Forward-Looking Statements

All statements other than statements of historical fact included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements. Forward-looking statements involve various important assumptions, risks, uncertainties and other factors which could cause our actual results to differ materially from those expressed in such forward-looking statements. Forward-looking statements in this discussion can be identified by words such as "anticipate," "believe," "could," "estimate," "expect," "plan," "intend," "may," "should" or the negative of these terms or similar expressions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee


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future results, performance or achievement. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors including but not limited to, competitive factors and pricing pressures, changes in legal and regulatory requirements, cancellation or deferral of customer orders, technological change or difficulties, difficulties in the timely development of new products, difficulties in manufacturing, commercialization and trade difficulties and general economic conditions as well as the factors set forth in our public filings with the Securities and Exchange Commission.

You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Annual Report or the date of any document incorporated by reference, in this Annual Report. We are under no obligation, and expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934.

The Company's financial statements have been presented on the basis that it will continue as a going concern. The Company has not generated revenues from construction related operations to date. The Company has an Accumulated deficit of $10,045,978 as of December 31, 2020 which raises substantial doubt about the Company's ability to continue as a going concern.

To the extent that the Company's capital resources are not adequate to meet current and planned operating requirements, the Company will use additional funds through equity and debt financing, collaborative or other arrangements with corporate partners, licensees or others, and from other sources, which may have the effect of diluting the holdings of existing shareholders. The Company has subsequent current arrangements with respect to, or sources of, such additional financing and the Company does not anticipate that existing shareholders will be required to provide any portion of the Company's future financing requirements.

No assurance can be given that additional financing will be available when needed or that such financing will be available on terms Acceptable to the Company. If adequate funds are not available, the Company may be required to delay or terminate expenditures for certain of its programs that it would otherwise seek to develop and commercialize. This would have a material adverse effect on the Company and raise doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that may result from the outcome of this uncertainty.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The summary of significant accounting policies of Auscrete Corporation is presented to assist in the understanding of the Company's financial statements.

The financial statements and notes are representations of the Company's management, who is responsible for their integrity and objectivity. You should read this section together with our financial statements and related notes thereto included elsewhere in this report.

The financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP").

Please see the notes to the financial statements for further discussion on Significant accounting plicies.

GOING CONCERN AND PLAN OF OPERATION

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The Company's financial statements have been presented on the basis that it will continue as a going concern. The Company has not generated revenues from construction related operations to date. The Company has an Accumulated deficit of $10,045,978 as of December 31, 2020 and no current revenue stream, which raises substantial doubt about the Company's ability to continue as a going concern.

The Company will use additional funds through equity and debt financing, collaborative or other arrangements with corporate partners, licensees or others, and from other sources, which may have the effect of diluting the holdings of existing shareholders. The Company has subsequent current arrangements with respect to, or sources of, such additional financing and the Company does not anticipate that existing shareholders will be required to provide any portion of the Company's future financing requirements.

No assurance can be given that additional financing will be available when needed or that such financing will be available on terms Acceptable to the Company. If adequate funds are not available, the Company may be required to delay or terminate expenditures for certain of its programs that it would otherwise seek to develop and commercialize. This would have a material adverse effect on the Company and raise doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that may result from the outcome of this uncertainty.

RELATED PARTY TRANSACTIONS

As of December 31, 2020, and December 31, 2019, the balance owed to John Sprovieri was $0 and $6,766 respectively.

Results of Operations

During the twelve-month period ended December 31, 2020 the Company had commenced its manufacturing operations which brought material operational changes from the last audited financials of December 31, 2019. Revenue for the twelve months ending December 31, 2020 was $13,000 compared to $0 for the same period in 2019. This increase was due to the sale of one house.

Results of Operations comparison of the fiscal year ended December 31, 2019 to the fiscal year ended December 31, 2020.

The company had a net loss of $(1,1596,768) for the year ended December 31, 2020 compared to a net loss of $(1,728,448) for the year ended December 31, 2019. The main reason is the increase in share-based expense from $210,000 in 2019 compared to $1,150,000 in 2020.

The company's operational expenses during 2020 were involved in fund-raising, day to day operations, payroll, facility lease, utilities, compliance fees, equipment and materials purchases.

The company acquired access to investment funds which were to produce results in limited cash acquisitions throughout 2020.

The intended set up of facilities and subsequent operations of the company, being the manufacture of construction products for commercial and residential structures, had begun during 4th quarter of 2020 with the first contracted home beginning construction.

For the twelve months ended December 31, 2020 our accounting and legal was $35,450 compared to $42,850 for the same period in 2019. We used less external accounting assistance during the period.

For the twelve months ended December 31, 2020 our salaries expense was $176,555 compared to $125,920 for the same period in 2019. The increase in salaries expense was mainly due to the increase in the admin support.


