Note 12a. above), Bellissima is obligated to pay the Bellissima Licensor a Royalty Fee equal to 10% of monthly gross sales (12.5% for sales in excess of defined Case Break Points) of Bellissima Brand products payable monthly. The Bellissima Licensor has the ~~years ended~~right to terminate the endorsement if Bellissima fails to sell 10,000 cases of Bellissima Brand products in year 1, 15,000 cases in year 2, or 20,000 cases in year 3 and each subsequent year.

c. Brand Licensing Agreement relating to Hooters Marks

On July 23, 2018, United Spirits, Inc. (“United”) executed a Brand Licensing Agreement (the “Agreement”) with HI Limited Partnership (“the Licensor”). The Agreement provides United a license to use certain “Hooters” Marks to manufacture, market, distribute, and sell alcoholic products.

The Initial Term of the Agreement is from July 23, 2018 through December 31, ~~2011~~2020. Provided that United is not in breach of any terms of the Agreement, United may extend the Term for an additional 3 years through December 31, 2023.

The Agreement provides for United’s payment of Royalty Fees (payable quarterly) to the Licensor equal to 6% of the net sales of the licensed products subject to a minimum royalty fee of $65,000 for Agreement year 1 (ending December 31, 2018), $255,000 for Agreement year 2, $315,000 for Agreement year 3 and ~~2012~~4, $360,000 for Agreement year 5, and $420,000 for Agreement year 6.

The Agreement also provided for United’s payment of an advance payment of $30,000 to the ~~three months ended March 31, 2013 follows:~~

Stock
Options Warrants

Outstanding at December 31, 2010 1,300,000 20,722,184

Granted and Issued - -
Exercised - -
Forfeited/expired/cancelled (300,000 ) (1,400,000 )

Outstanding at December 31, 2011 1,000,000 19,322,184

Granted and issued - -
Exercised - -
Forfeited/expired/cancelled - (5,162,500 )

Outstanding at December 31, 2012 1,000,000 14,159,684

Granted and issued - -
Exercised - -
Forfeited/expired/cancelled - (385,000 )

Outstanding at March 31, 2013 1,000,000 13,774,684

~~Stock options outstanding at March 31, 2013 consist of:~~

Date Number Number Exercise Expiration
Granted Outstanding Exercisable Price Date

January 1, 2008 1,000,000 - $ 0.10 (a) June 30, 2013

Total 1,000,000 -

~~(a) Estimated since exercise price is~~Licensor to be ~~determined based on future stock price.~~

credited towards royalty fees payable to Licensor. On September 6, 2018, the $30,000 advance payment was paid to the Licensor. The ~~aggregate intrinsic value~~Agreement also provides for United’s payment of a marketing contribution equal to 2% of the ~~1,000,000 fully vested stock options at March 31, 2013 is $0.~~

