The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes included elsewhere in this quarterly report.
References in the following discussion and throughout this annual report to
"we", "our", "us", "12 ReTech Corporation", "12 ReTech", "RETC", "the Company",
and similar terms refer to, 12 ReTech Corporation. unless otherwise expressly
stated or the context otherwise requires. This discussion contains
forward-looking statements that involve risks and uncertainties. 12 ReTech
Corporation actual results could differ materially from those discussed below.
Factors that could cause or contribute to such differences include, but are not
limited to, those identified below, and those discussed in the section titled
"Risk Factors" included elsewhere in this filing.



Company



12 ReTech Corporation is a holding company with subsidiaries that develop, sell,
and install software that we believe enhance the shopping experience for
shoppers and retailers. As a holding company, we also acquire synergistic
operating companies that manufacture and sell fashion and other products to
other retailers as well as selling these products online. In October 2019, we
acquired retail stores in airport terminals and casinos, solidifying us as a
true Omni-Channel retailer. Owning our own brick and mortar stores will allow us
to deploy our cutting-edge software and Apps in the United States, to
demonstrate its effectiveness at attracting shoppers and inducing them to
purchase. In our own stores, we plan to test, in real time, new software
products which should delight consumers and generate incremental revenues and
profits for our stores. If we can show incremental revenues and profits for
ourselves, we believe that other retailers may follow our example and deploy our
software solutions themselves.

With the intended future launch of our social shopping app which is in development in 2021 (see subsequent events), we intend to associate with other retailers on a new shopping platform that will benefit both consumers and retailers in new and exciting ways.





Despite constrained funding the Company has made significant development
progress during 2021 and is nearly ready to start performing Beta Testing. The
Company needs to obtain some additional funding to-be able to test the App,
complete development and bring to market. However, management believes that our
Social Shopping App May provide a 4th platform that may compete effectively with
Google, Facebook, Instagram and Amazon for the mutual benefit of both retailers
and consumers! Management believes that our App may quickly grow exponentially
once launched and mat generate significant revenue for our shareholder's
benefit. Our own Bluwire retail stores and our own brands led by RuneNYC are
planned to be lead examples of the types of marketing retailers can benefit from
both in-store and online. We believe our Social Shopping App led by Rune NYC and
Bluwire May also generate significantly increased revenue what we believe will
be consumers rapid adoption of our shopping platform.



During the 4th quarter 2019 and continuing in the first quarter 2020 amid the
effects of the pandemic created by COVID-19, the Company chose to consolidate
its operations around three operating entities; 12 Tech, Inc., formed in Arizona
on December 26, 2019 ("12 Tech"), 12 Retail Corporation, formed on September
17th, 2017 ("12 Retail"), and the 12 Fashion Group, Inc formed on June 26, 2020.



12 Retail operates its own retail outlet(s) as well as those of Bluwire Group,
LLC ("Bluwire"), that operates retail stores in airports (mainly in
international terminals) and casinos. Because of their locations mainly in
international terminals of airports, all Bluwire Company owned stores and all
but one royalty store remains closed due to Covid-19. 12 Retail will also serve
to demonstrate the effectiveness of the software technology created by 12 Tech
in improving revenues and profits for retailers as well as providing access to
other retailers through our soon-to-be-launched social shopping app, and through
our wholesale fashion business relationships.



12 Fashion Group, Inc., an Arizona Corporation, was formed on June 26, 2020, and
operates our fashion wholesale and direct to consumer brands, including Rune
NYC, Social Sunday, and Red Wire Design, as well as consolidating remaining
operations from our other smaller fashion acquisitions.



