As filed with the Securities and Exchange Commission on October 19, 2015September 23, 2020

Registration No. 333-238999

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

AMENDMENT NO. 2 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

  

Hometown International, Inc.HOMETOWN INTERNATIONAL, INC.

(Exact nameName of registrantRegistrant as specifiedSpecified in itsIts Charter)

 

Nevada 5810 46-5705488
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)No.)

 

25 E. Grant Street

Woodstown, NJ 08098

Telephone: (856)759-9034

(Address, including zip code,Including Zip Code, and telephone number,

Telephone Number, Including area code,Area Code, of registrant’s principal executive offices)Registrant’s Principal Executive Offices)

 

VCorp Services, LLC

701 S. Carson Street

Carson City, Nevada 89701

Telephone: (888) 528-2677

c/o Hometown International, Inc.

1645 Village Center Circle, Suite 170

Las Vegas, Nevada 89134

(707) 525-9900

(Name, address, including zip code, and telephone number,

Including
including area code, of agent for service)

 

Copies of communications to:

Gregg E. Jaclin, Esq.

Szaferman, Lakind, Blumstein & Blader, PC

101 Grovers Mill Road, Suite 200

Lawrenceville, NJ 08648

Phone: 609-275-0400

Fax: 609-275-4511

 

Mark E. Crone, Esq.

Eric Mendelson, Esq.

The Crone Law Group, PC

500 Fifth Avenue, Suite 938

New York, NY 10110

Telephone: 646-861-7891

Approximate date of commencement of proposed sale to the public: from From time to time after the effective date of this registration statement, becomes effective.as determined by market and other conditions.

  

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering.¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.¨

 

If delivery of the prospectusthis Form is expected to be madea post-effective amendment filed pursuant to Rule 434, please462(c) under the Securities Act, check the following box.¨box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

  

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

 

Large accelerated filerfiler: ☐¨Accelerated filer: ☐
 Accelerated filer¨
Non-accelerated filer¨filer: ☐Smaller reporting companycompany: ☒
xEmerging Growth Company: ☒

 

CalculationIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Registration Feethe Securities Act ☐

 

Title of Each
Class Of
Securities to
be Registered
 Amount to
be
Registered (1)
  Proposed
Maximum
Offering
Price per
Share (2)
  Proposed
Maximum
Offering
Price
  Amount of
Registration
Fee
 
common stock, par value $0.0001 per share (the “Common Stock”)  

242,340

  $0.75   

181,755

   $

18.30

 
Common stock, par value $0.0001 per share, issuable pursuant to the exercise of warrants issued to the selling shareholders  

484,680

  $0.75   

363,510

  $

36.61

 
TOTAL  

727,020

       

545,265

   $

54.91

 

 

(1) This registration statement covers the resale by our selling shareholders of up to 242,340 shares of Common Stock and 484,680 shares of Common Stock underlying certain warrants previously issued to such selling shareholders.

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to Be Registered Amount
to be
Registered(1)
  Proposed Maximum Offering Price
Per Share(2)
  Proposed Maximum Aggregate Offering Price  Amount of Registration Fee (3) 
Common Stock, par value $0.0001 per share  2,783,637  $6.50  $18,093,640.50  $2,348.55 
Total  2,783,637          $2,348.55 

(2) The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o). Our Common Stock is not traded on any national exchange and in accordance with Rule 457; the offering price was determined by the price of the shares that were sold to our shareholders in a private placement memorandum. As of the date of this registration statement, we plan to engage with a market maker to file an application with the Financial Industry Regulatory Authority (“FINRA”) to have our Common Stock quoted on OTCQB. However, there can be no assurance that the application for quotation will be approved by FINRA.

(1)Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), there are also being registered hereby an additional indeterminate number of shares of the Registrant’s Common Stock, $0.0001 par value (the “Common Stock”) as may become issuable to the selling stockholders as a result of stock splits, stock dividends and similar transactions, and, in any such event, the number of shares registered hereby shall be automatically increased to cover the additional shares.
(2)Estimated in accordance with Rule 457(c) under the Securities Act solely for the purpose of calculating the registration fee.
(3)The registration fee was previously paid by the Registrant in connection with the filing of its Registration Statement on Form S-1 on June 8, 2020.

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SUCHSAID SECTION 8(a), MAY DETERMINE.

 

 

 

The information in this preliminary prospectus is not complete and may be changed. WeThese securities may not sell these securitiesbe sold until the registration statement filed with the Securities and Exchange Commission (the “SEC”) becomesis effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offersnor does it seek an offer to buy these securities in any statejurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUSSUBJECT TO COMPLETION ON ____________

Subject to completion. Dated ____ __, 2020.

PRELIMINARY PROSPECTUS

 

HOMETOWN INTERNATIONAL, INC.

 

2,783,637 shares of common stock

727,020 SHARES OF COMMON STOCK

This prospectus relates to the re-sale by the selling shareholders identified in this prospectus, or their assigns, each a Selling Shareholder and, collectively, the Selling Shareholders, of an aggregate of 2,783,637 shares of common stock, par value $0.0001 per share, of Hometown International, Inc., a Nevada corporation, or the Company.

 

The selling shareholders named inshares offered by this prospectus may be sold by the Selling Shareholders or their transferees, pledgees, donees or assigns or other successors-in-interest that receive any of the shares as a gift, distribution, or other non-sale related transfer at the fixed price of $6.50 until such time as our shares are offering allquoted on the on the over- the-counter bulletin board (“OTCBB”), the OTCQX, the OTCQB or listed on any other national securities exchange or automated interdealer quotation system, as described under “Plan of Distribution” herein.

All net proceeds from the sale or other disposition of the shares of Common Stock offered throughcovered by this prospectus. This prospectus iswill go to be used by the selling shareholders in connection with a potential resale of up to an aggregate of 727,020 shares of the Company's Common Stock consisting of (i) 242,340 shares of Common Stock and (ii) 484,680 shares of Common Stock issuable upon exercise of warrants (the “Warrant”) for an exercise price of $2.50 that expires on July 31, 2017.Selling Shareholders. We will not receive anynone of the proceeds from the sale or other disposition of the Common Stockshares of common stock covered by this prospectus.prospectus by the Selling Shareholders. We could, however, receive up to $1,211,700will bear all expenses of registration incurred in connection with this offering, but all selling and other expenses incurred by the event the Warrants are exercised for cash, notwithstanding that such Warrants have a cashless exercise feature. We expect that itSelling Shareholders will be economically viable for and inborne by them.

The Selling Shareholders may be deemed “underwriters” within the best interestmeaning of the Warrant holders to exercise their Warrants onceSecurities Act of 1933, as amendedin connection with the priceresale or other disposition of ourthe shares of common stock trade above the exercise price of the Warrant, or at $2.50 per share.covered by this prospectus.

 

Our Common Stock is presently not tradedquoted on any market or securities exchange. The selling security holders have not engaged any underwriter in connection with the sale of their shares of Common Stock. Common stock being registered in this registration statement may be sold by selling security holders at a fixedOTC Pink under the symbol “HWIN” On September 21, 2020, the closing price of $0.75 per share untilof our Common Stock isas quoted on the OTCQB and thereafter at a prevailing market prices or privately negotiated prices or in transactions that are not in the public market. As of the date of this registration statement, we plan to engage with a market maker to file an application with FINRA to have our Common Stock quoted on the OTCQB. However, there can be no assurance that the application for quotation will be approved by FINRA. We have agreed to bear the expenses relating to the registration of the shares of the selling shareholders.OTC Pink was $9.50 per share.

 

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

We are an emerging“emerging growth companycompany” as that term is used indefined under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”)federal securities laws, and, as such, are subject toeligible for reduced public company reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company” on page 1of this prospectus.

 

Investing in our Common Stock involves a high degree of risk. See “Risk Factors”risks. You should carefully read the “Risk Factors beginning on page 2 to read about factors you should consider4 of this prospectus before buying shares of our Common Stock.investing.

 

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

The Datedate of This Prospectus is: ________________.this prospectus is ____________ __, 2020.

 

 

TABLE OF CONTENTS

 

 PAGEPage
About this Prospectusii
Prospectus Summary1
Risk Factors24
Cautionary Statement Regarding Forward-Looking Statements8
Use of Proceeds8
Determination of Offering Price8
Dilution8
Market for Common Equity and Related Stockholder Matters8
Description of Business9
Market Price and Dividends9
Our Business10
Description of Property1117
Legal Proceedings1117
ManagementManagement’s Discussion and Analysis of Financial Condition and PlanResults of Operations11
Directors, Executive Officers, Promoters and Control Persons14
Executive Compensation15
Security Ownership of Certain Beneficial Owners and Management15
Transactions with Related Persons, Promoters and Certain Control Persons16
Selling Security holders16
Plan of Distribution18
Management22
Principal Shareholders24
Related Party Transactions26
Description of Securities to be Registered19
Interests of Named Experts and Counsel20
Where you can find more information20
Index to Financial StatementsF-1
Signatures23

  
Selling Shareholders31
Plan of Distribution34
Legal Matters36
Experts36
Where You Can Find More Information36
Index to Consolidated Financial Statements of Hometown International, Inc.F-1

i

 

Please read this prospectus carefully. It describes our business, our financial condition and results of operations. We have prepared this prospectus so that you will have the information necessary to make an informed investment decision.ABOUT THIS PROSPECTUS

 

You should rely only on the information contained in this prospectus. Weprospectus or contained in any prospectus supplement or free writing prospectus filed with the Securities and Exchange Commission (the “SEC”). Neither we nor the selling shareholders have not authorized any other personanyone to provide you with additional information or information different information. Thisfrom that contained in this prospectus is not an offerfiled with the SEC. The selling shareholders are offering to sell, nor is itand seeking an offeroffers to buy, these securitiesshares of our Common Stock only in any statejurisdictions where the offer or sale is notoffers and sales are permitted. The information contained in this prospectus is complete and accurate only as of the date onof this prospectus, regardless of the front cover, but the informationtime of delivery of this prospectus or of any sale of shares of our Common Stock. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: Neither we nor the selling shareholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of Common Stock and the distribution of this prospectus outside the United States.

As used in this prospectus, unless otherwise designated, the terms “we,” “us,” “our,” the “Company,” “Hometown” and “our company” refer to Hometown International, Inc. a Nevada corporation, and its wholly-owned subsidiary described below.

ii

 

PROSPECTUS SUMMARY

 

This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information thatBefore making an investment decision, you should consider before investing in the Common Stock. You should carefully read the entire prospectus carefully, including the sections entitled “Risk Factors”, “Management’s DiscussionFactors,” beginning on page 4 and Analysis of Financial Condition and Results of Operations” and the Financial“Cautionary Statement Regarding Forward-Looking Statements, before making an investment decision. In this prospectus, the terms “Hometown International” “Company,“we,” “us” and “our”, “our company” refer to Hometown International,, Inc.beginning on page 8.

 

OverviewAbout Hometown

 

IncorporatedHometown International, Inc. was incorporated on May 19, 2014 under the laws of the State of Nevada, Hometown International, Inc.Nevada. The Company is the originator of a new Delicatessen concept. Through itsour wholly-owned subsidiary, Your Hometown Deli Limited Liability Company, (“Your Hometown Deli”), the Company intends towe operate a delicatessen storesstore that featurefeatures “home-style” sandwiches and other entrees in a casual and friendly atmosphere. The storesstore is designed to offer local patrons of all ages with a comfortable community gathering places. Targeted towards smaller towns and communities, the Company’s sole unit was built in Paulsboro, New Jersey.

On March 23, 2020, we were forced to temporarily close the delicatessen due to the stay-at-home order issued by the Governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19, However, on September 8, 2020, the delicatessen was reopened for business.

Warrants

The Board of Directors of the Company authorized the issuance of warrants to all of the Company’s shareholders of record as of April 15, 2020. As of such date, the Company issued to each shareholder of record: (i) five Class A Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at an exercise price of $1.25 per share (the “Class A Warrants”), (ii) five Class B Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at an exercise price of $1.50 per share (the “Class B Warrants”), (iii) five Class C Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at an exercise price of $1.75 per share (the “Class C Warrants”), and (iv) five Class D Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at an exercise price of $2.00 per share (the “Class D Warrants”), with each warrant expiring on April 15, 2035 (collectively, the “Warrants”). The Company issued an aggregate of 155,940,080 Warrants. As of the date of this prospectus, no Warrants have been exercised.

Private Placement

On April 14, 2020, we consummated private offers and sales (collectively, the “Private Placement”) of an aggregate of 2,500,000 shares of common stock to Blackwell Partners LLC – Series A, STAR V Partners LLC and Maso Capital Investments Limited for gross cash proceeds to us of $2,500,000. These three investors are plannedalso Selling Shareholders, with respect to an aggregate of 1,500,000 of the purchased shares.. In addition to customary representations and warranties made by the parties in the subscription agreements, the Company agreed to discuss with each investor, at least on a quarterly basis, and in advance of any consideration taken by the Company, of its current plans to list on a national securities exchange. The Company also agreed not to take certain actions without the express written consent of one of such holders, including any change in management or to the board of directors, change the Company’s independent public accountant, incurrence of any expense over $50,000, or any other material action. The Company further agreed to maintain its corporate existence and not sell all or substantially all of its assets, except when the surviving entity is a publicly traded entity which assumes the Company’s obligations under the Warrants the investors received and under the Registration Rights Agreement. In connection with the Private Placement, the Company entered into Registration Rights Agreements with the investors pursuant to which the Company agreed to register the shares of common stock issued to said investors and the shares issuable upon the exercise of the Warrants. The Company intends to utilize the net proceeds from this private placement to explore and evaluate potential merger candidates for the Company and for general corporate purposes.

1

Going Concern

As reflected in the accompanying consolidated financial statements, the Company used cash in operations of $156,671, has an accumulated deficit of $806,920, and has a net loss of $149,341 for the year ended December 31, 2019. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

On March 23, 2020, we were forced to temporarily close the delicatessen due to the stay-at-home order issued by the Governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19. As of March 30, 2020, we had $11,245 of cash on hand, and a cash burn rate of approximately $13,000 per month. Therefore, our independent auditors issued a going concern opinion in connection with the audit of the Company’s consolidated financial statements for the year ended December 31, 2019. The report of our independent registered public accounting firm on our audited consolidated financial statements as of December 31, 2019 and 2018 and for each of the two years then ended includes an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern based upon our recurring losses, cash used in operations and accumulated deficit.

On September 8, 2020, the delicatessen was reopened for business. There will be no assurances that we will be able to generate sufficient revenues. We are unable to estimate the ultimate impact of the COVID-19 pandemic on our financial condition and future results of operations. 

Corporate Information

Our common stock offered in this prospectus is quoted on the OTC Pink under the symbol “HWIN”.

Our principal executive offices are located at 25 E. Grant Street, Woodstown, New Jersey 08098 and our telephone number is 856-759-9034. We do not have a website.

Implications of Being an Emerging Growth Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

a requirement to provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion   and Analysis of Financial Condition and Results of Operations” disclosure;

reduced disclosure about executive compensation arrangements;

no non-binding advisory votes on executive compensation or golden parachute arrangements; and

an exemption from the auditor attestation requirement in the assessment of internal control over financial reporting.

We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we had total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we had issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years.

2

THE OFFERING

Securities Offered by the Selling Shareholders2,783,637 shares of common stock.
Trading MarketThe common stock offered in this prospectus is quoted on the OTC Pink under the symbol “HWIN”. In the future, we intend to seek to have our common stock listed on a national securities exchange. However, we may not be successful in having our shares listed on a national securities exchange.
Common Stock Outstanding Before this Offering7,797,004
Common Stock Outstanding After this Offering7,797,004
Use of ProceedsThe Selling Shareholders will receive all of the net proceeds from the sale of shares of Common Stock in this offering. See “Use of Proceeds”.
Plan of DistributionThe Selling Shareholders may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents only at the fixed price of $6.50 until such time as our shares are quoted on the OTCBB, the OTCQX, the OTCQB or listed on any other national securities exchange or automated interdealer quotation system. Registration of the Common Stock covered by this prospectus does not mean, however, that such shares necessarily will be offered or sold. See “Plan of Distribution”.
Risk FactorsPlease read “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the securities offered in this prospectus.

3

RISK FACTORS

Risks Related to our Business

Our financial situation creates doubt whether we will continue as a going concern.

There can be no assurances that we will ever be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital and no assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available, we may be forced to discontinue operations, which would cause investors to lose their entire investment.

Our consolidated financial statements for the year ended December 31, 2019, were prepared assuming that we would continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. 

The report of our independent registered public accounting firm on our audited consolidated financial statements as of December 31, 2019 and 2018 and for each of the two years then ended includes an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern based upon our recurring losses, cash used in operations and accumulated deficit,

Our financial condition and results of operations have been and are expected to continue to be adversely affected by the recent coronavirus outbreak.

In December 2019, a novel strain of coronavirus, known as COVID-19, was first reported and was subsequently declared a pandemic by the World Health Organization in March 2020. To date, this outbreak has surfaced in nearly all regions around the world, and as the pandemic continues to spread, particularly in the United States, businesses as well as federal, state and local governments have implemented significant actions to attempt to mitigate this public health crisis. As a result, on March 23, 2020, we were forced to temporarily close our delicatessen due to the stay-at-home order issued by the Governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19, However, on September 8, 2020, the delicatessen was reopened for business. We experienced a decrease in revenues as a result of the COVID-19 pandemic even before the stay-at-home order was issued. Even now that the order is lifted and the delicatessen is re-opened, we may have a slowdown in customer’s visit due to the current economic condition. There will be no assurances that we will able tp generate sufficient revenues. The further spread of COVID-19, and the requirements to take action to mitigate the spread of the pandemic, will impact our ability to carry out our business as usual and may materially adversely impact global economic conditions, our business, results of operations, cash flows and financial condition. Even now that we have reopened our store, we might be subject to modified hours and conditions. Moreover, should New Jersey fail to fully contain COVID-19 or suffer a COVID-19 relapse, the market for our deli may not recover quickly or at all, which could have a material adverse effect on our business and results of operations. As a result, we may incur additional impairment charges to our inventory, store and corporate assets, any of which may have a significant or material impact on our financial results. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the scope and duration of actions to contain COVID-19 or treat its impact, among others. While such actions may be relaxed or rolled back if and when the pandemic abates, the actions may be reinstated as it continues to evolve. The scope and timing of any such reinstatements are difficult to predict and may materially affect our future operations.


Economic conditions in the United States could adversely affect our business and financial results.

As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in or uncertainty about macro-economic conditions. Our customers may have less money for discretionary purchases and may stop or reduce their purchases of our products or trade down to competitors’ lower priced foods as a result of job losses, foreclosures, bankruptcies, increased fuel and energy costs, higher interest rates, inflation, higher taxes, reduced access to credit, economic uncertainty and potential negative impacts relating to federal economic policy changes and recent international trade disputes. These factors may also result in a general downturn in the restaurant industry. Decreases in customer traffic and/or average value per transaction will negatively impact our financial performance as reduced revenues without a corresponding decrease in expenses result in sales de-leveraging, which creates downward pressure on margins and also negatively impacts net revenues, operating income and earnings per share. There is also a risk that if negative economic conditions or uncertainty persist for a long period of time or worsen, consumers may make long-lasting changes to their discretionary purchasing behavior, including less frequent discretionary purchases on a more permanent basis.

If our business plans are not successful, we may not be able to continue operations as a going concern and our shareholders may lose their entire investment in us.

On March 23, 2020, we were forced to temporarily closed the delicatessen due to the stay-at-home order issued by the Governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19, However, on September 8, 2020, the delicatessen was reopened for business. Even though the order has been lifted and the delicatessen is re-opened, we may have a slowdown in customer’s visit due to the current economic condition. There will be no assurances that we will generate sufficient revenues. We expect our growth rate and sales to be volatile in the near term as a result of the COVID-19 once we resume our delicatessen operations.

We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. Therefore, our future operations may be dependent on our ability to secure additional financing. The COVID-19 pandemic may have an adverse impact on the Company’s ability to raise capital or to continue as a going concern. As a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern and the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

We do not have any agreement for a business combination or other transaction.

We have no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. We cannot assure you that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management has not identified any particular industry or specific business within an industry for evaluation. We cannot guarantee that we will be able to negotiate a business combination on favorable terms, and there is consequently a risk that future funds allocated to the purchase of our shares will not be invested in a company with active business operations.

Future success is highly dependent on the ability of management to locate and attract a suitable acquisition.

The success of our proposed plan of operation will depend to a great extent on the operations, financial condition and management of the identified target company. While business combinations with entities having established operating histories are preferred, there can be no assurance that we will be successful in locating candidates meeting such criteria. The decision to enter into a business combination will likely be made without detailed feasibility studies, independent analysis, market surveys or similar information which, if we had more funds available to it, would be desirable. In the event we complete a business combination, the success of our operations will be dependent upon management of the target company and numerous other factors beyond our control. We cannot assure you that we will identify a target company and consummate a business combination.


There is competition for those private companies suitable for a merger or combination transaction of the type contemplated by management.

We are in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. We are and will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do. Consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

We have not conducted market research to identify business opportunities, which may affect our ability to identify a business to merge with or acquire.

We have neither conducted nor have others made available to us results of market research concerning prospective business opportunities. Therefore, we have no assurances that market demand exists for a merger or acquisition as contemplated by us. Our management has not identified any specific business combination or other transactions for formal evaluation by us, such that it may be expected that any such target business or transaction will present such a level of risk that conventional private or public offerings of securities or conventional bank financing will not be available. There is no assurance that we will be able to acquire a business opportunity on terms favorable to us. Decisions as to which business opportunity to participate in will be unilaterally made by our management, which may act without the consent, vote or approval of our stockholders.

Although management intends to devote only a limited amount of time to seeking a target company, which may adversely impact our ability to identify a suitable acquisition candidate, our Chairman intends to devote his full business time to seeking a target company.

While seeking a business combination, management anticipates devoting very limited time to our affairs in total. However, Peter Coker, Jr., our Chairman, intends to devote his full time to seeking a business combination for the Company. Neither Mr. Coker nor any of our officers have entered into any written employment agreements with us and are not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify and consummate a successful business combination. We are dependent on the services of our management to obtain the additional capital required to implement our business plan and for investigating, negotiating and integrating potential acquisition opportunities. The loss of services of our officers could have a substantial adverse effect on us. The expansion of our business will be largely contingent on our ability to attract and retain highly qualified corporate and operations level management team. We cannot assure you that we will find suitable management personnel or will have financial resources to attract or retain such people if found.

The time and cost of preparing a private company to become a public reporting company may preclude us from entering into a merger or acquisition with the most attractive private companies.

Target companies that are private or that fail to comply with SEC reporting requirements may delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including audited consolidated financial statements for the company acquired. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition.


Any potential acquisition or merger with a foreign company may subject us to additional risks.

If we enter into a business combination with a foreign concern, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.

We may need to raise additional capital to consummate a merger or business combination. If our outstanding warrants operations do not produce the necessary cash needed, or if we cannot obtain needed funds, we may be forced to reduce or cease our activities with consequent loss to investors.

There is no assurance that we will be able to obtain additional funding when it is needed, or that such funding, if available, will be obtainable on terms acceptable to us. If we cannot obtain needed funds, we may be forced to reduce or cease our activities with consequent loss to investors. In addition, should we incur significant presently unforeseen expenses or delays, we may not be able to accomplish our goals.

Our shareholders may not be afforded an opportunity to vote on our proposed business combination.

We might consummate a business combination without obtaining shareholder approval of such transaction. Although a business combination might be structured so that obtaining shareholder approval of the business combination at a meeting called for such purpose would be a condition to closing, it is possible that we will consummate a business combination without the need for obtaining such approval. The decision as to whether we will seek shareholder approval of a proposed business combination or not will be made by us, solely in our discretion, and will be based on a variety of factors such as the structure of the transaction, the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval.

Our failure to adopt certain corporate governance procedures may prevent us from obtaining a listing on a national securities exchange.

We do not have an audit, compensation or nominating and corporate governance committee. The functions such committees would perform are performed by the board as a whole. Consequently, there is a potential conflict of interest in board decisions that may adversely affect our ability to become a listed security on a national securities exchange and as a result adversely affect the liquidity of our Common Stock.

Risks Related to our Common Stock

Although the selling shareholders are selling their shares at a fixed price of $6.50 until the shares are quoted or listed, there is a significant amount of volatility with respect to said price.

In the last private placement, we sold our shares at $1.00 per share. As of September 21, 2020, our stock is quoted on the OTC Pink Market at a price of $9.50. We currently have an aggregate of 155,940,080 warrants outstanding, all of which are exercisable at prices significantly below the fixed price of the shares being offered and sold pursuant to this prospectus. During the first quarter of this year, we repurchased our shares at a purchase price of $1.00 per share. Accordingly, there is a significant amount of volatility with respect to the fixed price of $6.50 that the selling shareholders are offering their shares.

Since we are traded on the OTC Pink Market, an active, liquid trading market for our common stock may not develop or be sustained. If and when an active market develops the price of our common stock may be volatile.

Presently, our common stock is traded on the OTC pink sheets. Presently there is limited trading in our stock and in the absence of an active trading market investors may have difficulty buying and selling or obtaining market quotations, market visibility for shares of our common stock may be limited, and a lack of visibility for shares of our common stock may have a depressive effect on the market price for shares of our common stock.

The lack of an active market impairs your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares.


Trading in stocks quoted on the Pink Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. The securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of shares of our common stock. Moreover, the pink sheets is not a stock exchange, and trading of securities is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a national stock exchange like the NYSE. Accordingly, stockholders may have difficulty reselling any shares of common stock.

There is no assurance that we will be able to pay dividends to our shareholders, which means that you could receive little or no return on your investment.

Payment of dividends from our earnings and profits may be made at the sole discretion of our board of directors. There is no assurance that we will generate any distributable cash from operations.  Our board may elect to retain cash for operating purposes, debt retirement, or some other purpose. Consequently, you may receive little or no return on your investment.

Our shares will be subordinate to all of our debts and liabilities, which increases the risk that you could lose your entire investment.

Our shares are equity interests that will be subordinate to all of our current and future indebtedness with respect to claims on our assets. In any liquidation, all of our debts and liabilities must be paid before any payment is made to our shareholders. The amount of any debt financing we incur creates a substantial risk that in the event of our bankruptcy, liquidation or reorganization, we may have no assets remaining for distribution to our shareholders after payment of our debts.

There is a limited public market for our Common Stock.

There is currently a limited public market for the common stock. Holders of our common stock may, therefore, have difficulty selling their common stock, should they decide to do so. In addition, there can be no assurances that such markets will continue or that any shares of common stock will be able to be sold without incurring a loss. Any such market price of the common stock may not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value, and may not be indicative of the market price for the common stock in the future. Further, the market price for the common stock may be volatile depending on a number of factors, including business performance, industry dynamics, news announcements or changes in general.

We may, in the future, issue additional common shares, which would reduce investors’ percent of ownership and may dilute our share value.

Our Articles of Incorporation authorizes the issuance of 250,000,000 shares of capital stock. We have an aggregate of 155,940,080 warrants issued and outstanding which are all currently exercisable. The future issuance of common stock will result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors and might have an adverse effect on any trading market for our common stock.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although the absence of these words does not necessarily mean that a statement is not forward-looking. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements.


We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this prospectus and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

All forward-looking statements speak only as of the date of this prospectus. We undertake no obligation to update any forward-looking statements or other information contained herein. Shareholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this report are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved.

These forward-looking statements represent our intentions, plans, expectations, assumptions `and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. All subsequent written and oral forward-looking statements concerning other matters addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

USE OF PROCEEDS

We are not selling any of the Common Stock covered by this prospectus and will receive no net proceeds from the sale or other disposition of the shares covered hereby by the Selling Shareholders. All of the net proceeds from the sale or other disposition of Common Stock covered by this prospectus will go to the Selling Shareholders. We will bear all costs associated with registering the shares of Common Stock offered by this prospectus, but all selling and other expenses incurred by the Selling Shareholders will be borne by them.

MARKET PRICE AND DIVIDENDS

Market Price for our Common Stock

There is a limited public market for our common shares. Our common shares are quoted on the OTC Pink under the symbol “HWIN”. Trading in stocks quoted on the OTC Pink is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.

OTC Pink securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Pink securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Pink issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.


Our common stock became eligible for quotation on the OTC Pink on May 9, 2019. Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders

As of September 22, 2020, there were 52 holders of record of our Common Stock. The number of record holders does not include an indeterminate number of stockholders whose shares are held by brokers in street name.

