Use of Generally Accepted Accounting Principles ("GAAP") Financial Measures



We use United States GAAP financial measures in the section of this report
captioned "Management's Discussion and Analysis or Plan of Operation" (MD&A),
unless otherwise noted. All of the GAAP financial measures used by us in this
report relate to the inclusion of financial information. This discussion and
analysis should be read in conjunction with our financial statements and the
notes thereto included elsewhere in this annual report. All references to dollar
amounts in this section are in United States dollars, unless expressly stated
otherwise. Please see Item 1A [Missing Graphic Reference] "Risk Factors" for a
list of our risk factors.



Results of Operations

Comparison of the Fiscal Years Ended December 31, 2021 and December 31, 2020

A comparison of the Company's operating results for the fiscal years ended December 31, 2021 and December 31, 2020 are as follows:

For the year ended December 31, 2021:



                                                                                          North
                                                                                        American
                                                                                         Custom
                                           Global Digital        GDSI Florida,          Specialty
                                           Solutions, Inc             LLC             Vehicles, Inc          Totals
Revenue                                   $              -      $             -      $             -      $          -
Cost of Sales                                            -                    -                    -                 -
Gross Profit                                             -                    -                    -                 -
Operating Expenses                               2,240,437                    -                    -         2,240,437
Operating Income (Loss)                         (2,240,437 )                  -                    -        (2,240,437 )
Other Income (Expenses)                          4,451,746                    -                    -         4,451,746
Income (Loss) - Before Tax                $      2,211,309      $             -      $             -      $  2,211,309

For the year ended December 31, 2020:





                                                                                          North
                                                                                        American
                                                                                         Custom
                                           Global Digital        GDSI Florida,          Specialty
                                           Solutions, Inc             LLC            Vehicles, Inc.          Totals
Revenue                                   $              -      $             -      $             -      $          -
Cost of Sales                                            -                    -                    -                 -
Gross Profit                                             -                    -                    -                 -
Operating Expenses                               1,085,417                    -                    -         1,085,417
Operating Income (Loss)                         (1,085,417 )                  -                    -        (1,085,417 )
Other Income (Expenses)                         11,521,123                    -                    -        11,521,123

Income (Loss) - Before Tax                $     10,435,706      $          

         $             -      $ 10,435,706


                                      -17-

  Table of Contents

The variances between fiscal years ending December 31, 2021 and 2020 are as
follows:



                                                                                            North
                                                                                           American
                                                                                            Custom
                                                                                          Specialty
                                           Global Digital                                 Vehicles,
                                           Solutions, Inc        GDSI Florida, LLC           Inc              Totals
Revenue                                   $              -      $                 -      $          -      $          -
Cost of Sales                                            -                        -                 -                 -
Gross Profit                                             -                        -                 -                 -
Operating Expenses                               1,155,020                        -                 -         1,155,020
Operating Income (Loss)                         (1,155,020 )                      -                 -        (1,155,020 )
Other Income (Expenses)                         15,972,869                        -                 -        15,972,869
Income (Loss) - Before Tax                $     14,817,849      $                 -      $          -      $ 14,817,849




Operating Loss

Loss from operations for the years ended December 31, 2021, and 2020 was $2,240,437 and $1,085,417 respectively. The decrease in operating loss is due to decrease in Selling and Administrative costs.

Liquidity, Financial Condition and Capital Resources





As of December 31, 2021, we had cash of $98,800 on hand and a working capital
deficiency of $ 11.128,449 as compared to cash on hand of $264 and a working
capital deficiency of $17,403,295 as of December 31, 2020.

The decrease in working capital is mainly due to the overall reduction in our business activities and lack of outside funding.





Note Financing



On January 26, 2015, the Company agreed to a $250,000 principal (and a $25,000
original discount amount) Convertible Note with JMJ Financial ("JMJ"). The Note
matures on January 26, 2017, unless earlier converted pursuant to the terms of
the Convertible Note. The Note bears interest at 0% if repaid in the first 90
days and then a one-time interest charge of 12% applied on the principal sum.
The outstanding principal and interest under the Note is convertible, solely
upon an Event of Default (as defined in the Note), at the option of the Holder
of the Note into shares of the Company's common stock as set forth in the Note.

