SPECTRAL CAPITAL CORPORATION The following discussion and analysis of our financial condition, results of operations and liquidity should be read in conjunction with our consolidated financial statements for the years endedDecember 31, 2021 and 2020 and the related notes appearing elsewhere in this annual report. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles. -------------------------------------------------------------------------------- 9 --------------------------------------------------------------------------------
CRITICAL ACCOUNTING POLICIES Our critical accounting policies, including the assumptions and judgments underlying those policies, are more fully described in the notes to our consolidated financial statements. We have consistently applied these policies in all material respects. Investors are cautioned, however, that these policies are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially. Set forth below are the accounting policies that we believe most critical to an understanding of our financial condition, results of operations and liquidity.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company,Spectral Holdings, Inc , its 60% owned subsidiary,Noot Holdings, Inc , from its date of incorporation ofFebruary 28, 2013 , and its 60% owned subsidiary,Monitr Holdings, Inc. from its date of incorporation ofDecember 1, 2013 . All material intercompany accounts and transactions have been eliminated in consolidation. 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 and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. OVERVIEWSpectral Capital Corporation ("Spectral" or the Company, also "We or Us") is a technology company focused on the identification, acquisition, development, financing of technology that has the potential to transform existing industries. We look for technology that can be protected through patents or laws regarding trade secrets. Spectral has acquired significant stakes in two technology companies. Spectral intends to own, in full or in part, early stage technology companies. PLAN OF OPERATIONSSpectral Capital is a technology startup accelerator that invests in early stage companies. Spectral targets industry verticals and solutions where disruption and network effects allow for rapid adoption and displacement of incumbents. We work with startups focusing them on rapid development, getting to market, and refining their products and services with innovative features that reflect direct customer and market feedback. In addition to meeting some of the financing needs of our portfolio companies, we provide our teams with executive support at the technology, marketing and operations level in effort to bring optimal results. Noot is a mobile technology company that created the mobile application "Noot" which utilized proprietary search engine technology for mobile devices that delivered personalized information to the user. While Noot is no longer a working mobile application, as we determined the revenue potential did not meet our expectations, we are seeking alternative business opportunities to utilize the underlining technology.
Monitr, launched in late 2014, is a technology and financial data services company that identifies for investors stocks that its software detects to be trending up in price at the moment.
· Monitr leverages cloud computing, big data and software to analyze the financial markets to discover those stocks that are trending now. Thousands of companies, news stories, blogs and opinion pieces are analyzed daily to uncover the trends and displayed in an accessible and easy-to-use web based interface for investors and traders.
· Many investors use only a few sources to become informed of market conditions, Monitr provides investors with access to thousands of sources.
Monitr specializes in the analysis of news and opinion to determine the
aggregate sentiment and trends of equities across markets in part to detect
trends and provide relevant data for its users. In a change to its business
model, Monitr no longer offers these services direct to individual customers for
monthly or annual fees. Instead it has focused on sourcing its services to
professional trading organizations that want access to Monitr´s trend detecting
software. Due
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to a lack of financial investment in the software, Monitr is not able to perform at the level required for paying customers.
On
RESULTS OF OPERATIONS FOR THE YEARS ENDED
Revenues
We are currently engaged in a technology development business and have exited natural resources. To date we have not recognized significant revenues.
Operating Expenses Operating expenses increased$4,458 , from$168,399 for the year endedDecember 31, 2020 to$172,857 for the year endedDecember 31, 2021 . The increase is due to the increase in audit fees for the 2020 audit.