Dividend Policy

We have never declared or paid any cash dividends on our common stock. We intend to retain future earnings, if any, to finance the expansion of our business. As a result, the Company does not anticipate paying any cash dividends in the foreseeable future. 

OUR BUSINESS

Overview

Hometown International, Inc. was incorporated on May 19, 2014 under the laws of the State of Nevada. The Company is the originator of a new Delicatessen concept. Through our wholly-owned subsidiary, Your Hometown Deli Limited Liability Company, we operate a delicatessen store that features “home-style” sandwiches and other entrees in a casual and friendly atmosphere. The store is designed to offer local patrons of all ages with a comfortable community gathering places. Targeted towards smaller towns and communities, the Company’s first unit is planned to bewas built in Paulsboro, New Jersey.

 

On January 18, 2014, Your HometwonHometown Deli LLC. was formed under the laws of State of New Jersey. On May 29, 2014, Your Hometown Deli LLC, entered into a Membership Interest Purchase Agreement with Hometown International, Incthe Company and is now a wholly-owned subsidiary of Hometown International. The Company intends to introduceour Company. We introduced the delicatessen concept under the Your Hometown Deli brand name. Based on the Paulsboro unit’s performance, the Company may consider expanding the concept to other communities throughout the United States.

As of the date of this registration statement, we are undergoing a Regulation D Rule 506 offering in which we are offering up to 300,000 units (the “Units”), consisting of one (1) share of Common Stock and two (2) warrants each to purchase one (1) share of Common Stock at an exercise price of $2.50 per share. The Units are being offered at a price of $0.75 per Unit and there is no minimum subscription requirement for the investors. As of the date of this registration statement, we have sold 242, 340 Units and therefore we could receive up to $1,211,700 in the event the Warrants are exercised for cash, notwithstanding that such Warrants have a cashless exercise feature. We expect that it will be economically viable for and in the best interest of the Warrant holders to exercise their Warrants once the price of our common stock trade above the exercise price of the Warrant, or at $2.50 per share.

As of October 2015, although our business has begun its operation in anticipation of our grand opening in November 2015, we have generated no revenue. Besides the equipment, fixtures, and inventories we purchased for our deli store, we have limited assets. We had minimal working capital as of the date of this registration statement and used cash in operating activities for the reporting period then ended. These factors raise substantial doubt from our auditor about our ability to continue as a going concern.

As reflected in the financial statements, the Company used cash in operations of $60,288 and has a net loss of $92,654 for the six months ended June 30, 2015. In addition, the Company has not generated any revenues from inception. These factors raise substantial doubt from our auditor about our ability to continue as a going concern. It is, however, our belief that the sale of 300,000 Units will provide our Company with sufficient capital resource to continue our business for the next twelve (12) months. We also anticipate to generate revenue once we open our first deli store. However, our cash position may not be sufficient to support our daily operations. While we believe in the viability of our strategy to generate sufficient revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our continued existence is dependent upon our ability to continue to execute our operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to our company.

Where You Can Find Us

The Company's principal executive office and mailing address is 25 E. Grant Street Woodstown, NJ 08098. Our Company’s principal telephone number is (856)759-9034.

Implications of Being an Emerging Growth Company

We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

A requirement to have only two years of audited financial statements and only two years of related MD&A;
Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;
Reduced disclosure about the emerging growth company’s executive compensation arrangements; and
No non-binding advisory votes on executive compensation or golden parachute arrangements.

We have already taken advantage of these reduced reporting burdens in this prospectus, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. We have elected to use the extended transition period provided above and therefore our financial statements may not be comparable to companies that comply with public company effective dates.

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We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

The Offering

Common stock offered by selling security holders

727,020 shares of Common Stock. This number represents approximately 13.33% of our current outstanding Common Stock*.
Common stock outstanding before the offering5,242,340 shares of Common Stock**.
Common stock outstanding after the offering

5,242,340 shares of Common Stock**.

Terms of the OfferingThe selling security holders will determine when and how they will sell the common stock offered in this prospectus. The selling security holders will sell at a fixed price of $0.75 per share for the duration of the offering.
Termination of the OfferingThe offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) such time as all of the common stock becomes eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act (iii) or we decide at any time to terminate the registration of the shares at our sole discretion.
Trading MarketThere is currently no trading market for our Common Stock. We intend to apply soon for quotation on the OTCQB. We will require the assistance of a market-maker to apply for quotation and there is no guarantee that a market-maker will agree to assist us.
Use of proceeds

We are not selling any shares of the Common Stock covered by this prospectus. As such, we will not receive any of the offering proceeds from the registration of the shares of Common Stock covered by this prospectus. We could, however, receive up to $1,211,700 in the event the Warrants are exercised for cash (notwithstanding that such Warrants have a cashless exercise feature). We will use the proceeds from the exercise of the Warrants for general corporate purposes, which may include, among other things, our working capital needs and other general corporate purposes. However, there is no guarantee that any of the warrants will be exercised.

Risk FactorsThe Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page 2.

* On a fully-diluted basis

** Does not include Common Stock underlying any convertible notes, warrant or option, including ones offered in this registration statement.

RISK FACTORS

The shares of our Common Stock being offered for sale are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the Common Stock. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in the following risk factors and elsewhere in this registration statement. Before purchasing any of the shares of Common Stock, you should carefully consider the following factors relating to our business and prospects. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, you may lose all or part of your investment. You should carefully consider the risks described below and the other information in this prospectus before investing in our Common Stock.

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Risks Related to Our Business

LIMITED OPERATING HISTORY

The founders of the Company began developing its delicatessen concept in late 2013. The Company operates its business through its wholly-owned subsidiary, Your Hometown Deli, LLC, which was formed on January 18, 2014 and its physical restaurant location is expected to begin have a grand opening in the fourth quarter of 2015. The Company has had limited operations upon which an evaluation of the Company and its prospects could be based. There can be no assurance that management of the Company will be successful in completing the Company’s programs, implementing the corporate infrastructure to support operations at the levels called for by the Company’s business plan, executing a successful sales and marketing plan to attain significant penetration of the delicatessen market or that the Company will generate sufficient revenues to meet its expenses or to achieve or maintain profitability.

OUR AUDITOR’S SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN

We had minimal working capital as of the date of this registration statement and used cash in operating activities for the reporting period then ended. These factors raise substantial doubt from our auditor about the Company’s ability to continue as a going concern.

We are attempting to generate sufficient revenue; however, our cash position may not be sufficient to support our daily operations. While we believe in the viability of our strategy to generate sufficient revenues and in our ability to raise additional funds, there can be no assurances to that effect. The ability of our company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan, generate sufficient revenue and in its ability to raise additional funds.

DIFFICULTIES IN ESTABLISHING A NEW BRAND

The Company’s business strategy is to develop the Your Hometown Deli brand name as a respected brand in the Delicatessen Industry. The marketing of retail food establishments is highly dependent on creating favorable consumer perception through well-orchestrated marketing and advertising. The Company has little advertising experience, having expended no capital on such activities to date. Many of Company’s competitors have significantly greater advertising resources/experience and enjoy well-established brand names. There can be no assurance that the Company’s initial advertising and promotional activities will be successful in creating the desired consumer perception.

DIFFICULTIES ENTERING INTO NEW OR MODIFIED ARRANGEMENTS WITH FUTURE SUPPLIERS OR SERVICE PROVIDERS

When we open our store and begin to operate our business, we plan to enter into contractual arrangements with various suppliers and service providers. We may encounter difficulties in negotiating pricing or other terms that are favorable to our business or able to fit into our financial budget. Our inability to enter into agreements on favorable terms may have an adverse affect on our business and operating results. We currently, however, do not have any contractual relationship with any of such suppliers or service providers and anticipate to face this risk when we open our deli.

COMPETITIONS IN THE INDUSTRY

The Delicatessen industry is highly competitive. Potential customers have many choices to purchase food items, including supermarkets, convenience stores, nationally franchised and locally owned and operated food-related establishments. Many competing businesses are well funded and have a national presence. Competition includes other non-delicatessen food service concepts, including other fast food, Italian dining, pizza, Asian, burgers, and cooking/eating at home. Because of the high number of consumer alternatives, there is risk that consumer acceptance of the Deli concept will be low, which will have a materially adverse effect on the Company. Competition can negatively affect product selling prices which in turn could negatively affect profitability. The industry is dynamic with many businesses entering or exiting the market over time. Such changes in competition could also have a materially adverse effect on the Company.

LIMITED EXPERIENCE IN OPERATING A DELICATESSEN

 

The Company has limited experience operating in the delicatessen, grocery or restaurant businesses. Retail food-related establishments are complex businesses that require experienced management supervision to perform satisfactorily. While the Company anticipates hiring qualified and experienced managers as employees, it is possible that qualified employees will not be hired. There is also no assurance that employees will perform to Company needs and expectations. The Company will be highly dependent on the employees it hires. If managers and other employees are not available or do not perform satisfactorily, it could have a material adverse effect on the Company’s financial performance.

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ADVERSE EFFECT OF INCREASE IN LABOR COSTS

Labor costs are significant percentage of delicatessen operating expenses and failure to control these costs could have a material adverse effect on the Company. The management has limited experience controlling labor costs in this industry. Once our deli is launched, out management’s ability to control labor costs depends on many factors, including experience, local labor markets, and the productivity of individual employees.

CHANGES IN CONSUMER TASTES AND SPENDING HABIT

Our success depends, in part, upon the popularity of our products and our ability to develop new menu items that appeal to consumers. Shifts in consumer taste away from our current menu items, our inability to develop new menu items that appeal to consumers’ new preference, or changes in our menu that eliminate items popular with some consumers could harm our business. Also, our success depends to a significant extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income. Accordingly, after the opening of our deli and once we begin to generate revenue from our operations, we may experience declines in sales during economic downturns or during periods of uncertainty. Any material decline in the amount of discretionary spending could have a material adverse effect on our sales, results of operations, business and financial condition.

ADVERSE EFFECT OF DISRUPTIONS TO OUR SUPPLY CHAIN

When we open our deli and begin to operate our business, we may rely on ingredients provided by certain third-party vendors and suppliers. Accordingly, we are particularly susceptible to risks related to these suppliers, including their continued ability to maintain sufficient production of our key ingredients, to supply ingredients that meet our quality standards, and the risk of delivery disruptions that could arise due to a number of factors including adverse weather, traffic conditions and mechanical issues related to their delivery trucks. Our dependence on consistent deliveries to our principal business office by suppliers and vendors could encounter the risks of shortages, supply interruptions and/or the need to quickly seek alternative suppliers at higher prices, all of which could adversely impact our operations. There are many factors which could cause shortages or interruptions in the supply of our key ingredients, including weather, unanticipated demand, labor, production or distribution problems, quality issues and cost, and the financial health of our suppliers, most of which are beyond our control, and which could have an adverse effect on our business and results of operations.

FLUCTUATIONS IN FOOD AND SUPPLY COSTS

Supplies and prices of the various products that we plan to use to prepare our food offerings can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries, and such prices may fluctuate. An increase in pricing of any ingredient that is used in our future offering could result in an increase in costs from our future suppliers, and we may not be able to increase prices to cover increased costs which would have an adverse effect on our operating results and profitability.

POTENTIAL RISKS INVOLVING FOOD SAFETY AND HEALTH ISSUES

Food service businesses, such as delicatessen, can be adversely affected by litigation and complaints from customers or government authorities resulting from food quality, illness, injury or other health concerns or operating issues. Such allegations may negatively affect our reputation, regardless of whether the allegations are true, by discouraging customers from purchasing our products. We could also incur significant litigation costs or liabilities in connection with a lawsuit or claim against us.

FAILURE TO COMPLY WITH GOVERNMENTAL LAWS OR REGULATIONS

In connection with the operation of our business, we are subject to extensive federal, state and local laws and regulations, including those related to:

·nutritional content labeling and disclosure requirements;

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·management and protection of the personal data of our employees and customers;

·sales tax; and

·various federal, state and local laws relating to, among other things, business, health, food safety codes.

These laws and regulations are complex, which complicates monitoring and compliance. As a result, regulatory risks are inherent in our operations. We may experience material difficulties or failures with respect to compliance with these laws and regulations in the future. Our failure to comply with these laws and regulations could result in litigation, fines, penalties, judgments or other sanctions, any of which could adversely affect our business, operations and reputation.

SIGNIFICANT ADVERSE IMPACT TO OUR CAPITAL RESERVE OF ANY LIABLE UNINSURED CLAIM

We may not have sufficient insurance to cover potential risks and liabilities, including, but not limited to, injuries or economic losses arising out of or relating to our omission or errors in providing our services. Even if we decide to obtain additional insurance coverage in the future, it is possible that: (1) we may not be able to get enough insurance to meet our needs; (2) we may have to pay very high premiums for the additional coverage; (3) we may not be able to acquire any insurance for certain types of business risk; or (4) we may have gaps in coverage for certain risks. We may be exposed to potential uninsured claims for which we could have to expend significant amounts of capital. Consequently, if we were found liable for a significant uninsured claim in the future, we may be forced to expend a significant amount of our capital to resolve the uninsured claim.

DEPENDENCE ON KEY PERSONNEL

The Company will be dependent on several key members of its management and operations teams for the foreseeable future. In particular, the Company is dependent on Paul F. Morina, President and Christina Lindenmuth, Vice President. The loss of the services from any of key personnel could have a material adverse effect on the operations and prospects of the Company. At this time, the Company has no employment agreements with any of these individuals, though it is contemplated that the Company may enter into such agreements with certain of its key employees on terms and conditions usual and customary for its industry. The Company does not currently have any "key man" life insurance on any of its employees.

OUR OFFICERS’ AND DIRECTORS’ SIGNIFICANT CONTROL OVER THE COMPANY

As of the date of this registration statement, our officers and directors, Paul Morina and Christina Lindenmuth, beneficially own approximately 95.50% of our Common Stock and are able to exercise control over all matters requiring shareholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions. Our directors will be able to significantly influence decisions affecting our capital structure. This control may have the effect of delaying or preventing changes in control or changes in management, or limiting the ability of our other shareholders to approve transactions that they may deem to be in Company’s best interest.

OUR DIRECTORS’ AND OFFICERS’ POTENTIAL CONFLICT OF INTEREST

From time to time, because our officers and directors, Paul Morina and Christina Lindenmuth, have significant control over the Company, there may be conflict of interest between their personal interest and that of the Company for matters such as setting the level of their compensation. In the event that our officers and directors make decisions in favor of their personal interest, this potential conflict of interest may have an adverse effect on our business and results of operations.

NEED FOR FINANCING

We largely depend on additional capital to implement our business plan and support our operations. Currently, we have no established bank-financing arrangements. Therefore, it is likely we will need to seek additional financing through future private offering of our equity securities, or through strategic partnerships and other arrangements with corporate partners. We have no current plans for additional financing.

We cannot assure you that we will be able to raise the working capital as needed on terms acceptable to us, if at all. The sale of additional equity securities will result in dilution to our shareholders. The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations.

If we are unable to raise capital as needed, we are required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results, or cease our operations entirely, in which case, you will lose all your investment.

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ADVERSE EFFECT TO YOUR INTEREST UPON ADDITIONAL FINANCING

If we raise additional capital subsequent to this offering through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, we may also have to issue securities that may have rights, preferences and privileges senior to our Common Stock. In the event we seek to raise additional capital through the issuance of debt or its equivalents, this will result in increased interest expense.

INDEMNIFICATION AND LIMITATION OF LIABILITY

Our Certificate of Incorporation and By-Laws include provisions that eliminate the personal liability of the directors of the our company for monetary damages to the fullest extent possible under the laws of the State of Nevada or other applicable law. These provisions eliminate the liability of directors to the Company and its shareholders for monetary damages arising out of any violation of a director of her fiduciary duty of due care. Under Nevada law, however, such provisions do not eliminate the personal liability of a director for (i) breach of the director’s duty of loyalty, (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violation of law, (iii) payment of dividends or repurchases of stock other than from lawfully available funds, or (iv) any transaction from which the director derived an improper benefit. These provisions do not affect a director’s liabilities under the federal securities laws or the recovery of damages by third parties.

DISRUPTIONS IN THE NATIONAL AND GLOBAL ECONOMIES

Disruptions in the United States national and global economies may result in high unemployment rates and declines in consumer confidence and spending. If such conditions occur, they may result in significant declines in the retail industry, which could directly affect the demand of our products. There can be no assurance that government responses to the disruptions will be able to restore investor confidence. Disruptions in the national and global economies therefore may adversely impact our revenues, results of operations, business and financial condition.

Risks Related to Our Common Stock

RESTRICTED SECURITIES; LIMITED TRANSFERABILITY

The securities should be considered a long-term, illiquid investment. Our securities have not been registered under the Securities Act, and cannot be sold without registration under the Securities Act or any exemption from registration. In addition, the securities are not registered under any state securities laws that would permit their transfer. Because of these restrictions and the absence of an active trading market for our securities, a shareholder will likely be unable to liquidate an investment even though other personal financial circumstances would dictate such liquidation.

NO PUBLIC TRADING MARKET

There is no established public trading marketing for our Common Stock and there can be no assurance that one will ever develop. Market liquidity will depend on the perception of our operating business and any steps that our management might take to bring us to the awareness of investors. There can be no assurance given that there will be any awareness generated. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business. As a result holders of our securities may not find purchasers for our securities should they to sell securities held by them. Consequently, our securities should be purchased only by investors having no need for liquidity in their investment and who can hold our securities for an indefinite period of time.

NOT LIKELY TO PAY DIVIDENDS

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any dividends in the foreseeable future, but will review this policy as circumstances dictate.

WILL BE SUBJECT NOW AND IN THE FUTURE TO THE SEC’S “PENNY STOCK” RULES

We will be subject now and in the future to the SEC’s “penny stock” rules if our shares of Common Stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.

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In addition, the penny stock rules require that prior to a transaction; the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for shares of our Common Stock. As long as our shares of Common Stock are subject to the penny stock rules, the holders of such shares of Common Stock may find it more difficult to sell their securities.

COSTS TO COMPLY WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS

We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including but not limited to requirements under the Sarbanes-Oxley Act of 2002. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. In addition, we may not be able to absorb these costs of being a public company which will negatively affect our business operations.

MANAGEMENT’S LACK OF PUBLIC COMPANY EXPERIENCE

Ourmanagement lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. Our management has never been responsible for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.

OUR STATUS AS AN “EMERGING GROWTH COMPANY” UNDER THE JOBS ACT OF 2012

We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an “emerging growth company,” we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period provided above and therefore our financial statements may not be comparable to companies that comply with public company effective dates.

Because of the exemptions from various reporting requirements provided to us as an “emerging growth company,” we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our reports are not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this report, including in the documents incorporated by reference into this report, includes some statements that are not purely historical and that are “forward-looking statements.” The forward-looking statements contained in this report are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including the following forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions. Such forward-looking statements include, but are not limited to, statements regarding our and their management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition, results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

USE OF PROCEEDS

We will not receive any proceeds from the sale of Common Stock by the selling security holders. All of the net proceeds from the sale of our Common Stock will go to the selling security holders as described below in the sections entitled “Selling Security Holders” and “Plan of Distribution.” We have agreed to bear the expenses relating to the registration of the Common Stock for the selling security holders. We could, however, receive up to $1,211,700 in the event that the Warrants are exercised for cash (notwithstanding that such Warrants have a cashless exercise feature). We will use the proceeds from the exercise of the Warrants for general corporate purposes, which may include, among other things, our working capital needs and other general corporate purposes. However, there is no guarantee that any of the Warrants will be exercised. We could, however, receive up to $1,211,700 in the event the Warrants are exercised for cash, notwithstanding that such Warrants have a cashless exercise feature. We expect that it will be economically viable for and in the best interest of the Warrant holders to exercise their Warrants once the price of our common stock trade above the exercise price of the Warrant, or at $2.50 per share.

DETERMINATION OF OFFERING PRICE

Since our Common Stock is not listed or quoted on any exchange or quotation system, the offering price of the shares of Common Stock was determined by the price of the Common Stock that was sold to our security holders pursuant to an exemption under Section 4(2) of the Securities Act and Rule 506 of Regulation D sold promulgated under the Securities Act. The investors in the private placement received Units consisting of one share of common stock and two warrants to purchase shares of common stock for $0.75 per unit.

The offering price of the shares of our Common Stock does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market.

Although our Common Stock is not listed on a public exchange, we will be filing to obtain a quotation on the OTCQB concurrently with the filing of this prospectus. In order to be quoted on the OTCQB, a market maker must file an application on our behalf in order to make a market for our Common Stock. As of the date of this registration statement, we plan to engage with certain market maker to file an application with FINRA to have our Common Stock quoted on the OTCQB. However, there can be no assurance that the application for quotation will be approved by FINRA.

In addition, there is no assurance that our Common Stock will trade at market prices in excess of the initial offering price as prices for the Common Stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity.

DILUTION

The Common Stock to be sold by the selling stockholders provide in the “Selling Security Holders” section is Common Stock that is currently issued. Accordingly, there will be no dilution to our existing stockholders.In the event that the 484,680 shares underlying the Warrants being offered in this prospectus are exercised into Common Stock, as the case may be, the current common shares outstanding will be diluted by up to approximately 8.47%.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is presently no public market for our shares of Common Stock. We anticipate applying for quoting of our Common Stock on the OTCQB upon the effectiveness of the registration statement of which this prospectus forms apart. However, we can provide no assurance that our shares of Common Stock will be quoted on the OTCQB or, if quoted, that a public market will materialize.

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Holders of Capital Stock

As of the date of this registration statement, we had thirty-six (36) holders of our Common Stock.

Stock Option Grants

We do not have a stock option plan in place and have not granted any stock options at this time.

DESCRIPTION OF BUSINESS

Hometown International, Inc. (the "Company”) is the originator of a new “Delicatessen” concept called “Your Hometown Deli.” Your Hometown Delis plan to featurefeatures “home-style” sandwiches, food items, and groceries in a casual and friendly atmosphere. Your Hometown Delis are designed to be comfortable community gathering places for customers of all ages. The Company seeks to create an establishment that will appeal to local residents and commuting workers, conveniently offering high-quality products at fair prices. Targeted towards smaller towns and communities, the Company’s first and only location was opened in Paulsboro, New Jersey on October 14, 2015.

 

Recent Developments

Impact of Current Coronavirus (COVID-19) Pandemic on the Company

On March 23, 2020, we were forced to temporarily close the delicatessen due to the stay-at-home order issued by the governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19. Although we reopened the delicatessen on September 8, 2020, the temporarily closure and other effects of COVID-19 had a material impact on our business. There will be no assurances that we will be able to generate sufficient revenues. We are unable to estimate the ultimate impact of the COVID-19 pandemic on our financial condition and future results of operations.

Corporate Developments

On December 31, 2019, each of Paul F. Morina and Christine T. Lindenmuth, the principal officers and directors and majority shareholders of the Company, entered into separate Stock Purchase Agreements with Peter L. Coker, Jr., which provided for the sale by each of them of 1,000,000 shares of common stock of the Company. The consideration paid for the shares, which represented approximately 38% of the issued and outstanding share capital of the Company, was an aggregate of $3,000.


On February 1, 2020, Christine Lindenmuth, an officer and director of the Company, granted Peter L. Coker, Jr., Chairman of our Board, an option to purchase all of her 1,500,000 shares in the Company for $500. On March 19, 2020, Mr. Coker exercised the option and paid Ms. Lindenmuth $1,500 for the 1,500,000 shares. Mr. Coker simultaneously sold all of the 1,500,00 shares to three separate purchasers.

On February 17, 2020, Mr. Coker was appointed as the Chairman of the Board of Directors of the Company.

On March 18, 2020 the Company repurchased an aggregate of 38,336 shares of the Company’s common stock from a total of 11 shareholders, at a purchase price of $1.00 per share.

On March 18, 2020, the Board of Directors of the Company authorized the issuance of warrants to the shareholders of record as of March 31, 2020, which was then extended to April 15, 2020. As of such date, the Company send each shareholder of record (i) five Class A Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.25 per share, (ii) five Class B Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.50 per share, (iii) five Class C Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.75 per share and (iv) five Class D Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $2.00 per share, with each warrant expiring on April 15, 2035 (collectively, the “Warrants”). The Company issued an aggregate of 155,940,080 Warrants. The Warrants include antidilution provisions and other rights, which are contained in all the Warrants. In addition to the customary antidilution adjustment for stock splits and reclassifications, if at any time the Company issues rights to purchase shares pro rata to all of its the shareholders, then the holders of the Warrants shall be entitled to such rights. The holders of the Warrant shall also be entitled to dividends paid to the Company’s shareholders as if the holders had exercised the Warrants. Moreover, until the Company’s common stock is listed or quoted on a national securities exchange, if the Company sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of or issues (or announce any offer, sale, grant or any option to purchase or other disposition) any common stock or common stock equivalents at an effective price per share less than the exercise price of the Warrants then in effect, then simultaneously with the consummation of each such issuance, the exercise price of the Warrants shall be reduced to equal such lower price. In addition, the holders of the Warrants shall be entitled to all notices as if said holders were holders of the common stock of the Company. To date none of the Warrants have been exercised.

On March 23, 2020, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada increasing the number of shares of common stock the Company is authorized to issue from 100,000,000 to 250,000,000.

Effective as of May 1, 2020, we entered into a Consulting Agreement with Tryon Capital Ventures LLC, a North Carolina limited liability company (“Tryon”) which is 50% owned by the father of Mr. Coker, our Chairman of the Board, primarily to advise management on the operation of our existing delicatessen business and the requirements related to being a public company. The term of the Tryon Consulting Agreement is one year; provided, however, that each party has the right to terminate the agreement upon 30 days’ prior written notice to the other. Pursuant to the Tryon Consulting Agreement, Tryon shall receive $15,000 per month during the term of the agreement, in addition to reimbursement of expenses approved in advance by the Company.

Pursuant to the Tryon Consulting Agreement, Tryon was engaged as a consultant to the Company, to, among other things, support in the research, development, and analysis of product, financial and strategic matters, and to perform such other necessary and appropriate duties that are, from time to time, delegated by one or more officers of the Company, including, but not limited to, the provision of the following services to the Company during the term of this Agreement:

Advise on research, development, and analysis of product, financial and strategic matters;

Assist in the preparation and procurement of contracts and product proposals to include drafting, editing, and review of specific proposal sections;


Assist the Company’s management with corporate and securities matters, such as the drafting and reviewing of registration statements, and replies to SEC comments and requests for additional information, interacting with the Company’s counsel and auditors to insure complete and accurate disclosures in SEC filings, communicating with the Company’s management, counsel, accountants and auditors to assist with and coordinate the filings of Forms 10-Q, 10-K, and 8-K along with the corresponding board resolutions, assist with listing applications for the trading of the Company’s shares, including the application for trading on the OTCQB and a possible application for up-listing to a national exchange;

Assisting in the introduction of the Company, its products, and solutions to potential customers and strategic partners to support the Company’s efforts to develop and sell its products; and

Advising the company with capital formation, the execution of any capital raises, and the coordination with possible investors and current shareholders.

It is anticipated that we will require the services of Tryon Capital to assist in the investigation of specific business opportunities and the negotiation, if /when presented, along with the drafting and execution of relevant agreements, disclosure documents and other instruments.

Effective as of May 1, 2020, we also entered into a Consulting Agreement with VCH Limited, a company formed under the laws of Macau (“VCH”) which beneficially owns in excess of 10% of our common stock. Pursuant to this VCH Consulting agreement, VCH was engaged as a consultant to the Company, primarily to create and build a presence with high net worth and institutional investors and advise management on evaluating other lines of business that may be beneficial to the Company’s shareholders. The term of the agreement is one year; provided, however, that each party has the right to terminate the agreement upon 30 days’ prior written notice to the other. Pursuant to the agreement, VCH shall receive $25,000 per month during the term of the agreement, in addition to reimbursement of expenses approved in advance by the Company.

Pursuant to the VCH Consulting Agreement, VCH was engaged as a consultant to the Company, to, among other things work closely with the Company’s Chairman to create and build a presence with high net worth and institutional investors, to act in such capacity and to provide the resources, guidance, feedback, advise and counsel in connection with the future PR/IR of the company with respect to both the buy and sell side of Wall Street. This includes introducing institutional and individual investors and bankers/analysts to the company via calls/meetings/webinars, etc

In addition, in our efforts to analyze potential acquisition targets, VCH will help management evaluate new business opportunities by considering the following factors:

potential for growth, indicated by new technology, anticipated market expansion or new products;

competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;

strength and diversity of management, either in place or scheduled for recruitment;

capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through bank loans or other commercial borrowing arrangements, through joint ventures or similar arrangements or from other sources;

the cost of participation by us as compared to the perceived tangible and intangible values and potentials;

the extent to which the business opportunity can be advanced;


the accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and

other relevant factors.