During the year ended December 31, 2017, in settlement of the default, we entered into a Repayment Agreement with JMJ Financial. The Company agreed to repay the balance as follows by wire:

? $12,500 within five business days of the Issuer securing funding, provided


        that such payment shall be made on January 31, 2018.

? $12,500 within 45 days after the first payment.

? $12,500 within 45 days after the second payment.

? $47,014 within 30 days after the third payment.

A total of $25,000 has been paid through the date of this filing. The first payment of $12,500 was made on February 14, 2018, and the second payment of $12,500 was made on May 17, 2018. No payments have been made since then.


On January 16, 2015, the Company agreed to a $78,750 principal Convertible
Redeemable Note with LG Capital Funding, LLC ("LG Capital"). The Note matures on
January 16, 2016, unless earlier converted pursuant to the terms of the
Convertible Note. The Note bears interest at 8% per annum. The outstanding
principal and interest under the Note is convertible, solely upon an Event of
Default (as defined in the Note), at the option of the Holder of the Note into
shares of the Company's common stock as set forth in the Note. On December 12,
2017, the Company entered into a redemption agreement with LG Capital Funding,
LLC, to repay the outstanding balance of $68,110.

                                      -18-

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During the year ended December 31, 2017, in settlement of the default, we entered into a Convertible Note Redemption Agreement with LG Capital Funding, LLC. The Company is to wire redemption payment as follows:

? $6,500 by December 29, 2017 (paid on January 2, 2018)

? $6,500 by January 31, 2018 (paid on March 5, 2019)

? $6,500 by February 28, 2018 (paid on March 5, 2019)






  ? $25,000 by March 30, 2018

? The remaining balance by April 30, 2018

A total of $19,500 has been paid at the date of this filing, with the remaining scheduled payments not yet made.





On December 22, 2017, the Company entered into a financing agreement with an
accredited investor for $1.2 million amended on December 10, 2019, and increased
to $1,850,000.



Under the terms of the agreement, the Company is to receive milestone payments
based on the progress of the Company's lawsuit for damages against Grupo Rontan
Metalurgica, S.A (the "Lawsuit"). Such milestone payments consist of (i) an
initial purchase price payment of $300,000, which the Company received on
December 22, 2017 (ii) $150,000 within 30 days of the Lawsuit surviving a motion
to dismiss on the primary claims; (iii) $100,000 within 30 days of the close of
all discovery in the Lawsuit; and (iv) $650,000 within 30 days of the Lawsuit
surviving a motion for summary judgment and challenges on the primary claims. As
part of the agreement, the Company shall pay the investor an investment return
of 100% of the litigation proceeds to recoup all money invested, plus 27.5% of
the total litigation proceeds received by the Company. As of December 31, 2021
and through the date of this report $2,550,000 remains outstanding.



On December 23, 2017, the Company entered into a $485,000 Demand Promissory Note
with Vox Business Trust, LLC (the "Purchaser"). The note was in settlement of
the amounts accrued under a consulting agreement (Note 7), including $200,000
owed for retainer payments through December 2017 and $285,000 owed to the
Purchaser when the Resolution Progress Funding was met on December 22, 2017. As
part of the agreement, the Purchaser may not demand payment prior to the date of
the Resolution Funding Date. The Company also agreed to grant 5,000,000 shares
within 90 days of the Resolution Progress Funding Date and 10,000,000 shares
within 90 days of the Resolution Funding Date. The 5,000,000 shares were issued
on March 13, 2018. As of December 31, 2021, and through the date of this report
$926,500 of the Demand Promissory note remains outstanding.



On December 26, 2017, the Company entered into a $485,000 Demand Promissory Note
with RLT Consulting, Inc (the "Purchaser"). The note was in settlement of the
amounts accrued under a consulting agreement (Note 7), including $200,000 owed
for retainer payments through December 2017, and $285,000 owed to the Purchaser
when the Resolution Progress Funding was met on December 22, 2017. As part of
the agreement, the Purchaser may not demand payment prior to the date of the
Resolution Funding Date. The Company also agreed to grant 5,000,000 shares
within 90 days of the Resolution Progress Funding Date and 10,000,000 shares
within 90 days of the Resolution Funding Date. The 5,000,000 shares were issued
on March 13, 2018 (along with an additional 4,000,000 for further services). As
of December 31, 2021, and through the date of this report $919,500 of the Demand
Promissory note remains outstanding.