~~Iconic Brands, Inc. and Subsidiary~~

~~(a development stage company)~~

~~Notes to Consolidated Financial Statements~~

~~March 31, 2013~~

~~(Unaudited)~~

~~Warrants outstanding at March 31, 2013 consist of:~~

Date Number Number Exercise Expiration
Issued Outstanding Exercisable Price Date
June 10, 2008 27,500 27,500 $ 1.00 June 10, 2013
June 10, 2008 27,500 27,500 $ 1.50 June 10, 2013
June 10, 2008 25,000 25,000 $ 1.00 December 10, 2013
June 10, 2008 25,000 25,000 $ 1.50 December 10, 2013
June 11, 2008 30,000 30,000 $ 1.00 December 11, 2013
June 11, 2008 30,000 30,000 $ 1.50 December 11, 2013
July 2, 2008 110,000 110,000 $ 1.00 January 2, 2014
July 2, 2008 110,000 110,000 $ 1.50 January 2, 2014
July 23, 2008 50,000 50,000 $ 1.00 January 23, 2014
July 23, 2008 50,000 50,000 $ 1.50 January 23, 2014
August 11, 2008 1,000,000 1,000,000 $ 1.00 August 11, 2013
August 12, 2009 400,000 400,000 $ 1.00 August 12, 2014
August 12, 2009 533,334 533,334 $ 1.50 August 12, 2014
August 19, 2009 1,000,000 1,000,000 $ 0.01 August 19, 2014
August 19, 2009 1,000,000 1,000,000 $ 1.00 August 19, 2014
September 14, 2009 200,000 200,000 $ 1.00 September 14, 2014
September 14, 2009 200,000 200,000 $ 1.50 September 14, 2014
January 6, 2010 100,000 100,000 $ 0.22 January 6, 2015
January 13, 2010 100,000 100,000 $ 0.23 January 13, 2015
February 8, 2010 500,000 500,000 $ 1.00 February 8, 2015
February 8, 2010 500,000 500,000 $ 1.50 February 8, 2015
March 16, 2010 2,000,000 2,000,000 $ 0.25 March 16, 2015
April 15, 2010 1,200,000 1,200,000 $ 0.20 April 15, 2013
April 19, 2010 4,556,350 4,556,350 $ 0.20 April 19, 2013

Total 13,774,684 13,774,684

~~8. DISCONTINUED OPERATIONS~~

~~On September 14, 2010 (see Note 1), the Company ceased operations~~prior year’s net sales of the ~~Company’s wholly owned subsidiary Iconic Imports. Accordingly,~~Licensed Products. If United fails to spend the ~~assets and liabilities and operations of Iconic Imports, Inc. have been presented as discontinued operations~~required marketing contribution in any calendar year, the ~~accompanying consolidated financial statements for the periods presented.~~

~~Iconic Brands, Inc. and Subsidiary~~

~~(a development stage company)~~

~~Notes~~deficiency will be paid to ~~Consolidated Financial Statements~~

~~March 31, 2013~~

~~(Unaudited)~~

Licensor.

For the three months ended March 31, ~~2013 and 2012, income (loss) from discontinued operations consisted of:~~

2013 2012
Revenues $ - $ -

Cost of goods sold - -

Gross profit - -

Selling, general and administrative expenses - -

Operating income - -

Gain from United States Bankruptcy Court discharge of indebtedness 5,366,639 -

Interest expense (including amortization of debt discounts of $0 and $3,143, respectively) (13,138 ) (19,746 )

Income (loss) before income tax provision 5,353,501 (19,746 )

Income tax provision - -

Income (loss) from discontinued operations $ 5,353,501 $ (19,746 )

2019, royalties expense under this Agreement was $63,750 (equal to 25% of the year 2019 minimum royalty fee).

F-16
Table of Contents

Iconic Brands, Inc. ~~and Subsidiary~~

~~(a development stage company)~~

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2013~~

2019 and 2018

(Unaudited)

d. Distribution Agreement

On May 1, 2015, BiVi entered into a Distribution Agreement with United Spirits, Inc. (“United”) for United to distribute and wholesale BiVi’s product and to act as the licensed importer and wholesaler. The ~~assets~~Distribution Agreement provides United the exclusive right for a term of ten years to sell BiVi’s product for an agreed distribution fee equal to $1.00 per case of product sold. United is owned and ~~liabilities~~managed by Richard DeCicco, the controlling shareholder, President, CEO, and Director of Iconic.

In November 2015, Bellissima and United agreed to have United distribute and wholesale Bellissima’s Products under the same terms contained in the Distribution Agreement with BiVi described in the preceding paragraph.