Private Placement

On April 14, 2020, we consummated private offers and sales (collectively, the “Private Placement”) of an aggregate of 2,500,000 shares of common stock for gross cash proceeds of $2,500,000 to three investors, Blackwell Partners LLC – Series A, to Blackwell Partners LLC – Series A, STAR V Partners LLC and Maso Capital Investments Limited. These investors are also Selling Shareholders with respect to an aggregate of 1,500,000 of the purchased shares. In addition to customary representations and warranties made by the parties in the Private Placement documents, the Company agreed to discuss with these investors, at least on a quarterly basis, and in advance of any consideration taken by the Company, of its current plans to list on a national securities exchange. The Company also agreed not to take certain actions without the express written consent of one of such investors, including any change in management or to the board of directors, change the Company’s independent public accountant, incurrence of any expense over $50,000, or any other material action. The Company further agreed to maintain its corporate existence and not sell all or substantially all of its assets, except when the surviving entity is a publicly traded entity which assumes the Company’s obligations under the Warrants and the Registration Rights Agreement. In connection with the Private Placement, the Company entered into Registration Rights Agreements with the three investors pursuant to which the Company agreed to register the shares of common stock issued to the investors and the shares issuable upon the exercise of the Warrants they received.

The Company intends to utilize the net proceeds from the Offering to explore and evaluate potential merger candidates for the Company and for general corporate purposes.

Registration Rights

In connection with the Private Placement, the Company entered into Registration Rights Agreements with the investors, pursuant to which the Company agreed that no later than 20 calendar days after it receives notice from at least two-thirds of the investors, the Company shall file a registration statement with the SEC covering the shares issued in the Private Placement, and the shares of common stock issuable upon exercise of the Warrants received by the three investors. The Company agreed to use its commercially reasonable efforts to ensure that such registration statement is declared effective within 60 calendar days of filing with the SEC, or 90 days in the event of a full review by the SEC. If the Company is late in filing the registration statement, or if the registration statement is not declared effective on a timely basis, the Company will be required to pay these three investors, who are also included as selling shareholders in this prospectus, liquidated damages at a rate equal to 1% of the purchase price for each full month the registration requirements have not been satisfied; provided, however, that in no event shall the aggregate of any such liquidated damages exceed 10% of the total purchase price. The Company is required to use its commercially reasonable efforts to maintain the effectiveness of the Registration Statement until the expiration of the Warrants, or until Rule 144 is available.

On April 22, 2020, the Company received a demand letter from the investors pursuant to the Registration Rights Agreement requesting that the Company register the Common Stock and the warrants owned by the three investors in a registration statement. On May 6, 2020, the three investors consented to a waiver of all the securities being registered to only include the 2,500,000 shares of Common Stock. On June 4, 2020, the three investors consented to a second waiver and agreed to include only 1,500,000 shares of Common Stock owned by the investors.

Going forward, we intend to seek, investigate and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for our shareholders. Our objectives discussed below are extremely general and are not intended to restrict discretion of our Board of Directors to search for and enter into potential business opportunities or to reject any such opportunities. We have no particular business combination in mind and have not entered into any negotiations regarding such a combination. Neither our officers nor any of our affiliates has engaged in any negotiations with any representative of any company regarding the possibility of an acquisition or combination between our company and such other company. We have not yet entered into any agreement, nor do we have any commitment or understanding to enter into or become engaged in a transaction.


We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. Further, we may acquire or combine with a venture that is in its preliminary or early stages of development, one that is already in operation or one that is in a more mature stage of its corporate existence. Accordingly, business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex.

The analysis of new business opportunities will be undertaken by or under the supervision of our executive officers and directors, none of whom is a business analyst. Therefore, it is anticipated that outside consultants or advisors may be utilized to assist us in the search for and analysis of qualified target companies.

A decision to participate or not in a specific business opportunity will be made based upon our analysis of the quality of the prospective business opportunity’s management and personnel, its assets, the anticipated acceptability of products or marketing concepts, the merit of a proposed business plan and numerous other factors that are difficult, if not impossible, to analyze using any objective criteria. We have unrestricted flexibility in seeking, analyzing and participating in potential business opportunities.

In our efforts to analyze potential acquisition targets, we will consider the following kinds of factors:

potential for growth, indicated by new technology, anticipated market expansion or new products;

competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;

strength and diversity of management, either in place or scheduled for recruitment;

capital requirements and anticipated availability of required funds, to be provided by us or from operations, through the sale of additional securities, through bank loans or other commercial borrowing arrangements, through joint ventures or similar arrangements or from other sources;

the cost of participation by us as compared to the perceived tangible and intangible values and potentials;

the extent to which the business opportunity can be advanced;

the accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and

other relevant factors.

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data.

Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to our limited capital available for investigation, we may not discover or adequately evaluate adverse facts about the opportunity to be acquired.

In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, licensing agreement or other arrangement with another entity. We also may acquire stock or assets of an existing business. On the consummation of a transaction it is probable that the present management and shareholders of the company will no longer be in control of the company. In addition, some or all of our officers and directors, as part of the terms of the acquisition transaction, likely will be required to resign and be replaced by one or more new officers and directors without a vote of our shareholders.


It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of a transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. The issuance of substantial additional securities and their potential sale into any trading market which may develop in our securities may have a depressive effect on that market.

While the actual terms of a transaction to which we may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition as a “tax-free” reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended.

With respect to any merger or acquisition, negotiations with target company management are expected to focus on the percentage of our company that the target company shareholders would acquire in exchange for all of their shareholdings in the target company. Depending upon, among other things, the target company’s assets and liabilities, our existing shareholders will in all likelihood hold a substantially lesser percentage ownership interest in our company following any merger or acquisition. The percentage ownership of our existing shareholders may be subject to significant reduction in the event we acquire a target company with substantial assets. Any merger or acquisition effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our shareholders at such time.

We will participate in a business opportunity only after the negotiation and execution of appropriate agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing, will outline the manner of bearing costs, including costs associated with our attorneys and accountants, and will include miscellaneous other terms.

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation would not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in our loss of the related costs incurred.

We expect to encounter substantial competition in our efforts to identify and consummate a transaction with a business opportunity. The primary competition will be from other companies organized and funded for similar purposes, small venture capital partnerships and corporations, small business investment companies and wealthy individuals, all of which may have substantially greater financial and other resources than we do. In view of our limited financial resources and limited management availability, we may be at a competitive disadvantage compared to our competitors.

The Your Hometown Deli Concept

 

Your Hometown Deli is a delicatessen concept that will focus on providing high-quality food products not available in local supermarkets or take-out restaurants. The delicatessen concept has a worldwide history with the term first appearing in the English language in 1889. The word “delicatessen” originates in the German language and means "delicacies"“delicacies” or “fine foods.” Delicatessens vary throughout the world, but in the United States a delicatessen (or “deli”) is a small retail store that is a blend of a grocery and a fast-food restaurant.

 

The Company’s Your Hometown Deli concept will beis patterned after traditional delicatessens, offering a wider and fresher menu than found at fast-food restaurants. Sandwiches and green salads will beare made fresh to order. Like many delis, Your Hometown Deli intends to serveserves some hot foods kept on a steam table, similar to a cafeteria. In addition to ready-to-eat food, the Your Hometown Deli plans to sellsells cold cuts by weight. A wide variety of beverages are also expected to be sold together with potato chips and similar products.

 


In addition to the lunch items, Your Hometown Deli plans to offer a number of additional items geared toward the breakfast crowd. Newspapers,our food offering, newspapers, limited household items and small snack items, such as candy, cookies and chewing gums are planned to be available for purchase. Your Hometown Delis are expected to provideDeli also provides take-out service and limited seating in the store.

 

Products

 

Your Hometown Deli will provideprovides sandwiches, soups, salads, deli meats/cheeses, hot/cold drinks, fresh breads/rolls and small retail items for cooking, baking, and home use. Salads will include made-to-order green salads, prepared pasta, potato, chicken, or other variety of "wet"“wet” salads. Breakfast products will include baked goods (breakfast pastries, bagels, toast), yogurt, and hot breakfast sandwiches. Fresh coffee, tea and other hot and cold beverages willare also be available for purchase.

 

Strategy

 

The Company’s business strategy is to create a food-centered social environment within the local community that offers higher-quality prepared food and ingredients than is typically found locally. CompanyThe Company’s management believes that broader market trends and certain locality-specific attributes support this strategy. The average American eats out 4-5 times a week and according to the United States Department of Labor. Management of the Company believes the increased popularity of eating out in the United States is a social trend that is likely to continue in the future. In addition, Management will select Your Hometown Deli locations that appear to support this strategy.

 

Our continued existence is dependent upon our ability to continue to execute our operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available or will be available on terms acceptable to our company. If we cannot obtain financing or if we determine not to proceed with our business plan, we may decide to exit our existing business and explore potential strategic alternatives, including establishing a new business, or target an existing business for acquisition, without restriction to any specific business, industry or geographical location.

Location

 

The Company’s first unit will be locatedsole location is in Paulsboro, a borough in Gloucester County, New Jersey that was founded in 1904. Paulsboro is located directly across the Delaware River from the city of Philadelphia and the Philadelphia airport. The Your Hometown Deli will beis located on a property in the commercial area of downtown Paulsboro that has two buildings. The front building will beis the location of the new Your Hometown Deli as well as the local Conrail offices. The rear building is used throughout the week as a practice facility by the local wrestling club and other sports groups. Paulsboro has a national reputation for its wrestling activities and one of the Company’s founders is a leader in the sport of wrestling.

 

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The borough of Paulsboro is undergoing a redevelopment phase from a petroleum products specialty port into an adaptable “OmniPort” able to handle a diversity of bulk, break bulk cargo and shipping containers. Studies completed in 2012 concluded that the port is well suited to become a center for the manufacturing, assembly, and transport of wind turbines and platforms for the development of Atlantic Wind Connection. The port is located approximately one mile from the site of the Your Hometown Deli. The ManagementCompany’s management believes that hundreds of employees around the area will eventually pass the Your Hometown Deli, the only food establishment on the main commuter route to the Port, in a few months from the opening of the deli.Port.

 

The Market

 

The local Paulsboro market is small, but conducive to hosting a Your Hometown Deli. According to the 2010 United States Census, there were 6,097 people and 2,286 households residing in the borough. The median household income was $43,846. The broader Philadelphia Metropolitan Statistical Area is the sixth-largest metropolitan area in the United States with a population to 6.53 million people.

 

The Company anticipates drawing customers from people living in Paulsboro and the adjacent communities of Greenwich, Clarksboro, and West Deptford, New Jersey. Commuting workers are also anticipated to be customers.

 


Local students and coaches who frequently use the sports practice facility on the property are another group of potential customers. The practice facility is also home to the “The Monster Factory,” a professional wrestling training and wrestling match promotions organization. In business more than 30 years, the Monster Factory has become “the world’s most famous wrestling school” and has been featured in theRolling Stone,,NewsWeek,, andWall Street Journal.Journal. The Company believes that the attendees of Monster Factory wrestling events are potential customers for Your Hometown Deli.

 

Local competing delicatessen concept stores include Wally’s Grocery & Deli. Other dining and grocery options in the area include locally owned pizzerias, seafood, and fine dining restaurants. Fast food options in the vicinity include McDonalds, Burger King, and Wendy’s. Grocery stores include Wawa, Dollar General, Heritage’s Dairy Stores and Fair Deal Food Market.

 

EmployeesSales and Marketing

 

The Company presently has ten employees apart from its officers and directors, Paul F. Morina, President and Christine T. Lindenmuth. Both are currently working for the Company without any compensation. From time to time, the Company may hire more employees based on its business needs and these decisions will be made by the officers if and when appropriate

Sales and Marketing

The Company will relyrelies heavily on word of mouth for its marketing. The Company’s founders have close ties to the community in which the first store will be openedis located and it is anticipatedbelieve that these relationships will help the Company’s sales and marketing efforts. A portion of the Company’s marketing budget is allocated to be spent on signage and other forms of local advertising. The Company plans to have a website that describes its offerings, menu, and daily specials and coupons, which are expected to be used to attract new customers and to increase sales. Social media is planned to be usedWe use Facebook to describe the quality, atmosphere, products, specials, customer opinions and general information about the Your Hometown Deli’s operation. All sales and marketing messages will attempt to describe the unique character of the Your Hometown Deli and its family-oriented style and old-world feel.

 

Seasonality

 

We do not have a seasonal business cycle. However, we may offer seasonal food items or adjust our menu items depending on the seasons.

 

Environmental Matters

 

Our business currently does not implicate any environmental regulation.

 

Intellectual Property

 

We do not hold any patents, trademarks or other registered intellectual property on products relating to our business. However, in addition to our domain name, from time to time,business except that we may apply for patents, trademarks or other registered intellectual property essential to the protection of our brand and success of our business.have a Facebook page.

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DESCRIPTION OF PROPERTY

 

The Company’s principal executive office and mailing address is 25 E. Grant Street, Woodstown, NJ 08098. Our telephone number is (856) 759-9034.

 

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with our officer Paul MarinaMantua Creek Group, LLC (“Mantua”), a related party, for the store space at 541A Mantua Ave, Paulsbroro,Paulsboro, NJ 08066 for a monthly rate of $500. As of the date ofThe lease was extended on August 12, 2019 for an additional two-year term. Management believes that this registration statement, the operating lease agreement has been fully executed and the Companyspace is expected to begin paying rent to Mr. Marinaadequate for the lease of the space starting in October 2015.

Once our business grows and generates sufficient revenue, we may look to expand our Your Hometown Deli concept and open stores in other locations throughout the United States.its current needs.

 

LEGAL PROCEEDINGS

 

Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. From time to time, we may become involved in various lawsuits andThere are no pending legal proceedings to which arise, in the ordinary course of business. However, as of the date of this registration statement, we are currently not involved witha party or in which any such legal proceedingsdirector, officer or claims.affiliate of ours, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.

 


MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION

AND RESULTRESULTS OF OPERATIONS

 

TheYou should read the following plan of operation provides information which management believes is relevant to an assessment and understanding ofdiscussion together with our results of operations and financial condition. The discussion should be read along with ourconsolidated financial statements and the related notes thereto.included elsewhere in this prospectus. This section includes a number ofdiscussion contains forward-looking statements that reflectare based on our current views with respect to future eventsexpectations, estimates and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, projectprojections about our business and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could causeoperations. Our actual results tomay differ materially from our predictions.those currently anticipated and expressed in such forward-looking statements.

 

Business Impact of Current Coronavirus (COVID-19) Pandemic on the Company

As of March 23, 2020, we were forced to temporarily close the delicatessen due to the stay-at-home order issued by the governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19. Although we reopened the delicatessen on September 8, 2020, the temporarily closure and other effects of COVID-19 had a material impact on our business. There will be no assurances that we will be able to generate sufficient revenues. We are unable to estimate the ultimate impact of the COVID-19 pandemic on our financial condition and future results of operations.

Overview

 

Incorporated on May 19, 2014 under the laws of the State of Nevada, Hometown International, Inc. is the originator of a new Delicatessen concept. Through our wholly-owned subsidiary, Your Hometown Deli Limited Liability Company (“Your Hometown Deli”), we plan to operate a delicatessen storesstore that featurefeatures “home-style” sandwiches and other entrees in a casual and friendly atmosphere. The stores are planned to bestore is designed to offer local patrons of all ages with a comfortable community gathering places. Targeted towards smaller towns and communities, the Company’s first unitand only store is planned to be builtlocated in Paulsboro, New Jersey.

 

On January 18, 2014, Your Hometwon Deli, LLC. was formed underApril 14, 2020, we consummated a private offer and sale of an aggregate of 2,500,000 shares of common stock for gross cash proceeds to us of $2,500,000. The Company intends to utilize the laws of State of New Jersey. On May 29, 2014, Your Hometown Deli, LLC, entered into a Membership Interest Purchase Agreement with ournet proceeds from this offering to explore and evaluate potential merger candidates for the Company and is now a wholly-owned subsidiary of our Company. We intend to introduce the delicatessen concept under the Your Hometown Deli brand name. Based on the Paulsboro unit’s performance, we may consider expanding the concept to other communities throughout the United States.for general corporate purposes.

 

AsOn April 15, 2020, we issued to each shareholder of record on said date: (i) five Class A Warrants, entitling the holder thereof to purchase five shares of the date of this registration statement, we are undergoing a Regulation D Rule 506 offering in which we are offering up to 300,000 units (the “Units”), consisting of one (1) share of Common Stock and two (2) warrants each to purchase one (1) share of Common StockCompany’s common stock at an exercise price of $2.50$1.25 per share. The Units are being offeredshare (the “Class A Warrants”), (ii) five Class B Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at aan exercise price of $0.75$1.50 per Unitshare (the “Class B Warrants”), (iii) five Class C Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at an exercise price of $1.75 per share (the “Class C Warrants”), and there is no minimum subscription requirement(iv) five Class D Warrants, entitling the holder thereof to purchase five shares of the Company’s common stock at an exercise price of $2.00 per share (the “Class D Warrants”), with each warrant expiring on April 15, 2035 (collectively, the “Warrants”). The Company issued an aggregate of 155,940,080 Warrants. No warrants have been exercised to date.

Results of Operations - Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

We generated revenue of $0 and $4,205 for the investors.three months ended June 30, 2020 and 2019, respectively. The decrease in revenue is attributed to the closure of the delicatessen as a result of COVID-19. The total cost and expenses were $176,444 for the three months ended June 30, 2020, compared to $47,308 for the three months ended June 30, 2019. The increase in total cost and expenses is mainly attributed to $80,000 in consulting fee –related parties and $68,755 of professional fees. Increase in consulting expense was attributable to consulting agreements entered on May 1, 2020 with related parties. Increase in professional fees was attributable to legal fees required in connection with filing with the Securities and Exchange Commission Form S-1 Registration Statement. We incurred loss from operations of $176,444 and $43,103 for the three months ended June 30, 2020 and 2019, respectively. The increase of $133,341 in loss from operations is mainly attributed to the added expenses incurred due to increases in consulting and professional fees during the three months ended June 30, 2020.

 

As of October 2015, haveDue to the described factors above, we had limited active business operations and generated no revenue. Except for the equipment and fixtures we purchased in connection to our deli store, we have limited assets. We had minimal working capital as of the date of this registration statement and used cash in operating activities for the reporting period then ended. These factors raise substantial doubt from our auditor about our ability to continue as a going concern.

As reflected in the financial statements, Company used cash in operations of $60,288 and has a net loss of $92,654$178,015 and $49,852 for the three months ended June 30, 2020 and 2019, respectively.


Results of Operations - Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

We generated revenue of $3,577 and $8,813 for the six months ended June 30, 2015. In addition,2020 and 2019, respectively. The decrease in revenue is mainly attributed to the Company has not generated any revenues from inception. These factors raise substantial doubt from our auditor about our ability to continueclosure of the delicatessen as a going concern. It is our belief that the saleresult of 300,000 Units will provide our Company with sufficient capital resource to continue our businessCOVID-19. The total cost and expenses were $257,383 for the next twelve (12) months.six months ended June 30, 2020, compared to $88,121 for the six months ended June 30, 2019. The increase in total cost and expenses is mainly attributed to $128,075 of professional fees and $80,000 of consulting fees – related parties for the six months ended June 30, 2020, as compared to $32,210 of professional fees and no consulting fees during for the six months ended June 30, 2019. Increase in consulting expense was attributable to consulting agreements entered on May 1, 2020 with related parties. Increase in professional fees was attributable to legal fees required in connection with filing with the Securities and Exchange Commission Form S-1 Registration Statement. We also anticipate generating revenue onceincurred loss from operations of $253,806 and $79,308 for the six months ended June 30, 2020 and 2019, respectively. The increase of $174,498 in loss from operations is mainly attributed to the amount of professional fees and consulting fees.

Due to the described factors above, we open our first deli store. However, our cash position may not be sufficient to support our daily operations. While we believe inhad a net loss of $262,706 and $92,295 for the viability of our strategy to generate sufficient revenuessix months ended June 30, 2020 and in our ability to raise additional funds, there can be no assurances to that effect. Our continued existence is dependent upon our ability to continue to execute our operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to our company.2019, respectively.

 

Liquidity and Capital Resources

Plan

As of OperationsJune 30, 2020, we had total assets of $1,920,125, consisting of $1,911,717 in cash, $5,687 in net operating lease asset, $2,415 in leasehold improvements, and $306 in inventory. Our liabilities as of June 30, 2020 were $77,377, which comprised of $11,477 in accounts payable and accrued expenses, $60,213 due to certain officers, and $5,687 in operating lease liability. As of June 30, 2020, we had a working capital deficit of $1,834,646.

 

The Delifollowing is scheduled to open in November 2015. The delaya summary of the grand opening has been due to difficulty getting final inspections approved. The business plan calls for a walk-in style deli, where customers could buy sandwiches, cold cutsour cash flows provided by (used in) operating, investing, and salads from the counter. Additionally there will be dry goods and beverages associated with the deli conceptfinancing activities for the customer to purchase.six months ended June 30, 2020 and 2019:

  For the six
months
ended
June 30,
2020
  For the six
months
ended
June 30,
2019
 
Net Cash Used in Operating Activities $(300,421) $(42,891)
Net Cash Used in Investing Activities      
Net Cash Provided by Financing Activities $2,206,756  $42,551 
Net Increase (Decrease) in Cash and Cash Equivalents $1,906,335  $(340)

For the six months ended June 30, 2020, net cash used in operations of $300,421 was the result of a net loss of $262,706 offset by offset by in-kind contribution of services of $15,428, depreciation expense of $3,623, a decrease in operating lease right of use of $2,637, a decrease of inventory of $738, an increase of accounts payable and accrued expenses of $57,504 and a decrease in operating lease liabilities of $2,637. For the six months ended June 30, 2019, net cash used in operations of $42,891 was the result of a net loss of $92,295 offset by offset by in-kind contribution of services of $15,428, depreciation expense of $3,627, a decrease of inventory of $212, and a decrease of accounts payable and accrued expenses of $30,137.

 

Between late fallNet cash used in our investing activities were $0 and early winter of 2013, we gutted$0 for the interior space of our store located at 541A Mantua Ave,Paulsbroro, NJ 08066,the future site of Your Hometown Deli. The space was once used as an office/retail space for a local canvasing company. During that time period, we installed the carpet, took down wallssix months ended June 30, 2020 and doors, and removed ceiling tiles and insulation due to water damage and wears and tears.June 30, 2019, respectively.

 

During the first quarterOur financing activities resulted in a cash inflow of 2014, we began the process of upgrading the electric to sustain various types of refrigeration units including deli cases and beverage units, both hot and cold. Upgrades were deemed necessary by the management to meet the needs of a security system and appliances in the kitchen. We also installed plumbing and gas lines$2,206,756 for the kitchensix months ended June 30, 2020, which is represented by $2,500,000 proceeds from issuance of common stock, $7,196 proceeds from a shareholder loan payable, $332,104 loan repayment to related party, $70,000 proceeds from note payable- related party and purchased$38,336 and purchase of treasury stock. Our financing activities resulted in a commercial grade six-burner oven. During the summercash inflow of 2014, to be fully compliant with local building codes and various ordinances, we laid concrete for sidewalks, walkways and driveways, as well as a patio for refuse. We also painted the exterior of the building and purchased our first deli case and other kitchen supplies. Later in 2014, we installed dry walls in the main dining area, put in fire wall and cement board$42,551 for the kitchensix months ended June 30, 2019, which is represented by $4,451 proceeds from a shareholder loan payable and mounted$38,100 proceeds from note payable- related party.


We are dependent on the revenues from our delicatessen operations and receipt of capital investment or other financing to fund our ongoing operations. On April 14, 2020, we consummated a private offer and sale of an ANSUL systemaggregate of 2,500,000 shares of common stock for commercial hood. Meanwhile, various sinksgross cash proceeds to us of $2,500,000. The Company plans to utilize the net proceeds from this offering to explore and tables were purchased, along with a second deli case. We also repaired the windows, patched, painted and polished the interior floor with epoxy coveringevaluate potential merger candidates for the finish.

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Between winter of 2014Company and now,to fund general corporate purposes. To that end, we have painted interior wallsentered into consulting agreements with two consultants, Tryon Capital Ventures and put up chair railVCH Limited, for $15,000 and base-board in entire space. We also installed closet door, kitchen counter, deli counter and coffee bar. We finished the plumbing system in the kitchen and installed sinks, stove, and a grill. Wire racks were also purchased for shelving for the sale of convenience items. We also installed a new in-ground drainage system to reroute gutter water, as well as new ceiling tiles and insulation. We also graded our driveway and erected a store sign. There is also a cable phone line available to use.

We installed the wiring of the ANSUL fire system and security system, the installation of privacy fence around the waste removal area and put in additional handicap parking spots in our parking lot to accommodate local ordinance. We installed new front doors, purchased different types of kitchen appliance and a POS system to process future credit card transactions. We currently maintain ten employees on staff in addition to the owners. We kicked off a soft opening of our restaurant as of October 14, 2015. A grand opening has also been planned for mid-November. Promotion and marketing of our deli has been primarily through word of mouth, signage in front of our physical store location, articles and ads to be placed in the local newspaper (the Record Today), sponsorship of the glasses for an annual Wine Festival planned on November 21, 2015 with Your Hometown Deli info printed on the side of glass. We are currently working to launch our website and Facebook page. Our menu offering has been set to include cold sandwiches, subs, wraps and salads. We have submitted a credit application to use Dietz and Watson as our primary supplier for various deli meats, cheeses and salads. Also available for purchase are items such as pastas, sauces, oils, vinegars, spices and authentic Italian treats. 

$25,000 per month, respectively. We plan to use the proceeds from ourthe private placement offering to fundpay for these obligations.

On March 23, 2020, we were forced to temporarily close the delicatessen due to the stay-at-home order issued by the Governor of New Jersey on March 9, 2020, resulting from the outbreak of COVID-19.

On April 24, 2020, the Company fully repaid the notes payable to Peter L. Coker, Jr., our planChairman, in the principal amount of $285,126, and $46.978 of accrued interest. The loans, which were paid in full, were repaid from the proceeds of said private placement.

We reopened the delicatessen on September 8, 2020, the temporarily closure and other effects of COVID-19 had a material impact on our business. We experienced a decrease in revenues as a result of the COVID-19 pandemic even before the stay-at-home order was issued. Even now that the order is lifted and the delicatessen is re-opened, we may have a slowdown in customer’s visit due to the current economic condition. There can be no assurances that we will able to generate sufficient revenues. The further spread of COVID-19, and the requirements to take action to mitigate the spread of the pandemic, will impact our ability to carry out our business as usual and may materially adversely impact global economic conditions, our business, results of operations, includingcash flows and financial condition.

Even now that we have reopened our marketing effortstore, we might be subject to modified hours and equipment purchase. Weconditions. Moreover, should New Jersey fail to fully contain COVID-19 or suffer a COVID-19 relapse, the market for our deli may not recover quickly or at all, which could have a material adverse effect on our business and results of operations. As a result, we may incur additional expenses forimpairment charges to our inventory, butstore and corporate assets, any of which may have a significant or material impact on our financial results. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the scope and duration of actions to contain COVID-19 or treat its impact, among others. We are unable to estimate the ultimate impact of the COVID-19 pandemic on our financial condition and future results of operations.

As of September 21, 2020, we had approximately $1,700,000 of cash on hand, and a cash burn rate of approximately $80,000 per month. Therefore, the Company believes it is management’s belief that the store will begin to generate revenue quickly from its operation once the deli is open and therefore generatehave sufficient cash flow to fund our operation.sustain its current operations for the next 12 months.

 

Critical Accounting Policies and Estimates

 

While our significant accounting policies are more fully described in Note 1 to our financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

Use of Estimates

In preparing consolidated financial statements in conformity with generally accepted accounting principles, we aremanagement is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Significant estimates include valuation of in kind contribution of service and valuation of deferred tax assets. Actual results could differ from those estimates.

 

Fair value measurements and Fair value of Financial InstrumentsRevenue Recognition

Effective January 1, 2018, the Company recognizes revenue in accordance with Accounting Standards Codification 2014-09, Revenue from Contracts with Customers (Topic 606).

The carrying amounts on our financial instruments including note receivable, accounts payable and note payable, approximate fair value due toCompany generates revenue operating a delicatessen. Revenue from the relatively short period to maturity for these instruments.operations of Company-owned delicatessen are recognized when sales occur.