Today, 12 Tech aims to provide technology solutions both online and inside
retail brick and mortar that helps retailers acquire customers, reduce overhead
expenses, streamline operations, and gain incremental revenues and profits.
Existing 12 Tech solutions are deployed mainly in Asia. We are planning to
deploy our solutions in the United States retail markets, which serve the
world's largest consumer economy. While we continue to operate in Asia, we have
consolidated our international units, which were focused on our technology
deployment ("12 Japan" and "12 Europe"), and consolidated our software
development company 12 Hong Kong, Ltd ("12 HK"), under 12 Tech to further
streamline our own operations.



As the retail environment continues to evolve, we as both retailers and
technologists, will evolve with it. We believe our developed software, both
current and in development, will delight consumers, provide contactless
experiential shopping, and assist retailers with the recapture of their revenues
as they combat the dual threats of Amazon and Walmart. Our software, once fully
deployed and implemented, may provide retailers with another effective online
and mobile sales channel besides their current options of Google, Amazon, and/or
Facebook/Instagram.



As an innovative retail technology company that has been built through
acquisitions and ideas, we will continue to search for additional synergistic
acquisitions that bring incremental revenues and profitability and/or provide
innovative software solutions.



26







Principal subsidiaries



The details of the principal subsidiaries of the Company as of September 30,
2021, are set out as follows (additional consolidation may occur in the future):



                                                             Attributable
  Name of       Place of         Date of      Acquisition       Equity
  Company     Incorporation   Incorporation      Date         Interest %                  Business
12 Retail     Arizona, USA    Sept. 18,       Formed by                 100 %   Includes the operations of
Corporation                   2017            12 ReTech                         Bluwire Group, LLC (acquired
("12                                          Corporation                       October 1, 2019), and its
Retail")

subsidiaries and as its own

operations.


12 Fashion    Arizona, USA    June 26, 2020   Formed by                 100 %   Includes the operations of
Group Inc                                     12 ReTech                    
Red Wire Group, LLC (acquired
                                              Corporation                       February 19, 2019, now
                                                                                defunct), Rune NYC, LLC
                                                                                (acquired March 14, 2019),
                                                                                and Social Decay, LLC dba
                                                                                Social Sunday (acquired
                                                                                November 01, 2019) and other
                                                                                brands


12 Tech Inc   Arizona, USA    Dec 26,2019     Formed by                 100

% Includes the operations and

12 ReTech

Intellectual Properties of 12


                                              Corporation

Japan Limited (acquired July

31, 2017), 12 Hong Kong

Limited) acquired July 31,

2017), and 12 Europe AG

(acquired October 26, 2017,


                                                                                now defunct), and its own
                                                                                operations




27







Business and Operations



12 ReTech Corporation is a Technology company that is creating software that
management believes will create new platforms and tools for smaller retailers to
compete with major companies like Amazon and Walmart and delight consumers. To
better understand the entire retail environment the Company has acquired
operating companies that sell direct to consumers online and in physical stores
as well as to other retailers. These acquisitions, in addition to providing
current revenue to the Company management believes that they will provide entree
to other retailers for the sale and or licensing of our technology solutions.



From an operating perspective, 12 ReTech Corporation is a holding company with
three main operating companies that themselves may now and/or in the future own
other subsidiaries. They are: 12 Retail Corporation which now operates our
casino stores and subsidiaries Bluwire Group, LLC, 12 Fashion Group, Inc, that
operates our fashion brands and wholesale manufacturing brands, and 12 Tech Inc
that designed and develops our retail software.



The Company has earned money from four different revenue streams (in declining
order): Retail Sales, Wholesale and Online sales of Fashion products, Royalty
Payments for 3rd party licensing of the Bluwire name, and technology sales.

Effects on us of the Covid-19 Pandemic


While the Company's operations were severely impacted during 2020 from the
Covid-19 pandemic, the lock downs, stay at home orders, and reductions capacity
limits in retail stores and restaurants and restriction on travel Management
used that time to tighten up our operations, raise capital and focus on creating
our Social Shopping App that we believe will be the future of retail. For more
details on the effect of Covid-19 and our operations in 2020 please see our Form
10-k for the 12 month period ended December 31, 2020 and subsequent events
therein.

