What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-15 compared with 2021-08-13 · 260 added, 254 removed, 40 unchanged (93% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We use the terms “Magellan,” “we,”

“our,” and “us” to refer to Magellan Gold Corporation.

The following discussion and analysis provides

information that management believes is relevant for an assessment and understanding of our results of operations and financial condition.

This information should be read in conjunction with our audited financial statements, which are included in our Annual Report on Form

10-K for the fiscal year ended December 31, 2020, and our interim unaudited financial statements and notes thereto included

with this report in Part I, Item 1.

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We use the terms

“Magellan,” “we,” “our,” and “us” to refer to Magellan Gold Corporation.

The following discussion

and analysis provides information that management believes is relevant for an assessment and understanding of our results of operations

and financial condition.

This information should be read in conjunction with our audited financial statements, which are included in

our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and our interim unaudited financial statements and notes

thereto included with this report in Part I, Item 1.

COVID-19 Pandemic

In December 2019, a novel

strain of coronavirus (“COVID-19”) emerged in China.

On March 11, 2020, the World Health Organization declared the outbreak

of COVID-19 a pandemic.

December 2019, a novel strain of coronavirus (“COVID-19”) emerged in China.

On March 11, 2020, the World Health Organization

declared the outbreak of COVID-19 a pandemic.

The outbreak has now spread to the United States and infections have been reported globally.

The COVID-19 pandemic

is rapidly evolving.

The information in this Annual Report is based on data currently available to us and will likely change as the pandemic

As COVID-19 continues to spread throughout areas in which we operate, we believe the outbreak has the potential to have a

material negative impact on our operating results and financial condition.

The extent of the impact of COVID-19 on our operational

and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our operators,

employees and vendors, and the impact on the Company’s ability to obtain debt and equity financing to fund ongoing exploration activities,

all of which are uncertain and cannot be predicted.

Given these uncertainties, we cannot reasonably estimate the related impact

to our business, operating results and financial condition.

We expect the trends

highlighted above with respect to the impact of the COVID-19 pandemic to continue and, in some cases, accelerate.

The extent of the COVID-19

pandemic’s continued effect on our operational and financial performance will depend on future developments, including the duration,

spread and intensity of the outbreak, the pace at which jurisdictions across the country re-open and restrictions begin to lift, the availability

of government financial support to our business, tenants and operators and whether a resurgence of the outbreak occurs.

Due to these uncertainties,

we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial

condition and cash flows but it could be material.

Forward-Looking Statements

Some of the information presented in this Form

10-Q constitutes “forward-looking statements”.

These forward-looking statements include, but are not limited to, statements

that include terms such as “may,” “will,” “intend,” “anticipate,” “estimate,”

“expect,” “continue,” “believe,” “plan,” or the like, as well as all statements that are

not historical facts.

Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to

differ materially from current expectations.

Although we believe our expectations are based on reasonable assumptions within the bounds

of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from expectations.

All forward-looking statements speak only as of

the date on which they are made.

We undertake no obligation to update such statements to reflect events that occur or circumstances that

exist after the date on which they are made.

We were incorporated on September 28, 2010, in

COVID-19 pandemic is rapidly evolving.

The information in this Annual Report is based on data currently available to us and will likely

change as the pandemic progresses.

As COVID-19 continues to spread throughout areas in which we operate, we believe the outbreak has

the potential to have a material negative impact on our operating results and financial condition.

The extent of the impact

of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the

outbreak, impact on our operators, employees and vendors, and the impact on the Company’s ability to obtain debt and equity financing

to fund ongoing exploration activities, all of which are uncertain and cannot be predicted.

Given these uncertainties, we

cannot reasonably estimate the related impact to our business, operating results and financial condition.

expect the trends highlighted above with respect to the impact of the COVID-19 pandemic to continue and, in some cases, accelerate.

extent of the COVID-19 pandemic’s continued effect on our operational and financial performance will depend on future developments,

including the duration, spread and intensity of the outbreak, the pace at which jurisdictions across the country re-open and restrictions

begin to lift, the availability of government financial support to our business, tenants and operators and whether a resurgence of the

outbreak occurs.

Due to these uncertainties, we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on

our business, results of operations, financial condition and cash flows but it could be material.