 On May 15, 2018, the Company entered into an Investment Return Purchase
Agreement with Peter Land an accredited investor (the "Purchaser") for proceeds
of $200,000 (the "Investment Agreement"). Under the terms of the Investment
Agreement, the Company agreed to pay the Purchaser the $200,000 proceeds plus a
10% return, or $20,000 (the "Investment Return") within three (3) months from
the date of the Investment Agreement. The Investment Return is being recognized
as interest expense over the three months. Such Investment Return shall be paid
earlier if the Company secures funding totaling $500,000 within 90 days from the
date of the Investment Agreement. In addition, the Company agreed to issue to
the Purchaser 2,000,000 warrants to purchase common stock of the Company at an
exercise price of $0.01 per share, exercisable for a period of three (3) years.
The warrants were valued using the Black Scholes Merton model, resulting in a
fair value of $13,000. The key valuation assumptions used consist, in part, of
the price of the Company's common stock of $0.007 at issuance date; a risk-free
interest rate of 2.75% and expected volatility of the Company's common stock, of
274.39%, Due to the short-term nature of the Investment Agreement, the warrant
fair value was immediately expensed as a financing cost. As of December 31,
2021, the Investment Return has not been paid to the Purchaser, and $200,000 is
outstanding. We are currently in default under terms of the note.

                                      -19-

  Table of Contents

Notes Payable



On May 12, 2020, the Company and BBVA USA entered into a 1% SBA PPP, Promissory
Note, in the aggregate principal of $103,125. The note is payable in monthly
payments of $5,805 beginning on December 12, 2020, ending on May 12, 2022. The
Company has requested a debt forgiveness from the SBA and is waiting for a
response. BBVA USA has waived the monthly repayment requirement until the SBA
responds.



On August 31, 2017, the Company entered into a $20,000 6% promissory note with
an individual. The note is due on February 15, 2018. Upon default, the interest
rate increases to 18% until the principal is fully repaid. The Company has a
verbal agreement with the individual to extend the terms of the note.



On May 1, 2018, the Company entered into a $36,000 promissory note with an
individual with $5,000 original issue discount for net proceeds of $31,000. The
Company has a verbal agreement with the individual to extend the terms of the
note.



On June 1, 2018, the Company entered into a $300,000 non-convertible note with
an accredited investor with $150,000 original issue discount ("OID") for net
proceeds of $150,000. As part of the note agreement, the Company also agreed to
issue the investor 5,000,000 warrants at an exercise price of $0.01, exercisable
for a period of three (3) years. The warrants were valued using the Black
Scholes Merton model, resulting in a relative fair value after allocation of
$28,378. The key valuation assumptions used consist, in part, of the price of
the Company's common stock of $0.007 at issuance date; a risk-free interest rate
of 2.62% and expected volatility of the Company's common stock, of 275.26%, The
relative fair value of the warrants as well as the OID have been classified as a
debt discount to be amortized over the life of the note using the effective
interest method. Payments of $100,000 were made on May 31, 2019 ,and June 24,
2019. The final payment of $100,000 was made on March 10, 2021



On May 28, 2019, the Company amended the March 28, 2018, $50,000 note payable.
The Company agreed to increase the holder's return by $25,000 to $50,000 and
repaid the original $50,000 principal in May 2019. Additionally, the holder is
to receive 1,000,000 additional common stock warrants under the same terms as
the original March 2018 warrants and the holder will receive $15,000 in common
stock at a 20% discount to the closing price on the date the $50,000 holder's
return is paid. The note was paid off on May 22, 2019, and the stock was issued
on August 10, 2019.

Securities Purchase Agreement/Convertible Notes





On December 19, 2018, The Company and Adar Alef, LLC entered into a security
purchase agreement for four 8% Convertible Notes in the aggregate principal of
$105,000 with all four notes being in the amount of $26, 500 each. The notes
shall contain a 5% OID such that the purchase price shall be $25,000. The notes
are convertible into shares of common stock of The Company. Note 1 was issued
December 19, 2018, and paid off on June 24, 2019. Notes 1 and 2 in the amount of
$25,250 were issued on August 1st and August 19th respectively This note was
paid off on April 15, 2020.