e. Compensation Arrangements

Effective April 1, 2018, the Company executed Employment Agreements with its Chief Executive Officer Richard DeCicco (“DeCicco”) and its Vice President of Sales and Marketing Roseann Faltings (“Faltings”). Both agreements have a term of 24 months (to March 31, 2020). The DeCicco Employment Agreement provides for a base salary at the rate of $265,000 per annum and a compensation stock award of 300,000 shares of Iconic ~~Imports~~common stock issuable upon the effective date of the planned reverse stock split. The Faltings Employment Agreement provides for a base salary at the rate of $150,000 per annum and a compensation stock award of 100,000 shares of Iconic common stock issuable upon the effective date of the planned reverse stock split. For the year ended December 31, 2018, we accrued a total of $311,250 officers compensation pursuant to these two Employment Agreements. In 2018, the accrued compensation was allocated 50% to Iconic ($155,625), 40% to Bellissima ($124,500), and 10% to BiVi ($31,125). For the three months ended March 31, 2019, we accrued a total of $103,750 officers compensation pursuant to these two Employment Agreements which was allocated 50% to Iconic ($51,875), 40% to Bellissima ($41,500), and 10% to BiVi ($10,375).

Prior to April 1, 2018, the Company used the services of its chief executive officer Richard DeCicco and its assistant secretary Roseann Faltings under informal compensation arrangements (without any employment agreements).

As of March 31, 2019 and December 31, 2018, accrued officers compensation was $915,000 and $811,250, respectively.

f. Lease Agreement

On March 27, 2018, United Spirits, Inc. executed a lease extension for the Company’s office and warehouse space in North Amityville New York. The extension has a term of three years from February 1, 2018 to January 31, 2021 and provides for monthly rent of $4,478.

At March 31, 2019, the future minimum lease payments under this non-cancellable operating lease were:

Year ended December 31, 2019

40,302

Year ended December 31, 2020

53,736

Year ended December 31, 2021

4,478

Total

$ 98,516

The operating lease liability of $89,673 at March 31, ~~2013~~2019 as presented in the Consolidated Balance Sheet represents the discounted (at our 10% estimated incremental borrowing rate) value of the future lease payments of $98,516 at March 31, 2019.

g. Major customers.

For the three months ended March 31, 2019, five customers accounted for 18%, 17%, 15%, 14%, and ~~December~~11% of sales.

F-17
Table of Contents

Iconic Brands, Inc.

Notes to Consolidated Financial Statements

Three months ended March 31, ~~2012 consisted of:~~

2013 2012
Assets
Current assets $ - $ -

Total assets $ - $ -

Liabilities
Current portion of debt $ - $ 545,000
Accounts payable - 1,219,768
Accrued interest payable - 274,963
Other accrued expenses and other current liabilities - 1,651,092
Current liabilities - 3,690,823
Long – term debt - 1,477,338
Total liabilities - 5,168,161

Net liabilities $ - $ (5,168,161 )

On April 23, 2019, an investor converted 673,398 shares of Series E convertible preferred stock into 269,359 shares of Company common stock.

On May 8, 2019, Iconic executed a Warrant Exercise Agreement with four holders of Company warrants. The holders exercised a total of 960,000 warrants at an agreed price of $0.32 per share and paid the Company a total of $307,200. Pursuant to the Warrant Exercise Agreement, the holders were issued a total of 1,920,000 New Warrants which are exercisable into Company common stock at a price of $2.25 per share for a period of five years.

On May 9, 2019, Iconic entered into a Share Exchange Agreement (the “Agreement”) with Green Grow Farms, Inc. (“Green Grow”) and NY Farms Group Inc. (“NY Farms”). Pursuant to the Agreement, Iconic acquired a 51% equity interest in Green Grow in exchange for (i) cash consideration of $200,000, $50,000 of which was paid and the balance of which is payable within 30 days of Closing, and (ii) 2,000,000 shares of Company common stock. In addition, the Company has agreed to issue up to an additional 6,000,000 shares based upon gross revenues reached by Green Grow (at a rate of 120,000 shares per $1,000,000 of gross revenues up to a maximum of $50,000,000) within 36 months of the Closing.

Our cash on hand as of March 31, 2019 was $162,517. Based on our minimal sales and annualized monthly burn rate of approximately $146,000 per month, we will need to continue to fund operations by raising capital from the sale of our stock and debt financings.