 


Recent Accounting Pronouncements

 

In April 2015,February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03, “ Interest – Imputation of Interest (Subtopic 835-30): SimplifyingASU 2016-02, “Leases” Topic 842, which amends the Presentation of Debt Issuance Costs”, is to simplify presentation of debt issuance costsguidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring that debt issuance costs related to a recognized debt liability be presented inthe recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet as a direct deduction fromfor all leases longer than 12 months. Under the carrying amountstandard, disclosures are required to meet the objective of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt issuance costs. For public companies, the ASU is effective forenabling users of financial statements issued for fiscal years beginning after December 15, 2015,to assess the amount, timing, and interim periods within those fiscal years. Early application is permitted. We are currently reviewing the provisionsuncertainty of this ASU to determine if therecash flows arising from leases. For lessees, leases will be any impact on our resultsclassified as finance or operating, with classification affecting the pattern and classification of operations, cash flows or financial condition.

In April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-04, “Compensation – Retirement Benefits (Topic 715): Practical Expedient forexpense recognition in the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”, permitsincome statement. The Company adopted the entity to measure defined benefit plan assets and obligationsnew lease guidance effective January 1, 2019 using the month-end that is closestmodified retrospective transition approach, applying the new standard to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. We are currently reviewing the provisionsall of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, provides guidance to customers about whether a cloud computing arrangement includes a software license. If such an arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. For public business entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

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In April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions”, specifies that, for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business beforeits leases existing at the date of a drop down transaction shouldinitial application which is the effective date of adoption. Consequently, financial information will not be allocated entirelyupdated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the general partner. In that circumstance,lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported earnings per unitconsolidated statements of the limited partners (which is typically the earnings per unit measure presentedoperations and did not result in the financial statements) would not change asa cumulative catch-up adjustment to opening equity. As a result, of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ beforeCompany has recorded Right-to-use assets and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. We are currently reviewing the provisions ofcorresponding Lease obligations as more fully discussed in our consolidated financial statements included in this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.Registration Statement.

 

All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.

 

Going ConcernResults of Operations for the years ended December 31, 2019 and December 31, 2018

 

Our financial statements have been prepared on a going concern basis, which contemplatesComparison of the realization of assetsFiscal Year Ended December 31, 2019 and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should our company be unable to continue as a going concern.

As reflected in the financial statements,the Company used cash in operations of $60,288 and has a net loss of $92,654 for the six months ended June 30, 2015. In addition, the Company has not generated any revenues from inception. These factors raise substantial doubt from our auditor about our ability to continue as a going concern. Our continued existence is dependent upon our ability to continue to execute our operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to our company.2018

 

We are attempting to complete the launch of our first location to generate sufficient revenue; however, our cash position may not be sufficient to support our daily operations. While we believegenerated $21,772 and $32,205 in the viability of our strategy to generate sufficient revenues and in our ability to raise additional funds, there can be no assurances to that effect. The ability of our company to continue as a going concern is dependent upon our ability to further implement our business plan, generate sufficient revenue and in our ability to raise additional funds.

Results of Operations

Comparison for the Three Months Ended June 30, 2015 and 2014

Because we have yet to open our first deli, we generated no revenue for the three monthsfiscal year ended June 30, 2015December 31, 2019 and 20142018, respectively. We incurred operating expenses of $53,419$153,930 and $10,689$119,505 for the three monthsfiscal year ended June 30, 2015December 31, 2019 and 2014,2018, respectively. Our operating expenses for the three monthsfiscal year ended June 30, 2015 consistsDecember 31, 2019 consisted of consulting fees to a related partyfood, beverage and supplies of $24,000,$15,824, direct operating and occupancy costs of $9,446, labor costs of $102, professional fees of $18,350$56,776 and general and administrative fees of $64,467, compared to food, beverage and supplies of $20,172, direct operating and occupancy costs of $8,734, labor costs of $360, professional fees of $34,096 and general and administrative expenses of $11,069, compared to consulting fees to a related party of $0, professional fees of $10,000 and general and administrative expenses of $689$48,828 for the three monthsfiscal year ended June 30, 2014.December 31, 2018. We had a net loss of $53,494$149,341 for the three monthsfiscal year ended June 30, 2015,December 31, 2019 compared to net loss of $10,689$108,843 for the three monthsfiscal year ended June 30, 2014.

For the Six Months Ended June 30, 2015

We generated no revenue for the six months ended June 30, 2015. We incurred operating expenses of $92,579 for the six months ended June 30, 2015. Our operating expenses for the six months ended June 30, 2015 consists of consulting fees to a related party of $48,000, professional fees of $25,589 and general and administrative expenses of $11,069. We had a net loss of $92,654 for the six months ended June 30, 2015.December 31, 2018.

 

For the Period from January 18, 2014 (Inception) to June 30, 2014

We generated no revenue from January 18, 2014 (inception) to June 30, 2014. We incurred a total operating expenses of $62,317, consisting of $40,000 in consulting fee to a related party and general and administrative expense of $22,317 for the period from inception to June 30, 2014. We had a net loss of $62,317 For the Period from January 18, 2014 (inception) to June 30, 2014.

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should our company be unable to continue as a going concern.

Liquidity and Capital Resources - for the years ended and as of December 31, 2019 and as of December 31, 2018

 

For the Six Months Ended June 30, 2015

As of June 30, 2015,December 31, 2019, we had total assets of $34,342$20,788 and $27,632$492,426 in liabilities, respectively. Thus, we had a total stockholders’ equitydeficit of $6,710$471,638 as of June 30, 2015.

December 31, 2019. As of December 31, 2018, we had total assets of $14,868 and $368,021 in liabilities, respectively. Thus, we had a total stockholders’ deficit of $353,153 as of December 31, 2018.

 

13

As of June 30, 2015,December 31, 2019, we had a cash balance of $10,167.$5,382. Operating activities used $60,288$156,671 in cash for the six monthsfiscal year ended June 30, 2015. InvestingDecember 31, 2019. Financing activities used $10,516provided $161,444 in cash for the six monthsfiscal year ended June 30, 2015. Financing activities during the six months ended June 30, 2015 provided $67,500 in cash, which is attributed to the $67,500 in proceeds from the sale of our stock. We estimate that we have enough cash to continue operations for five months.

For the Period from January 18, 2014 (Inception) to December 31, 2014

As2019.As of December 31, 2014,2018, we had a cash balance of $13,471. We had nominal assets and generated no revenues from inception to$609. Operating activities used $53,544 in cash for the fiscal year ended December 31, 2014. We currently have no material commitments2018. Financing activities provided $48,812 in cash for capital expenditures. We may be required to raise additional funds, particularly ifthe fiscal year ended December 31, 2018.

On December 31, 2019, we are unable to continue generating positive cash flow as a result ofborrowed $175,000 from Peter Coker, Jr., our operations. We estimate that based on current plans and assumptions, that our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months. In addition, our company may, from time to time, receive continued funding and capital resources from related parties. However, asChairman of the dateBoard. The principal amount, plus accrued and unpaid interest at 8% per annum, is due and payable on June 30, 2020. The loan was repaid in full on April 24, 2020.

On December 31, 2019, the Company entered into an unsecured promissory note with Peter Coker, Jr. in the amount of this registration statement, such related parties do not have any existing obligation$10,000. Pursuant to advance funds or working capital to support our business, nor can our company relythe terms of the note, the note is bearing 8% interest, unsecured and is due on any advance funds from such related parties. Other than working capital, we presently have no other alternative sourceDecember 31, 2020. The loan was repaid in full on April 24, 2020.

21

Going concern

As reflected in the accompanying consolidated financial statements, the Company used cash in operations of working capital.$156,671, has an accumulated deficit of $806,920, and has a net loss of $149,341 for the year ended December 31, 2019. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We may need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We do not anticipate we will be profitable in 2015. Therefore our future operations may be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our Common Stock. The inability to obtain additional capital will restrict our ability to grow and may reduce ourThis raises substantial doubt about its ability to continue as a going concern. The ability of the Company to conductcontinue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business operations. If we areplan. The financial statements do not include any adjustments that might be necessary if the Company is unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations.continue as a going concern.

 

We anticipate that dependingOn March 23, 2020, we were forced to temporarily close the delicatessen due to the stay-at-home order issued by the Governor of New Jersey on market conditionsMarch 9, 2020, resulting from the outbreak of COVID-19. As of March 30, 2020, we had $11,245 of cash on hand, and our plana burn rate of operations, we may incur operating losses in the foreseeable future.approximately $13,000 per month. Therefore, our independent auditors have raisedissued a going concern opinion in connection with the audit of the Company’s consolidated financial statements for the year ended December 31, 2019. The report of our independent registered public accounting firm on our audited consolidated financial statements as of December 31, 2019 and 2018 and for each of the two years then ended includes an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.concern based upon our recurring losses, cash used in operations and accumulated deficit.

 

Our liquidity mayOn September 8, 2020, the delicatessen was reopened for business. There will be negatively impacted byno assurances that we will be able to generate sufficient revenues. We are unable to estimate the significant costs associated withultimate impact of the COVID-19 pandemic on our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Actfinancial condition and future results of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.operations.

 

Off-Balance Sheet Arrangements

 

We do not have noany off-balance sheet arrangements.

 

Contractual ObligationsMANAGEMENT

 

On August 1, 2014, the Company entered into a consulting agreement with Tryon Capital Ventures, LLC where Beth Floyd is a part time employee, to receive administrativeDirectors and other miscellaneous services. The consulting agreement covers all of the back office services provided for the Company and additionally all of the work necessary to complete this registration statement filings and other work necessary to keep the Company compliance with the SEC. The Company is required to pay $8,000 a month. The agreement is to remain in effect unless either party desires to cancel the agreement.Executive Officers

 

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with a Mantua Creek Group LLC, for which our President Paul Morina is a member of, for its store space at a monthly rate of $500. As of the date hereof, the operating lease agreement has been fully executed and Company is expected to begin paying rent starting in October 2015.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The following table sets forth the names and ages of our officers and directors as of October 19, 2015.directors. Our executive officers are elected annually by our Board of Directors. Our executive officers hold their offices until they resign, are removed by the Board, or a successor is elected and qualified.

 

Name Age Position
Peter L. Coker, Jr.51Chairman of the Board of Directors
Paul F. Morina 5662 President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director
Christine T. Lindenmuth 4045 Vice President, Secretary and Director
Beth Floyd33Secretary

14

 

Set forth below is a brief description of the background and business experience of our executive officers and directors.

Peter L. Coker Jr., Chairman – Since February 2013, Mr. Coker has been the Chairman (Executive Director) of South Shore Holdings Limited, a Hong Kong listed company . He is also a member of that company’s Finance and Investment Committee, Disclosure Committee and Executive Committee, and a director of its various subsidiaries. Mr. Coker was the Managing Partner of Pacific Advisers, and was also a partner of TDR Capital Investment Ltd (a Shenzhen-based private equity firm) from 2009 to 2013. From 2006 to 2009, Mr. Coker served as Chairman of Global Trading Offshore Pte (Singapore). From 2002 to 2005, Mr. Coker served as the Chairman of Wellington Securities (New Zealand). Mr. Coker served as an officer of the Bridge Companies prior to joining Wellington Securities (New Zealand) in 2002. During his service with the Bridge Companies, Mr. Coker held the title of Managing Director-Asia, Chief Executive Officer of E-Bridge and directorManaging Director of Bridge Asia where he was responsible for the past five years.firm’s equity business in Japan and South East Asia/Australia. From 2000 to 2001, Mr. Coker served as the Chairman of IRESS Market Technology Limited (formerly BridgeDFS) (ASX: IRE). Mr. Coker graduated from Lehigh University in the United States with a Bachelor of Arts degree in 1990. Our board of directors believes Mr. Coker’s industry experience, as well as his extensive finance and operations experience, uniquely position him to lead the Company through our next phase as a company.

 


Paul F. Morina,, President, CEO, CFO, Treasurer and Director - Since 2008, Mr. Morina has been nationally recognized for his coaching and leadership at a local, regional and national level. His accomplishments include the very prestigious 2011 National Coach of the Year award by the National Wrestling Association and being inducted into the James Madison University Hall of Fame in 2012. Mr. Morina currently serves as the Principal of Paulsboro (NJ) High School and as the Head Wrestling Coach.Coach since 1986. Mr. Morina has spent his entire career in the Paulsboro Public School District where he began his career as an Elementary School Physical Education Teacher and Health Instructor.Instructor in 1982. He has held the positions of High School Physical Education and Health Instructor, Head Coach, and High School Athletic Director.

Mr. Morina’s college wrestling career was well recognized. While at James Madison University, he was a two-time NCAA Eastern Regional champion. Mr. Morina has been highly successful coaching high school wrestling for over 27 years in his hometown of Paulsboro, N. J. Named the 1994 State Wrestling Man-of-the-Year by Wrestling USA Magazine, his teams have won 25 class state championships, 24 district championships and 25 conference titles. He has a 550-34-4 overall record and has lead the Paulsboro wrestling program to exceed 1,000 victories.

In addition to his work within the Paulsboro public school systems, Mr. Morina served as a Member of Paulsboro Town Council from 2005 to 2011. Mr. Morina earned his B. A. from James Madison University and his M. Ed. degree from Widener University. We believe that Mr. Morina’s in-depth knowledge and extensive experience makes him a valuable member of our board of directors.

 

Christine T. Lindenmuth,Vice President, Secretary and Director - Since September 2012, Ms. Lindenmuth has been motivating and educating students for almost 15 years. She currently is a Math Teacher at Paulsboro High School, where she is also active in the Paulsboro Education Association, Mentor Club, Renaissance Committee and Alternative Education Program. Prior to Paulsboro High, Ms. Lindenmuth was a Student Advisor at Salem Community College.College from 2010 through 2012. She has also served as a School Counselor at Gateway Regional High School, Lindenwold High School and Salem County Vocational School.

Ms. Lindenmuth started her career as a Math Teacher in 1997 at the PG-CP Regional High School, where she taught accelerated students at the Academy of Science and Engineering. Ms. Lindenmuth currently serves on Salem County School Employee Federal Credit Union Loan Committee, as an Association Representative for the Penns Grove Chapter of the New Jersey Teachers Union, and as a representative on the State Educational Policy Committee for the New Jersey Education Association. Ms. Lindenmuth earned her BAB.A. from Rider University and her M. Ed. from Wilmington University.

Beth Floyd,Secretary - We believe that Ms. Floyd has over 10 yearsLindenmuth’s in-depth knowledge and extensive experience makes her a valuable member of experience in the food service industry. She has held a numberour board of positions with Maggiano’s Little Italy, serving as assistant accounting manager from 2009 to 2010 and then promoted to maître d’ at the Durham, NC restaurant. Ms. Floyd received her BA from University of North Carolina at Chapel Hill with a major in journalism and mass communications.directors.

 

Term of Office

 

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

 

Family Relationships

There are no family relationships between any of our directors or executive officers.

Certain Legal Proceedings

There are no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

EXECUTIVE AND DIRECTOR COMPENSATION

Compensation

 

Our executive officers have not received any compensation for services rendered to us and are not accruing any compensation pursuant to any agreement with us.

We do not expect to pay any compensation to any of our officers until sufficient and sustainable revenues and profits are realized.

 


No retirement, pension, profit sharing, insurance programs, long-term incentive plans or other similar programs have been adopted by us for the benefit of our employees. We had no outstanding equity awards as of the date of this registration statement.prospectus.

There were no outstanding equity awards made to any officers or directors as of December 31, 2019.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTPRINCIPAL SHAREHOLDERS

 

The following table provideslists, as of September 22, 2020, the names and addressesnumber shares of Common Stock beneficially owned by (i) each person or entity known to usthe Company to ownbe the beneficial owner of more than 5% of ourthe Company’s outstanding sharescommon stock; (ii) each executive officer; and (iii) all officers and directors as a group. Information relating to beneficial ownership of Common Stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as of October 19, 2015 and by the officers and directors, individually and as a group.to which he or she may not have any pecuniary beneficial interest. Except as otherwise indicated, all shares are owned directly and the shareholders listed possessesnoted below, each person has sole voting and investment power with respect to the shares shown.beneficially owned.

 

Unless otherwise indicated, the business address of each such person is c/o Hometown International, Inc., 25 E. Grant Street, Woodstown, New Jersey 08098. The percentages below are calculated based on 7,797,004 shares of Common Stock issued and outstanding as of September 22, 2020.

Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership  Percent 
Peter L. Coker, Jr.  0   0 
Paul F. Morina(1)  31,500,000   83.34%
Christine T. Lindenmuth  0   0 
All Executive Officers and Directors as a group (3 persons)  31,500,000   83.34%
Blackwell Partners LLC – Series A (2)
8/F Printing House
6 Duddell Street
Central Hong Kong, Hong Kong
  28,980,000(3)  81.87%
STAR V Partners LLC (4)
8/F Printing House
6 Duddell Street
Central Hong Kong, Hong Kong
  13,938,750(5)  66.15%
Maso Capital Investments Limited (6)
8/F Printing House
6 Duddell Street
Central Hong Kong, Hong Kong
  9,581,250(7)  56.62%
Global Equity Limited(8)
Avenida Da Praia Grande
No. 759, 1 Andar
Macau, China
  42,000,000(9)  87.87%
IPC-Trading Company(10)
Avenida Da Praia Grande
No. 759, 1 Andar
Macau, China
  10,500,000(11)  57.39%
RTO Limited (12)
Avenida Da Praia Grande
No. 759, 1 Andar
Macau, China
  10,500,000(13)  57.39%
VCH Limited(14)
Avenida Da Praia Grande
No. 759, 1 Andar
Macau, China
  10,500,000(15)  57.39%
Europa Capital Investments,LLC (16)
610 Jones Ferry Road, Suite 207
Carrboro, North Carolina 27510
  1,990,400(17)  19.76%
Peter L. Coker, Sr. (18)
12804 Morehead
Chapel Hill, North Carolina 27517
  1,330,014(19)  14.67%


15(1)Includes 1,500,000 shares of common stock issued and outstanding, 7,500,000 shares issuable upon the exercise of the Class A Warrants, 7,500,000 shares issuable upon the exercise of the Class B Warrants, 7,500,000 shares issuable upon the exercise of the Class C Warrants, and 7,500,000 shares issuable upon the exercise of the Class D Warrants.

Name Number of Shares
Beneficially Owned
  Percent of Class (1) 
Paul F. Morina,President, CEO, CFO & Director  2,500,000   

47.69

%
Christine T. Lindenmuth,Vice President  2,500,000   

47.695

%
Beth Floyd,Secretary  0   0%
         
All Executive Officers and Directors as a group (1 person)  5,000,000   

95.38

%
5% Beneficial Owners:None        

 

(1)(2)

Based on 5,242,340Manoj Jain, authorized signatory of Maso Capital Partners Limited (“Maso”), has sole voting and investment power over the securities of the Company held by Blackwell Partners LLC – Series A (“Blackwell”). Mr. Jain and Maso disclaim beneficial ownership over the securities of the Company held by Blackwell.

(3)Includes 1,380,000 shares of Common Stockcommon stock issued and outstanding, as6,900,000 shares issuable upon the exercise of October 19, 2015.the Class A Warrants, 6,900,000 shares issuable upon the exercise of the Class B Warrants, 6,900,000 shares issuable upon the exercise of the Class C Warrants, and 6,900,000 shares issuable upon the exercise of the Class D Warrants.

(4)Manoj Jain, authorized signatory of Maso, has sole voting and investment power over the securities of the Company held by STAR V Partners LLC (“Star”). Mr. Jain and Maso disclaim beneficial ownership over the securities of the Company held by Star.

(5)Includes 663,750 shares of common stock issued and outstanding, 3,318,750 shares issuable upon the exercise of the Class A Warrants, 3,318,750 shares issuable upon the exercise of the Class B Warrants, 3,318,750 shares issuable upon the exercise of the Class C Warrants, and 3,318,750 shares issuable upon the exercise of the Class D Warrants.

(6)Manoj Jain, authorized signatory of Maso, has sole voting and investment power over the securities of the Company held by Maso Capital Investments Limited.

(7)Includes 456,250 shares of common stock issued and outstanding, 2,281,250 shares issuable upon the exercise of the Class A Warrants, 2,281,250 shares issuable upon the exercise of the Class B Warrants, 2,281,250 shares issuable upon the exercise of the Class C Warrants, and 2,281,250 shares issuable upon the exercise of the Class D Warrants.

(8)Michael R. Tyldesley and Ibrahima Thiam, the owners of Global Equity Limited (“Global”), have joint voting and investment power over the securities of the Company held by Global.

(9)Includes 2,000,000 shares of common stock issued and outstanding, 10,000,000 shares issuable upon the exercise of the Class A Warrants, 10,000,000 shares issuable upon the exercise of the Class B Warrants, 10,000,000 shares issuable upon the exercise of the Class C Warrants, and 10,000,000 shares issuable upon the exercise of the Class D Warrants. Global Equity purchased the 2,000,000 shares of common stock from Peter L. Coker, Jr., our Chairman, in April 2020.

(10)Ibrahima Thiam and Lan Moi Lilia, the owners of IPC-Trading Company Ltd. (“IPC”), have joint voting and investment power over the securities of the Company held by IPC.

(11)Includes 500,000 shares of common stock issued and outstanding, 2,500,000 shares issuable upon the exercise of the Class A Warrants, 2,500,000 shares issuable upon the exercise of the Class B Warrants, 2,500,000 shares issuable upon the exercise of the Class C Warrants, and 2,500,000 shares issuable upon the exercise of the Class D Warrants.

(12)Nathalie Tina Pasyawon, the owner of RTO Limited (“RTO”), has sole voting and investment power over the securities of the Company held by RTO.


(13)Includes 500,000 shares of common stock issued and outstanding, 2,500,000 shares issuable upon the exercise of the Class A Warrants, 2,500,000 shares issuable upon the exercise of the Class B Warrants, 2,500,000 shares issuable upon the exercise of the Class C Warrants, and 2,500,000 shares issuable upon the exercise of the Class D Warrants.

(14)Michael Tyldesley, the managing director of VCH Limited (“VCH”), has sole voting and investment power over the securities of the Company held by VCH.

(15)Includes 500,000 shares of common stock issued and outstanding, 2,500,000 shares issuable upon the exercise of the Class A Warrants, 2,500,000 shares issuable upon the exercise of the Class B Warrants, 2,500,000 shares issuable upon the exercise of the Class C Warrants, and 2,500,000 shares issuable upon the exercise of the Class D Warrants.

(16)Peter L. Coker, Sr. and Peter Reichard, managing members of Europa Capital Investments, LLC (“Europa”) have joint voting and investment power over the securities of the Company held by Europa. Peter Coker, Sr. is the father of our Chairman, Peter Coker, Jr.

(17)Includes 90,400 shares of common stock issued and outstanding, 475,000 shares issuable upon the exercise of the Class A Warrants, 475,000 shares issuable upon the exercise of the Class B Warrants, 475,000 shares issuable upon the exercise of the Class C Warrants, and 475,000 shares issuable upon the exercise of the Class D Warrants.

(18)Peter L. Coker, Sr. is a managing member of Europa and the father of our Chairman, Peter L. Coker, Jr.

(19)Includes 63,334 shares of common stock issued and outstanding, 316,670 shares issuable upon the exercise of the Class A Warrants, 316,670 shares issuable upon the exercise of the Class B Warrants, 316,670 shares issuable upon the exercise of the Class C Warrants, and 316,670 shares issuable upon the exercise of the Class D Warrants.

 

Changes in Control

We are not aware of any arrangements that may result in “changes in control”, as that term is defined by the provisions of Item 403(c) of Regulation S-K. However, if all or a material portion of the Warrants held by the selling shareholders are exercised, the selling shareholders will have the ability to control management and the direction of the Company.

TRANSACTIONS WITHCERTAIN RELATIONSHIPS AND RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONSTRANSACTIONS

Except as disclosed below, since the beginning of the last two fiscal years, none of the following persons has had any direct or indirect material interest in any transaction to which our Company was or is a party, or in any proposed transaction to which our Company proposes to be a party:

any director or officer of the Company;

any proposed director or officer of the Company;

any person who beneficially owns, directly or indirectly, more than 5% percent of the voting rights attached to our common stock; or

any member of the immediate family of any of the foregoing persons (including a spouse, parents, children, siblings, and in-laws).

Effective as of May 1, 2020, we entered into a Consulting Agreement with Tryon Capital Ventures LLC, a North Carolina limited liability company (“Tryon”) which is 50% owned by Peter Coker, Sr., the father of Peter L. Coker, Jr., our Chairman of the Board. Pursuant to the agreement, Tryon shall receive $15,000 per month during the term of the agreement, in addition to reimbursement of expenses approved in advance by the Company.

Effective as of May 1, 2020, we entered into a Consulting Agreement with VCH Limited, a company formed under the laws of Macau (“VCH”) which owns in excess of 10% of our common stock. Pursuant to this agreement, VCH shall receive $25,000 per month during the term of the agreement, in addition to reimbursement of expenses approved in advance by the Company.


On March 18, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman, in the amount of $50,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on March 31, 2021. The note principal and accrued interest were repaid in full on April 24, 2020.

On February 13, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman, in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on February 13, 2021. As of March 31, 2020, the Company accrued $142 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full.

On February 1, 2020, Christine Lindenmuth, an officer and director of the Company, granted Peter L. Coker, Jr., Chairman of our Board, an option to purchase all of her 1,500,000 shares in the Company for $500. On March 19, 2020, Mr. Coker exercised the option and paid Ms. Lindenmuth $1,500 for the 1,500,000 shares. Mr. Coker simultaneously sold all of the 1,500,00 shares to three separate purchasers.

On December 31, 2019, each of Paul F. Morina and Christine T. Lindenmuth, the principal officers and directors and majority shareholders of the Company, entered into separate Stock Purchase Agreements with Peter Coker, Jr., which provided for the sale by each of them of 1,000,000 shares of common stock of the Company (the “Purchased Shares”) to Mr. Coker. The consideration paid for the Purchased Shares, which represents approximately 38% of the issued and outstanding share capital of the Company, was an aggregate of $3,000. The source of the cash consideration for the Purchased Shares was personal funds of Mr. Coker. On February 17, 2020, we appointed Mr. Coker as our Chairman.

On April 16, 2020, the 2,000,000 shares which Peter L. Coker, Jr. had purchased from Mr. Morina and Ms. Lindenmuth were sold to Global Equity.

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr. in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on December 31, 2020. The note principal and accrued interest repaid in full on April 24, 2020.

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr. in the amount of $175,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on June 30, 2020. The note principal and accrued interest repaid in full on April 24, 2020.

On December 31, 2019, the Company and Europa agreed to combine the principal and accrued interest of multiple notes and issued a new unsecured promissory note in the amount of $144,979. The note is bearing 8% interest, unsecured and due on December 31, 2020. On March 18, 2020, $100,000 of the principal amount of debt owed was converted to 100,000 shares of the Company’s common stock and the remaining principal balance owed in the amount of $44,979, plus any accrued and unpaid interest, is due and payable on December 31, 2020. The note principal and accrued interest repaid in full on April 24, 2020.

On December 31, 2019, the Company and Peter L. Coker, Jr. agreed to combine the principal and accrued interest of a note and issued a new unsecured promissory note in the amount of $30,126. The note is bearing 8% interest, unsecured and due on December 31, 2020. The note principal and accrued interest repaid in full on April 24, 2020.

On November 5, 2019, the Company entered into an unsecured promissory note with Europa Capital Investments, LLC (“Europa”), a limited liability company in which Mr. Coker Sr., father to our Chairman, is a managing member in the amount of $8,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 5, 2020. As of December 31, 2019, the Company accrued $122 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note in the amount of $144,197. The note is bearing 8% interest, unsecured and due on December 31, 2020.


On August 13, 2019, the Company entered into an unsecured promissory note with Europa in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 13, 2020. As of December 31, 2019, the Company accrued $466 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On July 16, 2019, the Company entered into an unsecured promissory note with Europa in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 16, 2020. As of December 31, 2019, the Company accrued $560 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On June 20, 2019, the Company entered into an unsecured promissory note with Europa in the amount of $100. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on June 20, 2020. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020. 