Financing and Convertible Debt





During the period June 2017 until July 2021 the Company financed most of its
operations, acquisitions and technology through convertible debt. The issue with
convertible debt is the dilution that our shareholders experienced as these debt
holders converted their debt to common stock and then sold that common stock
into the market.



During 2020 and the first 6 months of 2021 the Company raised $758,150 in new
convertible debt and the existing debt holders converted their older debt in the
amount of $ 650,464 into 9,122,400,274 shares of common stock. At September 30,
2021 the Company owed $1,317,467 in convertible debt, held a default reserve of
$1,463,120 and maintained a derivative liability reserve of $10,090,212.



During 2020 the Company received $294,882 in PPP funds from the SBA under the
CARES Act ("ACT:) During this quarter the Company was able to have the SBA
forgive $114,980 in accordance with the ACT requirements leavening a PPP balance
of $ 343,401 which management believes will also be forgiven under the ACT.
After September 30, 2021, the Company was able to have the SBA forgive an
additional $166,435 leaving a remaining balance of $58,247 in PPP loans from
2020. In the event that none of these additional PPP loans are not forgiven,
then the Company will begin making payments of $2,451 per month. During 2021,
the company also received $302,602 in PPP funds. The company will also ask for
these funds to be forgiven in accordance with CARES ACT.

Also, during 2020 the Company received $325,300 in EIDL Funds from the SBA. These funds carry a 3.75% annual interest and the Company will begin making aggregate monthly payments of $1,588 over the next 360 months.





On June 4, 2021, $70,200 of the first round of PPP loans was forgiven by the
SBA. During the third quarter, $114,980 of the first and second round PPP loans
were also forgiven by the SBA. As a subsequent event, the $192,900 of the PPP
loans were also forgiven by the SBA.



28







Results of Operations

Three Months Ended September 30,2021 and 2020.





Revenues



During the three months ended September 30, 2021 our revenue increased to
$190,876 from $68,052 for the three months ended September 30, 2020, an increase
of $122,824 or 180%, which is primarily the result of new Mohegan Sun store

and
12 Fashion Group.



Cost of revenues



During the three months ended September 30, 2021 we incurred costs associated
with the delivery of our products in the amount of $101,518, as compared to
$33,539 for the comparable period in 2020. These expenses are related to costs
of manufacturing goods.



General and Administrative



Our general and administrative expenses for the three months ended September 30,
2021 were $365,474, a decrease of $1,309, compared to $366,783 for the three
months ended September 30, 2020. This is primarily due to salary for personnel
associated with Bluwire stores.



Professional fees



Our professional fees for the three months ended September 30, 2021 increased by
$87,848 to $182,027, compared to $94,179 for the three months ended September
30, 2020. Our professional fees include expenses related to our external
auditors, legal costs, and consultants.



Other Income and Expense



Our other expenses increased by $12,008,621 to a net other expense of $5,332,852
for the three months ended September 30, 2021 compared to other income of
$6,675,769 for the three months ended September 30, 2020. The majority of the
increase is due an increase in loss on derivative liability of $12,109,496 and
increase in interest expense of $210,646 partially offset by an decrease in
general default reserve expense of $303,835. There are three main components of
the increase of the 2021 Other Expense category:

1. There was an increase in loss of derivative liability of $12,109,496 to

$5,420,896 from gain of $6,688,600 for the three months ended September 30,


     2021, compared to three month ended September 30, 2020.

  2. There was an increase of $210,646 in interest expense to $309,398 from
     $98,752 for the period ended September 30, 2021 compared to the period

September 30, 2020. The increase in interest expense is related to the cost

of convertible notes and the cost of convertible preferred stock during the

same period.

3. Offset by decrease of $303,835 due to gain in reserve expense to $172,704

from a loss of $131,131 for the period ended September 30, 2021 compared to

the period September 30, 2020. The decrease in reserve expense is related to


     the reserve associated with convertible notes and preferred stock.