Forward-Looking

Some of the information

presented in this Form 10-Q constitutes “forward-looking statements”.

These forward-looking statements include, but are not

limited to, statements that include terms such as “may,” “will,” “intend,” “anticipate,”

“estimate,” “expect,” “continue,” “believe,” “plan,” or the like, as well

as all statements that are not historical facts.

Forward-looking statements are inherently subject to risks and uncertainties that could

cause actual results to differ materially from current expectations.

Although we believe our expectations are based on reasonable assumptions

within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially

from expectations.

All forward-looking

statements speak only as of the date on which they are made.

We undertake no obligation to update such statements to reflect events that

occur or circumstances that exist after the date on which they are made.

We were incorporated

on September 28, 2010, in Nevada.

Our principal business is the acquisition and exploration of mineral properties in the United States.

We have not presently determined

whether the properties to which we have mineral rights contain mineral reserves that are economically recoverable.

We have only had exploration and project development

operations to date and we rely upon the sale of our securities and borrowings from officers, directors and other significant investors

to fund our operations, as we have not generated any revenue.

Magellan entered into a stock purchase agreement

to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims in Idaho County.

We have not presently determined whether the properties to which we have mineral rights contain mineral reserves that are economically

We have only had

exploration and project development operations to date and we rely upon the sale of our securities and borrowings from officers, directors

and other significant investors to fund our operations, as we have not generated any revenue.

Magellan entered

into a stock purchase agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented

mining claims in Idaho County.

Idaho that includes the historic Center Star Gold Mine near Elk City, Idaho.

The Center Star Mine hosts high grade gold mineralization

that was discovered in the early 1900’s.

There was periodic historic production and development work done under different ownership

through the 1980s.

With the high-grade gold mineralization present, Magellan will be evaluating the historic mine data to assess the potential

to develop a gold resource at Center Star.

The project area is located 45 miles from Grangeville, Idaho and near the town of Elk City,

In consideration for 100% of the issued and outstanding

shares of Clearwater, Magellan has agreed to pay its sole shareholder 1,000,000 shares of Magellan common stock and $150,000.

The 1,000,000

shares will be issued (i) 250,000 shares at closing (ii) 250,000 shares at the time the Center Mine receives its permit to reopen the

main portal of the mine, (iv) 250,000 shares at the point the main portal has been reopened and (iv) 250,000 shares two years from the

closing concurrent with the pay-off of the secured promissory note.

The cash consideration of $25,000 will be paid within 30 days of closing

and the balance of $125,000 to be evidenced by a secured promissory note due in two years.

The Note will be secured by the Clearwater

shares and assets.

Magellan has issued 750,000 of the 1,000,000 shares and has paid $12,500 of the required $25,000 payment.

Effective March 31, 2020, we divested our subsidiary

holding all of our international assets and plan to advance our Idaho gold project towards resource definition and eventual development,

and possibly to acquire additional mineral rights and conduct additional exploration, development and permitting activities.

lease payments, permitting applications and exploration and development efforts will require additional capital.

We rely upon the sale

of our securities as well as advances and loans from executive management and significant shareholders to fund our operations as we have

not generated any significant revenue.

Effective March 31, 2020 the Company entered into

an Agreement to Accept Collateral in Full Satisfaction of Obligations (the “Agreement”) with certain holders of Promissory

Notes (the “Lenders”) due December 31, 2019 (the “Notes”) in the aggregate principal amount of $1.05 million.

The Company is indebted under the Notes to the Lenders and the Company’s obligations to the Lenders are secured by a Stock Pledge

and Security Agreement covering 100 shares of common stock of Magellan Acquisition Corporation and one (1) share of MV2 (the “Collateral”)

held under a Collateral Agent Agreement.

The Center Star Mine hosts

high grade gold mineralization that was discovered in the early 1900’s.

There was periodic historic production and development

work done under different ownership through the 1980s.

With the high-grade gold mineralization present, Magellan will be evaluating the

historic mine data to assess the potential to develop a gold resource at Center Star.

The project area is located 45 miles from Grangeville,

Idaho and near the town of Elk City, Idaho.

In consideration

for 100% of the issued and outstanding shares of Clearwater, Magellan has agreed to pay its sole shareholder 1,000,000 shares of Magellan

common stock and $150,000.