On June 13, 2019 the Company entered into an unsecured promissory note with Europa in the amount of $15,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on June 13, 2020. As of December 31, 2019, the Company accrued $839 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

 

On May 29, 2014,16, 2019 the Company entered into an unsecured promissory note with Europa in the amount of $11,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on May 16, 2020. As of December 31, 2019, the Company accrued $706 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a Membership Interest Purchasenew unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On February 28, 2019, the Company entered into an unsecured promissory note with Europa in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on February 28, 2020. As of December 31, 2018, the Company accrued $1,039 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On November 27, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $1,200. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 27, 2019. As of December 31, 2019, the Company accrued $138 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On October 23, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $9,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on October 23, 2019. As of December 31, 2019, the Company accrued $1,131 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On September 27, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $1,200. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on September 27, 2019. As of December 31, 2019, the Company accrued $160 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On August 23, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $2,400. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 23, 2019. As of December 31, 2019, the Company accrued $347 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.


On July 26, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $10,500. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 26, 2019. As of December 31, 2019, the Company accrued $1,607 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On July 9, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $1,500. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 9, 2019. As of December 31, 2019, the Company accrued $238 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On February 22, 2018, the Company entered into an unsecured promissory note with Europa in the amount of $19,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on February 22, 2019. As of December 31, 2019, the Company accrued $3,843 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On January 22, 2018, we entered into a Stock Repurchase Agreement with Your Hometown Deli, LLC. The Company was deemedBenchmark Capital, LLC, an entity affiliated with two of our minority shareholders, to have issued 5,000,000repurchase 7,000 shares of common stock, as founder’s sharesfor an aggregate purchase price of $5,250. The transaction closed on January 22, 2018. We funded the repurchase through the issuance of a promissory note to Benchmark Capital, LLC dated January 22, 2018 in the amount of $5,250. Pursuant to the membersterms of Your Hometown Deli, LLC,the note, the note is bearing 6% interest, unsecured and is due on or before July 31, 2018. On August 3, 2018, the note was extended to December 31, 2018. On December 31, 2019, the Company repaid the note principal and accrued interest in full.

On November 15, 2017, the Company entered into an unsecured promissory note with Mr. Paul F. Morina, who has been our President, CEO, CFOEuorpa in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and Director sinceis due on November 15, 2018. As of December 31, 2019, the inception ofCompany accrued $2,356 in interest expense. On December 31, 2019, the Company and Ms. Christine T. Lindenmuth, who has been our Vice Presidentthe note holder agreed to combine the principal and Director sinceaccrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

On October 26, 2017, the inceptionCompany entered into an unsecured promissory note with Europa in the amount of $3,400. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on October 26, 2018. As of December 31, 2019, the Company each receive 2,500,000 shares pursuantaccrued $824 in interest expense. On December 31, 2019, the Company and the note holder agreed to their membershipcombine the principal and accrued interest in Your Hometown Deli, LLC.and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020.

 

On August 9, 2017, the Company entered into an unsecured promissory note with Tryon Capital Ventures, LLC in the amount of $1,119. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 9, 2018. As of December 31, 2018, the Company accrued $301 in interest expense. On December 31, 2019, the note principal and accrued interest were repaid in full.

On July 19, 2017, the Company entered into an unsecured promissory note with Tryon Capital Ventures, LLC in the amount of $341. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 19, 2018. As of December 31, 2019, the Company accrued $94 in interest expense. On December 31, 2019, the note principal and accrued interest were repaid in full. The principal of Tryon Capital is the father of Peter Coker, Jr., our Chairman.

On January 19, 2017, the Company entered into an unsecured promissory note with a related party Shoaleh C.M. Colombi in the amount of $5,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on January 19, 2018. As of December 31, 2018, the Company accrued $1,707 in interest expense. On December 31, 2019, the note holder assigned $5,000 of principal and $1,707 of accrued interest to a related party. On December 31, 2019, the note principal and accrued interest was repaid in full.


On March 21, 2016, the Company entered into an unsecured promissory note with Lawrence Reichard, a related party in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on March 21, 2017. As of December 31, 2019, the Company accrued $9,134 in interest expense. On December 31, 2019, the note holder assigned $9,134 of accrued interest to another related party. On December 31, 2019, the note principal and accrued interest were repaid in full.

On November 9, 2015, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 9, 2016. As of December 31, 2019, Company accrued $10,126 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 The loan was paid on full on April 24, 2020.

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with Mantua Creek Group LLC, for which our Paul Morina, our President, is a member of, for its store space at a monthly rate of $500. The amount of rent was determined by current market rate for retail space in the area and discounted slightly because the tenants would be financing most of the leasehold improvements. As of the date hereof, the operating lease agreement has been fully executed andbut Mantua has granted the Company is expectedan extension to beginstart paying rent starting in October 2015.

on January 1, 2016. On August 1, 2014,12, 2019, Mantua granted the Company entered into a consulting agreement with Tryon Capital Ventures, LLC where Beth Floyd is a part time employee, to receive administrative and other miscellaneous services. The consulting agreement covers allan extension of the back office services providedterm of the lease for two additional years. For the years ended December 31, 2019 and 2018, the Company had a rent expense of $6,000 and additionally all of the work necessary to complete this registration statement filings and other work necessary to keep the Company compliance with the SEC. The Company is required to pay $8,000 a month which was determined by current market rate of consultant in the area with similar background and experience in the fast-food business. The agreement is to remain in effect unless either party desires to cancel the agreement. For the period from January 18, 2014 (inception) to June 30, 2015, the Company paid $88,000 in consulting fees under the agreement. (See Note 7 to our condensed consolidated financial statements for the period from inception to December 31, 2014 and for the six months ended June 30, 2015).

$6,000, respectively.

 

On October 16, 2014, the Company entered into an unsecured promissory note with Christine LindenmuthLindemuth in the amount of $2,000. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand (See Note 4 to our consolidated financial statements fordemand. The note was paid in full on January 27, 2020.

For the period from inception toyears ended December 31, 2014).2019 and 2018, the Company recorded $30,856 and $30,856 as in kind contribution of services provided by President and Vice President of the Company.

 

On November 21, 2014,During the Company receivedyear ended December 31, 2019, certain officers paid an unsecured promissory note from Beth Floydaggregate $19,054 in exchange for $2,500.expenses on Company’s behalf as an advance. Pursuant to the terms of the note, the note iswas non-interest bearing, unsecured and was due on demand. As of December 31, 2019, the balance due to officers was $53,017.

 

For the period from January 18, 2014 (inception) to December 31, 2014three and six months ended June 30, 2015,2020 and 2019, the Company recorded $19,228$7,714 and $15,428, respectively, as in kind contribution of services provided by President and Vice President of the Company.

 

SELLING SECURITY HOLDERSDuring the six months ended June 30, 2020, certain officers paid an aggregate $7,196 in expenses on Company’s behalf as an advance. Pursuant to the terms of the note, the note was non-interest bearing, unsecured and was due on demand. As of June 30, 2020, the balance due to officers was $60,213.

Director Independence

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our Board comprised of a majority of “Independent Directors.” We do not believe that our directors currently meet the definition of “independent” as promulgated by the rules and regulations of NASDAQ. 

30

DESCRIPTION OF CAPITAL STOCK

The rights of our stockholders are be governed by Nevada law, and our Articles of Incorporation, as amended, and our Bylaws. The following briefly summarizes the material terms of our Common Stock.

Common Stock

 

The Company is authorized to issue 250,000,000 shares of common stock at a par value of $0.0001 and as of September 22, 2020 had 7,797,004 shares of common stock issued and outstanding.

Dividend Rights

The holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine.

Voting Rights

Each holder of our common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for in our articles of incorporation, which means that the holders of a majority of our shares of common stock voted can elect all of the directors then standing for election.

Preemptive or Similar Rights

Our Common Stock being offeredis not entitled to preemptive rights and is not subject to conversion or redemption.

Liquidation Rights

Upon our liquidation, dissolution, or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our Common Stock outstanding at that time after payment of other claims of creditors.

SELLING SHAREHOLDERS

We are registering for resale by the selling security holders consistSelling Shareholders named herein an aggregate of (i) 242,3402,783,637 shares of Common Stock that are issued and (ii) 484,680 shares of Common Stock issuable upon exercise ofoutstanding. Except as described in “Prospectus Summary—Recent Developments” above or as described in the “Warrant” held by 36 shareholders, who purchasedtable below, the Common Stock pursuant to an ongoing Regulation D Rule 506 offering at an offering price of $0.75 per Unit.

Selling Shareholders have not had any material relationship with us within the past three years. The following table sets forth information with respectthe shares beneficially owned, as of September 22, 2020, by the Selling Shareholders prior to the maximum number of shares of Common Stock beneficially ownedoffering contemplated by the selling shareholders named below and as adjusted to give effect to the sale of the shares offered hereby. The table liststhis prospectus, the number of shares that the Selling Shareholders may offer and sell from time to time under this prospectus and the number of Common Stockshares which the Selling Shareholders would own beneficially if all such offered shares are sold.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentage of shares beneficially owned prior to the offering is based on 7,797,004 shares of our common stock outstanding as of September 22, 2020.

None of the Selling Shareholders are a registered broker-dealer or an affiliate of a registered broker-dealer. None of the Selling Shareholders nor any of their respective affiliates have held a position or office, or had any other material relationship, with us or any of our predecessors or affiliates. The Selling Shareholders have acquired their shares solely for investment and not with a view to or for resale or distribution of such securities.  

For each Selling Shareholder named below, the number indicated in the column entitled “Beneficial Ownership Before the Offering” includes the Class A Warrants, the Class B Warrants, the Class C Warrants and the Class D Warrants owned by each selling shareholder as ofsuch Selling Shareholder. The number in the date of this prospectus,column entitled “Beneficial Ownership After the Offering” assumes that all the shares of Common Stock covered bybeing registered in this prospectus that may be disposed of by each of the selling shareholders,for said Selling Shareholder are being sold and therefore the number indicated therein represents the aggregate amount of shares that will be beneficially ownedWarrants held by the selling shareholders assuming all of the shares covered by this prospectus are sold.

The shares beneficially owned have been determined in accordance with rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. The information in the table below is current as of the date of this prospectus. The selling shareholders may from time to time offer and sell pursuant to this prospectus any or all of the Common Stock being registered. The selling shareholders are under no obligation to sell all or any portion of such shares nor are the selling shareholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling shareholders.Selling Shareholder.

 


Selling Securityholder Beneficial Ownership Before the Offering  Number of Shares being Offered  Beneficial Ownership After the Offering  Percentage of Ownership After the Offering 
Blackwell Partners LLC – Series A (1)  28,980,000   828,000   28,152,000   79.53%
Star V Partners LLC (2)  13,938,750   398,250   13,540,500   64.26%
Maso Capital Investments Limited (3)  9,581,250   273,750   9,307,500   55%
IPC-Trading Company (4)  10,500,000   500,000   10,000,000   56.19%
RTO Limited (5)  10,500,000   500,000   10,000,000   56.19%
Europa Capital Investments, LLC(6)  1,990,400   90,400   1,900,000   19.59%
Peter L. Coker, Sr. (7)  1,330,014   63,334   1,266,680   13.98%
Dina C. Dunn  630,000   30,000   600,000   7.15%
Marvin K. Blount III and Rebecca C. Blount  560,007   26,667   533,340   6.40%
John L. Patten Trust(8)  560,007   26,667   533,340   6.40%
Lawrence Reichard  280,014   13,334   266,680   3.31%
Kathleen N. Patten(8)  168,000   8,000   160,000   2.01%
Nancy L. Papp  140,700   6,700   134,000   * 
Irv Pyun  105,000   5,000   100,000   * 
Ronnie R. Bullins  27,993   1,333   26,660   * 
Amy H. Chan  21,000   1,000   20,000   * 
London Fall Protection, LP (9)  21,000   1,000   20,000   * 
Joseph Tony London  21,000   1,000   20,000   * 
STAT Constructors LP (10)  21,000   1,000   20,000   * 
John C. Wilson  21,000   1,000   20,000   * 
David W. Yoder  21,000   1,000   20,000   * 
Robert E. Fredrick  12,600   600   12,000   * 
Margaret Maria Dunn  500   500   0   * 
Matthew Lee Dunn  500   500   0   * 
Robert Llompart  500   500   0   * 
Emily Reichard  500   500   0   * 
Anthony Bertuzzi  500   500   0   * 
Ohio Blasting Equipment & Media Inc. (11)  7,014   334   6,680   * 
William P. Witt  7,014   334   6,680   * 
Jeannene Alt  7,014   334   6,680   * 
Lauren Russo  300   300   0   * 
Liza Harris Gantert  200   200   0   * 
Emily Jane Becker Harris  200   200   0   * 
Maria A. Bernstein c/f George Bernstein  100   100   0   * 
Maria A. Bernstein c/f Samantha R. Bernstein  100   100   0   * 
Harriett A. Coker  100   100   0   * 
James G. Coker  100   100   0   * 
Matthew Harris  100   100   0   * 
William T. Harris III  100   100   0   * 
Linda Hiatt  100   100   0   * 
Irene Jasper  100   100   0   * 
Alex Paoloni  100   100   0   * 
Kathryn Reichard  100   100   0   * 
Sandell F. Reichard  100   100   0   * 
Stephen Reichard  100   100   0   * 
Jessica R. Sweeney  100   100   0   * 
Kyle Sweeney  100   100   0   * 


16*Less than 2%

Name Shares
Beneficially
Owned
Prior
to Offering (1)
  Percent
Beneficially
Owned
Prior to
Offering (2)
  Shares to 
be Offered
  Amount
Beneficially
Owned
After
Offering
  Percent
Beneficially
Owned
After
Offering(1)
 
Alt, Jeannene  1,002   0.02%  1,002   0   0%
Beaurline, Anne L.  8,001   0.15%  8,001   0   0%
Benchmark Capital LLC (3)  21,000   0.40%  21,000   0   0%
Blount, Marvin K. III & Rebecca C. Blount (Jointly)  80,001   1.53%  80,0001   0   0%
Bullins, Ronnie R.  3,999   0.08%  3,999   0   0%
Chan, Amy H.  3,000   0.06%  3,000   0   0%
Coker, Peggy Lee  20,001   0.38%  20,001   0   0%
Dietz, Patricia A.  20,001   0.38%  20,001   0   0%
Dietz, Scott C.  9,999   0.19%  9,999   0   0%
Duggins, Adam W.  3,000   0.06%  3,000   0   0%
Duggins, J. Nathan III  3,000   0.06%  3,000   0   0%
Dunn, Dina C.  90,000   1.72%  90,000   0   0%
Fredrick, Robert E.  1,800   0.03%  1,800   0   0%
Harberger, Deborah L.  20,100   0.38%  20.100   0   0%
London Fall Protection LP (4)  3,000   0.06%  3,000   0   0%
London, Joseph Tony  3,000   0.06%  3,000   0   0%
McCaskill, T. Gray  3,000   0.06%  3,000   0   0%
Moavenzadeh, Leyla Diana  80,001   1.53%  80,001   0   0%
Moran, Sara E.  8,001   0.15%  8,001   0   0%
Ohio Blasting Equipment & Media Inc. (5)  1,002   0.02%  1,002   0   0%
Papp, Nancy L.  20,100   0.38%  6,700   0   0%
Patten, John L. (John L. Patten Trust DTD)  80,001   1.53%  80,001   0   0%
Patten, Kathleen N.  15,999   0.31%  15,999   0   0%
Phoenix Associates, Inc. (6)  110,001   2.10%  110,001   0   0%
Randolph, Kimberly  20,001   0.38%  20,001   0   0%
Reichard, Lawrence  40,002   0.76%  40.002   0   0%
Rice, Mary C.  8,001   0.15%  8,001   0   0%
Stat Constructors LP (7)  3,000   0.06%  3,000   0   0%

Sussman, April

  

10,002

   

0.19

%  

10,002

   0   0 

Sussman, Max

  

10,002

   

0.19

%  

10,002

   0   0 
Swenson, Larry R.  20,001   0.38%  20,001   0   0%
Wilson, John C.  3,000   0.06%  3,000   0   0%
Witt, William P.  1,002   0.02%  1,002   0   0%
Yoder, David W.  3,000   0.06%  3,000   0   0%
TOTAL  

727,020

   

13.87

%  

727,020

   0   0%

 

(1)Each selling shareholder holds one thirdManoj Jain, authorized signatory of shares beneficially owned in Company’s Common StockMaso Capital Partners Limited (“Maso”), has sole voting and two thirds of shares beneficially owned in Common Stock underlyinginvestment power over the Warrants.securities held by Blackwell Partners LLC – Series A (“Blackwell”).

(2)

Based on 5,242,340 sharesManoj Jain, authorized signatory of Common Stock issuedMaso, has sole voting and outstanding asinvestment power over the securities held by STAR V Partners LLC.

(3)Manoj Jain, has sole voting and investment power over the securities held by Maso Capital Investments Limited.

(4)Ibrahima Thiam and Lan Moi Lilia, the owners of October 19, 2015IPC-Trading Company Ltd. (“IPC”), have joint voting and on a fully-diluted basis. Beneficial ownership percentage is determined underinvestment power over the rulessecurities of the SECCompany held by IPC.

(5)Nathalie Tina Pasyawon, the owner of RTO Limited (“RTO”), has sole voting and includes investment power with respectover the securities of the Company held by RTO.

(6)Peter Coker Sr. and Peter Reichard are the managing members of Europa Capital Investments, LLC and have joint power to Common Stock. The number of shares beneficiallyvote and invest the securities owned by a person includes sharesEuropa Capital Investments, LLC. Each of Common Stock underlying warrants, stock optionsMr. Coker and other derivative securities to acquire our Common Stock held by that person that are currently exercisable or convertible within 60 days after October 16, 2015. The shares issuable underMr. Reichard disclaims beneficial ownership over these securities are treated as outstanding for computingsecurities.

(7)Peter Coker, Sr. is the percentagerecord and beneficial owner of these securities. Europa Capital Investments, LLC and Mr. Reichard, the managing member of Europa Capital, disclaim beneficial ownership of the person holdingover these securities, but are not treated as outstanding for the purposes of computing the percentage ownership of any other person.

securities.

(3)(8)JamesKathleen Patten acting alone, has voting and investment power over the shares beneficially ownedsecurities held by Benchmark Capital LLC. the John L. Patten Trust.

 

17(9)

(4)Amy Chan, acting alone,Joseph London is the owner of London Fall Protection, LP and has sole voting and investment power over the shares beneficially ownedsecurities held by London Fall Protection, LP.

(5)(10)William P. Witt, acting alone,Joseph London is the owner of STAT Constructors LP and has sole voting and investment power over the shares beneficially ownedsecurities held by STAT Constructors LP.

(11)William Witt and Jeannene Alt are owner and director, respectively, of Ohio Blasting Equipment & Media Inc.
(6)Luther H. Hodges, acting alone, has voting and investmenthave joint power overto vote and invest the shares beneficially ownedsecurities held byPhoenix Associates, Inc.
(7)Joseph London, acting alone, has voting and investment power over the shares beneficially owned byStat Constructors LP Ohio Blasting Equipment& Media.

  

There are no agreements between the company and any selling shareholder pursuant to which the shares subject to this registration statement were issued.

None of the selling shareholders or their beneficial owners:

-has had a material relationship with us other than as a shareholder at any time within the past three years; or
-has ever been one of our officers or directors or an officer or director of our predecessors or affiliates
-are broker-dealers or affiliated with broker-dealers.


PLAN OF DISTRIBUTION

 

We are registering an aggregate of 2,783,637 shares of Common Stock which are currently issued and outstanding. We will not receive any of the proceeds from the sale by the Selling Shareholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

The selling shareholders may sell some or all of their shares to be sold by the Selling Shareholders can only be sold at athe fixed sale price of $0.75$6.50 per share for the duration of the offering. Althoughuntil such time as our Common Stock is not listed on a public exchange, we will be filing to obtain a quotation on the OTCQB concurrently with the filing of this prospectus. In order to beshares are quoted on the OTC Bulletin Board, aOTCBB, the OTCQX, the OTCQB or listed on any other national securities exchange or automated interdealer quotation system, and thereafter at prevailing market maker must file an application on our behalf in order to make a market for our Common Stock. Asprices or privately negotiated prices. The offering price of $6.50 per share was determined based upon the closing trading price of the date of this registration statement, we plan to engage with certain market maker to file an application with FINRA to have our Common Stock quotedCompany’s common stock on the OTCQB. However, there can be no assurance thatOTC Pink Market on June 8, 2020, the application for quotation will be approved by FINRA. However, sales by selling security holder must be made atdate this Registration Statement was originally filed with the fixed price of $0.75 for the durationCommission. The Selling Shareholders may sell all or a portion of the offering.

Once a market has developed for our Common Stock, the shares may be sold or distributedof common stock beneficially owned by them and offered hereby from time to time by the selling stockholders, directly toor through one or more purchasersunderwriters, broker-dealers or through brokers or dealers who act solely as agents. The distribution ofIf the shares of common stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold in one or more transactions at fixed prices. These sales may be effected in onetransactions, which may involve crosses or more of the following methods:block transactions,

 

 ·ordinary brokers transactions, which may include long or short sales,
·transactions involving cross or block trades on any national securities exchange or market where our Common Stock is trading, market where our Common Stock is trading,
·through direct sales to purchasers or sales effected through agents,
·through transactions in options, swaps or other derivatives (whether exchange listed of otherwise), or exchangequotation service on which the securities may be listed or otherwise), or
·any combinationquoted at the time of the foregoing.sale;

 

In addition, the selling shareholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of shares in the course of hedging the positions they assume with the selling stockholders. The selling shareholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus. None of the selling shareholders are broker-dealers or affiliates of broker dealers.

We will advise the selling shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling shareholders and their affiliates. In addition, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling security holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 18in the over-the-counter market;

 in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

 

through the writing of options, whether such options are listed on an options exchange or otherwise;

 

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

Brokers, dealers,

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

short sales;

sales pursuant to Rule 144;

broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share;

a combination of any such methods of sale; and

any other method permitted pursuant to applicable law.


If the Selling Shareholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, participating in the distribution of the sharessuch underwriters, broker-dealers or agents may receive compensationcommissions in the form of discounts, concessions or commissions from the selling shareholders and/Selling Shareholders or thecommissions from purchasers of the shares of common stock for whom such broker-dealersthey may act as agent or to whom they may sell as principal (which discounts, concessions or both (which compensationcommissions as to a particular broker-dealerunderwriters, broker-dealers or agents may be in excess of those customary commissions)in the types of transactions involved). NeitherIn connection with sales of the shares of common stock or otherwise, the Selling Shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The Selling Shareholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The Selling Shareholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

The Selling Shareholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling shareholders nor we can presently estimatebeneficial owners for purposes of this prospectus.

The Selling Shareholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of such compensation. We knowshares of no existing arrangements betweencommon stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any other shareholder, broker, dealerdiscounts, commissions or agent relatingconcessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or distribution of the shares. Wean exemption from registration or qualification is available and is complied with.

There can be no assurance that any Selling Shareholder will not receivesell any proceeds from the saleor all of the shares of the selling shareholderscommon stock registered pursuant to the registration statement, of which this prospectus. prospectus forms a part.

The Selling Shareholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the Selling Shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

We have agreed to bear thewill pay all expenses of the registration of the shares of Common Stock pursuant to the Registration Rights Agreements, including legal and accountingSEC filing fees and such expenses are estimatedof compliance with state securities or “blue sky” laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the Selling Shareholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling shareholders will be entitled to contribution. We may be approximately $77,250.indemnified by the Selling Shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the Registration Rights Agreement, or we may be entitled to contribution.

  

Notwithstanding anything set forth herein, no FINRA member will charge commissions that exceed 8% of the total proceeds of the offering.

35

 

DESCRIPTION OF SECURITIES TO BE REGISTEREDLEGAL MATTERS

General

Our authorized share capital consists of i) 100,000,000 shares of Common Stock, par value $0.0001 per share. As of the date hereof, 5,242,340 shares of our Common Stock were issued and outstanding.

Common Stock

The shareholders of our Common Stock currently have: (i) equal ratable rights to dividends from funds legally available therefore, when, as and if declared by the Board; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of the affairs of the Company; (iii) do not have pre-emptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights applicable thereto; and (iv) are entitled to one non-cumulative vote per share on all matters on which stock holders may vote. This means that the holders of a majority of the voting power of the shares voting for the election of directors can elect all directors to be elected if they choose to do so. Please refer to the Company’s Articles of Incorporation, by-laws and the applicable statutes of the State of Delaware for a more complete description of the rights and liabilities of holders of the Company’s securities.

We currently intend to retain our entire available discretionary cash flow to finance the growth, development and expansion of our business and do not anticipate paying any cash dividends on the Common Stock in the foreseeable future. Any future dividends will be paid at the discretion of the Board.

If we liquidate or dissolve our business, the shareholders of our Common Stock will share ratably in all our assets that are available for distribution to our stockholders after our creditors are paid in full and the holders of all series of our outstanding preferred stock, if any, receive their liquidation preferences in full.

Non-cumulative Voting

Holders of Shares of the Company’s common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding Shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining Shares will not be able to elect any of the Company’s directors. After this private placement is completed, assuming the sale of all the Shares of common stock, present shareholders will own approximately 94% of the Company’s outstanding Shares.

Dividends

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our Board and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

19

Transfer Agent and Registrar

Currently we do not have a stock transfer agent. However, upon filing this registration statement, we do intend to engage a transfer agent to issue physical certificates to our shareholders.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

 

The validity of the Common Stockshares of common stock being offered pursuant toby this registration statement will beprospectus has been passed upon for us by Szaferman, Lakind, Blumstein & Blader,The Crone Law Group, P.C., Lawrenceville, NJ 08648.

EXPERTS

 

The consolidated financial statements included in this prospectus and in the registration statement for the year ended December 31, 2019 have been audited by Liggett Vogt & Webb, P.A,PA, an independent registered public accounting firm, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement filed with the SEC, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

 

WHERE YOU CAN FIND MORE INFORMATION

 

WeThis prospectus is part of a Registration Statement on Form S-1 we have filed with the SEC a registration statement under the Securities Act for the Common StockSEC. We have not included in this offering. This prospectus does not contain all of the information contained in the registration statementRegistration Statement and theyou should refer to our Registration Statement and its exhibits and schedule that were filed with the registration statement. Forfor further information with respect to us and our Common Stock, we refer you to the registration statement and the exhibits and schedule that were filed with the registration statement. Statements contained in this prospectus about the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and we refer you to the full text of the contract or other document filed as an exhibit to the registration statement. Ainformation. You can obtain a copy of the registration statement andRegistration Statement, including the exhibits and schedules that were filed with it, from the registration statementSEC as indicated below.

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may be inspected without chargeread and copy any materials we file with the SEC at thetheir Public Reference Room maintained by the SEC at 100 F Street, N.E.NE, Washington, DC 20549, and copieson official business days during the hours of all or any part of the registration statement10 a.m. to 3 p.m. You may be obtained from the SEC upon payment of the prescribed fee. Information regardingobtain information about the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxyOur filings are also available to the public from commercial document retrieval services and information statements, and other information regarding registrants that file electronically with the SEC. The address ofat the website maintained by the SEC at www.sec.gov.

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. Therefore, if anyone gives you different or additional information, you should not rely on it. The information contained in this prospectus iswww.sec.gov. correct as of its date. It may not continue to be correct after this date.

 

20


Hometown International, Inc.PART I – FINANCIAL INFORMATION

 

Index to the ConsolidatedItem 1. Financial StatementsStatements.

 

Financial Statements for the Year ended December 31, 2014INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

HOMETOWN INTERNATIONAL, INC.

CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

 

Page
Audited Consolidated Financial Statements for the years ended December 31, 2019 and 2018
Report of Independent Registered Public Accounting Firm��F-2
   
Consolidated Balance Sheet atSheets as of December 31, 20142019 and 2018 F-3
   
Consolidated StatementStatements of Operations Forfor the Period from January 18, 2014 (inception) toyears ended December 31, 20142019 and 2018 F-4
   
Consolidated StatementStatements of Changes in Stockholder's Equity ForStockholders’ Deficit for the Period from January 18, 2014 (inception) toperiod ended December 31, 20142019 and 2018 F-5
   
Consolidated StatementStatements of Cash Flows for the For the Period from January 18, 2014 (inception) toyears ended December 31, 20142019 and 2018 F-6
   
Notes to the Consolidated Financial Statements as of December 31, 2019 and 2018F-7
Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2020 and 2019 F- 7

Financial Statements for the Three and Six Months ended June 30, 2015

Condensed Consolidated Balance Sheets atas of June 30, 2015 (Unaudited)2020 (unaudited) and December 31, 20142019 F-15F-24
   
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 (Consolidated2020 and Unaudited) and the Period from January 18, 2014 (inception) to June 30, 20142019 (unaudited) F-16F-25
   
Condensed Consolidated Statement of Changes in Stockholders’Stockholder’s Equity (Deficit) for the three and six months ended June 30, 2015 (Unaudited)2020 (unaudited) F-17F-26
   
Condensed Consolidated StatementsStatement of Cash FlowsStockholders’ Equity (Deficit) for the three and six months ended June 30, 2015 (Unaudited) and the Period from January 18, 2014 (inception) to June 30, 2014.2019 (unaudited) F-18F-28
   
Notes to the Condensed Consolidated Financial Statements (Unaudited)as of June 30, 2020 (unaudited) F-19F-29

F-1


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of:

Hometown International, Inc.

