You should read the following discussion together with our financial statements and the related notes included elsewhere in this annual report on Form 10-K. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.

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. The delicatessen was re-opened on September 8, 2020, with a "soft opening" to a limited audience, prior to its "Grand Re-Opening" to the public on September 22, 2020. The temporarily closure and other effects of COVID-19 had a material impact on our business during 2020. Although we are unable to estimate the ultimate impact, it is anticipated that the COVID-19 pandemic will continue to effect the flow of customers into the deli throughout 2021. Those customers include commuting workers, local students and coaches who frequent the sports facility on the property and the reduced number of people willing to dine outside the household.





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 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 and only store is located in Paulsboro, New Jersey.

On January 18, 2014, Your Hometown 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 our Company and is now a wholly-owned subsidiary of our Company. We introduced the delicatessen concept under the Your Hometown Deli brand name.

We began generating revenue from the sales of our food and beverage since our soft opening in mid-October 2015. 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 annual report 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.





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During the year ended December 31, 2020, we continued to refine our menu and operating hours. We have limited advertising using social media and word of mouth; however, we continue to place an advertisement in a local high school sports calendar and have attended various local events with food samples and menus. We have attended events like the Lighthouse Challenge held at Tinicum Rear Range Lighthouse and various political fundraisers throughout Gloucester County. We expect our losses to continue.

As reflected in the financial statements, the Company used cash in operations of $668,668 and has a net loss from operations of $631,356 and an accumulated deficit of $1,438,276 for the fiscal year ended December 31, 2020.

Critical Accounting Policies and Estimates





Use of Estimate

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.





Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification, Revenue from Contracts with Customers (Topic 606). The standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

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

Recent Accounting Pronouncements

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





Results of Operations

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

Comparison for the Fiscal Year Ended December 31, 2020 and 2019

We generated revenue of $13,976 and $21,772 for the years ended December 31, 2020 and 2019, respectively. The decrease in revenue is attributed to the deli being closed due to COVID-19. The deli was re-opened on September 8, 2020, with a "soft opening" to a limited audience, prior to its "Grand Re-Opening" to the public on September 22, 2020.

The total cost and expenses was $638,414 for the year ended December 31, 2020, compared to $153,930 for the year ended December 31, 2019. This increase in costs and expenses is primarily due to $320,000 of consulting fees paid to related parties during the year ended December 31, 2020, an increase of $113,991 in professional resulting from the registration statement filed by the Company during the year ended December 31, 2020 and an increase of $59,909 in general and administrative expenses. Increase in general and administrative fees was attributable to fees required in connection with filing with the Security and Exchange Commission and an increase in general business expenses.

We incurred loss from operations of $624,438 and $132,158 for the years ended December 31, 2020 and 2019, respectively. This increase in loss from operations was due to a reduction in revenues and an increase in operating costs.

Other income for the year ended December 31, 2020 was $1,000 resulting from the New Jersey Economic Development Authority grant received from the NJEDA Small Business Emergency Assistance Phase 2 Grant assistance program in light of the impact of the coronavirus pandemic.

Interest income increased by $1,173 to $1,173 for the year ended December 31, 2020 from $0 for the year ended December 31, 2019. The increase was primarily due to interest on note receivable - related party.

Interest expense was $9,091 for the year ended December 31, 2020, compared to $27,183 for the year ended December 31, 2019. This decrease was due to a lower interest expense on the loans as a result of a decrease in debt outstanding.

Due to the described factors above, we had a net loss of $631,356 and $149,341 for the years ended December 31, 2020 and 2019, respectively.

Liquidity and Capital Resources

As of December 31, 2020, we had current assets of $1,556,426, consisting of $1,398,006 in cash, $6,594 in prepaid expenses, $954 in inventory, $150,000 in note receivable - related party and $872 in interest receivable - related party. Our current liabilities as of December 31, 2020, were $70,051, which is comprised of $64,749 due to certain officers, $2,388 in accounts payable and accrued expenses, and $2,914 in current operating lease liability.