Net Loss

For the three months ended September 30, 2021, we incurred of a net loss of $5,801,660 compared to a net gain of $6,180,064 for the three months ended September 30, 2020. This decrease in net loss is primarily the result of the decrease in net other expense.





The Company is expending working capital to further their business plan. This
includes the further development, refinement, and improvement of their software
and its adaptation to various European languages and geography. The Company is
also expending working capital on the development of new technology which is
designed to further enhance the attractiveness of their offerings to their
target customer base in the new post Covid-19 contactless environment.

Nine Months Ended September 30, 2021 and 2020





Revenue



During the nine months ended September 30, 2021 our revenue decreased to
$511,603 from $590,814, a decrease of $79,211 or 13%, compared to the nine
months ended September 30, 2020. The loss of revenues is as a result of the
global pandemic due to COVID 19 on our Bluwire subsidiary. Our only open
subsidiary is located in the state of Connecticut which fully reopening during
the second quarter of 2021 and caused a significant decrease in traffic at the
Mohegan Sun. The company has not yet opened our Dulles and Newark locations due
to the COVID pandemic. The Company hopes that this behavior will stabilize and
that this location will see a more normal level of traffic, notwithstanding any
unforeseen changes due to COVID 19 in that state.



Cost of revenue



During the nine months ended September 30, 2021 we incurred costs associated
with the delivery of our products in the amount of $317,227, compared to
$304,700 for the comparable period in 2020. These expenses are related to costs
of manufacturing goods.



General and Administrative




Our general and administrative expenses for the nine months ended September 30,
2021 were $1,112,822, a decrease of $312,534, compared to $1,425,356 for the
nine months ended September 30, 2020. This decrease is primarily due result of
impact due to COVID 19 and forced closure of operations during many months.




Professional fees



Our professional fees for the nine months ended September 30, 2021 increased by
$55,517 to $484,198, compared to $428,681 for the nine months ended September
30, 2020. Our professional fees include expenses related to our external
auditors, legal costs, and consultants. In order to preserve our subsidiaries
operations, the company conserved on spending during 2020 and 2021.



Depreciation and amortization




Our depreciation expense for the nine months ended September 30, 2021 were
$42,874, a decrease of $221,804 or 84% when, compared to $264,678 for the nine
months ended September 30, 2020. Our depreciation and amortization expense
include's intangibles and leasehold improvements added October 1, 2019 as part
of the Bluwire acquisition. The company had fully depreciated most of these
assets as of December 31, 2020 and as such there was less fixed assets to
depreciate in 2021.



Other Income and Expense



Our other expenses increased by $3,461,568 to a net other expense of $6,059,453
for the nine months ended September 30, 2021 compared to $2,597,885 for the nine
months ended September 30, 2020. There are two main components of the increase
of the 2021 Other Expense category:

1. A increase in loss on derivative liability of $2,267,517 to loss of $4,590,597 from loss of $2,323,080 which is the result of the calculation of derivative liability using Black-Scholes.


2. The increase in interest expense of $1,754,860. There was an increase in
interest expense to $2,090,199 from $335,339 for the period ended September 30,
2021 compared to the period September 30, 2020. This is related to the cost of
convertible notes and the cost of convertible preferred stock during the same
period.



29







Net Loss




As a result of the foregoing, for the nine months ended September 30, 2021, we
incurred of a net loss of $7,504,971 compared to a comprehensive net loss of
$4,430,486 for the nine months ended September 30, 2020. This increase in net
loss is primarily the result of the increase in net other expense.



The Company is expending working capital to further their business plan. This
includes the further development, refinement and improvement of their software
and its adaptation to various European languages and geography. The Company is
also expending working capital on the development of new technology which is
designed to further enhance the attractiveness of their offerings to their

target customer base.