 

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetsheets of Hometown International, Inc. and Subsidiary (the “Company”) as of December 31, 2014,2019 and 2018, the related consolidated statementstatements of operations, changes in stockholders’ equitydeficit and cash flows for each of the two years in the period from January 18, 2014 (inception) toended December 31, 2014. 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 9 to the financial statements, the Company has a net loss, a working capital deficit, and an accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 9. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audit.audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anmisstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit includesof its internal controls over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit providesaudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Hometown International, Inc. and Subsidiary as of December 31, 2014 and the results of its operations and its cash flows for the periodfrom January 18, 2014 (inception) to December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has minimal operations, a net loss of $62,317 for the period from January 18, 2014 (inception) to December 31, 2014 and used cash in operations from inception of $34,395. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Liggett & Webb, P.A.

LIGGETT VOGT & WEBB, P.A.

Certified Public Accountants

We have served as the Company’s auditor since 2015

 

Boynton Beach, Florida

June 4, 2015March 30, 2020

 

F-2

F-2

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Balance Sheets 

  

December 31,

2019

 

December 31,

2018

     
ASSETS    
     
Current Assets    
Cash $5,382  $609 
Inventory  1,044   906 
Total Current Assets  6,426   1,515 
         
Leasehold improvements and equipment, net  6,038   13,353 
Operating lease asset, net  8,324   - 
         
Total Assets $20,788  $14,868 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
         
Current Liabilities        
Accounts payable and accrued expenses $68,981  $138,540 
Operating lease liability, current  5,411   - 
Due to Officers - related parties  53,017   33,963 
Note payable - related party  362,104   114,518 
Note payable  -   81,000 
Total Current Liabilities  489,513   368,021 
         
Long Term Liabilities        
Operating lease liability, net of current  2,913   - 
         
Total Liabilities  492,426   368,021 
         
Commitments and Contingencies (See Note 7)  -   - 
         
Stockholders’ Deficit        
Common stock, $0.0001 par value; 250,000,000 shares authorized, 5,235,340 and 5,235,340 issued and outstanding, respectively  523   523 
Additional paid-in capital  334,759   303,903 
Accumulated deficit  (806,920)  (657,579)
         
Total Stockholders’ Deficit  (471,638)  (353,153)
         
Total Liabilities and Stockholders’ Deficit $20,788  $14,868 

See accompanying notes to consolidated financial statements 

F-3

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Balance Sheet

AsStatements of December 31, 2014Operations

 

ASSETS    
     
Current Assets    
Cash $13,471 
Note receivable - related party  2,500 
Total Current Assets  15,971 
     
Leasehold improvements, net  11,159 
     
Total Assets $27,130 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current Liabilities    
Accounts payable and accrued expenses $8,694 
Note payable - related party  2,000 
     
Total Liabilities  10,694 
     
Commitments and Contingencies (See Note 6)    
     
Stockholders' Equity    
Common stock, $0.0001 par value; 100,000,000 shares authorized, 5,099,002 issued and outstanding  510 
Additional paid-in capital  78,243 
Accumulated deficit  (62,317)
     
Total Stockholders' Equity  16,436 
     
Total Liabilities and Stockholders' Equity $27,130 
  Year Ended Year Ended
  

December 31,

2019

 

December 31,

2018

     
Sales $21,772  $32,205 
         
Costs and Expenses        
Food, beverage and supplies  15,824   20,172 
Labor  102   360 
Direct operating and occupancy  9,446   8,734 
Depreciation  7,315   7,315 
Professional fees  56,776   34,096 
General and administrative  64,467   48,828 
Total cost and expenses  153,930   119,505 
         
Loss from Operations  (132,158)  (87,300)
         
Other Income/(Expenses)        
Gain on debt settlement  10,000   - 
Interest Expense  (27,183)  (21,543)
Total Other Income/(Expenses)  (17,183)  (21,543)
         
LOSS FROM OPERATIONS BEFORE INCOME TAXES  (149,341)  (108,843)
         
Provision for Income Taxes  -   - 
         
NET LOSS $(149,341) $(108,843)
         
Net Loss Per Share - Basic and Diluted $(0.03) $(0.02)
         
Weighted average number of shares outstanding during the period - Basic and Diluted  5,235,340   5,235,761 

 

See accompanying notes to consolidated financial statements

 

F-3

F-4

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Statement of OperationsStockholders’ Deficit

For the Period From January 18, 2014 (Inception) toyears ended December 31, 20142019 and 2018

 

Operating Expenses    
Consulting expense - related party $40,000 
General and administrative  22,317 
Total Operating Expenses  62,317 
     
Loss from Operations  (62,317)
     
Other Expenses    
Interest Expense  - 
     
LOSS FROM OPERATIONS BEFORE INCOME TAXES  (62,317)
     
Provision for Income Taxes  - 
     
NET LOSS $(62,317)
     
Net Loss Per Share - Basic and Diluted $(0.01)
     
Weighted average number of shares outstanding  during the period - Basic and Diluted  5,033,264 
    Additional   Total
  Common stock paid-in Accumulated Stockholders’
  Shares Amount capital Deficit Deficit
           
Balance, December 31, 2017  5,242,340  $524  $278,296  $(548,736) $(269,916)
                     
Repurchase of common stock  (7,000)  (1)  (5,249)  -   (5,250)
                     
In kind contribution of services  -   -   30,856   -   30,856 
                     
Net loss for the year ended December 31, 2018  -   -   -   (108,843)  (108,843)
                     
Balance, December 31, 2018  5,235,340  $523  $303,903  $(657,579) $(353,153)
                     
In kind contribution of services  -   -   30,856   -   30,856 
                     
Net loss for the year ended December 31, 2019  -   -   -   (149,341)  (149,341)
                     
Balance, December 31, 2019  5,235,340  $523  $334,759  $(806,920) $(471,638)

 

See accompanying notes to consolidated financial statements

 

F-4

F-5

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated StatementStatements of Stockholders' Equity

For the Period From January 18, 2014 (Inception) to December 31, 2014Cash Flows

 

  Preferred Stock  Common stock  Additional
paid-in
  Accumulated  Total
Stockholders'
 
  Shares  Amount  Shares  Amount  capital  Deficit  Equity 
                      
Balance January 18, 2014  -  $-   -  $-  $-  $-  $- 
                             
Common stock issued for services to founder  -   -   5,000,000   500   (225)  -   275 
                             
Common stock issued for cash, net of stock offering cost ($0.75 / per share), net of stock offering costs  -   -   99,002   10   59,240   -   59,250 
                             
In kind contribution of services  -   -   -   -   19,228   -   19,228 
                             
Net loss for the period January 18, 2014 to December 31, 2014  -       -   -   -   (62,317)  (62,317)
                             
Net loss for the period from January 18, 2014 (inception) to December 31, 2014  -  $-   5,099,002  $510  $78,243  $(62,317) $16,436 
  Year Ended Year Ended
  

December 31,

2019

 

December 31,

2018

Cash Flows From Operating Activities:    
Net Loss $(149,341) $(108,843)
Adjustments to reconcile net loss to net cash used in operations        
In-kind contribution of services  30,856   30,856 
Depreciation expense  7,315   7,315 
Gain on debt settlement  10,000   - 
Amortization of operating lease assets  2,102   - 
Changes in operating assets and liabilities:        
Increase in inventory  (138)  (294)
Decrease in prepaid expenses  -   1,360 
(Decrease) Increase in accounts payable and accrued expenses  (55,363)  16,062 
Decrease in operating lease liability  (2,102)  - 
Net Cash Used In Operating Activities  (156,671)  (53,544)
         
Net Cash Used In Investing Activities  -   - 
         
Cash Flows From Financing Activities:        
Proceeds from/due to officers  19,054   9,012 
Repayment of note payable  (81,000)  - 
Repayment of note payable - related party  (31,710)  (5,000)
Proceeds from note payable - related party  255,100   44,800 
Net Cash Provided by Financing Activities  161,444   48,812 
         
Net Increase (Decrease) in Cash  4,773   (4,732)
         
Cash at Beginning of Year  609   5,341 
         
Cash at End of Year $5,382  $609 
         
Supplemental disclosure of cash flow information:        
         
Cash paid for interest $44,367  $164 
Cash paid for taxes $-  $- 
         
Supplemental disclosure of non-cash investing and financing activities:        
Repurchase of common stock in exchange for a note payable - related party $-  $5,250 
Operating lease asset obtained for operating lease liability $10,426  $- 
Accrued interest converted to note payable principal $25,196  $- 

 

See accompanying notes to consolidated financial statements

 

F-5

F-6

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Consolidated Statement of Cash Flows

For the Period From January 18, 2014 (Inception) to December 31, 2014

Cash Flows From Operating Activities:    
Net Loss $(62,317)
Adjustments to reconcile net loss to net cash used in operations    
In-kind contribution of services  19,228 
Changes in operating assets and liabilities:    
Increase in accounts payable and accrued expenses  8,694 
Net Cash Used In Operating Activities  (34,395)
     
Cash Flows From Investing Activities:    
Payment for leasehold improvements  (11,159)
Note receivable - related party  (2,500)
Net Cash Used In Investing Activities  (13,659)
     
Cash Flows From Financing Activities:    
Proceeds from common stock issued to founders  275 
Proceeds from note payable- related party  2,000 
Proceeds from issuance of common stock, net of stock offering costs  59,250 
Net Cash Provided by Financing Activities  61,525 
     
Net Increase in Cash  13,471 
     
Cash at Beginning of Period  - 
     
Cash at End of Period $13,471 
     
Supplemental disclosure of cash flow information:    
     
Cash paid for interest $- 
Cash paid for taxes $- 

See accompanying notes to consolidated financial statements

F-6

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 20142019 AND 2018

 

NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) Organization

Hometown International, Inc. (the "Company"“Company”) was incorporated under the laws of the State of Nevada on May 19, 2014. The Company is the originator of a new “Delicatessen” concept (“Your Hometown Deli”). The Company intends that its delicatessens will feature “home-style” sandwiches and other entrees in a casual friendly atmosphere. Hometown Delis are designed to be comfortable community gathering places for guests of all ages.

 

On January 18, 2014, Your HometwonHometown Deli, LLC. was formed under the laws of the State of New Jersey. On May 29, 2014, Your Hometown Deli, LLC, entered into a Membership Interest Purchase Agreement with Hometown International, Inc. For accounting purposes, this transaction is being accounted for as a merger of entities under common control and has been treated as a recapitalization of Hometown International, Inc. with Your Hometown Deli, LLC, as the accounting acquirer (see Note 5(D))acquirer). The historical financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 5,000,000 shares issued to the shareholder of Your Hometown Deli, LLC.,LLC, in conjunction with the share exchange transaction has been presented as outstanding for all periods.

 

The Company’s accounting year end is December 31, which wasis the year end of Your Hometown Deli, LLC.

 

(B) Principles of Consolidation

 

The accompanying 2014December 31, 2019 and 2018, consolidated financial statements include the accounts of Hometown International, Inc. and its wholly owned subsidiary, Your Hometown Deli, LLC. All intercompany accounts have been eliminated upon consolidation.

 

(C) Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Significant estimates include valuation of in kind contribution of service and valuation of deferred tax assets. Actual results could differ from those estimates.

 

(D) Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2014,2019 and December 31, 2018, the Company had no cash equivalents.

 

(E) Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.” Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. The Company has 198,004 shares issuable upon the exercise of warrants that were not included in the computation ofno common stock equivalents and potentially dilutive loss per share because their inclusion is anti-dilutivesecurities outstanding for the period from January 18, 2014 (inception) toyears ended December 31, 2014.2019 and 2018, respectively.

 

F-7

F-7

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 20142019 AND 2018

 

(F) Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

The Company'sCompany’s income tax expense differed from the statutory rates (federal 34%21% and state 9%) as follows:

 

 December 31,
2019
 December 31,
2018
 December 31, 2014     
Expected tax expense (benefit) - Federal $(19,281) $(28,539) $(20,800)
Expected tax expense (benefit) - State  (5,609)  (13,441)  (9,796)
Non-deductible expenses  7,680   8,674   8,674 
Change in valuation allowance  17,210   33,306   21,922 
Provision for income taxes (benefit) $- 
Actual tax expense (benefit) $-  $- 

 

The net deferred income taxes in the accompanying balance sheet includesheets includes the following amounts of deferred tax assets and liabilities:

 

  December 31, 2014 
Deferred income tax assets:    
Net operating loss carryforwards $17,210 
Total deferred tax assets  17,210 
Less: valuation allowance  (17,210)
Net deferred income tax assets $- 

Gross deferred tax assets:

Net operating loss carryforwards $176,554  $143,248 
Total deferred tax assets  (176,554)  (143,248)
Less: valuation allowance  176,554   143,248 
Net deferred tax asset recorded $-  $- 

 

As of December 31, 2014,2019 and 2018, the Company has a net operating loss carry forward of approximately $43,000$628,084 and $509,598 available to offset future taxable income through December 31, 2034.2039. The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company’s continued operating loss and the uncertainty of the Company’s ability to utilize allapproximately $121,000 of the net operating loss carryforwards before they will expire through the year 2034.2037 and approximately $55,000 of net operating loss carryforwards that have no expiration date.

 

The net change in the valuation allowance for the periodyears ended December 31, 20142019 and 2018 was an increase of $17,210 since January 18, 2014 (inception).

F-8

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014$33,306 and $21,922, respectively.

 

The company’s federal income tax returns for the period ended December 31, 2014years 2016-2019 remain subject to examination by the Internal Revenue Service through 2017.2023.

F-8

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

 

(G) Property and Equipment

 

Property and equipment is recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter onset the property and equipment is put into service.

 

Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in other income.

(H) Revenue Recognition

 

TheEffective January 1, 2018, the Company will recognizerecognizes revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company generates revenue operating a delicatessen deli.

(I) Fair Value of Financial Instruments

The carrying amounts on the Company’s financial instruments including note receivable, accounts payable and note payable, approximate fair value due to the relatively short period to maturity for these instruments.

(J) Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation ("ASUE 2014-10"). The guidance is intended to reduce the overall cost and complexity associated with financial reporting for development stage entities without reducing the availability of relevant information. The Board also believes the changes will simplify the consolidation accounting guidance by removing the differential accounting requirements for development stage entities. As a result of these changes, there no longer will be any accounting or reporting differences in GAAP between development stage entities and other operating entities. For organizations defined as public business entities the presentation and disclosure requirements in Topic 915 will no longer be required starting with the first annual period beginning after December 15, 2014, including interim periods therein. Early application is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the period from January 18, 2014 (inception) through December 31, 2014.

F-9

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014

In June 2014, FASB issued Accounting Standards Update (“ASU”) No.Codification 2014-09, “RevenueRevenue from Contracts with Customers”. The update gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. The proposed ASU,Customers (Topic 606), which would apply to any entity that enters into contracts to provide goods or services, would supersedesupersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally,The updated guidance states that an entity should recognize revenue to depict the update would supersede some cost guidance includedtransfer of promised goods or services to customers in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition,an amount that reflects the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirementsconsideration to which anthe entity must refer.expects to be entitled in exchange for those goods or services. The update isguidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016,2017, and the Company adopted the standard using the modified retrospective approach effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial statements.

The Company generates revenue operating a delicatessen. Revenue from the operations of Company-owned delicatessen are recognized when sales occur.

(I) Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including interim periods within that reporting period. This updatedcash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

We adopted accounting guidance isfor financial and non-financial assets and liabilities (ASC 820). The adoption did not expected to have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flowsflow), and the cost approach (cost to replace the service capacity of an asset or financial condition. We are currently reviewingreplacement cost). The guidance utilizes a fair value hierarchy that prioritizes the provisionsinputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

F-9

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

(J) Recent Accounting Pronouncements

 

In August 2014,February 2016, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is noASU 2016-02, “Leases” Topic 842, which amends the guidance in U.S. GAAP about management’s responsibilityformer ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to evaluate whether there is substantial doubt about an entity’s abilitymeet the objective of enabling users of financial statements to continueassess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as a going concernfinance or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so,operating, with classification affecting the amendments are intended to reduce diversitypattern and classification of expense recognition in the timingincome statement. The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and contentthe disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of footnote disclosures. The amendments require managementpractical expedients which permits us to assess an entity’s ability to continuenot reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for consideringand assessing impairment. The adoption of the mitigating effectlease standard did not change our previously reported consolidated statements of management’s plans, (4) require certain disclosures when substantial doubt is alleviated asoperations and did not result in a cumulative catch-up adjustment to opening equity. As a result, of consideration of management’s plans, (5) require an express statementthe Company has recorded Right-to-use assets and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendmentscorresponding Lease obligations as more fully discussed in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.Note 7.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable

(K) Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

(L) Inventories

Inventories consist of food and beverages, and are stated at cost of $1,044.

(M) Advertising

Advertising costs are expensed as incurred. These costs are included in direct operating & occupancy expenses and totaled $0 and $0 for the years ended December 31, 2019 and 2018, respectively.

F-10

F-10

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 20142019 AND 2018

 

NOTE 2PROPERTYLEASEHOLD IMPROVEMENT AND EQUIPMENT

 

PropertyLeasehold improvement and equipment consist of the following at December 31, 2014:2019 and December 31, 2018:

 

 December 31, Estimated December 31, December 31,
 2014 Useful Life 2019 2018
Leasehold Improvements $11,159 5 years  33,455   33,455 
Equipment  3,120   3,120 
Leasehold Improvements and Equipment  36,575   36,575 
Less: Accumulated Depreciation  -   (30,537)  (23,222)
Leasehold Improvements, Net $11,159 
Leasehold Improvements and Equipment, Net $6,038  $13,353 

  

Depreciation expense was $0$7,315 and $7,315 for the period from January 18, 2014 (inception) toyears ended December 31, 2014 since the store has not been opened as of December 31, 2014.2019 and 2018, respectively.

 

NOTE 3NOTE RECEIVABLE – RELATED PARTY

On November 21, 2014, the Company received an unsecured promissory note from a related party in exchange for $2,500. Pursuant to the terms of the note, the note is non-interest bearing and due on demand (See Note 7).

NOTE 4NOTE PAYABLE – RELATED PARTY

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on December 31, 2020 (See Note 8).

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $175,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on June 30, 2020 (See Note 8).

On December 31, 2019, the Company and a related party note holder agreed to combine the principal and accrued interest of multiple notes and issued a new unsecured promissory note in the amount of $144,979. The note is bearing 8% interest, unsecured and due on December 31, 2020 (See Note 8).

On December 31, 2019, the Company and Peter L. Coker, Jr., our Chairman of the Board agreed to combine the principal and accrued interest of a note and issued a new unsecured promissory note in the amount of $30,126. The note is bearing 8% interest, unsecured and due on December 31, 2020 (See Note 8).

On November 5, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $8,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 5, 2020. As of December 31, 2019, the Company accrued $122 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On August 13, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 13, 2020. As of December 31, 2019, the Company accrued $466 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

F-11

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On July 16, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 16, 2020. As of December 31, 2019, the Company accrued $560 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On June 20, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $100. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on June 20, 2020. As of December 31, 2019, the Company accrued $5 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On June 13, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $15,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on June 13, 2020. As of December 31, 2019, the Company accrued $839 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On May 16, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $11,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on May 16, 2020. As of December 31, 2019, the Company accrued $706 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On February 28, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on February 28, 2020. As of December 31, 2019, the Company accrued $1,039 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On November 27, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $1,200. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 27, 2019. As of December 31, 2019, the Company accrued $138 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

F-12

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On October 23, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $9,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on October 23, 2019. As of December 31, 2019, the Company accrued $1,131 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On September 27, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $1,200. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on September 27, 2019. As of December 31, 2019, the Company accrued $160 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On August 23, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $2,400. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 23, 2019. As of December 31, 2019, the Company accrued $347 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On July 26, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $10,500. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 26, 2019. As of December 30, 2019, the Company accrued $1,607 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On July 9, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $1,500. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 9, 2019. As of December 31, 2019, the Company accrued $238 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On February 22, 2018, the Company entered into an unsecured promissory note with a related party in the amount of $19,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on February 22, 2019. As of December 31, 2019, the Company accrued $3,843 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

F-13

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On January 22, 2018, we entered into a Stock Repurchase Agreement with Benchmark Capital, LLC, a related party, to repurchase 7,000 shares of common stock, for an aggregate purchase price of $5,250. The transaction closed on January 22, 2018. We funded the repurchase through the issuance of a promissory note to Benchmark Capital, LLC dated January 22, 2018 in the amount of $5,250. Pursuant to the terms of the note, the note is bearing 6% interest, unsecured and is due on or before July 31, 2018. On August 3, 2018, the note was extended to December 31, 2018. On December 31, 2019, the note principal and accrued interest were repaid in full (See Note 6(C) and 8).

On November 15, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 15, 2018. As of December 31, 2019, the Company accrued $2,356 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On October 26, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $3,400. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on October 26, 2018. As of December 31, 2019, the Company accrued $824 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On August 15, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $2,608. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 15, 2018. As of December 31, 2019, the Company accrued $697 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 8).

On July 19, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $341. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 19, 2018. As of December 31, 2019 the Company has accrued $94 in interest expense. On December 31, 2019, the note principal and accrued interest was repaid in full (See Note 8).

On August 9, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $1,119. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 9, 2018. As of December 31, 2019, the Company has accrued $301 in interest expense. On December 31, 2019, the note principal and accrued interest were repaid in full (See Note 8).

F-14

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On January 19, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $5,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on January 19, 2018. As of December 31, 2019, the Company accrued $1,707 in interest expense. On December 31, 2019, the note holder assigned $5,000 of principal and $1,707 of accrued interest to a related party. On December 31, 2019, the note principal and accrued interest were repaid in full (See Note 8).

On March 21, 2016, the Company entered into an unsecured promissory note with a related party in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on March 21, 2017. As of December 31, 2019, the Company accrued $9,134 in interest expense. On December 31, 2019, the note holder assigned $9,134 of accrued interest to another related party. On December 31, 2019, the note principal and accrued interest were repaid in full to related parties (See Note 8).

On November 9, 2015, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 9, 2016. As of December 31, 2019, Company accrued $10,126 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $30,126 promissory note dated December 31, 2019 and see Note 8).

 

On October 16, 2014, the Company entered into an unsecured promissory note with a related party in the amount of $2,000. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demanddemand. The note was subsequently paid in full on January 25, 2020 (See Note 7)8 and 10).

 

NOTE 4DUE TO OFFICERS  – RELATED PARTY

During the year ended December 31, 2019, certain officers paid an aggregate $19,054 in expenses on Company’s behalf as an advance. Pursuant to the terms of the note, the note was non-interest bearing, unsecured and was due on demand. As of December 31, 2019, the balance due to officers was $53,017 (See Note 8).

NOTE 5STOCKHOLDERS’ EQUITYNOTE PAYABLE

 

(A) Common Stock Issued for CashOn March 21, 2017, the Company entered into an unsecured promissory note in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on March 21, 2018. As of December 31, 2019, the Company accrued $6,373 in interest expense. On December 31, 2019, the note principal and accrued interest was repaid in full.

 

TheOn August 22, 2016, the Company entered into an unsecured promissory note in the amount of $25,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 22, 2017. As of December 31, 2019, the note holder accrued $9,938 in interest expense. On December 31, 2019, the note holder assigned $9,938 of accrued interest and $25,000 of principal to a related party. On December 31, 2019, the note principal and accrued interest were repaid in full to a related party.

On March 17, 2016, the Company entered into an unsecured promissory note in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on March 21, 2017. As of December 31, 2019, the note holder accrued $5,499 in interest expense. On December 31, 2019, the note holder assigned $5,499 of accrued interest to a related party. On December 31, 2019, the note principal and accrued interest were repaid in full to a related party.

F-15

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On February 11, 2016, the Company entered into an unsecured promissory note in the amount of $4,000. Pursuant to the terms of the note, the note is bearing 4% interest, unsecured and is due on demand. As of December 31, 2019, the Company accrued $671 in interest expense. On December 31, 2019, note principal and accrued interest were repaid in full.

On November 12, 2015, the Company entered into an unsecured promissory note in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 12, 2016. As of December 31, 2019, the Company accrued $10,183 in interest expense. On December 31, 2019, the note holder assigned $10,183 of accrued interest and $20,000 of principal to a related party. On December 31, 2019, the note principal and accrued interest were repaid in full to a related party.

NOTE 6STOCKHOLDERS’   DEFICIT

(A) Increase in Authorized Shares

On March 23, 2020, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada increasing the number of shares of common stock the Company is authorized to issue from 100,000,000 shares of common stock with a par value of $0.0001 per share.to 250,000,000.

 

For the period ended December 31, 2014 the Company issued 99,002 units of common stock for $59,250 ($0.75/unit), net of offering cost of $15,000. Each unit consisted of one share of common stock and two warrants to purchase common stock for a total of 99,002 shares of common stock and 198,004 warrants to purchase common stock at an exercise price of $2.50 per share or immediately callable by the Company if the Company's common stock trades for a period of 20 consecutive days at an average price of $3 per share or greater. The warrants expire on July 31, 2017.

(B) In kind contribution of services

 

For the period from January 18, 2014 (inception) toyears ended December 31, 2014,2019 and 2018, the Company recorded $19,228$30,856 and $30,856, respectively, as in kind contribution of services provided by President and Vice President of the Company (See Note 7)8).

 

F-11

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014

(C) WarrantsCommon stock repurchase

The following tables summarize all warrant grants for the period from January 18, 2014 (inception) to December 31, 2014, and the related changes during the period are presented below.

  Number of
Warrants
  Weighted
Average
Exercise Price
 
Warrants        
Balance at  January 18, 2014  -  $- 
Granted  198,004   2.50 
Exercised  -   - 
Forfeited  -   - 
Balance at December 31, 2014  198,004  $2.50 
Warrants exercisable at December 31, 2014  198,004  $2.50 

198,004 of the total warrants outstanding are fully vested, exercisable and non-forfeitable.

(D) Common Stock Issued for Acquisition of an Entity Under Common Control

 

On May 29, 2014, the CompanyJanuary 22, 2018, we entered into a Membership Interest PurchaseStock Repurchase Agreement with Your Hometown Deli, LLC. The Company was deemedBenchmark Capital, LLC, a related party, to have issued 5,000,000repurchase 7,000 shares of common stock, for an aggregate purchase price of $5,250. The transaction closed on January 22, 2018. We funded the repurchase through the issuance of a promissory note to Your Hometown Deli,Benchmark Capital, LLC members. The Company has accounted fordated January 22, 2018 in the transaction as a combinationamount of entities under common control$5,250. Pursuant to the terms of the note, the note is bearing 6% interest, unsecured and accordingly, recordedis due on or before July 31, 2018. On August 3, 2018, the merger at historical cost of $275note was extended to December 31, 2018. On December 31, 2019, the note principal and accrued interest was repaid in full (See Note 1(A)3 and 7)8).

   

NOTE 67COMMITMENTS AND CONTINGENCIES

 

(A) Consulting Agreement

On August 1, 2014, the Company entered into a consulting agreement with an entity related to one of our Officers to receive administrative and other miscellaneous services. The Company is required to pay $8,000 a month. The agreement is to remain in effect unless either party desires to cancel the agreement.

(B) Operating Lease Agreement

 

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with a related party for its store space at a monthly rate of $500. As ofOn September 21, 2015, the Company executed the lease and opened the store on October 14, 2015. On December 31, 2014,29, 2015, the operatingCompany signed an addendum to the lease for the lease agreement has not been fully executed. The rent payments will commenceto start 30 days after the opening of the deli. The store opens. As of December 31, 2014,opened on October 14, 2015, the storefirst payments would have been due on November 15, 2015, however since the deli was not opened and nofully functioning, the first monthly rent payment was due January 1, 2016. On August 12, 2019, the Company was granted a two-year extension of non-cancelable operating lease with a related party for its store space at a monthly rate of $500. For the years ended December 31, 2019 and 2018, the Company had a rent expense of $6,000 and $6,000, respectively (See Note 7)8).

