The following discussion and analysis should be read together with our financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this Annual Report on Form 10-K.





Critical Accounting Policies

The Securities and Exchange Commission ("SEC") defines "critical accounting policies" as those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Not all of the accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following policies could be deemed to be critical within the SEC definition.





Revenue Recognition

We recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.

Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined.





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Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company's goodwill, impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, allowances for uncollectible accounts, inventory valuation, valuations of non-cash capital stock issuances and the valuation allowance on deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Fair Value of Financial Instruments

Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2022, the amounts reported for cash, prepaid expenses, accounts payable and accrued expenses approximate the fair value because of their short maturities.

Recently Issued Accounting Pronouncements

Management adopted a recently issued accounting pronouncement during the year ended December 31, 2022, as disclosed in the Notes to the financial statements included in this report.

Results of Operations for the years ended December 31, 2022 and 2021.





                                                               Year Ended
                                                     December 31,      December 31,
                                                         2022              2021
Revenue                                              $  10,376,573     $   4,143,744
Cost of Goods Sold                                       8,881,276         3,574,060

Operating Expenses, Depreciation and Amortization 8,078,019 6,615,136

Loss from Operations before Other Income (Expense) (6,582,722 ) (6,045,452 )



Other Income (Expense)                                  (4,207,999 )       3,927,671

Net Income (Loss)                                    $ (10,790,721 )   $  (2,117,781 )




Revenue and Cost of Sales

Revenue for the year ended December 31, 2022 and 2021 was $10,376,573 and $4,143,744, respectively. Cost of sales for the year ended December 31, 2022 and 2021, was $8,881,276 and $3,574,060, respectively. Revenue increased primarily due to our subsidiary's increase in sales of its products.





Operating Expenses

Selling and Marketing Expenses

Selling and Marketing ("S&M") expenses for the years ended December 31, 2022 and 2021, were $2,727,030 and $2,841,331, respectively. The decrease in selling and marketing expenses was primarily due to a decrease in marketing and investor relations expense.





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General Administrative Expenses

General administrative ("G&A") expenses for the years ended December 31, 2022 and 2021, were $4,459,763 and $3,612,988, respectively. General and administrative expenses increased primarily due to an increase in non-cash outside services expense.





Depreciation Expense

Depreciation expense for the years ended December 31, 2022 and 2021, were $39,959 and $44,817, respectively.





Other Income and Expenses

Other income and (expenses) decreased by $8,135,670 to $(4,207,999) for the year ended December 31, 2022, compared to $3,927,671 for the year ended December 31, 2021. The decrease was predominantly the result of a decrease in non-cash accounts associated with the fair value of the derivatives in the amount of $8,891,605, decrease in other income in the amount of $156,979, decrease in gain on write off of loans payable in the amount of $77,233, decrease in unrealized gain on investment securities in the amount of $245,645, and settlement for non-conversion of common stock in the amount of $13,500, offset by an increase in impairment of asset for sale in the amount of $2,000, decrease is loss on conversion of preferred stock in the amount of $929,870, loss on exchange of preferred stock in the amount of $40,000, and decrease in interest expense in the amount of $279,422.





Net Income (Loss)

Our net loss increased by $8,672,940 to $(10,790,721) for the year ended December 31, 2022, compared to net loss of $(2,117,781) for the year ended December 31, 2021. The majority of the increase in net loss was due primarily to an increase in other income and expenses associated with the net change in derivative instruments estimated each period. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price, volatility, variable conversion prices based on market prices defined in the respective agreements and probabilities of certain outcomes based on managements' estimates. These inputs are subject to significant changes from period to period, therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

The financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments that might result if we are unable to continue as a going concern. During the year ended December 31, 2022, total cash used in operations was $4,648,365. As of December 31, 2022, we had a working capital deficit of $14,245,179 and a shareholders' deficit of $26,016,787. These factors, among others raise substantial doubt about our ability to continue as a going concern. Our independent auditors, in their report on our audited financial statements for the year ended December 31, 2022 expressed substantial doubt about our ability to continue as a going concern. The ability of us to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. We have obtained funds from investors in the year ended December 31, 2022, and have standing purchase orders and open invoices with customers and we are pursuing various financing alternatives to fund the Company's operations so it can continue as a going concern in the medium to long term. Management believes this funding will continue from our current investors and new investors. There can be no assurance that such funding will be available to the Company in the amount required at any time or, if available, that it can be obtained on terms satisfactory to the Company. Management believes the existing shareholders, the prospective new investors and current and future revenue will provide the additional cash needed to meet our obligations as they become due and will allow the development of our core business operations.





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At December 31, 2022 and December 31, 2021, we had cash of $1,354,814 and $706,421, respectively, and working capital deficit of $14,245,179 and $12,826,008, respectively. The increase in working capital deficit was due primarily to an increase in non-cash derivative liabilities.

During the year ended December 31, 2022, we raised an aggregate of $5,067,777 in offerings of preferred stock and $1,347,500 in convertible secured promissory notes. Our ability to continue as a going concern is dependent upon raising capital from financing transactions and future revenue, however, there cannot be any assurance that we will be able to raise additional capital from financings.

Net cash used in operating activities was $(4,648,365) for the year ended December 31, 2022, compared to $(4,843,130) for the year ended December 31, 2021. The decrease of $194,765 in cash used in operating activities was due primarily to a decrease in loss on conversion of debt and shares issued for services.

Net cash flows (used in) investing activities for the year ended December 31, 2022 and 2021 were $(1,158,904) and $(18,000), respectively. The net increase in cash used in investing activities was primarily due to an increase in purchase of SPAC related Class B shares and notes payables.

Net cash flows provided by financing activities was $6,455,662 for the year ended December 31, 2022, as compared to $5,151,430 for the prior year ended December 31, 2021. The increase in cash provided by financing activities was primarily due to proceeds from issuances of preferred stock and promissory notes.

We do not have any material commitments for capital expenditures during the next twelve months. Although our proceeds from the issuance of convertible debt together with revenue from operations are currently sufficient to fund our operating expenses in the near future, we will need to raise additional funds in the future so that we can expand our operations. Therefore, our future operations are 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, the trading price of our common stock and 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 significant 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 may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.

We have estimated our current average burn and believe that we have assets to ensure that we can function without liquidation for a limited time, due to our cash on hand, growing revenue, and our ability to raise money from our investor base. Based on the aforesaid, we believe we have the ability to continue our operations for the immediate future and will be able to realize assets and discharge liabilities in the normal course of operations. However, there cannot be any assurance that any of the aforementioned assumptions will come to fruition and as such we may only be able to function for a short time.





Recent Trends

Known trends, demands, commitments, events, or uncertainties that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results is set forth throughout this Report.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.





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