We had net cash used in operating activities for the three months ended March 31, 2019 of $369,576, compared to $887,573 for the three months ended March 31, 2018. For the three months ended March 31, 2019, the net cash used in operating activities consisted primarily of our net loss of $672,667 plus a net loss attributable to our subsidiaries of $309,697, offset primarily by a change in stock-based compensation of $290,700 and accounts payable and accrued expenses of $220,754. For the three months ended March 31, 2018, the net cash used in operating activities consisted primarily of our net income of $349,602 plus a net loss attributable to our subsidiaries of $347,747, offset primarily by change in fair market value of derivative liabilities of $(827,197).

We had no investing activities for the three months ended March 31, 2019 or March 31, 2018.

Our net cash provided by financing activities for the three months ended March 31, 2019 was $340,630, compared to $9,700 for the three months ended March 31, 2018, which consisted of proceeds from the sale of our Series E preferred stock and warrants.

Except as set forth below or previously reported on a Current Report on Form 8-K, we had no unregistered sales of equity securities during the three month period ended March 31, 2019.

On January 18, 2019, we effected a 1-for-250 reverse stock split (the “Reverse Stock Split”). No fractional shares were issued, and no cash or other consideration was paid in connection with the Reverse Stock Split. Instead, the Company issued one whole share of the post-Reverse Stock Split common stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split. Accordingly, we issued 64 shares of common stock in the Reverse Stock Split to avoid the issuance of fractional shares.

On September 27, 2018, we entered into a Securities Purchase Agreement (the “2018 Agreement”) with certain investors to sell 4,650,000 shares of our Series E Convertible Preferred Stock and warrants to acquire 1,860,000 shares of common stock for up to an aggregate of $1,162,500. The 2018 Agreement is also subject to a Registration Rights Agreement, and except as set forth below, the 2018 Agreement and its corresponding Registration Rights Agreement contain the same material terms as the 2017 Agreement and its Registration Rights Agreement discussed above. Pursuant to the 2018 Agreement, this purchase and sale will occur in three closings. The first closing occurred on September 27, 2018, and we received an aggregate of $387,500 in exchange for 1,550,000 shares of Series E Preferred Stock and warrants to acquire 620,000 shares of common stock. The second closing occurred on January 29, 2019, and we received another $387,500 in exchange for 1,550,000 shares of Series E Preferred Stock and warrants to acquire 620,000 shares of common stock. The third closing, for the remaining $387,500 in exchange for 1,550,000 shares of Series E Preferred Stock and warrants to acquire 620,000 shares of common stock, will occur on or within five trading days of the date that a registration statement registering all the shares of common stock issuable upon conversion of the investors’ Series E Convertible Preferred shares and exercise of their warrants.

On January 16, 2019, we issued 436,125 shares of common stock to the Escrow Agent pursuant to the Amended Settlement Agreement.

On January 24, 2019, we issued 98,078 shares of common stock to the Escrow Agent pursuant to the Amended Settlement Agreement. This issuance completed our obligation to deliver shares of our common stock to the Escrow Agent.

On February 7, 2019, we agreed to issue 120,000 shares of our common stock (issued April 18, 2019) and a $50,000 note payable due December 31, 2019 to a former Bellissima consultant pursuant to a Settlement and Release Agreement.

On March 15, 2019, we agreed to issue 150,000 shares of our common stock (issued April 8, 2019) to a consulting firm entity pursuant to a Business Development Agreement.

On March 27, 2019, we issued 1,000,000 shares of our common stock to Chief Executive Officer Richard DeCicco in exchange for the surrender of the 1,000 shares of Series C Preferred Stock owned by Mr. DeCicco.

On March 27, 2019, we issued a total of 1,000,000 shares of our common stock (500,000 shares to Chief Executive Officer Richard DeCicco; 500,000 shares to Vice President Roseann Faltings) in exchange for the surrender of the 5 shares each of Series D Preferred Stock owned by Mr. DeCicco and Ms. Faltings.

All of the issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, there was no solicitation, and the investors were accredited or sophisticated.

