The following discussion and analysis of the results of operations and financial
condition for the years ended December 31, 2020 and 2019 should be read in
conjunction with our consolidated financial statements and the notes to those
consolidated financial statements that are included elsewhere in this Annual
Report. Our discussion includes forward-looking statements based upon current
expectations that involve risks and uncertainties, such as our plans,
objectives, expectations and intentions. Actual results and the timing of events
could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors. See "Forward-Looking Statements."



Compensation Expense

Compensation expense for the twelve months ended December 31, 2020 and 2019 was $120,000. This is for the base salary of our Chief Executive, Conrad R. Huss

General and Administrative Expense

General and Administrative expense for the year ended December 31, 2019 was $166,255 compared to $425,698 for the year ended December 31, 2018. The break-out of General and Administrative expense is as follows;





                                    2020          2019        Difference
Consulting fees                   $ 225,000     $  36,000     $   189,000
Reconciliation of debt balances     257,324             -         257,324
Financing costs                           -       100,000        (100,000 )
Investor relations                        -         2,500          (2,500 )
Transfer agent/SEC/other             14,500        27,755         (13,255 )

Total                             $ 497,324     $ 166,255     $   331,069




Line-item analyses follow:

Consulting fees were $189,000 higher during the current period due to a new consulting contract being entered into as of April 1, 2020 at $25,000 per month.

Reconciliation of debt balances was $257,324. Upon reconciling the balances of amounts owed to Oasis Capital, LLC, it was determined that the balance was understated by $257,324. This correction was made in the fourth quarter of 2020.

Financing costs were $100,000 lower in the current period due to a one-time expense in 2019.





Professional Fees



Professional fees for the year ended December 31, 2020 were $48,325 compared to
$104,930 for the year ended December 31, 2019. Professional fees consist mostly
of legal, accounting and audit fees. The decrease was primarily due to reduced
legal fees associated with conversions and lower audit expenses.



Other Income (Expense)

Other Income (expense) for the year ended December 31 2020 was ($1,518,380) compared to ($1,196,345) for the year ended December 31, 2019. The break-out of Other Income (Expense) is as follows;





                                                          2020             2019          Difference
Interest expense                                      $   (613,046 )   $ (1,024,755 )   $    411,709

Change in fair value of derivatives                     (1,837,933 )         19,557       (1,857,490 )
Loss on receivables                                              -         (442,365 )        442,365
Loss on issuance of convertible Preferred stock                  -         (194,547 )        194,547
Gain on extinguishment of debt and accrued interest        931,342          492,016          439,326 )
Loss on convertible notes                                        -         

(46,250 )        (46,250 )
Total                                                 $ (1,518,380 )   $ (1,196,345 )   $   (322,035 )

Interest expense was lower by $411,709 in 2020 due to reduced debt levels, the write-off of the third-party debt and lower amortization of debt discount.

The change in fair value of derivatives was $1,857,490 higher due to greater volatility in the market price of the Company's stock.

Gain on extinguishment of debt and accrued interest was $439,326 greater due to the write-off of old debt and accrued interest. See NOTE 11- WRITE-OFF OF THIRD-PARTY NOTE for more detail





                                       10





Net Loss




The Company had a net loss of ($2,184,029) for the year ended December 31, 2020,
as compared to ($1,587,530) for the year ended December 31, 2019. Of the loss in
2020, approximately ($665,000) was due to operations and the remainder was due
primarily to interest expenses and derivative expenses on convertible debt,
partially offset by the gain on write-off of debt and accrued interest.

Liquidity and Capital Resources

For the year ended December 31, 2020, we used $37,600 in operating activities compared to $117,579 used in the prior year.

For the year ended December 31, 2020, we generated $37,600 through financing activities compared to $116,000 in the year ended December 31, 2019. The reduction in funds was due to reduced, funds from financings as the Company evaluates its operating options.

The Company currently owes $254,400 on notes payable, all of which are in default, and $2,217,163 for outstanding convertible notes. The majority of the notes payable are in default.





Going Concern



The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles which contemplate
continuation of the Company as a going-concern basis. The going concern basis
assumes that assets are realized, and liabilities are extinguished in the
ordinary course of business at amounts disclosed in the consolidated financial
statements. The Company has incurred recurring losses from operation and does
not currently have revenue generating operations. The Company has an accumulated
deficit of approximately $82 million, and a net loss for the year ended December
31, 2020 of $2.2 million. Of the loss, approximately $400,000 was due to
operations and the remainder was due primarily to interest expense, the
write-off of receivables and the loss on the issuance of preferred stock,
partially offset by the gain on extinguishment of debt. The Company's ability to
continue as a going concern depends upon its ability to obtain adequate funding
to support its operations through continuing investments of debt and/or equity
by qualified investors/creditors, internally generated working capital and
monetization of intellectual property assets. These factors raise substantial
doubt about the Company's ability to continue as a going concern. These
consolidated financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern. Management is
currently pursuing a business strategy which includes raising the necessary
funds to finance the Company's development and marketing efforts.



There can be no assurance that sufficient funds required during the next year or
thereafter will be generated from operations or available from external sources
such as debt or equity financings, or other potential sources. The inability to
generate cash flow from operations or to raise capital from external sources
will force the Company to substantially curtail and cease operations, therefore,
having a material adverse effect on its business. Furthermore, there can be no
assurance that any funds, if available, will possess attractive terms or not
have a significant dilutive effect on the Company's existing stockholders.

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