FIRST FOODS GROUP, INC. Cautionary Statements.
This annual report contains "forward-looking statements," as that term is used
in federal securities laws, about
These statements include, among others:
· statements concerning the potential benefits that
("
experience from its business activities and certain transactions it
contemplates or has completed; and
· statements of
strategies, anticipated developments and other matters that are not
historical facts. These statements may be made expressly in this Form 10-K.
You can find many of these statements by looking for words such as
"believes," "expects," "anticipates," "estimates," "opines," or similar
expressions used in this Form 10-K. These forward-looking statements are
subject to numerous assumptions, risks and uncertainties that may cause First
Foods' actual results to be materially different from any future results
expressed or implied by First Foods in those statements. The most important
facts that could prevent First Foods from achieving its stated goals include,
but are not limited to, the following:
(a) volatility or decline of First Foods' stock price;
(b) potential fluctuation of quarterly results;
(c) failure of First Foods to earn significant revenues or profits;
(d) inadequate capital to continue or expand its business, and inability to
raise additional capital or financing to implement its business plans;
(e) decline in demand for First Foods' products and services;
(f) rapid adverse changes in markets;
litigation with or legal claims and allegations by outside parties against
(g) First Foods , including but not limited to challenges to First Foods'
intellectual property rights;
reliance on proprietary merchant advance credit models, which involve the
(h) use of qualitative factors that are inherently judgmental and which could
result in merchant defaults; and
(i) New regulations impacting the business.
In addition, there is no assurance that (i)
Because the forward-looking statements are subject to risks and uncertainties,
actual results may differ materially from those expressed or implied by the
forward-looking statements.
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General
The Company is currently a "smaller reporting company" under the JOBS Act. A
company loses its "smaller reporting company" status on (i) the day its public
float becomes greater than or equal to
Holy Cacao is a majority owned subsidiary that is dedicated to producing, packaging, distributing and selling specialty chocolate products, including specialty chocolate products infused with a hemp-based ingredient in accordance with the Company's understanding of the Agricultural Act of 2014 (the "2014 Farm Bill") and/or the Agriculture Improvement Act of 2018 (the "2018 Farm Bill," and together with the 2014 Farm Bill, collectively, the "Farm Bill"), which renders the production of hemp in compliance with the provisions of the Farm Bill federally lawful. The Company has not been, is not, and has no current plans to be involved in producing, packaging, distributing or selling any product that is infused with a marijuana-based ingredient, although it intends to revisit the matter as regulations change in jurisdictions in which it operates.
The Company is also dedicated to licensing its intellectual property ("IP"), including its name, brand, and packaging, to third parties. The Company may license its IP to third parties that may produce, package, and distribute hemp-based products pursuant with the Company's understanding of the Farm Bill. The Company may license its IP to third parties that may produce, package, and distribute marijuana-based products, but only as such licensing is legal. Holy Cacao holds four trademarks for the brands, "The Edibles Cult", "Purely Irresistible", "Mystere" and "Southeast Edibles".
The Company also has a contract with
The Company is quoted on the OTCQB under "FIFG."
The Company's principal executive offices are located at
As of
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Results of Operations
Results of Operations for the Year Ended
Fiscal 2022 Highlights
Total net sales decreased 77% or
Products Performance
The following table shows net sales by category
for 2022 and 2021:
2022 Change 2021
Net sales by category:
Chocolate products $ 82,844 -74 % $ 323,084
Merchant cash advances 1,951 -95 % 39,673
Total net sales $ 84,795 -77 % $ 362,757
Chocolate products
Chocolate products net sales decreased during 2022 compared to 2021 due primarily to the saturation of the CBD market.
Merchant cash advances
Merchant cash advances net sales decreased during 2022 compared to 2021 due to the Company focusing upon and dedicating resources to the chocolate producing division of the Company.
Cost of Product Sales
Products cost of sales for 2022 and 2021 were as follows:
2022 2021
Cost of Product Sales:
Chocolate products 79,537 233,247
Total Cost of Product Sales: $ 79,537 $ 233,247
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Cost of product sales
The decrease in cost of product sales in 2022 as compared to 2021 was due to a decrease in product sales.
Legal fees for the year ended
General and administrative expenses for the year ended
Provision for merchant cash advances for the year ended
Impairment of assets expense for the year ended
Liquidity and Capital Resources
Net cash used in operating activities amounted to
Net cash used in investing activities amounted to
Net cash provided by financing activities amounted to
Concentration Risks
The Company recognizes the concentration of its merchant cash advances, which could inherently create a potential risk to future working capital in the event that the Company is not able to collect all, or a majority, of the outstanding merchant cash advances. The Company actively mitigates its portfolio concentration risk by monitoring its merchant cash advance provider's ability to participate in merchant cash advances from alternative providers and spreading merchant cash advance participation across various merchants.
As of
As of
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As of
There was no sales concentration for the year ended
For the year ended
For the year ended
Going Concern
The Company's consolidated financial statements are prepared using generally
accepted accounting principles in
The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However, neither any members of management nor any significant shareholders are currently committed to invest funds with us and; therefore, we cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The Company does not have sufficient cash flow for the next twelve months from the issuance of these audited consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying audited consolidated financial statements do not include any adjustments that might be necessary, if the Company is unable to continue as a going concern. These reasons raise substantial doubt that the Company can continue as a going concern.
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Contractual Obligations
Not applicable.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in
Certain of our accounting policies are particularly important to the portrayal and understanding of our financial position and results of operations and require us to apply significant judgment in their application. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, we use our judgment in making certain assumptions and estimates. Our critical accounting policies are outlined in Note 1 in the Notes to the Consolidated Financial Statements.
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