The 1,000,000 shares will be issued (i) 250,000 shares at closing (ii) 250,000 shares at the time the Center

Mine receives its permit to reopen the main portal of the mine, (iv) 250,000 shares at the point the main portal has been reopened and

(iv) 250,000 shares two years from the closing concurrent with the pay-off of the secured promissory note.

The cash consideration of

$25,000 will be paid within 30 days of closing and the balance of $125,000 to be evidenced by a secured promissory note due in two years.

The Note will be secured by the Clearwater shares and assets.

Magellan has issued 750,000 of the 1,000,000 shares and has paid $12,500

of the required $25,000 payment.

Effective March

31, 2020, we divested our subsidiary holding all of our international assets and plan to advance our Idaho gold project towards resource

definition and eventual development, and possibly to acquire additional mineral rights and conduct additional exploration, development

and permitting activities.

Our mineral lease payments, permitting applications and exploration and development efforts will require additional

We rely upon the sale of our securities as well as advances and loans from executive management and significant shareholders

to fund our operations as we have not generated any significant revenue.

Effective March

31, 2020 the Company entered into an Agreement to Accept Collateral in Full Satisfaction of Obligations (the “Agreement”)

with certain holders of Promissory Notes (the “Lenders”) due December 31, 2019 (the “Notes”) in the aggregate

principal amount of $1.05 million.

The Company is indebted under the Notes to the Lenders and the Company’s obligations to the

Lenders are secured by a Stock Pledge and Security Agreement covering 100 shares of common stock of Magellan Acquisition Corporation

and one (1) share of MV2 (the “Collateral”) held under a Collateral Agent Agreement.

Magellan Acquisition Corp.

and MV2 own the SDA Mill and El Dorado prospect in Nayarit, Mexico.

the SDA Mill and El Dorado prospect in Nayarit, Mexico.

The Notes matured on December 31, 2019 and remain unpaid and in default.

The Lenders have accelerated the Company’s

indebtedness.

Pursuant to terms set forth in the Agreement, the Lenders have agreed to accept the Collateral in full satisfaction of the

Notes and unconditionally and irrevocably waive any entitlement or right to receive payment of (i) the initial 10% Financing Fee included

in the principal amount of the Notes, (ii) the 5% Rollover Fee agreed to in an Allonge and Modification Agreement.

The effective date

of the Agreement was March 31, 2020.

On July 21, 2020, the Company entered into a Stock

Purchase agreement with Tri Power Resources, LLC to sell 1,000 shares representing 100% ownership of Gulf+Western Industries, Inc (“Gulf+Western”)

to Tri Power in consideration for the return and cancellation of 50,000 shares of the Company’s Series A Preferred Stock with a

stated value of $10 per share.

John Gibbs, a majority shareholder in the Company, is the Managing Member and Chief Executive Officer of

Tri Power Resources, LLC.

As a result of these agreements, the assets, liabilities

and operations of the Gulf+Western, MAC and MV2 have been reflected as discontinued operations in the Company’s consolidated balance

sheets, consolidated statements of operations, consolidated statements of cash flows and consolidated statements of other comprehensive

income (loss) for the periods presented.

Certain prior period amounts have been reclassified

to conform to the current period financial statement presentation, including the discontinued operations presentation resulting from the

disposition of the Company’s Gulf+Western, MAC and MV2 operations in 2020.

Results of Operations for the three months ended June 30, 2021

Three months ended June 30,

The Lenders have accelerated the Company’s indebtedness.

Pursuant to terms set forth in the Agreement, the Lenders have agreed

to accept the Collateral in full satisfaction of the Notes and unconditionally and irrevocably waive any entitlement or right to receive

payment of (i) the initial 10% Financing Fee included in the principal amount of the Notes, (ii) the 5% Rollover Fee agreed to in an

Allonge and Modification Agreement.

The effective date of the Agreement was March 31, 2020.

On July 21, 2020,

the Company entered into a Stock Purchase agreement with Tri Power Resources, LLC to sell 1,000 shares representing 100% ownership of

Gulf+Western Industries, Inc.

(“Gulf+Western”) to Tri Power in consideration for the return and cancellation of 50,000 shares

of the Company’s Series A Preferred Stock with a stated value of $10 per share.

