The following discussion and analysis of the results of operations and financial condition for the years ended December 31, 2021 and 2020 should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements that are included elsewhere in this Annual Report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See "Forward-Looking Statements."

Compensation Expense

Compensation expense for the twelve months ended December 31, 2021 and 2020 was $120,000. This is for the base salary of our Chief Executive, Conrad R. Huss

Consulting Expense

Consulting expenses were $300,000 for the year ended December 31, 2021 compared to $225,000 for the year ended December 31, 2020. The $75,000 increase was due to the fact that the consulting contract was outstanding for the entire twelve months while it was outstanding only for nine months during 2020.

On November 1, 2021, the Company signed a new consulting agreement with Frondeur Partners, LLC, a Nevada entity, to provide consulting services for a term lasting one year for a fee of $25,000 per month. The contract will renew automatically each year unless either party decides to terminate. Services to be provided include:

a) Preparation of financial statements

b) Preparation of SEC Reporting





- Quarterly reporting

- Annual reporting

- Form 8-Ks

c) Interaction with firm's auditors

d) Evaluation of merger partners





- Financial modelling

- Transaction negotiation

e) Any other needed financial service

General and Administrative Expenses

General and Administrative expenses were $43,769 for the year ended December 31, 2021 compared to $272,324 for the year ended December 31, 2020. The decrease was principally due to a Debt reconciliation was $257,324. Upon reconciling the balances of amounts owed to Oasis Capital, LLC, it was determined that the balance was understated by $257,324. This correction was made in the fourth quarter of 2020.

Professional Fees

Professional fees for the year ended December 31, 2021 were $39,000 compared to $48,325 for the year ended December 31, 2020. Professional fees consist mostly of legal, accounting and audit fees.




                                       9




Other Income (Expense)

Other Income (expense) for the year ended December 31 2021 was ($1,050,379) compared to ($1,775,704) for the year ended December 31, 2020. The break-out of Other Income (Expense) is as follows;




                                                         2021             2020         Difference
Interest expense                                     $ (1,038,632 )   $   (611,789 )   $  (426,853 )
Change in fair value of derivative liabilities           (741,027 )     (1,837,933 )     1,096,906
Loss on debt litigation (See Note 11)                    (266,412 )              -        (266,412 )
Debt reconciliation                                             -         (257,324 )       257,324
Gain on new methodology for accounting for debt
conversion features                                       995,692                -         995,692
Gain on extinguishment of debt and accrued
interest                                                        -          931,342        (931.342 )
Total                                                $ (1,050,379 )   $ (1,775,704 )   $   725,325

Interest expense was greater by $426,853 in 2021 due to increased debt levels and interest expense arising from the write-off of the third-party debt and lower amortization of debt discount.

Change in fair value of derivative liabilities was approximately $1.1 million improved as convertible debt instruments are now recorded as put premium on stock settled debt.



Net Loss

The Company had a net loss of ($1,553,148) for the year ended December 31, 2021, as compared to ($2,184,029) for the year ended December 31, 2020. Of the loss in 2021, approximately ($500,000) was due to operations and the remainder was due primarily to interest expenses, derivative expenses on convertible debt, partially offset by the gain on new methodology for accounting for debt conversion features

Liquidity and Capital Resources

For the year ended December 31, 2021, we used $65,289 in operating activities compared to $37,600 used in the prior year.

For the year ended December 31, 2021, we generated $71,000 through financing activities compared to $37,600 in the year ended December 31, 2020. The increase in funds was due greater funds from financings as the Company evaluates its operating options.

The Company currently owes $254,400 on notes payable, all of which are in default, and $857,483 for outstanding convertible notes. The majority of the notes payable are in default.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operation and does not currently have revenue generating operations. The Company has an accumulated deficit of approximately $83 million, and a net loss for the year ended December 31, 2021 of $1.5 million. Of the loss, approximately $500,000 was due to operations and the remainder was due primarily to interest expense, the write-off of receivables and the loss on the issuance of preferred stock, partially offset by the gain on extinguishment of debt. The Company's ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company's development and marketing efforts.

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or available from external sources such as debt or equity financings, or other potential sources. The inability to generate cash flow from operations or to raise capital from external sources will force the Company to substantially curtail and cease operations, therefore, having a material adverse effect on its business. Furthermore, there can be no assurance that any funds, if available, will possess attractive terms or not have a significant dilutive effect on the Company's existing stockholders.

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