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For the twelve months ended December 31, 2020 our share-based expense was $1,150,000 compared to $210,000 for the same period in 2019. During the Period January 1, 2020 to December 31, 2020 there were 1,250,000 shares issued to key individuals for service compensation to the Company.

For the twelve months ended December 31, 2020 our rent expense was $24,000 compared to $24,000 for the same period in 2019. Contract ongoing as is with no changes to original contract.

For the twelve months ended December 31, 2020 our G&A expense was $104,448 compared to $89,538 for the same period in 2019. Due to Covid, there were additional employment expenses during the year.

For the twelve months ended December 31, 2020 our depreciation expense was $11,693 compared to $5,228 for the same period in 2019. Some assets completed their depreciation schedule and new assets don't reach depreciation this period.

For the twelve months ended December 31, 2020 our gain / (loss) on derivatives was $284,644, compared to $(400,868) for the same period in 2019. Some notes were complete during the period.

For the twelve months ended December 31, 2020 our (loss) on sale of fixed assets was $0 compared to $(10,000) for the same period in 2019. Last year we wrote off no longer needed equipment valued at $10K.

For the twelve months ended December 31, 2020 our financing expense was $(189,285) compared to $(543,541) for the same period in 2019. Current notes are fixed price and discounts can't be manipulated by noteholders.

For the twelve months ended December 31, 2020 our Interest expense was $(193,237) compared to $(231,604) for the same period in 2019. Some notes were completed before the end of the period.

For the Twelve months ended December 31, 2020 our net loss was $(1,596,768) compared to $(1,728,448) for the same period in 2019. As there were no major asset purchases, therefore lower operational costs.

At the time of filing the Company has fully implemented its planned start-up strategy which has now positioned itself in an operational state of production.

The Company's specialized systems and major new equipment procurements have been integrated and installed into a fully operational batch plant and product manufacturing has commenced.

The Company is at the stage of delivering full house sets as its next tactical step in securing self-sustaining revenue capital.

Liquidity and Capital Resources

We have had minimal operating activity since inception of the company in 2010. Our 2020 short-term obligations were covered by funding received from convertible notes with a total value of $304,000 issued in 2020.

Net cash used in operating activities was $301,353 in the year ended December 31, 2020 compared to net cash used in operating activity of 258,560 for the year ended December 31, 2019.

Net cash used in investing activities was $3,690 in the year ended December 31, 2020. Net cash provided by investing activities for the year ended December 31, 2019 was $47,746.

Net cash provided by financing activities was $304,000 in the year ended December 31, 2020. Net cash provided by financing activities in the year ended December 31, 2019 was $210,500.

As of December 31, 2020, the Company had inadequate cash to operate its business at the current level for the next six months and to achieve its business goals. The success of our business plan during and beyond the next 6 months will be provided by additional loan financing and revenues of a minimum of $300,000


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Financing

Auscrete Corporation, a Wyoming public company was incorporated on December 31, 2009 and first became effective for an IPO with the SEC on August 16, 2012. It was established to finance an expansion of a current pilot facility operated by the founders in Rufus, OR. The IPO was not commenced and expired in February 2014. The company became Effective with a Registration Statement in December 2014 registering shareholder held shares for sale enabling re-application to FINRA for listing on the

OTCPink. The company engaged the services of a registered broker-dealer and market maker, Glendale Securities, LLC, who subsequently applied with the Financial Industry Regulatory Authority (FINRA).

Use of Funds Raised Through Financing

Initial Stage One targeted funding was $1.2 million and the company, during 2018, had purchased 5 acres of land on the Goldendale Industrial Estate. Initially it cost $102,000, including fees, to purchase the land.

In 2019 a change in Company strategy brought Management to make the decision to sell back its land investment and utilize the funds to establish an operational plant within a newly leased facility also in the Goldendale Washington area.

During the fiscal year both land sale funds and additional capital raised were used for major production equipment purchases and to fabricate startup provisions within a newly plant facility.

This Corporate profit orientated decision has provided greater advantageous results in assuring faster revenue generation.

The balance was used for working capital and expenses including wages, marketing and other working capital and reserves.

Marketing

Principal marketing efforts are initially aimed at leveraging specific contacts and relationships that have developed over the last 12 years since the inception of the founders' pilot plant. The company has interviewed and chosen an experienced sales person who will have the luxury of dealing with existing contacts as well as the multitude of inquiries received every week.

Auscrete's product is also extremely suitable for the construction of commercial and industrial structures. Company marketing will also explore the commercial world for applications and it is believed that such construction will become a large part of the company's future direction.

Financial Projections

The typical structure will be a home in the 1,100 - 3,000 sq. ft. range that will sell to the contractor or developer for around $80K-$200K with the average being over $150,000. Obviously, the company will look to increase output to meet future demands and expects to do this through internal financing.

Off-balance Sheet Arrangement

We have no significant 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.


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