John Gibbs, a majority shareholder in the Company,

is the Managing Member and Chief Executive Officer of Tri Power Resources, LLC.

As a result of

these agreements, the assets, liabilities and operations of the Gulf+Western, MAC and MV2 have been reflected as discontinued operations

in the Company’s consolidated balance sheets, consolidated statements of operations, consolidated statements of cash flows and

consolidated statements of other comprehensive income (loss) for the periods presented.

Certain prior period

amounts have been reclassified to conform to the current period financial statement presentation, including the discontinued operations

presentation resulting from the disposition of the Company’s Gulf+Western, MAC and MV2 operations in 2020.

Results of Operations for the

three months ended September 30, 2021 and 2020

Three months ended September 30,

Operating expenses:

General and administrative expenses

General and administrative

Total operating expenses

3 unchanged sentences

Loss on settlement of liabilities

Loss on conversion of debt

Loss on change in derivative liability

2 unchanged sentences

Net loss from discontinued operation

$ (2,246,644 )

Operating expenses

During the three months ended June 30, 2021, our

total operating expenses included general and administrative expenses of $531,550 as compared to $123,580 during the three months ended

June 30, 2020.

The $407,970 increase is primarily associated with increases in investor relations, officer compensation, stock-based compensation.

Other income (expense)

During the three months ended June 30, 2021, total

other expense was $101,384 as compared to $2,122,508 during the three months ended June 30, 2020.

The $2,021,124 change were mainly related

to the loss on settlement of liabilities and loss on conversion of debt.

Discontinued operations

The net loss from discontinued operations during

the three months ended June 30, 2020 totaled $556.

Net loss from discontinued operations represents the Mexico operations and Gulf+Western

that were disposed of in 2020.

Results of Operations for the six months ended June 30,

2021 and 2020

Six months ended June 30,

During the three

months ended September 30, 2021, our total operating expenses included general and administrative expenses of $392,852 as compared to

$393,468 during the three months ended September 30, 2020.

The $616 decrease is primarily associated with decrease in professional fees

which were offset by an increase in stock-based compensation.

During the three

months ended September 30, 2021, total other expense was $68,301 as compared to $191,109 during the three months ended September 30,

The $122,808 decrease was mainly related to the loss on settlement of liabilities and loss on conversion of debt.

The net loss from

discontinued operations during the three months ended September 30, 2020 totaled $906.

Net loss from discontinued operations represents

the Mexico operations and Gulf+Western that were disposed of in 2020.

Operations for the nine months ended September 30, 2021 and 2020

Nine months ended September 30,

Operating expenses:

General and administrative expenses

General and administrative

Total operating expenses

3 unchanged sentences

Loss on settlement of liabilities

Loss on conversion of debt

Loss on change in derivative liability

5 unchanged sentences

Operating expenses

During the six months ended June 30, 2021, our

total operating expenses included general and administrative expenses of $1,250,987 as compared to $293,565 during the six months ended

June 30, 2020.

The $957,422 increase is primarily associated with increases in investor relations, officer compensation, stock-based compensation.

Other income (expense)

During the six months ended June 30, 2021, total

other expense was $155,886 as compared to $2,197,240 during the six months ended June 30, 2020.

The $2,041,354 change were mainly related

to the loss on settlement of liabilities and loss on conversion of debt.

Discontinued operations

The net loss from discontinued operations during

the six months ended June 30, 2020 totaled $30,249.

Net loss from discontinued operations represents the Mexico operations and Gulf+Western

that were disposed of in 2020.

Liquidity and Capital Resources

Our unaudited consolidated financial statements

have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during

the next fiscal year.

Asset realization values may be significantly different from carrying values as shown in our consolidated financial

statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be

unable to continue as a going concern.

At June 30, 2021, we had not yet generated sufficient revenues or achieved profitable operations

and we have accumulated losses of $17,319,954.

We expect to incur further losses in the development of our business, all of which raises

substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern depends on our ability

to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when

they come due.

During the six months ended June 30, 2021, the

Company entered into a debt agreement to borrow $200,000 and received $175,000 in cash proceeds.

Additionally, the Company received $287,000 of

proceeds from the exercise of warrants.