 

F-12

F-16

 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 20142019 AND 2018

 

The Company adopted the new lease guidance effective August 12, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before August 12, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The adoption of the new guidance resulted in the recognition of ROU assets of $10,426 and lease liabilities of $10,426.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the August 12, 2019 adoption date. This rate was determined to be 10% and the Company determined the initial present value, at inception, of $10,426.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight line basis over the term of the lease.

F-17

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

Operating Leases

  December 31,
2019
   
Operating lease assets - right of use $8,324 
     
Lease liability is summarized below:    
     
Lease Liability $8,324 
Less: operating lease liability, current  (5,411)
Long term operating lease liability $2,913 
     
Maturities of lease liabilities at December 31, 2019 are as follows:    
     
2020 $6,000 
2021  3,000 
Total lease liability  9,000 
Less: present value discount  (676)
Total lease liability $8,324 

NOTE 78RELATED PARTY TRANSACTIONS

On May 29, 2014, the Company entered into a Membership Interest Purchase Agreement with Your Hometown Deli, LLC. The Company was deemed to have issued 5,000,000 shares of common stock to Your Hometown Deli, LLC members. The Company has accounted for the transaction as a combination of entities under common control and accordingly, recorded the merger at historical cost of $275. (See Note 5(D)).

 

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with a related party for its store space at a monthly rate of $500. As ofOn September 21, 2015, the Company executed the lease and opened the store on October 14, 2015. On December 31, 2014,29, 2015, the operatingCompany signed an addendum to the lease for the lease agreement has not been fully executed. The rent payments will commenceto start 30 days after the opening of the deli. The store opens. As of December 31, 2014,opened on October 14, 2015, the storefirst payments would have been due on November 15, 2015, however since the deli was not opened and nofully functioning, the first monthly rent payment was due (see Note 6(B)).

January 1, 2016. On August 1, 2014,12, 2019, the Company entered intowas granted a consulting agreementtwo-year extension of non-cancelable operating lease with an entitya related to oneparty for its store space at a monthly rate of our Officers to receive administrative and other miscellaneous services. The Company is required to pay $8,000 a month. The agreement is to remain in effect unless either party desires to cancel the agreement (see Note 6(A)).$500. For the period from January 18, 2014 (inception) toyears ended December 31, 2014,2019 and 2018, the Company paid $40,000 in consulting fees under the agreement.had a rent expense of $6,000 and $6,000, respectively (See Note 7).

 

On October 16, 2014, the Company entered into an unsecured promissory note with a related party in the amount of $2,000. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demanddemand. The note was subsequently paid in full on January 25, 2020 (See Note 4)3 and 10).

 

On November 21, 2014,January 19, 2017, the Company receivedentered into an unsecured promissory note fromwith a related party in exchange for $2,500.the amount of $5,000. Pursuant to the terms of the note, the note is non-interest bearing 10% interest, unsecured and is due on demandJanuary 19, 2018. As of December 31, 2018, the Company accrued $1,707 in interest expense . On December 31, 2019, the note holder assigned $5,000 of principal and $1,707 of accrued interest to a related party. On December 31, 2019, the note principal and accrued interest were repaid in full (See Note 3).

 

ForF-18

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On July 19, 2017, the period fromCompany entered into an unsecured promissory note with a related party in the amount of $341. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 19, 2018. As of December 31, 2019, the Company accrued $94 in interest expense. On December 31, 2019, the note principal and accrued interest were repaid in full (See Note 3) .

On August 9, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $1,119. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 9, 2018. As of December 31, 2018, the Company accrued $301 in interest expense. On December 31, 2019, the note principal and accrued interest were repaid in full (See Note 3).  

On November 5, 2019, the Company entered  into an unsecured promissory note with a related party in the amount of $8,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 5, 2020. As of December 31, 2019, the Company accrued $122 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On February 28, 2019, the Company entered  into an unsecured promissory note with a related party in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on February 28, 2020. As of December 31, 2018, the Company accrued $1,039 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On November 27, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $1,200. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 27, 2019. As of December 31, 2019, the Company accrued $138 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On October 23, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $9,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on October 23, 2019. As of December 31, 2019, the Company accrued $1,131 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On September 27, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $1,200. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on September 27, 2019. As of December 31, 2019, the Company accrued $160 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

F-19

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On August 23, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $2,400. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 23, 2019. As of December 31, 2019, the Company accrued $347 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On July 26, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $10,500. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 26, 2019. As of December 31, 2019, the Company accrued $1,607 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On July 9, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $1,500. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 9, 2019. As of December 31, 2019, the Company accrued $238 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On February 22, 2018, the Company entered  into an unsecured promissory note with a related party in the amount of $19,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on February 22, 2019. As of December 31, 2019, the Company accrued $3,843 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On November 15, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 18, 2018. As of December 31, 2019, the Company accrued $2,356 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On October 26, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $3,400. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on October 26, 2018. As of December 31, 2019, the Company accrued $824 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

F-20

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On August 15, 2017, the Company entered into an unsecured promissory note with a related party in the amount of $2,608. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 15, 2018. As of December 31, 2019, the Company accrued $697 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On March 21, 2016, the Company entered into an unsecured promissory note with a related party in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on March 21, 2017. As of December 31, 2019, the Company accrued $9,134 in interest expense. On December 31, 2019, the note holder assigned $9,134 of accrued interest to another related party. On December 31, 2019, the note principal and accrued interest were repaid in full to related parties (See Note 3).

On November 9, 2015, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on November 9, 2016. As of December 31, 2019, Company accrued $10,126 in interest expense. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $30,126 promissory note dated December 31, 2019 and see Note 3).

On January 18, 2014 (inception)22, 2018, we entered into a Stock Repurchase Agreement with Benchmark Capital, LLC, a related party, to repurchase 7,000 shares of common stock, for an aggregate purchase price of $5,250. The transaction closed on January 22, 2018. We funded the repurchase through the issuance of a promissory note to Benchmark Capital, LLC dated January 22, 2018 in the amount of $5,250. Pursuant to the terms of the note, the note is bearing 6% interest, unsecured and is due on or before July 31, 2018. On August 3, 2018, the note was extended to December 31, 2014,2018. On December 31, 2019, the Company repaid note principal and accrued interest was repaid in full (See Notes 3 and 6(C)).

For the years ended December 31, 2019 and 2018, the Company recorded $19,228$30,856 and $30,856 as in kind contribution of services provided by President and Vice President of the Company (See Note 5(B)6(B)).

During the year ended December 31, 2019, certain officers paid an aggregate $19,054 in expenses on Company’s behalf as an advance. Pursuant to the terms of the note, the note was non-interest bearing, unsecured and was due on demand. As of December 31, 2019, the balance due to officers was $53,017 (See Note 4).

On May 16, 2019 the Company entered  into an unsecured promissory note with a related party in the amount of $11,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on May 16, 2020. As of December 31, 2019, the Company accrued $706 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

F-21

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

On June 13, 2019 the Company entered  into an unsecured promissory note with a related party in the amount of $15,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on June 13, 2020. As of December 31, 2019, the Company accrued $839 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On June 20, 2019, the Company entered into an unsecured promissory note with a related party in the amount of $100. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on June 20, 2020. On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On August 13, 2019, the Company entered  into an unsecured promissory note with a related party in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on August 13, 2020. As of December 31, 2019, the Company accrued $466 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On July 16, 2019, the Company entered  into an unsecured promissory note with a related party in the amount of $12,000. Pursuant to the terms of the note, the note is bearing 10% interest, unsecured and is due on July 16, 2020. As of December 31, 2019, the Company accrued $560 in interest expense . On December 31, 2019, the Company and the note holder agreed to combine the principal and accrued interest and issued a new unsecured promissory note. The note is bearing 8% interest, unsecured and due on December 31, 2020 (refer to $144,979 promissory note dated December 31, 2019 and see Note 3).

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on December 31, 2020 (See Note 3)

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $175,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on June 30, 2020 (See Note  3).

On December 31, 2019, the Company and a related party note holder agreed to combine the principal and accrued interest of multiple notes and issued a new unsecured promissory note in the amount of $144,979. The note is bearing  8% interest, unsecured and due on December 31, 2020 (See Note 3).

On December 31, 2019, the Company and Peter L. Coker, Jr., our Chairman of the Board agreed to combine the principal and accrued interest of a note and issued a new unsecured promissory note in the amount of $30,126. The note is bearing  8% interest, unsecured and due on December 31, 2020 (See Note 3).

F-22

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2019 AND 2018

 

NOTE 89GOING CONCERN

 

As reflected in the accompanying consolidated financial statements, the Company has minimal operations with no revenue since inception, used cash in operations of $34,395 since inception and$156,671, has an accumulated deficit of $62,317 as$806,920, and has a net loss of $149,341 for the year ended December 31, 2014.2019. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being takenAs of March 23, 2020, we have closed the delicatessen given the stay-at-home order issued by the governor of New Jersey. According to obtainmanagement, this is a temporary situation until the order is lifted. This will have a material impact on our business.

We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We need to raise significant additional fundingcapital to fund our operating expenses, pay our obligations, and implement its strategic plans providegrow our company. Therefore, our future operations may be dependent on our ability to secure additional financing. The current Coronavirus Pandemic may have an adverse impact on the opportunity for the CompanyCompany’s ability to raise capital or to continue as a going concern.

 

NOTE 10F-13SUBSEQUENT EVENT

 

On January 25, 2020, the Company repaid in full a $2,000 related party promissory note dated October 16, 2014 (See Note 3 and 8).

On February 13, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., Chairman in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on February 13, 2021.

On March 18, 2020, the Company, entered into a Debt Exchange Agreement with a related party pursuant to which $100,000 of the principal amount of debt owed by the Company was converted to 100,000 shares of the Company’s common stock. The remaining principal balance owed to such party in the amount of $44,978.54, plus any accrued and unpaid interest, is due and payable on December 31, 2020.

On March 18, 2020 the Company repurchased an aggregate of 38,336 shares of the Company’s common stock from a total of 11 shareholders, at a purchase price of $1.00 per share. These shares were returned to the Company’s number of authorized but unissued shares of common stock.

On March 18, 2020, the Board of Directors of the Company authorized the issuance of warrants to the shareholders of record as of March 31, 2020. As of such date, the Company shall send each shareholder of record (i) five Class A Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.25 per share, (ii) five Class B Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.50 per share, (iii) five Class C Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.75 per share and (iv) five Class D Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $2.00 per share, with each warrant expiring on March 31, 2035. As of the date of this report, no warrants have been issued.

On March 18, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., Chairman in the amount of $50,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on March 31, 2021.

As of March 23, 2020, we have closed the delicatessen given the stay-at-home order issued by the governor of New Jersey. According to management, this is a temporary situation until the order is lifted. This will have a material impact on our business. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. Therefore, our future operations may be dependent on our ability to secure additional financing. The current Coronavirus Pandemic may have an adverse impact on the Company’s ability to raise capital or to continue as a going concern.

On March 23, 2020, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada increasing the number of shares of common stock the Company is authorized to issue from 100,000,000 to 250,000,000.


HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

  June 30,
2020
  December 31,
2019
 
  (Unaudited)    
       
ASSETS      
Current Assets      
Cash $1,911,717  $5,382 
Inventory  306   1,044 
Total Current Assets  1,912,023   6,426 
         
Leasehold improvements and equipment, net  2,415   6,038 
Operating lease asset, net  5,687   8,324 
         
Total Assets $1,920,125  $20,788 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
         
Current Liabilities        
Accounts payable and accrued expenses $11,477  $68,981 
Operating lease liability, current  5,687   5,411 
Due to Officers - related parties  60,213   53,017 
Note payable - related party  -   362,104 
Total Current Liabilities  77,377   489,513 
         
Long Term Liabilities        
Operating lease liability, net of current  -   2,913 
         
Total Liabilities  77,377   492,426 
         
Commitments and Contingencies (See Note 6)  -   - 
         
Stockholders’ Equity (Deficit)        
Common stock, $0.0001 par value; 250,000,000 shares authorized, 7,797,004 and 5,235,340 issued and outstanding, respectively  783   523 
Treasury stock, 38,336 and 0 shares at June 30, 2020 and December 31, 2019, respectively  (38,336)  - 
Additional paid-in capital  2,949,927   334,759 
Accumulated deficit  (1,069,626)  (806,920)
         
Total Stockholders’ Equity (Deficit)  1,842,748   (471,638)
         
Total Liabilities and Stockholders’ Equity (Deficit) $1,920,125  $20,788 

See accompanying notes to the unaudited condensed consolidated financial statements.

F-24

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

  For the three
Months Ended
  For the three
Months Ended
  For the Six
Months Ended
  For the Six
Months Ended
 
  June 30,
2020
  June 30,
2019
  June 30,
2020
  June 30,
2019
 
             
Sales $-  $4,205  $3,577  $8,813 
                 
Costs and Expenses                
Food, beverage and supplies  212   4,469   2,864   8,420 
Direct operating and occupancy  2,001   2,367   4,235   4,894 
Depreciation  1,812   1,823   3,623   3,627 
Consulting - related parties  80,000   -   80,000   - 
Professional fees  68,755   11,461   128,075   32,210 
General and administrative  23,664   27,188   38,586   38,970 
Total cost and expenses  176,444   47,308   257,383   88,121 
                 
Loss from Operations  (176,444)  (43,103)  (253,806)  (79,308)
                 
Other Expenses                
Interest Income  191   -   191   - 
Interest Expense  (1,762)  (6,749)  (9,091)  (12,987)
Total Other Expenses  (1,571)  (6,749)  (8,900)  (12,987)
                 
LOSS FROM OPERATIONS BEFORE INCOME TAXES  (178,015)  (49,852)  (262,706)  (92,295)
                 
Provision for Income Taxes  -   -   -   - 
                 
NET LOSS $(178,015) $(49,852) $(262,706) $(92,295)
                 
Net Loss Per Share - Basic and Diluted $(0.02) $(0.01) $(0.04) $(0.02)
                 
Weighted average number of shares outstanding during the period - Basic and Diluted  7,420,560   5,235,340   6,326,683   5,235,340 

See accompanying notes to the unaudited condensed consolidated financial statements.

F-25

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Stockholders’ Equity (Deficit)

For the for the three and six months ended June 30, 2020

(Unaudited)

  Common stock  Treasury  Additional
paid-in
  Accumulated  Total Stockholders’ 
  Shares  Amount  Shares  capital  Deficit  Equity (Deficit) 
                   
Balance, December 31, 2019  5,235,340  $523  $     -  $334,759  $(806,920) $(471,638)
                         
Conversion of note payable - related party to common shares ($1.00/share)  100,000   10   -   99,990   -   100,000 
                         
Repurchase of common shares ($1.00/share)  (38,336)  -   (38,336)  -   -   (38,336)
                         
Common stock issued for cash ($1.00/share)  2,500,000   250   -   2,499,750   -   2,500,000 
                         
In kind contribution of services  -   -   -   15,428   -   15,428 
                         
Net loss for the six months ended June 30, 2020  -   -   -   -   (262,706)  (262,706)
                         
Balance, June 30, 2020 (Unaudited)  7,797,004  $783  $(38,336) $2,949,927  $(1,069,626) $1,842,748 
                         
Balance, March 31, 2020 (Unaudited)  5,297,004  $533  $(38,336) $442,463  $(891,611) $(486,951)
                         
Common stock issued for cash ($1.00/share)  2,500,000   250   -   2,499,750   -   2,500,000 
                         
In kind contribution of services  -   -   -   7,714   -   7,714 
                         
Net loss for the three months ended June 30, 2020  -   -   -   -   (178,015)  (178,015)
                         
Balance, June 30, 2020 (Unaudited)  7,797,004  $783  $(38,336) $2,949,927  $(1,069,626) $1,842,748 

See accompanying notes to the unaudited condensed consolidated financial statements.


HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Stockholders’ Equity (Deficit)

For the three and six months ended June 30, 2019

(Unaudited)

  Common stock  Additional
paid-in
  Accumulated  Total
Stockholders’
 
  Shares  Amount  capital  Deficit  Equity (Deficit) 
                
Balance, December 31, 2018  5,235,340  $523  $303,903  $(657,579) $(353,153)
                     
In kind contribution of services  -   -   15,428   -   15,428 
                     
Net loss for the six months ended June 30, 2019  -   -   -   (92,295)  (92,295)
                     
Balance, June 30, 2019 (Unaudited)  5,235,340  $523  $319,331  $(749,874) $(430,020)
                     
Balance, March 31, 2019 (Unaudited)  5,235,340  $523  $311,617  $(700,022) $(387,882)
                     
In kind contribution of services  -   -   7,714   -   7,714 
                     
Net loss for the three months ended June 30, 2019  -   -   -   (49,852)  (49,852)
                     
Balance, June 30, 2019 (Unaudited)  5,235,340  $523  $319,331  $(749,874) $(430,020)

See accompanying notes to the unaudited condensed consolidated financial statements.

F-27

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  For the Six
Months Ended
  For the Six
Months Ended
 
  June 30,
2020
  June 30,
2019
 
Cash Flows From Operating Activities:      
Net Loss $(262,706) $(92,295)
Adjustments to reconcile net loss to net cash used in operations        
In-kind contribution of services  15,428   15,428 
Depreciation expense  3,623   3,627 
Amortization of operating lease assets  2,637   - 
Changes in operating assets and liabilities:        
Decrease in inventory  738   212 
Increase (Decrease) in accounts payable and accrued expenses  (57,504)  30,137 
Decrease in operating lease liability  (2,637)  - 
Net Cash Used In Operating Activities  (300,421)  (42,891)
         
Net Cash Used In Investing Activities  -   - 
         
Cash Flows From Financing Activities:        
Proceeds from common stock issuance for cash  2,500,000   - 
Proceeds from/due to officers  7,196   4,451 
Repayment of note payable - related party  (332,104)  - 
Proceeds from note payable - related party  70,000   38,100 
Purchase of treasury stock  (38,336)  - 
Net Cash Provided by Financing Activities  2,206,756   42,551 
         
Net Increase (Decrease) in Cash  1,906,335   (340)
         
Cash at Beginning of Period  5,382   609 
         
Cash at End of Period $1,911,717  $269 
         
Supplemental disclosure of cash flow information:        
         
Cash paid for interest $9,091  $- 
Cash paid for taxes $-  $- 
         
Supplemental disclosure of non-cash investing and financing activities:        
Note payable - related party, converted into 100,000 shares of common stock $100,000  $- 

See accompanying notes to the unaudited condensed consolidated financial statements.


HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014JUNE 30, 2020

(UNAUDITED)

 

NOTE 9SUBSEQUENT EVENTS

Subsequent to December 31, 2014 the Company issued 82,703 units for $62,025($0.75/unit). Each unit consisted of one share of common stock and one warrant that is exercisable into two shares of common stock at $5.00 ($2.50 per share) for a total of 165,406 shares of common stock and is immediately callable by the Company if the Company's common stock trades for a period of 20 consecutive days at an average price of $3 per share or greater. The warrants expire on July 31, 2017.

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through June 4, 2015 the date the financial statements were issued.

F-14

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

  June 30, 2015  December 31, 2014 
  (Unaudited)    
       
ASSETS        
Current Assets        
Cash $10,167  $13,471 
Note receivable - related party  2,500   2,500 
Total Current Assets  12,667   15,971 
         
Leasehold improvements, net  21,675   11,159 
         
Total Assets $34,342  $27,130 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
         
Current Liabilities        
Accounts payable and accrued expenses $25,632  $8,694 
Note payable - related party  2,000   2,000 
         
Total Liabilities  27,632   10,694 
         
Commitments and Contingencies (See Note 6)        
         
Stockholders' Equity        
Common stock, $0.0001 par value; 100,000,000 shares authorized, 5,209,005 and 5,099,002 issued and outstanding, respectively  521   510 
Additional paid-in capital  176,160   78,243 
Less: Subscription receivable  (15,000)  - 
Accumulated deficit  (154,971)  (62,317)
         
Total Stockholders' Equity  6,710   16,436 
         
Total Liabilities and Stockholders' Equity $34,342  $27,130 

See accompanying notes to unaudited condensed consolidated financial statements.

F-15

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Operations

(Unaudited)

  For the Three Months Ended  For the Six Months Ended  For the Period From January 18, 2014
(Inception) to
 
  June 30, 2015  June 30, 2014  June 30, 2015  June 30, 2014 
Operating Expenses                
Consulting expense - related party $24,000  $-  $48,000  $- 
Professional fees  18,350   10,000   25,589   10,000 
General and administrative  11,069   689   18,990   814 
Total Operating Expenses  53,419   10,689   92,579   10,814 
                 
Loss from Operations  (53,419)  (10,689)  (92,579)  (10,814)
                 
Other Expenses                
Interest Expense  (75)  -   (75)  - 
                 
LOSS FROM OPERATIONS BEFORE INCOME TAXES  (53,494)  (10,689)  (92,654)  (10,814)
                 
Provision for Income Taxes  -   -   -   - 
                 
NET LOSS $(53,494) $(10,689) $(92,654) $(10,814)
                 
Net Loss Per Share - Basic and Diluted $(0.01) $(0.00) $(0.02) $(0.00)
                 
Weighted average number of shares outstanding during the period - Basic and Diluted  5,179,358   5,000,000   5,156,960   5,000,000 

See accompanying notes to unaudited condensed consolidated financial statements.

F-16

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Stockholders' Equity

For the six months ended June 30, 2015

(Unaudited)

  Common stock  Additional        Total 
        paid-in  Accumulated  Subscription  Stockholders' 
  Shares  Amount  capital  Deficit  Receivable  Equity 
                   
Balance, December 31, 2014  5,099,002  $510  $78,243  $(62,317) $-  $16,436 
                         
Common stock issued for cash, net of stock offering cost ($0.75 / per share)  110,003   11   82,489   -   (15,000)  67,500 
                         
In kind contribution of services  -   -   15,428   -       15,428 
                         
Net loss for the six months ended June 30, 2015  -   -   -   (92,654)  -   (92,654)
                         
Balance, June 30, 2015  5,209,005  $521  $176,160  $(154,971) $(15,000) $6,710 

See accompanying notes to unaudited condensed consolidated financial statements.

F-17

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Cash Flows

(Unaudited)

  For the Six Months Ended  For the Period From
January 18, 2014
(Inception) to
 
  June 30, 2015  June 30, 2014 
Cash Flows From Operating Activities:        
Net Loss $(92,654) $(10,814)
Adjustments to reconcile net loss to net cash used in operations        
In-kind contribution of services  15,428   - 
Changes in operating assets and liabilities:        
Increase in accounts payable and accrued expenses  16,938   10,814 
Net Cash Used In Operating Activities  (60,288)  - 
         
Cash Flows From Investing Activities:        
Payments for leasehold improvements  (10,516)  - 
Net Cash Used In Investing Activities  (10,516)  - 
         
Cash Flows From Financing Activities:        
Proceeds from issuance of common stock, net of stock offering costs  67,500   150 
Net Cash Provided by Financing Activities  67,500   150 
         
Net Increase (Decrease) in Cash  (3,304)  150 
         
Cash at Beginning of Period  13,471   - 
         
Cash at End of Period $10,167  $150 
         
Supplemental disclosure of cash flow information:        
         
Cash paid for interest $-  $- 
Cash paid for taxes $-  $- 
         
Supplemental disclosure of non-cash investing and financing activities:        
         
Stock issued in exchange for subscription receivable $15,000  $- 

 See accompanying notes to unaudited condensed consolidated financial statements.

F-18

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) (A)Organization and Basis of Presentation

 

The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 30, 2020.

 

It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

 

Hometown International, Inc. (the "Company"“Company”) was incorporated under the laws of the State of Nevada on May 19, 2014. The Company is the originator of a new “Delicatessen” concept (“Your Hometown Deli”). The Company intends that its delicatessens will feature “home-style” sandwiches and other entrees in a casual friendly atmosphere. Hometown Delis are designed to be comfortable community gathering places for guests of all ages.

 

On January 18, 2014, Your HometwonHometown Deli, LLC. was formed under the laws of the State of New Jersey. On May 29, 2014, Your Hometown Deli, LLC, entered into a Membership Interest Purchase Agreement with Hometown International, Inc. For accounting purposes, this transaction is being accounted for as a merger of entities under common control and has been treated as a recapitalization of Hometown International, Inc. with Your Hometown Deli, LLC, as the accounting acquirer (see Note 5(D))acquirer). The historical financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 5,000,000 shares issued to the shareholder of Your Hometown Deli, LLC.,LLC, in conjunction with the share exchange transaction has been presented as outstanding for all periods.

 

The Company’s accounting year end is December 31, which wasis the year end of Your Hometown Deli, LLC.

As of March 23, 2020, we have temporarily closed the delicatessen given the stay-at-home order issued by the governor of New Jersey on March 9, 2020. As of the date of this report, the Stay at Home at Home Order has been lifted, on August 1, 2020 the Governor signed Executive Order No. 171 extending the Public Health Emergency for another 30 days until September 1, 2020. The deli has minimal staff and is not in a position to stay open and remain profitable while staying compliant with ongoing health requirements. We hope to be in a position to re-open the deli in September 2020.

  

(B) Principles of Consolidation

 

The accompanying June 30, 20152020 and 2019, condensed consolidated unaudited financial statements include the accounts of Hometown International, Inc. and its wholly owned subsidiary, Your Hometown Deli, LLC. The accompanying period from January 18, 2014 (inception) to June 30, 2014 includes the account of Your Hometown Deli, LLC and Hometown International, Inc. from May 19, 2014 to June 30, 2014. All intercompany accounts have been eliminated upon consolidation.


(C) Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Significant estimates include valuation of in kind contribution of service and valuation of deferred tax assets. Actual results could differ from those estimates.

 

F-19

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

(D) Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months90 days or less to be cash equivalents. At June 30, 20152020 and December 31, 2014,2019, the Company had no cash equivalents.

 

(E) Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.” Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. The Company has 418,009.” For June 30, 2020 and 0 shares issuable upon the exercise ofJune 30, 2019, warrants that were not included in the computation of dilutive lossincome/ (loss) per share because their inclusion is anti-dilutiveanti-dilutive.

The computation of basic and diluted loss per share for the three months ended June 30, 20152020 and 2014 and for the six months ended June 30, 2015 and for2019 excludes the period from January 18, 2014 (inception) to June 30, 2014, respectively.common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

June 30,
2020
June 30,
2019
Class A Warrants (Exercise price - $1.25/share)38,985,020   -
Class B Warrants (Exercise price - $1.50/share)38,985,020-
Class C Warrants (Exercise price - $1.75/share)38,985,020-
Class D Warrants (Exercise price - $2.00/share)38,985,020-
Total155,940,080-

  

(F) Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

The company’s federal income tax returns for the period ended December 31, 2014 remain subject to examination by the Internal Revenue Service through 2017.

((G)G) Property and Equipment

 

Property and equipment is recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter onset the property and equipment is put into service.


(H) Revenue Recognition

 

TheEffective January 1, 2018, the Company will recognizerecognizes revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”Accounting Standards Codification, Revenue from Contracts with Customers (Topic 606). In all cases,The standard states that an entity should recognize revenue is recognized only whento depict the price is fixed and determinable, persuasive evidencetransfer of promised goods or services to customers in an arrangement exists,amount that reflects the service is performed and collectability ofconsideration to which the resulting receivable is reasonably assured. entity expects to be entitled in exchange for those goods or services.

The Company generates revenue operating a delicatessen. Revenue from the operations of Company-owned delicatessen deli.

F-20

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)are recognized when sales occur.

 

(I) Fair Value of Financial Instruments

 

The carrying amounts on the Company’sCompany measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including note receivable,cash, accounts payable, and note payable,the short-term portion of long-term debt, the carrying amounts approximate fair value due to the relativelytheir short period to maturity for these instruments.maturities.

 

(J) Recent Accounting Pronouncements

In April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-03, “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”, is to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurementWe adopted accounting guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be anynon-financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flowsflow), and the cost approach (cost to replace the service capacity of an asset or financial condition.replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

 

In April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-04, “Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”, permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, provides guidance to customers about whether a cloud computing arrangement includes a software license. If such an arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. For public business entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 F-21Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

 Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015(J) Concentrations

(UNAUDITED)

 

In April 2015, FASB issuedThe Company maintains various bank accounts at one bank, which, at times, may have balances that exceed federally insured limits. The Company believes it is not exposed to any significant credit risk on its cash balances and has not experienced any losses in such accounts. At June 30, 2020 and December 31, 2019, the Company had cash balances in excess of FDIC limits of $1,752,121 and $0, respectively.  

(K) Recent Accounting Standards Update (“ASU”) No. 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions”, specifies that, for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. The ASU is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.Pronouncements

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.