Nevada		13-4362274
(State or other jurisdiction of ~~Incorporation~~ incorporation or organization)		~~IRS~~ (I.R.S. Employer Identification No.)

44 Seabro Avenue Amityville, NY		11701
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	o ¨	Accelerated filer	o ¨
Non-accelerated filer	o ¨	Smaller reporting company	x
(Do not check if a smaller reporting company)		Emerging growth company	x

PART I – FINANCIAL INFORMATION		~~Financial Statements~~			3
~~Item 2.~~
ITEM 1	Financial Statements		4

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		5	19
~~Item 3.~~
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk		11	21
~~Item 4.~~
ITEM 4	Controls and Procedures		11	21

PART II – ~~Other Information~~OTHER INFORMATION

~~Item 1.~~ ITEM 1	Legal Proceedings		12	22
~~Item 1A.~~	~~Risk Factors~~			22
~~Item 2.~~ ITEM 1A	Risk Factors		12

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds		12	22
~~Item 3.~~
ITEM 3	Defaults Upon Senior Securities		12	22

ITEM 4	Mine Safety Disclosures		13

ITEM 5	Other Information		13

ITEM 6	Exhibits		14


~~Item 4.~~ 2	~~Mine Safety Disclosures~~	22

~~Item 5.~~Table of Contents	~~Other Information~~	22

Exhibit No.		Description of Exhibits

3.1(1)		Articles of Incorporation of Iconic Brands, Inc.

3.2(1)		Bylaws of Iconic Brands, Inc., as amended

3.3(2)		Certificate of Designation of Series A Convertible Preferred Stock

3.4(2)		Certificate of Designation of Series B Convertible Preferred Stock

3.5(2)		Certificate of Designation of Series C Convertible Preferred Stock

3.6(2)		Certificate of Designation of Series D Convertible Preferred Stock

3.7(2)		Certificate of Designation of Series E Convertible Preferred Stock

101.INS		XBRL Instance Document

101.SCH		XBRL Schema Document

101.CAL		XBRL Calculation Linkbase Document

101.DEF		XBRL Definition Linkbase Document

101.LAB		XBRL Labels Linkbase Document

101.PRE		XBRL Presentation Linkbase Document

~~Nevada~~		~~13-4362274~~ ICONIC BRANDS, INC.
(Exact name of registrant as specified in its charter)

~~Iconic Brands, Inc. and Subsidiary~~ FINANCIAL STATEMENTS		Page(s)
~~(a development stage company)~~
Consolidated Balance Sheets

	March 31,			December 31,
	2013			2012
	(Unaudited)
Assets

Current assets:
Cash and cash equivalents	$	-		$	-
Current assets of discontinued operations (see Note 8)		-			-

Total current assets		-			-

Total assets	$	-		$	-

Liabilities and Stockholders' Deficiency

Current liabilities:
Current portion of debt	$	259,304		$	294,040
Accounts payable		91,637			92,009
Accrued interest on Iconic Brands, Inc. debt		30,379			77,233
Current liabilities of discontinued operations (see Note 8)		-			3,690,823

Total current liabilities		381,320			4,154,105

Long term debt		-			71,869

Long term debt of discontinued operations (see Note 8)		-			1,477,338

Series B preferred stock, $2.00 per share stated value; designated 1,000,000 shares,
issued and outstanding 916,603 and 916,603 shares, respectively		1,833,206			1,833,206

Total liabilities		2,214,526			7,536,518

Stockholders' deficiency:
Preferred stock, $.00001 par value; authorized 100,000,000 shares,
Series A, designated 1 share, issued and outstanding 1 and 1 shares, respectively		1			1
Common stock, $.00001 par value; authorized 100,000,000 shares,
issued and committed to be issued and outstanding 54,361,412 and 54,361,412 shares, respectively		544			544
Additional paid-in capital		8,955,666			8,955,666
Accumulated deficit prior to development stage period		(16,124,330	)		(16,124,330	)
Retained earnings (accumulated losses) during the development stage period January 1, 2011 to March 31, 2013		4,953,593			(368,399	)