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The following is a summary of our cash flows provided by (used in) operating,
investing, and financing activities for the years ended December 31, 2020 and
2019:



                                             For the year       For the year
                                                ended               ended
                                             December 31,       December 31,
                                                 2020               2019

Net Cash Used in Operating Activities $ (668,668 ) $ (156,671 ) Net Cash Used in Investing Activities $ (150,000 ) $

             -

Net Cash Provided by Financing Activities $ 2,211,292 $ 161,444 Net Increase in Cash and Cash Equivalents $ 1,392,624 $ 4,773

For the year ended December 31, 2020, we had used cash of $668,668 for operating activities, used cash of $150,000 in investing activities and financing activities provided $2,211,292. We had a net increase in cash and cash equivalents of $1,392,624 for the year ended December 31, 2020.

For the year ended December 31, 2020, net cash used in operations of $668,668 was the result of a net loss of $631,356 and a decrease of accounts payable and accrued expenses of $66,593, offset by in-kind contribution of services of $30,856, depreciation expense of $5,801 and an increase in prepaid expenses of $6,594.

For the year ended December 31, 2019, net cash used in operations of $156,671 was the result of a net loss of $149,341 and a decrease of accounts payable and accrued expenses of $55,363 offset by in-kind contribution of services of $30,856, depreciation expense of $7,315, and a gain on debt settlement of $10,000.

Net cash used in our investing activities were $150,000 and $0 for the years ended December 31, 2020 and December 31, 2019, respectively. The increase was attributable to issuance of note receivable -related party of $150,000.

Our financing activities resulted in a cash inflow of $2,211,292 for the year ended December 31, 2020, which is represented by $2,500,000 proceeds from issuance of common stock, $11,732 proceeds from/due to related parties, $332,104 loan repayment to related party, $70,000 proceeds from note payable- related party and $38,336 repurchase of stock. Our financing activities resulted in a cash inflow of $161,444 for the year ended December 31, 2019, which is represented by $19,054 proceeds from a shareholder loan payable, repayment of note payable of $81,000, repayment of note payable - related party of $31,710 and $255,100 proceeds, net of repayment from note payable- related party.

As reflected in the accompanying consolidated financial statements, the Company used cash in operations of $668,668, has an accumulated deficit of $1,438,276 and has a net loss of $631,356 for the year ended December 31, 2020.

On March 23, 2020, the Company temporarily closed the delicatessen due to the stay-at-home order issued by the Governor of New Jersey. Although the Stay at Home at Home Order has been lifted, on October 24, 2020, the Governor signed Executive Order No. 191 extending the Public Health Emergency for another 30 days. The deli was re-opened on September 8, 2020, with a "soft opening" to a limited audience, prior to its "Grand Re-Opening" to the public on September 22, 2020.

The Company experienced a decrease in revenues as a result of the COVID-19 pandemic even before the stay-at-home order was issued. Even though the delicatessen has been re-opened, the Company 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. The Company expects the growth rate and sales to be volatile in the near term. The Company slowly regains its customer base after reopening.

On April 14, 2020, the Company 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. On April 24, 2020, the Company fully repaid the notes payable to Peter L. Coker, Jr., our Chairman, 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 private placement. The Company plans to utilize the remainder of the proceeds to explore and evaluate potential merger candidates for the Company and to fund general corporate purposes. As of December 31, 2020, we had approximately $1,398,000 of cash on hand, and a cash burn rate of approximately $70,000 per month. Management believes that the current working capital are sufficient to sustain its current operations for the next 12 months. Management believes that the actions taken in respect of the COVID-19 pandemic and current working capital are sufficient to sustain its current operations at its current spending levels for the next 12 months. However, we are unable to estimate the ultimate impact of the COVID-19 pandemic on our financial condition and future results of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

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