SPECTRAL CAPITAL CORP’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (Form 10-K)

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 ended December 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.

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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 of February 28, 2013, and its 60% owned
subsidiary, Monitr Holdings, Inc. from its date of incorporation of December 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.



OVERVIEW



Spectral 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 OPERATIONS



Spectral 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 financial data technology and services company that identifies stocks for investors whose software detects the uptrend 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 only use a few sources to learn about market conditions, Monitr gives investors 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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                                       10

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to a lack of financial investment in the software, Monitr is unable to operate at the level required for paying customers.

At September 30, 2015one of Spectral’s portfolio companies, Kontexto, has gone out of business and is no longer in business.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020


Revenues


We are currently engaged in a technology development business and have abandoned natural resources. To date, we have not seen any significant revenue.


Operating Expenses



Operating expenses increased $4,458, from $168,399 for the year ended December
31, 2020 to $172,857 for the year ended December 31, 2021.  The increase is due
to the increase in audit fees for the 2020 audit.



CASH AND CAPITAL RESOURCES

From December 31, 2021we have had $264 money in cash. We intend to fund our operations through the use of cash and additional advances from our CEO and through debt and equity financings until sufficient operating cash flows can be obtained.



Net cash used in operating activities increased $4,728, from $23,772 for the
year ended December 31, 2020 to $28,500 for the year ended December 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 ended December 31, 2020 to $28,351 for the year ended December 31,
2021. Net cash provided by financing activities during the years ended December
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.

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                                       11

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                          SPECTRAL CAPITAL CORPORATION



                               TABLE OF CONTENTS



                           DECEMBER 31, 2021 AND 2020










Report of a registered independent accounting firm (PCAOB ID: F – 2 5041)

Consolidated balance sheets at December 31, 2021 and 2020 F – 3

Consolidated Statements of Income for the Years Ended the 31st of DecemberF-4

2021 and 2020

Consolidated Statement of Shareholders’ Deficit for the Years Ended F – 5 December 312021 and 2020

Consolidated Statements of Cash Flows for the Years Ended the 31st of DecemberF-6

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 Spectral Capital Company

Opinion on the financial statements



We have audited the accompanying consolidated balance sheets of Spectral Capital
Corporation (the "Company") as of December 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 of
December 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 in the United States.



Substantial doubt as to the ability of the company to continue its activities



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
the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.



We conducted our audit in accordance with PCAOB standards. These standards require that the audit be planned and performed to obtain reasonable assurance that the financial statements are free from material misstatement, whether due to error or fraud. The Company is not required to have, and we have not been retained 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 with respect to with regard to financial information. 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 are the auditor of the company since 2017

Lakewood, CO

March 4, 2022

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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 of December 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

                                  statements.

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                                      F-3

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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

                                  statements.

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                                      F-4

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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

                                  statements.

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                                      F-5

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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

                                  statements.

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                          SPECTRAL CAPITAL CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 – ACTIVITY AND NATURE OF OPERATIONS



Spectral Capital Corporation (the "Company" or "Spectral") was incorporated on
September 13, 2000 under the laws of the State 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 PRINCIPAL ACCOUNTING POLICIES

Continuity of exploitation

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 of
December 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 revenue from our planned core businesses.



The Company's business and operations are sensitive to general business and
economic conditions in the U.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 the U.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

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                                      F-7

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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 of February 28, 2013, and Monitr Holdings,
Inc. from its date of incorporation of December 1, 2013.  All material
intercompany accounts and transactions have been eliminated in consolidation.



Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles. The United States of America and are presented in US dollars.

Stock-based compensation

The Company accounts for employee stock-based compensation in accordance with
the guidance of the Financial 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

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Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities

in active markets.

Level 2 – Includes other directly or indirectly observable market data.

Level 3 – Unobservable inputs 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. From December 31, 2021 and 2020, the Company has no assets or liabilities that would be considered level 2 or 3.



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 lagging behind our we recent federal tax returns.



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-majority interests

Non-controlling interests disclosed within the consolidated statement of
operations represent the minority ownership's 40% share of net losses of Noot
Holdings, Inc. and Monitr Holdings, Inc incurred during the years ended December
31, 2021 and 2020. The following table sets forth the changes in non-controlling
interest for the years ended December 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 US dollar. Transaction gains or losses related to balances denominated in a currency other than the functional currency are recognized in the consolidated statements of income.

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 – TRANSACTIONS WITH RELATED PARTIES

Jenifer Osterwalderthe general manager of the company



Jenifer Osterwalder charges the Company $12,000 per month beginning January 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 ended December 31, 2021 and 2020, respectively. As of
December 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 of December 31, 2020 and 2019, the Company's
CEO was due $206,956 and $178,605 in connection with these advances,
respectively.



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                                      F-10

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NOTE 4 – SHAREHOLDERS’ DEFICIT

Changes in shareholders’ deficit

Net loss and non-controlling interest were the only changes to shareholders’ deficit during the years ended December 31, 2021 and 2020.


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 ended December 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 December 31, 20203,000,000 two-employee options expired unexercised.


NOTE 5 - INCOME TAXES



As of December 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.

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                                      F-11

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The provision for federal income tax is made up 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 the significant items making up our amount net of deferred tax 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 rents office space on a three-month basis in Seattle, Washington.



NOTE 7- SUBSEQUENT EVENTS

On 15th February of 2022 Sky PLL Data OU (Estonia)("Sky") entered into a
telecommunication services agreement with Spectral Capital Corporation which was
based upon a trial period with Spectral for January and February of 2022 and as
such requested service for March 2022. Sky sent a deposit of $100,000 to the
company to be released to the company beginning March 1, 2022 so it will not be
recognized as revenue until March 2022. Services pertaining to the deposit will
commence on March 2, 2022 for Sky.

In accordance with ASC 855-10, the Company has analysed its operations
subsequent to December 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.

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