Total stockholders' deficiency		(2,214,526	)		(7,536,518	)

Total liabilities and stockholders' deficiency	$	-		$	-

	Three Months Ended March 31,						Development Stage Period January 1, 2011 to March 31,
	2013			2012			2013

Sales	$	-		$	-		$	-

Expenses:
Professional fees		21,500			-			99,620
Other general and administrative expenses (including stock-based compensation of $0, $4,535 and $36,282, respectively)		-			2,881			42,629
Interest expense on Iconic Brands, Inc. debt (including amortization of debt discounts of $3,490, $4,122 and $36,466, respectively)		10,009			11,509			101,514

Total expenses		31,509			14,390			243,763

Loss from continuing operations		(31,509	)		(14,390	)		(243,763	)

Income (loss) from discontinued operations (see Note 8)		5,353,501			(19,746	)		5,197,356

Net income (loss)	$	5,321,992		$	(34,136	)	$	4,953,593

Basic income (loss) per common share:
Continuing operations	$	(0.00	)	$	(0.00	)
Discontinued operations		0.10			(0.00	)
Total	$	0.10		$	(0.00	)

Diluted income (loss) per common share:
Continuing operations	$	(0.00	)	$	(0.00	)
Discontinued operations		0.00			(0.00	)
Total	$	0.00		$	(0.00	)

Weighted average number of common shares outstanding:
Basic		54,361,412			54,361,412
Diluted		13,126,483,801			54,361,412

	Three Months Ended March 31, 2019			Three Months Ended March 31, 2018

Sales	$	121,913		$	61,719
Cost of Sales		81,435			37,409
Gross profit		40,478			24,310

Operating expenses:
Officers compensation		185,750			-
Professional and consulting fees		448,519			12,286
Royalties		75,188			6,590
Special promotion program with customer		-			597,138
Marketing and advertising		46,467			59,315
Occupancy costs		27,623			43,798
Travel and entertainment		64,269			40,315
Other		175,026			30,252

Total operating expenses		1,022,842			789,694

Income (loss) from operations		(982,364	)		(765,384	)

Other income (expense):
Income (expense) from derivative liability		-			827,197
Interest expense		-			(9,421	)
Amortization of debt discounts		-			(51,656	)
Other income		-			1,119

Total other income (expense) - net		-			767,239

Net income (loss)		(982,364	)		1,855

Net loss (income) attributable to noncontrolling interests in subsidiaries and variable interest entity		309,697			347,747

Net income (loss) attributable to Iconic Brands, Inc.	$	(672,667	)	$	349,602

Net income (loss) per common share:
Basic and diluted	$	(0.10	)	$	0.06

Weighted average common shares outstanding and to be issued to Escrow Agent:
Basic and diluted		6,159,404			6,331,457

Numerator:
Net income – basic	$	5,321,992
Add: Interest expense on convertible notes		10,069
Net income – diluted	$	5,332,061

Denominator:
Weighted average shares outstanding – basic		54,361,412
6% convertible notes and accrued interest		3,533,200,000
12% convertible notes and accrued interest		9,487,000,000
Series B preferred stock owned by Capstone Capital Group I, LLC		50,922,389
Warrants		1,000,000
Weighted average shares outstanding - diluted		13,126,483,801

		March 31, 2013			December 31, 2012

Convertible promissory note, interest at 7%, due September 13, 2014, net of
unamortized discount of $0 and $28,131, respectively	(A)	$	-		$	71,869

Loans payable, interest at 0%, due on demand	(C)		144,112			137,540

Convertible promissory note, interest at 6%, due June 30, 2010	(B)		30,000			30,000

Convertible promissory notes, interest at 12%, due June 30, 2010	(B)		70,000			70,000

Convertible promissory note, interest at 8% (default rate of 22%), due
February 7, 2011 (in default)	(A)		-			56,500

Convertible promissory note, interest at 9%, due January 31, 2014, net of
unamortized discount of $1,308 at March 31, 2013	(D)		15,192			-