LIQUIDITY AND CAPITAL RESOURCES
As of
Net cash used in operating activities increased$4,728 , from$23,772 for the year endedDecember 31, 2020 to$28,500 for the year endedDecember 31, 2021 . This continued low amount of costs was primarily related to the Company having limited operations, due to the cash flow limitations. Net cash provided by financing activities increased by$5,019 from$23,332 for the year endedDecember 31, 2020 to$28,351 for the year endedDecember 31, 2021 . Net cash provided by financing activities during the years endedDecember 31, 2021 and 2020 related to advances from a related party in connection with payment of the Company's obligations. We believe that our current financial resources are not sufficient to meet our working capital requirements over the next year. Additional funding will be necessary in order to expand portfolio operations and to reach our goals. Currently, the Company does not have any commitments or assurances for additional capital nor can the Company provide assurance that such financing will be available to it on favorable terms, or at all. If, after utilizing the existing sources of capital available to the Company, further capital needs are identified and the Company is not successful in obtaining the financing, it may be forced to curtail its existing or planned future operations. In addition, if necessary, we will decrease expenses and redirect our efforts towards a sale of one of more of our assets should funding become inadequate. -------------------------------------------------------------------------------- 11 --------------------------------------------------------------------------------
SPECTRAL CAPITAL CORPORATION TABLE OF CONTENTSDECEMBER 31, 2021 AND 2020
Report of Independent Registered Public Accounting Firm (PCAOB ID: F - 2 5041)
Consolidated Balance Sheets as of
Consolidated Statements of Operations for the years ended
2021 and 2020
Consolidated Statement of Stockholders' Deficit for the years ended F -
Consolidated Statements of Cash Flows for the years ended
2021 and 2020
Notes to Consolidated Financial Statements F
- 7
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F-1
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Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets ofSpectral Capital Corporation (the "Company") as ofDecember 31, 2021 and 2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as ofDecember 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted inthe United States .
Substantial Doubt about the Company's Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's minimal activities raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with thePublic Company Accounting Oversight Board (United States ) ("PCAOB") and are required to be independent with respect to the Company in accordance with theU.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s BF Borgers CPA PC BF Borgers CPA PC
We have served as the Company's auditor since 2017
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F-2
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SPECTRAL CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 2021 December 31, 2020
Assets:
Cash and cash equivalents $ 264 $ 413
Current assets 264 413
Total assets $ 264 $ 413
Liabilities and Stockholders' Deficit:
Current liabilities
Accounts payable and accrued liabilities $ 1,136 $ 1,406
Related party advances and accruals 1,261,609 1,089,258 Current liabilities 1,262,745 1,090,664 Total liabilities 1,262,745 1,090,664 Stockholders' Deficit: Preferred stock, par value$0.0001 , 5,000,000 shares authorized, no shares issued and outstanding -
-
Common stock, par value$0.0001 , 500,000,000 shares
authorized, 117,857,623 shares issued and
outstanding as ofDecember 31, 2021 and 2020 11,786 11,786 Additional paid-in capital 27,787,681 27,787,681 Accumulated deficit (28,840,224) (28,668,055) Total stockholders' deficit (1,040,757) (868,588) Non-controlling interest (221,724) (221,663) Total stockholders' deficit (1,262,481) (1,090,251) Total liabilities and stockholders' deficit $ 264 $ 413
The accompanying notes are an integral part of these consolidated financial
statements.
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SPECTRAL CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December Year Ended December
31, 2021 31, 2020
Revenues $ - $ 48
Costs of sales - -
Gross profit (loss) - 48
Operating expenses:
Selling, general and administrative 28,230 24,399
Wages and benefits 144,000 144,000
Total operating expenses 172,230 168,399
Net loss before non-controlling
interest (172,230) (168,351)
Loss attributable to non-controlling interest 61
578
Net loss attributable to Spectral Capital Corporation $ (172,169) $
(167,773)
Basic and diluted loss per common share $ (0.00) $
(0.00)
Weighted average shares - basic and diluted 117,857,623 117,857,623
The accompanying notes are an integral part of these consolidated financial
statements.
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SPECTRAL CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
Common Stock
Additional
Paid- in Non-Controlling Shareholders'
Shares Amount Capital Interest Accumulated Deficit Deficit
December 31, 2019 117,857,623 $ 11,786 $ 27,787,681 $ (221,085) $ (28,500,282) $ (921,900)
Non-controlling
interest - - - (578) - (578)
Net loss - - - - (167,773) (167,773)
December 31, 2020 117,857,623 $ 11,786 $ 27,787,681 $ (221,663) $ (28,668,055) $ (1,090,251)
Non-controlling
interest - - - (61) - (61)
Net loss - - - - (172,169) (172,169)
December 31, 2021 117,857,623 $ 11,786 $ 27,787,681 $ (221,724) $ (28,840,224) $ (1,262,481) The accompanying notes are an integral part of these consolidated financial
statements.