On September 24, 2019, the Company and Power Up Lending Group entered into a
security purchase agreement for a 10% Convertible Note in the aggregate
principal of $58,000 due on September 24, 2020. The note is convertible into
shares of common stock of the Company. The conversion price is equal to the
Variable Conversion price which is defined as 61% of the Market Price for the
lowest two trading dates during a fifteen-day trading period ending on the
latest complete trading date prior to the Conversion date. The note was paid off
on September 9, 2020.



On May 10, 2019, the Company and GHS Investments LLC entered into a security
agreement for a 10% Convertible Note in the aggregate principal of $335,000 due
on February 10, 2020. The note carries original issue discount or $35,000. The
note is convertible into shares of common stock of the Company. The "Conversion
Price" shall mean 60% multiplied by the Market Price (as defined herein),
representing a discount rate of 40%. "Market Price" means the lowest Traded
Price for the Common Stock during the twenty (20) Trading Day period ending on
the latest complete Trading Day prior to the Conversion Date. The Company is
required to maintain a common share reserve of not less than three times the
number of shares that is actually issuable upon full conversion of the note. The
purchaser will also receive warrants to purchase 5,000,000 shares of GDSI common
stock at $.01/share. Warrants will have a three-year term to exercise. The
Convertible Note is personally guaranteed by William Delgado, CEO.



The note was extended by the lender on October 21, 2021. The principal balance
owed as of December 31, 2020, was $608,760. On June 11, 2021 interest on the
note in the amount of $115,200.00 was converted into 8,000,000 shares of the
Company's common stock. The outstanding balance as of October 21, 2021, of
$737,597, converted into 25,500,000 shares of the Company's common stock. The
lender also received the 5,000,000 warrants mentioned in the above paragraph.

                                      -20-

  Table of Contents

 Convertible Promissory Note



On August 9, 2019, The Company entered into a convertible promissory note
arrangement with Actus Fund, LLC in the principal amount of $142,750. The
principal amount of the note with interest at 12% is due on May 19, 2020. The
note is convertible into shares of The Company's common stock. The conversion
price shall equal the lessor of (i) Current Market price or (ii) Variable Market
price as defined as Market Price less a 50% discount price. The note was paid
off on February 2, 2020.

On April 7, 2020, The Company entered into a convertible promissory note arrangement with Actus Fund, LLC in the principal amount of $197,000. The principal amount of the note with interest at 12% is due on February 7, 2021. The note is convertible into shares of The Company's common stock. The conversion price shall equal the lessor of (i) Current Market price or (ii) Variable Market price as defined as Market Price less a 50% discount price.


On January 21, 2019, the Company entered into a Convertible Promissory Note with
Crown Bridge Partners, LLC., in the principal amount of $75,000. The note
carries original issue discount of $7,500 The Principal amount with interest at
12% will be due in twelve months from the advance. The principal amount will be
advanced in Tranches of $25,000 each. The note is convertible into shares of The
Company's common stock. The conversion price shall equal the lessor of (i)
Current Market price or (ii) Variable Market price as defined as Market Price
less a 45% discount price. In addition, the Company agreed to issue to Crown
Bridge Partners 3,750,000 warrants to purchase common stock of the Company at an
exercise price of $0.01 per share, exercisable for a period of five (5) years.
The outstanding balance of the note was converted on April 14, 2020.



On October 16, 2019, the Company entered into a 10% Convertible Promissory Note
with Tangiers Global LLC. in the principal amount of $137,500 due on October 16,
2020. The note is convertible into shares of the Company's common stock. The
conversion price shall equal 60% of the lowest trading price of the Company's
common stock during the 20 consecutive trading days prior to the date on which
the holder elects to convert part of all of the note. The note was paid off

on
May 5, 2020.




  On February 7, 2020, the Company and Power Up Lending Group entered into a
security purchase agreement for a 10% Convertible Note in the aggregate
principal of $103,000, due on February 7, 2021. The note is convertible into
shares of common stock of the Company. The conversion price is equal to the
Variable Conversion price which is defined as 61% of the Market Price for the
lowest two trading dates during a fifteen-day trading period ending on the
latest complete trading date prior to the Conversion date. The note was paid off
on August 10, 2020.