Total			259,304			365,909

Less current portion of debt			(259,304	)		(294,040	)

Long term debt		$	-		$	71,869

	Three Months ended March 31,		Year Ended December 31,
	2013		2012		2011
Legal fees	$	2,500	$	5,270	$	27,500
Audit and accounting fees		2,500		7,500		17,500
Company’s stock transfer agent		1,872		10,432		-
Consulting fees		-		2,038		4,050

Total	$	6,872	$	25,240	$	49,050

Past due	$	100,000
Year ending March 31, 2014		160,612

Total		260,612
Less debt discounts		(1,308	)
Net	$	259,304

	March 31, 2013		December 31, 2012

Convertible note, interest at 7%	$	-	$	23,088
Convertible note, interest at 6%		5,332		4,889
Convertible notes, interest at 12%		24,877		22,805
Convertible note, interest at 8% (default rate of 22%)		-		26,451
Convertible note, interest at 9%		170		-

Total	$	30,379	$	77,233

	March 31, 2013		December 31, 2012

Promissory note, interest at 20%, due January 29, 2009 (in default)	$	-	$	100,000

Convertible promissory notes, interest at 10%, due October 25, 2007
to November 27, 2007 (in default) (A)		-		75,000

Promissory notes, interest at 13%, due May 31, 2010 (in default) (B)		-		220,000

Due Donald Chadwell (5% stockholder at December 31, 2012), interest at 0%,
no repayment terms		-		763,000

Due Richard DeCicco (officer, director and 29% stockholder at December 31,
2012) and affiliates, interest at 0%, no repayment terms		-		714,338

Convertible notes, interest at 7% (default rate of 14%), due August 27, 2012
to November 27, 2012 (in default) (A)		-		150,000

Total		-		2,022,338

Less current portion of debt		-		(545,000	)

Long term debt	$	-	$	1,477,338

	Common shares Equivalent

Balance, January 1, 2017		-
Issued in year ended December 31, 2017		534,000

Balance, December 31, 2017		534,000
Issued in year ended December 31, 2018		2,361,198

Balance, December 31, 2018		2,895,198
Issued in the three months ended March 31, 2019		620,000

Balance, March 31, 2019		3,515,198

	March 31, 2013		March 31, 2012
Federal income tax benefit attributable to:
Net operating loss carryover	$	3,798,051	$	5,556,669
Less: variation allowance	$	3,798,051	$	5,556,669
Net provision for Federal income taxes	$	0	$	0

	Stock
	Options			Warrants

Outstanding at December 31, 2010		1,300,000			20,722,184

Granted and Issued		-			-
Exercised		-			-
Forfeited/expired/cancelled		(300,000	)		(1,400,000	)

Outstanding at December 31, 2011		1,000,000			19,322,184

Granted and issued		-			-
Exercised		-			-
Forfeited/expired/cancelled		-			(5,162,500	)

Outstanding at December 31, 2012		1,000,000			14,159,684

Granted and issued		-			-
Exercised		-			-
Forfeited/expired/cancelled		-			(385,000	)