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SPECTRAL CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, Year Ended December 31,
2021 2020
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss attributable to
Spectral Capital Corporation $ (172,169) $ (167,773)
Adjustments to reconcile net
loss to net cash
used in by operating
activities:
Non-controlling interest (61) (578)
Changes in operating assets
and liabilities:
Due to related parties -
accrued salary 144,000 144,000
Accounts payable and accrued
expenses (270) 627
Deferred revenue - (48)
Net cash used in operating
activities (28,500) (23,772)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from related party
advances 28,351 23,332
Net cash provided by financing
activities 28,351 23,332
Change in cash and cash
equivalents (149) (440)
Cash and cash equivalents,
beginning of year 413 853
Cash and cash equivalents, end
of year $ 264 $ 413
Supplemental disclosures of cash flow information: Cash paid for interest $ - $
-
Cash paid for income taxes $ - $ -
The accompanying notes are an integral part of these consolidated financial
statements.
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F-6
--------------------------------------------------------------------------------SPECTRAL CAPITAL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BUSINESS AND NATURE OF OPERATIONS
Spectral Capital Corporation (the "Company" or "Spectral") was incorporated onSeptember 13, 2000 under the laws of theState of Nevada . Spectral is focused on the identification, acquisition, development, financing of technology that has the potential to transform existing industries. The Company looks for technology that can be protected through patents or laws regarding trade secrets. Spectral has acquired significant stakes in three technology companies currently and actively works with management to drive these companies toward increasing market penetration in their particular verticals. Spectral intends to own, in full or in part, technology companies whose founders and key management can take advantage of the deep networks and experience in technology development embodied in Spectral management.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company is in the development stage and has sustained substantial losses since inception. As ofDecember 31, 2021 , the Company has cash on hand of$264 and negative working capital of$1,262,481 . The Company expects current cash on hand will not be able to fund operations for a period 12 months or more. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. To date management has funded its operations through selling equity securities and advances from related parties. The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations, however, there can be no assurance the Company will be successful in these efforts. As of the date of these consolidated financial statements the Company does not have any firm commitments for capital. Without the required capital, the Company will be required to reduce their development expenditures which will potentially delay the completion of products which are expected to generate future revenues. Risks and Uncertainties
The Company has a limited operating history and has not generated revenues from our planned principal operations.
The Company's business and operations are sensitive to general business and economic conditions in theU.S. and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of theU.S. and world economy. A host of factors beyond the Company's control could cause fluctuations in these conditions, including the political environment and acts or threats of war or terrorism. Adverse developments in these general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect on the Company's consolidated financial condition and the results of its operations. The Company currently has no sales and limited marketing and/or distribution capabilities. The Company has limited experience in developing, training or managing a sales force and will incur substantial additional expenses if we decide to market any of our current and future products. Developing a marketing and sales force is also time consuming and could delay launch of our future products. In addition, the Company will compete with many companies that currently have extensive and well-funded marketing and sales operations. Our marketing and sales efforts may be unable to compete successfully against these companies. In addition, the Company has limited capital to devote sales and marketing. The Company's industry is characterized by rapid changes in technology and customer demands. As a result, the Company's products may quickly become obsolete and unmarketable. The Company's future success will depend on its ability to adapt to technological advances, anticipate customer demands, develop new products and enhance our current products on a timely and cost-effective basis. Further, the Company's products must remain competitive with those of other companies with substantially greater resources. The Company may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new products or enhanced -------------------------------------------------------------------------------- F-7 -------------------------------------------------------------------------------- versions of existing products. Also, the Company may not be able to adapt new or enhanced products to emerging industry standards, and the Company's new products may not be favourably received. Nor may we have the capital resources to further the development of existing and/or new ones.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company,Spectral Holdings, Inc , and its 60% owned subsidiaries,Noot Holdings, Inc. from its date of incorporation ofFebruary 28, 2013 , andMonitr Holdings, Inc. from its date of incorporation ofDecember 1, 2013 . All material intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation
The consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in
Stock-Based Compensation
The Company accounts for employee stock-based compensation in accordance with the guidance of theFinancial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation - Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company follows ASC Topic 505-50, Equity: Equity-Based Payments to Non-Employees for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered. Because the Company's stock-based compensation options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the estimate, amounts estimated using the Black-Scholes option pricing model may differ materially from the actual fair value of the Company's stock-based compensation options. Use of Estimates The preparation of the consolidated 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 and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company will recognize revenues in accordance with Accounting Standards
Codification ("ASC") 606, "Revenue from contracts with customers". Revenues will
be recognized when control of the promised goods or services is transferred to
our customers, in an amount that reflects the consideration we expect to be
entitled to in exchange for those goods or services.