(K)(L) Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

(M) Inventories

Inventories consist of food and beverages, and are stated at cost. 

NOTE 2PROPERTYLEASEHOLD IMPROVEMENT AND EQUIPMENT

 

PropertyLeasehold improvement and equipment consist of the following at June 30, 20152020 and December 31, 2014:2019:

 

 June 30, December, 31 Estimated June 30, December 31, 
 2015 2014 Useful Life 2020  2019 
Leasehold Improvements  21,675   11,159  5 years  33,455   33,455 
Equipment  3,120   3,120 
Leasehold Improvements and Equipment  36,575   36,575 
Less: Accumulated Depreciation  -   -     (34,160)  (30,537)
Leasehold Improvements, Net $21,675  $11,159   
Leasehold Improvements and Equipment, Net $2,415  $6,038 

  

Depreciation expense was $0$1,812 and $0$1,823 for the three months ended June 30, 2020 and 2019, respectively.

Depreciation expense was $3,623 and $3,627 for the six months ended to June 30, 20152020 and for the period from January 18, 2014 (inception) to June 30, 2014, respectively since the store has not been opened as of June 30, 2015.2019, respectively.

  

NOTE 3NOTE RECEIVABLE – RELATED PARTY

On November 21, 2014, the Company received an unsecured promissory note from a related party in exchange for $2,500. Pursuant to the terms of the note, the note is non-interest bearing and due on demand (See Note 7).

F-22

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

NOTE 4NOTE PAYABLE – RELATED PARTY

On March 18, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., Chairman in the amount of $50,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on March 31, 2021. As of April 24, 2020, the Company accrued $406 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 7).

On February 13, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., Chairman in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on February 13, 2021. As of April 24, 2020, the Company accrued $315 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 7).

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on December 31, 2020. As of April 24, 2020, the Company accrued $255 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 7).

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $175,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on June 30, 2020. As of April 24, 2020, the Company accrued $4,462 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 7).


On December 31, 2019, the Company and a related party note holder agreed to combine the principal and accrued interest of multiple notes and issued a new unsecured promissory note in the amount of $144,979. The note is bearing 8% interest, unsecured and due on December 31, 2020. On March 18, 2020, the Company, entered into a Debt Exchange Agreement with a related party pursuant to which $100,000 of the principal amount of debt owed by the Company was converted to 100,000 shares of the Company’s common stock. The remaining principal balance owed to such party in the amount of $44,978.54, plus any accrued and unpaid interest, is due and payable on December 31, 2020. As of April 24, 2020, the Company accrued $2,885 in interest expense. On April 24, 2020, the remaining note principal and accrued interest were repaid in full (See Note 7).

On December 31, 2019, the Company and Peter L. Coker, Jr., our Chairman of the Board agreed to combine the principal and accrued interest of a note and issued a new unsecured promissory note in the amount of $30,126. The note is bearing 8% interest, unsecured and due on December 31, 2020. As of April 24, 2020, the Company accrued $768 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 7).

 

On October 16, 2014, the Company entered into an unsecured promissory note with a related party in the amount of $2,000. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demanddemand. On January 25, 2020, the note principal was repaid in full (See Note 7). 

NOTE 4DUE TO OFFICERS  – RELATED PARTY

During the six months ended June 30, 2020, certain officers paid an aggregate $7,196 in expenses on Company’s behalf as an advance. Pursuant to the terms of the note, the note was non-interest bearing, unsecured and was due on demand. As of June 30, 2020, the balance due to officers was $60,213 (See Note 7).

 

NOTE 5STOCKHOLDERS’   EQUITYDEFICIT

 

(A) Common Stock Issued for CashIncrease in Authorized Shares

 

TheOn March 23, 2020, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada increasing the number of shares of common stock the Company is authorized to issue from 100,000,000 shares of common stockto 250,000,000 with a par value of $0.0001 per share.

 

During the six months ended June 30, 2015, the Company issued 110,003 units of common stock for $67,500 ($0.75/unit) and a subscription receivable of $15,000. The subscription receivable of $15,000 was collected on July 7, 2015. Each unit consisted of one share of common stock and two warrants to purchase common stock for a total of 110,003 shares of common stock and 220,005 warrants to purchase common stock at an exercise price of $2.50 per share or immediately callable by the Company if the Company's common stock trades for a period of 20 consecutive days at an average price of $3 per share or greater. The warrants expire on July 31, 2017.

For the period ended December 31, 2014 the Company issued 99,002 units of common stock for $59,250 ($0.75/unit), net of offering cost of $15,000. Each unit consisted of one share of common stock and two warrants to purchase common stock for a total of 99,002 shares of common stock and 198,004 warrants to purchase common stock at an exercise price of $2.50 per share or immediately callable by the Company if the Company's common stock trades for a period of 20 consecutive days at an average price of $3 per share or greater. The warrants expire on July 31, 2017.

(B) In kind contribution of services

 

For the three and six months ended June 30, 2015,2020 and 2019, the Company recorded $7,714 and $15,428, respectively, as in kind contribution of services provided by President and Vice President of the Company (See Note 7).

 

F-23

(C) Common stock repurchase

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

On March 18, 2020, the Company repurchased an aggregate of 38,336 shares of the Company’s common stock from a total of 11 shareholders, at a purchase price of $1.00 per share. These shares were returned to the Company’s number of authorized but unissued shares of common stock.

 

(C) Warrants(D) Warrant Issuance

 

On March 18, 2020, the Board of Directors of the Company authorized the issuance of warrants to the shareholders of record as of issuance date. As of such date, the Company shall send each shareholder of record (i) five Class A Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.25 per share, (ii) five Class B Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.50 per share, (iii) five Class C Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $1.75 per share and (iv) five Class D Warrants entitling the holder thereof to purchase five shares of common stock at an exercise price of $2.00 per share, with each warrant expiring on March 31, 2035.


On April 15, 2020, the Company issued twenty warrants for every one share of common stock held to shareholders of record as of April 15, 2020. The following tables summarize all warrant grantswarrants were issued to the shareholders of record on a pro-rata basis on the issuance date in the form of a stock dividend. There was no consideration in exchange for the six months ended June 30, 2015, and the related changes during the period are presented below.issuance of these warrants.

 

  Number of
Warrants
  Weighted
Average
Exercise
Price
 
Warrants        
Balance at January 18, 2014  -  $- 
Granted  198,004   2.50 
Exercised  -   - 
Forfeited  -   - 
Balance at December 31, 2014  198,004   2.50 
Granted  220,005   2.50 
Exercised  -   - 
Forfeited  -   - 
Balance at June 30. 2015  418,009   2.50 
         
Warrants exercisable at June 30, 2015  418,009  $2.50 

The Company issued the following warrants:

38,985,020 Class A Warrants

38,985,020 Class B Warrants

38,985,020 Class C Warrants

38,985,020 Class D Warrants

 

418,009As of the totaldate of this report, no warrants outstanding are fully vested, exercisable and non-forfeitable.have been exercised.

 

(D)(E) Common Stock Issued for Acquisition of an Entity Under Common Controlon Debt Conversion

On May 29, 2014,March 18, 2020, the Company, entered into a Membership Interest PurchaseDebt Exchange Agreement with Your Hometown Deli, LLC. Thea related party pursuant to which $100,000 of the principal amount of debt owed by the Company was deemedconverted to have issued 5,000,000100,000 shares of the Company’s common stock (See Note 3).

(F) Common Stock Issued for Cash

In April 2020, the Company sold 663,750 shares of common stock to Your Hometown Deli, LLC members.unrelated party for $663,750 in cash. The funds were received by the Company has accounted for the transaction as a combination of entities under common control and accordingly, recorded the merger at historical cost of $275 (See Note 1(A) and 7). on April 14, 2020.

 

In April 2020, the Company sold 1,380,000 shares of common stock to unrelated party for $1,380,000 in cash. The funds were received by the Company on April 15, 2020.

In April 2020, the Company sold 456,250 shares of common stock to unrelated party for $456,250 in cash. The funds were received by the Company on April 14, 2020.

NOTE 6COMMITMENTS AND CONTINGENCIES

 

(A) Consulting AgreementAgreements

 

On AugustEffective as of May 1, 2014, the Company2020, we entered into a consultingConsulting Agreement with Tryon Capital Ventures LLC, a North Carolina limited liability company (“Tryon”) which is 50% owned by the father of Peter L. Coker, Jr., our Chairman of the Board. Pursuant to this agreement, Tryon was engaged as a consultant to the Company, to, among other things, support in the research, development, and analysis of product, financial and strategic matters. The term of the Tryon Consulting Agreement is one year; provided, however, that each party has the right to terminate the agreement upon 30 days’ prior written notice to the other. Pursuant to the agreement, Tryon shall receive $15,000 per month during the term of the agreement, in addition to reimbursement of expenses approved in advance by the Company (See Note 7).

Effective as of May 1, 2020, we also entered into a Consulting Agreement with an entity related to oneVCH Limited, a company formed under the laws of Macau (“VCH”) which beneficially owns in excess of 10% of our officers,common stock. Pursuant to receive administrativethis agreement, VCH was engaged as a consultant to the Company, to, among other things, create and other miscellaneous services.build a presence with high net worth and institutional investors. The Company is required to pay $8,000 a month. Theterm of the agreement is one year; provided, however, that each party has the right to remainterminate the agreement upon 30 days’ prior written notice to the other. Pursuant to the agreement, VCH shall receive $25,000 per month during the term of the agreement, in effect unless either party desiresaddition to cancel the agreement. During the six months ended June 30, 2015,reimbursement of expenses approved in advance by the Company paid $48,000 in consulting fees under the agreement.(See Note 7).

  

F-34

(B) Operating Lease Agreement

 

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with a related party for its store space at a monthly rate of $500. As ofOn September 21, 2015, the Company executed the lease and opened the store on October 14, 2015. On December 31, 2014,29, 2015, the operatingCompany signed an addendum to the lease for the lease agreement has not been fully executed. The rent payments will commenceto start 30 days after the opening of the deli. The store opens. As of June 30,opened on October 14, 2015, the storefirst payments would have been due on November 15, 2015, however since the deli was not opened and nofully functioning, the first monthly rent payment was due January 1, 2016. On August 12, 2019, the Company was granted a two-year extension of non-cancelable operating lease with a related party for its store space at a monthly rate of $500. For the three months ended June 30, 2020 and 2019, the Company had a rent expense of $1,500 and $1,500, respectively.  For the six months ended June 30, 2020 and 2019, the Company had a rent expense of $3,000 and $3,000, respectively (See Note 7). The Company accounts for lease in accordance with ASC Topic 842.

 

F-24

Supplemental consolidated balance sheet information related to leases was as follows:

  

  June 30,
2020
 
    
Operating lease assets - right of use $5,687 
     
Lease Liability $5,687 
Less: operating lease liability, current  (5,687)
Long term operating lease liability $- 

 

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)Supplemental disclosures of cash flow information related to leases were as follows:

 

  

For the six months ended

June 30,
2020

  

For the six months ended

June 30,
2019

 
         
Cash paid for operating lease liabilities $3,000  $3,000 

For the six months ended June 30, 2020 and 2019, the total lease cost were $3,000 and $3,000, respectively. The Company did not incur any variable lease cost for both periods.

For the three months ended June 30, 2020 and 2019, the total lease cost were $1,500 and $1,500, respectively. The Company did not incur any variable lease cost for both periods.

NOTE 7RELATED PARTY TRANSACTIONS

On August 1, 2014, the Company entered into a consulting agreement with an entity related to one of our Officers to receive administrative and other miscellaneous services. The Company is required to pay $8,000 a month. The agreement is to remain in effect unless either party desires to cancel the agreement (see Note 6(A)). During the six months ended June 30, 2015, the Company paid $48,000 in consulting fees under the agreement.

On May 29, 2014, the Company entered into a Membership Interest Purchase Agreement with Your Hometown Deli, LLC. The Company was deemed to have issued 5,000,000 shares of common stock to Your Hometown Deli, LLC members. The Company has accounted for the transaction as a combination of entities under common control and accordingly, recorded the merger at historical cost of $275. (See Note 5(D)).

 

On July 1, 2014, the Company entered into a five-year non-cancelable operating lease with a related party for its store space at a monthly rate of $500. As ofOn September 21, 2015, the Company executed the lease and opened the store on October 14, 2015. On December 31, 2014,29, 2015, the operatingCompany signed an addendum to the lease for the lease agreement has not been fully executed. The rent payments will commenceto start 30 days after the opening of the deli. The store opens. As of June 30,opened on October 14, 2015, the storefirst payments would have been due on November 15, 2015, however since the deli was not opened and nofully functioning, the first monthly rent payment was due (seeJanuary 1, 2016. On August 12, 2019, the Company was granted a two-year extension of non-cancelable operating lease with a related party for its store space at a monthly rate of $500. For the three months ended June 30, 2020 and 2019, the Company had a rent expense of $1,500 and $1,500, respectively. For the six months ended June 30, 2020 and 2019, the Company had a rent expense of $3,000 and $3,000, respectively (See Note 6(B))6).


On October 16, 2014, the Company entered into an unsecured promissory note with a related party in the amount of $2,000. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand (See Note 4).

demand. On November 21, 2014, the Company received an unsecured promissory note from a related party in exchange for $2,500. Pursuant to the terms ofJanuary 25, 2020, the note the note is non-interest bearing and due on demandprincipal was repaid in full (See Note 3).

 

For the three and six months ended June 30, 2015,2020 and 2019, the Company recorded $7,714 and $15,428, respectively, as in kind contribution of services provided by President and Vice President of the Company (See Note 5(B)).

 

During six months ended June 30, 2020, certain officers paid an aggregate $7,196 in expenses on Company’s behalf as an advance. Pursuant to the terms of the note, the note was non-interest bearing, unsecured and was due on demand. As of June 30, 2020, the balance due to officers was $60,213 (See Note 4).

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $10,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on December 31, 2020. As of April 24, 2020, the Company accrued $255 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 3)

On December 31, 2019, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., our Chairman of the Board in the amount of $175,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on June 30, 2020. As of April 24, 2020, the Company accrued $4,462 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 3).

On December 31, 2019, the Company and a related party note holder agreed to combine the principal and accrued interest of multiple notes and issued a new unsecured promissory note in the amount of $144,979. The note is bearing 8% interest, unsecured and due on December 31, 2020. On March 18, 2020, the Company, entered into a Debt Exchange Agreement with a related party pursuant to which $100,000 of the principal amount of debt owed by the Company was converted to 100,000 shares of the Company’s common stock. The remaining principal balance owed to such party in the amount of $44,978.54, plus any accrued and unpaid interest, is due and payable on December 31, 2020. As of April 24, 2020, the Company accrued $2,885 in interest expense. On April 24, 2020, the remaining note principal and accrued interest were repaid in full (See Note 3).

On December 31, 2019, the Company and Peter L. Coker, Jr., our Chairman of the Board agreed to combine the principal and accrued interest of a note and issued a new unsecured promissory note in the amount of $30,126. The note is bearing 8% interest, unsecured and due on December 31, 2020. As of April 24, 2020, the Company accrued $768 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 3).

On March 18, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., Chairman in the amount of $50,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on March 31, 2021. As of April 24, 2020, the Company accrued $406 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 3).

On February 13, 2020, the Company entered into an unsecured promissory note with Peter L. Coker, Jr., Chairman in the amount of $20,000. Pursuant to the terms of the note, the note is bearing 8% interest, unsecured and is due on February 13, 2021. As of April 24, 2020, the Company accrued $315 in interest expense. On April 24, 2020, the note principal and accrued interest were repaid in full (See Note 3). 

Effective as of May 1, 2020, we also entered into a Consulting Agreement with VCH Limited, a company formed under the laws of Macau (“VCH”) which beneficially owns in excess of 10% of our common stock. Pursuant to this agreement, VCH was engaged as a consultant to the Company, to, among other things, create and build a presence with high net worth and institutional investors. The term of the agreement is one year; provided, however, that each party has the right to terminate the agreement upon 30 days’ prior written notice to the other. Pursuant to the agreement, VCH shall receive $25,000 per month during the term of the agreement, in addition to reimbursement of expenses approved in advance by the Company (See Note 6).

F-36

NOTE 8GOING CONCERN

 

As reflected in the accompanying condensed consolidated financial statements, the Company used cash in operations of $60,288$300,421, has an accumulated deficit of $1,069,626, and has a net loss of $92,654$262,706 for the six months ended June 30, 2015. In addition,2020.

On March 23, 2020, we have temporarily closed the Companydelicatessen given the stay-at-home order issued by the governor of New Jersey. Although the Stay at Home at Home Order has been lifted, on August 1, 2020, the Governor signed Executive Order No. 171 extending the Public Health Emergency for another 30 days until September 1, 2020. The deli has minimal staff and is not generated anyin a position to stay open and remain profitable while staying compliant with ongoing health requirements. We hope to be in a position to re-open the deli in September 2020.

We experienced a decrease in revenues from inception. This raises substantial doubt about itsas a result of the COVID-19 pandemic even before the stay-at-home order was issued. Even once the the delicatessen is re-opened, we may have a slowdown in customer’s visit due to the current economic condition. There will be no assurances that we will generate sufficient revenues. We expect our growth rate and sales to be volatile in the near term as a result of the COVID-19 once we resume our delicatessen operations. We plan to reopen the delicatessen in September 2020.

We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. Therefore, our future operations may be dependent on our ability to secure additional financing. The COVID-19 pandemic may have an adverse impact on the Company’s ability to raise capital or to continue as a going concern. TheAs a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern is dependent onand the Company’s ability to raise additional capital and implement its business plan.accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary ifmay result from the Company is unable to continue as a going concern.outcome of this uncertainty.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

F-25

HOMETOWN INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2015

(UNAUDITED)

NOTE 9SUBSEQUENT EVENTSEVENT

 

SubsequentIn June 2020, Your Hometown Deli, LLC executed the New Jersey Economic Development Authority Grant Application required for securing a Grant from the NJEDA Small Business Emergency Assistance Phase 2 Grant assistance program in light of the impact of the coronavirus (“COVID-19”) pandemic on the Company’s business. In connection therewith, Your Hometown Deli, LLC received a $1,000 Grant in July 2020, which does not have to June 30, 2015, the Company issued 26,667 units of common stock for $20,000 ($0.75/unit). Each unit consisted of one share of common stock and two warrants to purchase common stock for a total of 26,667 shares of common stock and 53,333 warrants to purchase common stock at an exercise price of $2.50 per share or immediately callable by the Company if the Company's common stock trades for a period of 20 consecutive days at an average price of $3 per share or greater. The warrants expire on July 31, 2017.be repaid.

 

In preparing these financial statements,On August 1, 2020, the CompanyGovernor of New Jersey signed Executive Order No. 171 extending the Public Health Emergency for another 30 days until September 1, 2020. The deli has evaluated eventsminimal staff and transactions for potential recognition or disclosure through August 17, 2015is not in a position to stay open and remain profitable while staying compliant with ongoing health requirements. We hope to be in a position to re-open the date the financial statements were issued.

deli in September 2020. 

F-26


HOMETOWN INTERNATIONAL, INC.

727,020 SHARESOF COMMON STOCKPART II

 

PROSPECTUS

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

Until _____________, all dealers that effect transactions in these securities whether or not participating in this offering may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

The Date of This Prospectus is ___________.

PART II  INFORMATION NOT REQUIRED IN THE PROSPECTUS

 

ITEM 13.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Item 13. Other Expenses

The following table sets forth the expenses payable by the registrant, in connection with the sale of Issuance and DistributionCommon Stock being registered under this registration statement. All amounts shown are estimates except for the SEC registration fee.

 

Securities and Exchange Commission registration fee $250 
Transfer Agent Fees $2,000 
Accounting fees and expenses $25,000 
Legal fees and expense $35,000 
Miscellaneous $15,000 
Total $77,250 
SEC Registration fee $2,348.55 
Legal fees and expenses $30,000 
Accountant’s fees and expenses $3,500 
Transfer Agent fees and expenses $2,500 
Miscellaneous $2,000 
Total $40,348.55 

 

All amounts are estimates other than the SEC’s registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their Common Stock, including any brokerage commissions or costs of sale.

Item 14. Indemnification of Directors and Officers

ITEM 14.INDEMNIFICATION OF DIRECTORS AND OFFICERS.

  

To the fullest extent permitted by the laws of the State of Nevada, our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his/her position, if he/she acted in good faith and in a manner he/she reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he/she is to be indemnified, we must indemnify him/her against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order.

 

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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is theretofore unenforceable.

 

ITEM 15.RECENT SALES OF UNREGISTERED SECURITIES.

Item 15. Recent Sales of Unregistered

Over the past three years, we have issued and sold the following securities without registration under the Securities Act:

 

On May 29, 2014,April 14, 2020, the Company entered into a Membership Interest Purchase Agreement with Your Hometown Deli, LLC. The Company was deemed to have issued 5,000,000consummated private offers and sales of an aggregate of 2,500,000 shares of common stock as founder’sto three accredited investors for gross cash proceeds of $2,500,000.

On March 18, 2020, the Company issued 100,000 shares of common stock to Europa Capital Investments, LLC, a North Carolina limited liability company, in exchange for $100,000 of the principal amount of debt owed by the Company to the members of Your Hometown Deli, LLC, with Mr. Paul F. Morina, who has been our President, CEO, CFOlender.

The offers, sales, and Director since the inceptionissuances of the Company and Ms. Christine T. Lindenmuth, who has been our Vice President and Director sincesecurities described above were exempt from the inception ofregistration requirements under the Company, each receive 2,500,000 shares pursuant to their membership interest in Your Hometown Deli, LLC.These shares were issuedSecurities Act, in reliance on the exemption underfrom registration provided by Section 4(2)4(a)(2) of the Securities Act of 1933, as amended.

Between June 2014 and August 17 2015, or the date for which Company’s financial statements were issued, we have sold through aincluding Regulation D Rule 506 offering a total of 235,672 shares of Common Stock and 471,344 shares of Common Stock underlying the Warrants to 32 investors, at a price per Unit of $0.75 forpromulgated thereunder, regarding transactions by an aggregate purchase price of $181,755. Subsequent to August 17, 2015 and prior to the filing of this registration statement, we have also sold through the same offering an additional 6,668 shares of Common Stock and 13,336 shares of Common Stock underlying the Warrants two (2) additional investors, who are among the selling stockholders under this registration statement, at a price per Unit of $0.75 for an aggregate purchase price of $5,001. As of the date of this registration statement, the Regulation D offering is not closed.The Common Stock issued in this offering was issued in a transactionissuer not involving a public offeringoffering. All purchasers of securities in reliance uponthe above transactions represented that they were accredited investors and were acquiring the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof and that they could bear the risks of the investment and could hold the securities for an exemption from registration provided by Rule 506indefinite period of Regulation D oftime. The purchasers received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration statement or an available exemption from the registration under the Securities Act. All certificates representing the securities in the transactions described in this Item 15 included appropriate legends setting forth that the securities had not been offered or sold pursuant to a registration statement and describing the applicable restrictions on transfer of 1933, as amended.

the securities

  

Item 16. Exhibits and Financial Statement SchedulesII-1

    

EXHIBITITEM 16.
NUMBEREXHIBITS AND FINANCIAL STATEMENT SCHEDULES.DESCRIPTION
3.1Certificate of Incorporation (1)
3.2Bylaws (1)
5.1Opinion of Szaferman, Lakind, Blumstein & Blader, P.C.*
10.1Membership Interest Purchase Agreement dated May 29, 2014 among Paul Marina, Christine Lindenmuth and the Company (1)
10.2Form of Subscription Agreement (1)

10.3

Lease Agreement dated July 1, 2014 by and between Mantua Creek Group, LLC and Your Hometown Deli, LLC

21.1List of Subsidiary (1)
23.1Consent of Liggett, Vogt & Webb, P.A
23.2Consent of Szaferman, Lakind, Blumstein & Blader, P.C. (filed as Exhibit 5.1)

 

* To be filed by amendment.

(1) previously filed.(a) Exhibits.

 

Item 17. UndertakingsSee the Exhibit Index attached to this registration statement, which is incorporated by reference herein. 

 

(A) (b) Financial Statement Schedules.

All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, or are inapplicable, and therefore have been omitted.

ITEM 17.UNDERTAKINGS.

The undersigned registrantRegistrant hereby undertakes:

 

(A) (1) To file, during any period in which offers, or sales are being made, a post-effective amendment to this registration statement:

 

i.(i) To include any prospectus required by sectionSection 10(a)(3) of the Securities Act of 1933;Act;

 

ii.(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SECCommission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20%20 percent change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement.statement; and

 

iii.(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;statement.

 

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

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(4) Insofar as indemnificationThat, for liabilities arisingthe purpose of determining liability under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(5) Eachpurchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.  Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(B) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

 

Pursuant to the requirementrequirements of the Securities Act of 1933, the registrantRegistrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, thereunto duly authorized in Paulsboro,the City of Woodstown, State of New Jersey on October 19, 2015.

September 23, 2020.

 

 HOMETOWN INTERNATIONAL, INC.
  
Date: September 23, 2020By:/s/Paul F. MarinaMorina
  Paul F. MarinaMorina
  

President, Chief Executive Officer,

Chief Financial Officer and Director

(Principal Executive Officer and
Principal Accounting Officer)

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature Title Date
     
/s/Paul F. Marina  Morina President, Chief Executive Officer, 

October 19, 2015

September 23, 2020
Paul F. MarinaMorina Chief Financial Officer and Director (Principal
(Principal Executive Officer and
Principal Accounting Officer)  

SignatureTitleDate
     
/s/ Peter L.Coker, Jr.Chairman of the Board of DirectorsSeptember 23, 2020
Peter L. Coker, Jr.
/s/ Christine Lindenmuth Director 

October 19, 2015

September 23, 2020
Christine Lindenmuth    

  

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SignatureExhibits # TitleDate
   
/s/Beth Floyd3.1 SecretaryArticles of Incorporation (1)
3.2 

October 19, 2015

By-Laws (1)
Beth Flyod3.3 Certificate of Amendment to the Articles of Incorporation dated March 23, 2020 (7)
4.1 Promissory Note, dated December 31, 2019, in the original principal amount of $175,000 (5)
4.2Form of Class A Warrant (6)
4.3Form of Class B Warrant (6)
4.4Form of Class C Warrant (6)
4.5Form of Class D Warrant (6)
5.1Opinion of The Crone Law Group, P.C. (11)
10.3Lease Agreement dated July 1, 2014 by and between Mantua Creek Group, LLC and Your Hometown Deli, LLC (2)
10.4Rent extension granted by Mantua Creek Group, LLC to Your Hometown Deli, LLC (3)
10.5Stock Repurchase Agreement dated as of January 22, 2018 by and among Hometown International Inc. and Benchmark Capital LLC (4)
10.6Promissory Note dated as of January 22, 2018 in the original principal amount of $5,250 issued to Benchmark Capital LLC (4)
10.7Stock Purchase Agreement, dated December 31,2019, by and between Paul F. Morina and Peter Coker, Jr. (5)
10.8Stock Purchase Agreement, dated December 31, 2019, by and between Christine T. Lindenmuth and Peter Coker, Jr. (5)
10.9Lease Addendum dated August 12, 2019 by and between Mantua Creek Group, LLC and Your Hometown Deli, LLC (8)
10.10Form of Subscription Agreement (9)
10.11Form of Registration Rights Agreement (9)
10.12Consulting Agreement, effective as of May 1, 2020, by and between Tryon Capital Ventures LLC and Hometown International, Inc. (10)
10.13Consulting Agreement, effective as of May 1, 2020, by and between VCH Limited and Hometown International, Inc. (10)
21.1List of Subsidiary (1)
23.1Consent of Liggett & Webb, P.A**
23.2Consent of The Crone Law Group, P.C. included in Exhibit 5.1
24.1Power of Attorney (included on the signature page of this registration statement)

   

23(1)Incorporated by reference to the Company’s draft registration statement on Form S-1 filed with the SEC on June 8, 2015.

(2)Incorporated by reference to the Company’s draft registration statement on Form S-1 filed with the SEC on October 19, 2015.

(3)Incorporated by reference to the Company’s registration statement on Form S-1 filed with the SEC on January 4, 2016.

(4)Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2018.

(5)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 7, 2020.

(6)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 20, 2020.

(7)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 25, 2020.

(8)Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2020.

(9)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 17, 2020.

(10)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 7, 2020.

(11)Incorporated by reference to Amendment No. 1 to the Company’s registration statement on Form S-1 filed with the SEC on July 7, 2020.

**Filed herewith.

 

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