Consolidation of Operations




In order to achieve cost synergies, the Company continues to take steps to
reduce and eliminate redundant and unnecessary costs in its operations.
Management recently created the 12 Fashion Group division of 12 Retail to house
and operate its fashion brand operations. The operations of Rune NYC, Red Wire
Group, and Social Sunday were combined, and steps were taken to reduce expenses
while still working to expand the business.



Management's recent decision in the 1st quarter of 2020 to outsource Red Wire
Group's manufacturing operations to qualified third parties has increased the
potential for profitability of the 12 Fashion Group's DIFY ("Do it For You")
apparel design and apparel manufacturing Today, we no longer operate our own
factory but still service existing customers and recruit new customers. As a
result, we have cut expenses dramatically and no longer have a manufacturing
factory's expenses such as payroll and rent. We have increased the customer base
and conduct our business providing design and project management services to our
client base. We have also decided to put the Red Wire Group into bankruptcy
protection which will eventually allow us to eliminate the debts of the former
operation. This may result in future gains in net income as well as allowing the
successor business to operate with a cost structure that does not need to scale
up with operational expansion and potentially earn a profit.



During the transition, Red Wire Group had a number of customer projects where
they had taken deposits (typically 50% of total project revenues) and could not
finish the project in its own factory. 12 Fashion Group found manufacturing
partners who were willing to finish each and every unfinished project. The
completed projects were to be invoiced for the remainder of the balances due and
the resultant payments would be used to pay the manufacturing partners for their
services. Some of these projects still remain unfinished at the time of the
filing this report due to the government mandated closures. Through our efforts
and good communication most of these customer relationships were salvaged, and
we can expect that 12 Fashion Group will continue to receive business from these
former customers of Red Wire Group.



This salvage operation allowed the Company to recognize revenues and expenses as
it would have done if Red Wire Group had completed their projects on their own.
However, there was a negative cash flow effect as all the resultant collected
accounts receivables generated by these projects went out to pay the
manufacturing partners. Management expects this to negatively affect gross
margins for the Company in the upcoming financial reports of the 1st quarter of
2021. Going forward in the second half of 2021, Management expects gross margins
to return to levels of between 30% and 40% for the 12 Fashion Group business.



Social Sunday's operations are also being restructured. Management has taken
steps to reduce cash outflows while it makes a decision regarding the future of
the Social Sunday operation. In the meantime, this business has been stood still
and it may be that we will use the bankruptcy laws to eliminate the debts.



Rune's business has also been consolidated into the 12 Fashion Group Division
with Rune's President, Emily Santamore, installed as President for the 12
Fashion Group's operation. Rune's business continues to service existing clients
and recruit new clients. It is Management's strategy that the improved cost
structures of the 12 Fashion Group will allow the business to grow and generate
profits over the next 12 months and beyond.



Beginning in early March 2020, the apparel business of 12 Fashion Group was
affected by the business shutdowns of geographies in the USA related to the
COVID-19 pandemic. Manufacturing partners had to shut down their operations
unless they were producing products such as face masks or hospital gowns that
were deemed essential to the fight against this infectious disease. As such, 12
Fashion Group and select manufacturing partners got into the face mask business.
So far, this business has produced quantities of product and revenues that are
approximately a third of what management would consider normal business activity
levels. Management does not expect business activities of the fashion industry
to return to normal levels until the following year.



In another consolidation of operations and expenses, Management partially
consolidated the operations of 12 Japan into 12 Hong Kong. In so doing, we are
eliminating much of the overhead expenses of one of the Asian operations while
retaining the ability to service our existing customer base. We have also
received 2 million yen ($18,000) from the government of Japan as a grant which
management plans to use to try to expand our business in Japan.