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants as of the measurement date. Applicable accounting guidance
provides an established hierarchy for inputs used in measuring fair value that
maximizes the use of observable inputs and minimizes the use of unobservable
inputs by requiring that the most observable inputs be used when available.
Observable inputs are inputs that market participants would use in valuing the
asset or liability and are developed based on market data obtained from sources
independent of the Company. Unobservable inputs are inputs that reflect the
Company's assumptions about the factors that market participants would use in
valuing the asset or liability. There are three levels of inputs that may be
used to measure fair value:
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F-8
--------------------------------------------------------------------------------Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities
in active markets.
Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.
Level 3 - Unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring
fair value. As of
The Company's financial instruments primarily consist of cash and cash equivalents, accounts payable, deferred revenue and amounts payable to related parties. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements. Income Taxes The Company follows ASC 740, Income Taxes for recording the provision for income taxes. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within the income tax provision. The Company's income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company recognizes windfall tax benefits associated with share-based awards directly to stockholders' equity only when realized. A windfall tax benefit occurs when the actual tax benefit realized by the Company upon an employee's disposition of a share-based award exceeds the deferred tax asset, if any, associated with the award that the Company had recorded. When assessing whether a tax benefit relating to share-based compensation has been realized, the Company follows the tax law ordering method, under which current year share-based compensation deductions are assumed to be utilized before net operating loss carryforwards and other tax attributes.
We are currently delinquent with respect to our
Investment in Securities The Company's investments consisting of common shares of non-controlled entities are accounted for on the cost basis. Impairment losses will be recorded when indicators of impairment are present.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
Basic Loss Per Share
Basic loss per share is calculated by dividing the Company's net loss applicable
to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Company's
net income available to common shareholders by the diluted weighted average
number of shares outstanding during the year. The diluted weighted average
number of shares outstanding is the basic weighted number
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F-9
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of shares adjusted for any potentially dilutive debt or equity. Common share
equivalents totalling 10,000,000 and 10,000,000 were outstanding at December 31,
2021 and 2020, respectively, representing outstanding options, and were not
included in the computation of diluted earnings per share for the years ended
December 31, 2021 and 2020, as their effect would have been anti-dilutive.
Non-Controlling Interests
Non-controlling interests disclosed within the consolidated statement of operations represent the minority ownership's 40% share of net losses ofNoot Holdings, Inc. andMonitr Holdings, Inc incurred during the years endedDecember 31, 2021 and 2020. The following table sets forth the changes in non-controlling interest for the years endedDecember 31, 2021 and 2020: Non-Controlling Interest Balance at December 31, 2019 $ (221,085) Net loss attributable to non-controlling interest (578) Balance at December 31, 2020 (221,663) Net loss attributable to non-controlling interest (61) Balance at December 31, 2021 $ (221,724) Foreign Currency
The Company's functional currency is the United States Dollar. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of operations.
Recent Accounting Pronouncements
The FASB issues ASUs to amend the authoritative literature in the FASB
Accounting Standards Codification ("ASC"). There have been a number of ASUs to
date, including those above, that amend the original text of ASC. Management
believes that those issued to date either (i) provide supplemental guidance,
(ii) are technical corrections, (iii) are not applicable to the Company or (iv)
are not expected to have a significant impact on the Company's financial
statements.