Outstanding at March 31, 2013		1,000,000			13,774,684

Date	Number		Number		Exercise		Expiration
Issued	Outstanding		Exercisable		Price		Date
June 10, 2008		27,500		27,500	$	1.00	June 10, 2013
June 10, 2008		27,500		27,500	$	1.50	June 10, 2013
June 10, 2008		25,000		25,000	$	1.00	December 10, 2013
June 10, 2008		25,000		25,000	$	1.50	December 10, 2013
June 11, 2008		30,000		30,000	$	1.00	December 11, 2013
June 11, 2008		30,000		30,000	$	1.50	December 11, 2013
July 2, 2008		110,000		110,000	$	1.00	January 2, 2014
July 2, 2008		110,000		110,000	$	1.50	January 2, 2014
July 23, 2008		50,000		50,000	$	1.00	January 23, 2014
July 23, 2008		50,000		50,000	$	1.50	January 23, 2014
August 11, 2008		1,000,000		1,000,000	$	1.00	August 11, 2013
August 12, 2009		400,000		400,000	$	1.00	August 12, 2014
August 12, 2009		533,334		533,334	$	1.50	August 12, 2014
August 19, 2009		1,000,000		1,000,000	$	0.01	August 19, 2014
August 19, 2009		1,000,000		1,000,000	$	1.00	August 19, 2014
September 14, 2009		200,000		200,000	$	1.00	September 14, 2014
September 14, 2009		200,000		200,000	$	1.50	September 14, 2014
January 6, 2010		100,000		100,000	$	0.22	January 6, 2015
January 13, 2010		100,000		100,000	$	0.23	January 13, 2015
February 8, 2010		500,000		500,000	$	1.00	February 8, 2015
February 8, 2010		500,000		500,000	$	1.50	February 8, 2015
March 16, 2010		2,000,000		2,000,000	$	0.25	March 16, 2015
April 15, 2010		1,200,000		1,200,000	$	0.20	April 15, 2013
April 19, 2010		4,556,350		4,556,350	$	0.20	April 19, 2013


Total		13,774,684		13,774,684

	2013			2012
Revenues	$	-		$	-

Cost of goods sold		-			-

Gross profit		-			-

Selling, general and administrative expenses		-			-

Operating income		-			-

Gain from United States Bankruptcy Court discharge of indebtedness		5,366,639			-

Interest expense (including amortization of debt discounts of $0 and $3,143, respectively)		(13,138	)		(19,746	)

Income (loss) before income tax provision		5,353,501			(19,746	)

Income tax provision		-			-

Income (loss) from discontinued operations	$	5,353,501		$	(19,746	)

Year ended December 31, 2019		40,302
Year ended December 31, 2020		53,736
Year ended December 31, 2021		4,478

Total	$	98,516

	Three Months			Three Months
	March 31,			March 31,
	2019			2018

Sales	$	121,913		$	61,719
Cost of sales		81,435			37,409
Gross profit		40,478			24,310

Operating expenses:
Officers compensation		185,750			-
Professional and consulting fees		448,519			12,286
Royalties		75,188			6,590
Special promotion program with customer		-			597,138
Marketing and advertising		46,467			59,315
Occupancy costs		27,623			43,798
Travel and entertainment		64,269			40,315
Other		175,026			30,252
Total operating expenses		1,022,842			789,694

Net operating income (loss)		(982,364	)		(765,384	)
Other income (expense), net		-			767,239

Net loss (income) attributable to noncontrolling interests in subsidiaries and variable interest entity		309,697			347,747

Net income (loss)	$	(672,667	)	$	349,602

(1)	Incorporated by reference to Form SB-2 filed on November 30, 2007.
(2)	Incorporated by reference to our Registration Statement on Form S-1 filed on September 19, 2018 (File No. 333-227420).


~~Description~~14

~~31.1~~		~~Rule 13a-14(a)/15d-14(a) Certifications~~Table of ~~Richard DeCicco, President, Principal Executive, Financial and Accounting Officer~~

~~32.1~~		~~Section 1350 Certifications of Richard DeCicco, President, Principal Executive, Financial and Accounting Officer~~ Contents

101.INS **		~~XBRL Instance Document~~

101.SCH **		~~XBRL Taxonomy Extension Schema Document~~

101.CAL **		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

101.DEF **		~~XBRL Taxonomy Extension Definition Linkbase Document~~

101.LAB **		~~XBRL Taxonomy Extension Label Linkbase Document~~

101.PRE **		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

	~~ICONIC BRANDS, INC.~~ Iconic Brands, Inc.

Dated: ~~June 10, 2013~~ May 20, 2019	By:	/s/ Richard J. DeCicco
	~~Name:~~	Richard J. DeCicco
	~~Title:~~ Its:	~~President (Principal~~ Chief Executive ~~Financial and Accounting Officer)~~Officer