30







Bluwire Group, which provided the bulk of the revenue growth of the 4th quarter
of 2019, has also been impacted by the COVID-19 pandemic. On or about March 16,
2020, every one of the Bluwire stores was shut down by local or federal
government mandates. Stores were shuttered and our staff was laid off. We are
staying in close communication with our landlords and the various airport
authorities where we have stores located. At this point, Management still does
not have a timeline for the reopening of these business operations. This
shutdown has negatively impacted the Company's revenues and cash flow. We have
applied for and received CARES Act Payment Protection Program funding and EIDL
for some of the stores. These funds will help Bluwire get back on its feet when
the airport and casino stores are allowed to reopen. Management predicts that it
will likely be the following year before airport traffic levels get back to
normal if not longer. We are currently expecting to report large negative
impacts to the Bluwire business in terms of revenues for the balance of this
year.

Liquidity and Capital Resources


The Company had met its current capital requirements primarily through the
issuance of debt-equity and preferred stock. With the resent acquisition and the
sale of the Medium Term Notes, Management believes it has sufficient working
capital to complete its business plans for the foreseeable future.

At September 30, 2021, cash and cash equivalents was $94,529 compared to $11,784 at December 31, 2020.





Although, our business plan calls for high growth, we anticipate that we may
continue to incur operating losses during the next twelve months. Our prospects
must be considered in light of the risks, expenses, and difficulties frequently
encountered by companies at our stage, particularly companies in new and rapidly
evolving markets. Our roll up acquisition strategy seeks to mitigate some of
those risks, but until more acquisitions can be completed, consolidated, or we
successfully launch our Social Shopping App and we reap the benefits of these
activities, we cannot accurately include their results in our projection of cash
needs. However, we believe that we have sufficient cash on hand for the fore
foreseeable future.

Risks include, but are not limited to, an evolving and unpredictable business model and the management of growth and the consummation and assimilation of multiple acquisitions.





31







Going Concern




The Company's financial statements are prepared using accounting principles
generally accepted in the United States ("U.S. GAAP") applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. Since the Company has not
generated significant revenue or gross profits adequate to cover operating
costs, has negative cash flows from operations, and negative working capital,
the Company has included a reference to the substantial doubt about our ability
to continue as a going concern in connection with our consolidated financial
statements for the period ended September 30, 2021. Our total accumulated
stockholders deficit as of September 30, 2021 was approximately $20 million.



The ability of the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until it establishes
a revenue stream and becomes profitable. Management's plans to continue as a
going concern include raising additional capital through sales of equity
securities and borrowing. However, management cannot provide any assurances that
the Company will be successful in accomplishing any of its plans. If the Company
is not able to obtain the necessary additional financing on a timely basis, the
Company will be required to delay, reduce the scope of or eliminate one or more
of the Company's research and development activities or commercialization
efforts or perhaps even cease the operation of its business. The ability of the
Company to continue as a going concern is dependent upon its ability to
successfully secure other sources of financing and attain profitable operations.
There is substantial doubt about the ability of the Company to continue as a
going concern for one year from the issuance of the accompanying consolidated
financial statements. The accompanying consolidated financial statements do not
include any adjustments that might be necessary if the Company is unable to
continue as a going concern.

Critical Accounting Policies and Estimates


The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities, and
expenses and the disclosure of contingent assets and liabilities. We use
assumptions that we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. We believe there have been no significant changes in accounting
policies for the period ended September 30, 2021. See Note 3 to the consolidated
statements in this Quarterly Report for a complete discussion of our significant
accounting policies and estimates.

Recently Issued Accounting Standards





The Company has reviewed all recently issued, but not yet adopted, accounting
standards in order to determine their effects, if any, on its consolidated
results of operation, financial position or cash flows. Based on that review,
the Company believes that none of these pronouncements will have a significant
effect on its consolidated financial statements. See Note 3 to the consolidated
statements in our 2020 Annual Report for a complete discussion of our
significant accounting policies and estimates.

Off-Balance Sheet Transactions

At September 30, 2021 and September 30, 2020, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

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