NOTE 3 - RELATED PARTY TRANSACTIONS
Jenifer Osterwalder charges the Company$12,000 per month beginningJanuary 1, 2020 for services rendered. Total amounts expended in the Company's consolidated financial statements in connection with the CEO's services was$144,000 and$144,000 for the years endedDecember 31, 2021 and 2020, respectively. As ofDecember 31, 2021 and 2020, amounts due to the CEO related to accrued salaries were$1,054,653 and$910,653 , respectively. From time to time due to the limited cash flow available, the Company's CEO pays certain operating expenditures on behalf of the Company. These advances bear no interest and are due on demand. As ofDecember 31, 2020 and 2019, the Company's CEO was due$206,956 and$178,605 in connection with these advances, respectively. -------------------------------------------------------------------------------- F-10 --------------------------------------------------------------------------------
NOTE 4 - STOCKHOLDERS' DEFICIT
Changes in Stockholders' Deficit
Net loss and non-controlling interest were the only changes to stockholders'
deficit during the years ended
Employee Options The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation - Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The Company has adopted a stock option and award plan to attract, retain and motivate its directors, officers, employees, consultants and advisors. Options provide the opportunity to acquire a proprietary interest in the Company and to benefit from its growth. Vesting terms and conditions are determined by the Board of Directors at the time of the grant. The Plan provides for the issuance of up to 15,000,000 common shares for employees, consultants, directors, and advisors. A summary of changes in stock options during the years endedDecember 31, 2021 and 2020 is as follows: Weighted Weighted Average Average Life Stock Options Exercise Price Remaining Outstanding, December 31, 2019 13,000,000$ 0.70 2.80 Issued - - - Exercised - - - Expired (3,000,000) 1.00 - Outstanding, December 31, 2020 10,000,000 0.61 1.10 Issued - - - Exercised - - - Expired - - - Outstanding, December 31, 2021 10,000,000$ 0.61 0.10 Vested, December 31, 2021 10,000,000$ 0.61 0.10
During the year ended
NOTE 5 - INCOME TAXES As ofDecember 31, 2021 , the Company had net operating loss carry forwards of approximately$14,400,000 that may be available to reduce future years' taxable income through 2037. Future tax benefits which may arise as a result of these losses have not been recognized in these consolidated financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. The difference between the Company's tax rate and the statutory rate is due to a full valuation allowance. -------------------------------------------------------------------------------- F-11 --------------------------------------------------------------------------------
The provision for Federal income tax consists of the following:
December 31, December 31,
2021 2020
Federal income tax benefit attributable to:
Current operations $ 36,155 $ 35,219
Less: valuation allowance (36,155) (35,219)
Net provision of income taxes $ - $ -
The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:
December 31, December 31,
2021 2020
Deferred tax asset attributable to:
Net operating loss carryforward $ 4,871,323 $ 4,835,168
Less: valuation allowance (4,871,323) (4,835,168)
Net deferred tax asset $ - $ -
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years. The Company is
subject to routine audits by taxing jurisdictions; however, there are currently
no audits for any tax periods in progress. The Company believes they are no
longer subject to income tax examinations for years prior to 2012.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The Company leases office space on a three-month basis in
NOTE 7- SUBSEQUENT EVENTS On 15th February of 2022 Sky PLL Data OU (Estonia )("Sky") entered into a telecommunication services agreement withSpectral Capital Corporation which was based upon a trial period with Spectral for January and February of 2022 and as such requested service forMarch 2022 . Sky sent a deposit of$100,000 to the company to be released to the company beginningMarch 1, 2022 so it will not be recognized as revenue untilMarch 2022 . Services pertaining to the deposit will commence onMarch 2, 2022 for Sky. In accordance with ASC 855-10, the Company has analysed its operations subsequent toDecember 31, 2021 to the date these consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, other than those disclosed above. -------------------------------------------------------------------------------- F-12
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