On April 3, 2020, the Company and First Fire Global Opportunity Fund LLC,
entered into a security purchase agreement for a 8% Senior Convertible
Promissory Note in the aggregate principal of $100,000 due on April 3, 2021. The
note is convertible into shares of common stock of the Company. The note can be
converted at any time after the issue date. The conversion price shall be equal
to the lower of the Fixed Conversion of $0.01 per share or the Alternative
Conversion Price which is defined as 60% of the Market Price for the lowest
trading date during a twenty-day trading period ending on the latest complete
trading date prior to the Conversion date. The note was paid off by a related
party of the Company see Note 9.



On April 6, 2020, the Company and Power Up Lending Group entered into a security
purchase agreement for a 10% Convertible  Note in the aggregate principal of
$53,000 due on April 6, 2021. The note is convertible into shares of common
stock of the Company. The conversion price is equal to the Variable Conversion
price which is defined as 61% of the Market Price for the lowest two trading
dates during a fifteen-day trading period ending on the latest complete trading
date prior to the Conversion date. The note was paid off on October 10, 2020.



On June 29, 2020, the Company and Power Up Lending Group entered into a security
purchase agreement for a 10% Convertible Note in the aggregate principal of
$53,000 due on June 29, 2021. The note is convertible into shares of common
stock of the Company. The conversion price is equal to the Variable Conversion
price which is defined as 61% of the Market Price for the lowest two trading
dates during a fifteen-day trading period ending on the latest complete trading
date prior to the Conversion date. The note was paid off by a related party

to
the Company.

                                      -21-

  Table of Contents

On April 15, 2020, the Company and Platinum Point Capital entered into a
security purchase agreement for a 10% Convertible Note in the aggregate
principal of $$82,500 due on April 15, 2021. The note is convertible into shares
of common stock of the Company. The note can be converted at any time after the
issue date. The conversion price is equal to the Variable Conversion price which
is defined as 60% of the Market Price for the lowest trading date during
twenty-day trading period ending on the latest complete trading date prior to
the Conversion date. The note was paid off the CEO of the Company. See Note 9.



On May 20, 2020, the Company and GS Capital Partners, LLC entered into a 10%
Convertible Note in the aggregate principal of $165,000 due on February 20,
2021. The note can be converted into shares of common stock of the Company. at
any time after the issue date, at a price of $0.01 per share.. GS Capital made
the following conversion in 2021. On January 21, 2021 Converted $26,678 of
principal and interest for 2,667808 shares, On March 9, 2021, converted $27,007
of principal and interest for 2,700,685 shares. The outstanding balance of
$115,000 was paid off by the Company on March 10, 2021.



On March 25, 2021, the Company and GS Capital Partners LLC entered into a
security purchase agreement for a Prime rate plus 8% Convertible Note in the
aggregate principal of $2,285,714. The note shall be paid in one or more
tranches. The maturity for each tranche shall be twelve-month period from
advance date. The holder has the right at any time to convert all or any part of
the outstanding principal into shares of common stock of the Company. The
conversion price shall be a fixed conversion price of $0.06, which upon a
default event, shall be equal to the lesser of (i) the fixed conversion price;
(ii) or 70% of the lowest intraday price during the 21 days preceding the
conversion request. On April 1, 2021, the Company received the first tranche of
$1,000,000. Upon the receipt of the first tranche, the Company issued 20,000,000
warrants, exercisable at $0.10, with a 10-year term and contain full-ratchet
anti-dilution protection provisions, with a fair value of $917,000. The Company
also issued 4,000,000 shares of common stock as commitment shares to the
noteholder, with a fair value of $184,000. On May 24, 2021, the Company received
the second tranche from GS Capital Partners LLC, for $796,000' less an OID of
$99,500. On May 24, 2021, the Company received the balance of the second tranche
for $346,857 less an OID of $48,357.



On November 23, 2021, and December 17, 2021, GS Capital Partners converted
$14,020 and $30,762 of principal and interest for 1,164,519 and 3,076,168 shares
of the Company's Common Stock. As of December 31, 2021, and through the date of
this report, the principal balance totaling $2,244,846 is outstanding.



On January 15, 2021, the Company and Power Up Lending Group entered into a
securities purchase agreement for a 10% convertible note in the aggregate
principal of $88,500 due on January 15, 2022. The conversion price is equal to
the variable conversion price which is defined as 61% of the market price for
the lowest two trading dates during a fifteen-day trading period ending on the
latest complete trading date prior to the conversion date. The conversion
feature meets the definition of a derivative and therefore requires bifurcation
and will be accounted for as a derivative liability on the date the note becomes
convertible. On July 13, 2021, the Company paid off the note, plus accrued
interest and redemption fees, for a total payment of $130,078.



On August 25, 2020, the Company and Power Up Lending Group entered into a
security purchase agreement for a 10% Convertible Note in the aggregate
principal of $103,000 due on August 25, 2021. The note is convertible into
shares of common stock of the Company. The conversion price is equal to the
Variable Conversion price which is defined as 61% of the Market Price for the
lowest two trading dates during a fifteen-day trading period ending on the
latest complete trading date prior to the Conversion date. The note was paid of
by the CEO of the Company on February 24, 2021.



On October 6, 2020, the Company and Power Up Lending Group entered into a
security purchase agreement for a 10% Convertible Note in the aggregate
principal of $75,000 due on August 25, 2021. The note is convertible into shares
of common stock of the Company. The conversion price is equal to the Variable
Conversion price which is defined as 61% of the Market Price for the lowest two
trading dates during a fifteen-day trading period ending on the latest complete
trading date prior to the Conversion date. The note was paid off by the Company
on April 8, 2021.



On December 10, 2021, the Company and Sixth Street Lending LLC, entered into a
security purchase agreement for a 8% Convertible Note in the aggregate principal
of $128,750, due on December 10, 2022. The note is convertible into shares of
common stock of the Company. The conversion price is equal to the Variable
Conversion price which is defined as 65% of the Market Price for the lowest two
trading dates during a fifteen-day trading period ending on the latest complete
trading date prior to the Conversion date. As of December 31, 2021, and through
the date of this report, the principal balance totaling $128,750.00 is
outstanding.



On June 7, 2021, the Company and Geneva Roth Remark Holdings, Inc., entered into
a security purchase agreement ("SPA") for an 8% promissory note in the aggregate
principal of $251,625, with a maturity date of June 7, 2022. The note included a
original issuance discount ("OID") of $22,875, for a purchase price of $228,750.
The interest was applied as a one time interest charge upon the issuance date,
in the amount of $20,130, recognized in accrued interest. The monthly payments
will include the outstanding principal and accrued interest, in 10 monthly
payments of $27,175, with the first payment on July 30, 2021. Upon an event of
default, as set forth in the agreement, the holder shall have the right to
convert the outstanding balance of the note into shares of common stock of the
Company, with a conversion rate based on 75% of the lowest trading price of the
common stock for the 5 trading days prior to the conversion date. In addition,
upon default, the interest increases to 22%, and any outstanding principal and
accrued interest shall be increased by 150%. The Company is required at have
authorized and reserved four times the number of shares that is actually
issuable upon full conversion of the note, which was initially 29,494,505
shares. While the note is still outstanding the Company shall not, without
written consent of the holder, issue any variable convertible instruments with a
convertible price that varies with the market price of the Company's common
stock, nor shall the Company without the holder's written consent, sell, lease
or otherwise dispose of any significant portion of its assets outside the
ordinary course of business.  In connection with the note, the Company issued
2,096,875 warrants, exercisable each at $03, with a 3-year term. As of December
31, 2021, and through the date of this report, the principal balance totaling
$150,975 is outstanding.

                                      -22-

  Table of Contents

On February 25, 2021, the Company and Leonite Capital LLC entered into a
securities purchase agreement for a prime rate plus 8% convertible note in the
aggregate principal of $2,285,714. The note shall be paid in one or more
tranches. The maturity for each tranche shall be twelve-month period from
advance date. The holder has the right at any time to convert all or any part of
the outstanding principal into shares of common stock of the Company. The
conversion price shall be a fixed conversion price of $0.06, which upon a
default event, shall be equal to the lesser of (i) the fixed conversion price;
(ii) or 70% of the lowest intraday price during the 21 days preceding the
conversion request.



On March 1, 2021, the Company received the first tranche of $1,000,000 from
Leonite Capital LLC. In connection with the note, the Company issued 20,000,000
warrants, exercisable at $0.10, with a 10-year term and contain full-ratchet
anti-dilution protection provisions, with a fair value of $507,000. The Company
also issued 4,000,000 shares of common stock as commitment shares to the
noteholder, with a fair value of $204,000. The warrants and the commitment
shares resulted in a debt discount of $1,000,000, which will be amortized using
the effective interest method over the life of the convertible note, and the
excess of $101,000 recognized as interest expense at issuance. The warrants were
evaluated to be classified as a liability, as based on the various convertible
notes outstanding with variable conversion rates it cannot be determined if
there are sufficient authorized shares available during the contract period. As
of December 31, 2021, and through the date of this report, the principal balance
totaling $1,133,145 is outstanding.



Going Concern



The audited consolidated financial statements contained in this annual report on
Form 10-K have been prepared on the assumption that the Company will continue as
a going concern. The Company has accumulated losses from inception through the
period ended December 31, 2021, of $ 49,319,252 as well as negative cash flows
from operating activities. Furthermore, as of the date of this filing, the
Company does not have sufficient cash resources to achieve its goals through
December 31, 2022.



The consolidated financial statements do not include any adjustments that may be
necessary should the Company be unable to continue as a going concern. The
Company's continuation as a going concern is dependent on its ability to obtain
any additional financing required and ultimately to attain profitability. If the
Company raises additional funds through the issuance of equity, the percentage
ownership of current shareholders could be reduced, and such securities might
have rights, preferences, or privileges senior to the rights, preferences, and
privileges of the Company's common stock. Additional financing may not be
available upon acceptable terms. If adequate funds are not available on
acceptable terms, the Company may not be able to take advantage of prospective
business endeavors or opportunities, which could significantly and materially
restrict its future plans for developing its business and achieving commercial
revenues. If the Company is unable to obtain necessary capital, the Company may
have to cease operations.



Working Capital Deficiency



                                Year Ended
                      December 31,      December 31,
                          2021              2020
Current Assets        $      98,800     $         264
Current Liabilities      11,257,572        17,403,559
Working Capital       $ (11,158,772 )   $ (17,403,295 )




The increase in current assets from 2020 to 2021 is due to an Increase in cash
provided by financing activities. The increase in current liabilities is mainly
due to increases in Convertible Notes Payable and Notes Payable during the

year
ended December 31, 2021.

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Cash Flow



                                                      Year Ended
                                            December 31,      December 31,
                                                2021              2020

Net cash used in operating activities $ (2,639,564 ) $ (1,471,997 ) Net cash used in investing activities

                   -           164,477 )
Net cash provided by financing activities       2,738,100         1,143,336
Increase (decrease) in cash                 $      98,536     $    (493,138 )




Operating Activities

Net cash used in operating activities was $ for the year ended December 31, 2021. Cash used during the year ended December 31, 2020, was primarily due to the net loss of $12,606,540.





Net cash used in operating activities was $1,471,997 for the year ended December
31, 2020.  Cash used during the year ended December 31, 2020 was primarily due
to the net loss of $12,605,540.



Investing Activities

For the year ended December 31, 2021, there was) of cash used for investing activities.

For the year ended December 31, 2020, there was $(164,477) cash used for investing activities





Financing Activities

For the years ended December 31, 2021, and 2020 net cash provided by financing activities was $ and $1,143,336. respectively. Cash provided by financing activities was due to the proceeds from convertible payable and notes payable.





Future Financing

We will require additional funds to implement our growth strategy for our business. In addition, while we have received capital from various private placements of equity and convertible debt that have enabled us to fund our operations, additional funds will be needed for further business development.



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Off-Balance Sheet Arrangements





We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures, or capital resources that are material to stockholders.



Effects of Inflation

We do not believe that inflation has had a material impact on our business, revenues, or operating results during the periods presented.

Critical Accounting Policies and Estimates





Our significant accounting policies are more fully described in the notes to our
financial statements included in this Annual Report on Form 10-K for the year
ended December 31, 2021. We believe that the accounting policies below are
critical for one to fully understand and evaluate our financial condition and
results of operations.



Recent Accounting Standards

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