We anticipate that additional funding will be

in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common

stock but cannot assure that any future financings will occur.

A summary of our cash provided by and used in

operating, investing and financing activities is as follows:

Six months ended June 30,

Net cash used in operating activities from continuing operations

Net cash used in operating activities from discontinued operations

During the nine

months ended September 30, 2021, our total operating expenses included general and administrative expenses of $1,643,839 as compared

to $686,589 during the nine months ended September 30, 2020.

The $957,250 increase is primarily associated with increases in rent, professional

fees, and stock-based compensation.

During the nine

months ended September 30, 2021, total other expense was $224,187 as compared to $2,388,349 during the nine months ended September 30,

The $2,164,162 change was mainly related to the loss on settlement of liabilities and loss on conversion of debt.

There was no net

loss from discontinued operations during the nine months ended September 30, 2021.

Liquidity and

Capital Resources

Our unaudited consolidated

financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue

our operations during the next fiscal year.

Asset realization values may be significantly different from carrying values as shown in

our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets

and liabilities should we be unable to continue as a going concern.

At September 30, 2021, we had not yet generated sufficient revenues

or achieved profitable operations and we have accumulated losses of $17,781,107.

We expect to incur further losses in the development

of our business, all of which raises substantial doubt about our ability to continue as a going concern.

Our ability to continue as a

going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising

from normal business operations when they come due.

During the nine

months ended September 30, 2021, the Company entered into a debt agreement to borrow $200,000 and received $175,000 in cash proceeds.

Additionally, the

Company received $287,000 of proceeds from the exercise of warrants.

We anticipate that

additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing

from the sale of our common stock but cannot assure that any future financings will occur.

A summary of our

cash provided by and used in operating, investing and financing activities is as follows:

Nine months ended September 30,

Net cash used in operating activities from

continuing operations

Net cash used in operating activities

Net cash used in investing activities from continuing operations

Net cash used in investing activities from discontinued operations

from discontinued operations

Net cash used in operating activities

Net cash used in investing activities from continuing

Net cash used in investing activities

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

from discontinued operations

Net cash used in investing activities

Net cash provided by financing activities from continuing

Net cash provided by financing activities

from discontinued operations

Net cash provided by financing activities

Effect of foreign currency exchange

2 unchanged sentences

Cash end of period

At June 30, 2021, we had $177,099 in cash and

a $1,120,747 working capital deficit.

This compares to cash of $0 and a working capital deficit of $1,476,062 at December 31, 2020.

Net cash used in operating activities from continuing

operations during the six months ended June 30, 2021 was $198,359 and was mainly comprised of our $1,416,608 net loss during the period,

adjusted by a non-cash charges of $1,109,638 of stock compensation, loss on change in derivative liability of $7,392 and accretion of

discounts on notes payable of $115,583.

In addition, it reflects changes in operating assets and liabilities of $14,364.

During the six months ended June 30, 2021, net

cash provided by financing activities from continuing operations was $412,185 comprised of $175,000 proceeds from convertible debt from

third parties, $287,000 proceeds from exercise of warrants, $605 proceeds on advances from third parties, offset by $30,420 payments on

advances from third parties and $20,000 payments on advances from related parties.

Off Balance Sheet Arrangements

We do not have and have never had any off-balance

At September 30,

2021, we had $72,006 in cash and a $1,299,535 working capital deficit.

This compares to cash of $0 and a working capital deficit of $1,476,062

at December 31, 2020.

Net cash used in

operating activities from continuing operations during the nine months ended September 30, 2021 was $259,642 and was mainly comprised

of our $1,868,026 net loss during the period, adjusted by a non-cash charges of $1,426,078 of stock compensation, loss on change in derivative

liability of $22,369 and accretion of discounts on notes payable of $153,438.

In addition, it reflects changes in operating assets and

liabilities of $6,499.

During the nine

months ended September 30, 2021, net cash provided by financing activities from continuing operations was $412,185 comprised of $175,000

proceeds from convertible debt from third parties, $287,000 proceeds from exercise of warrants, $605 proceeds on advances from third

parties, offset by $30,420 payments on advances from third parties and $20,000 payments on advances from related parties.

Sheet Arrangements

Summary of Significant Accounting Policies

Basis of Presentation and Principles of

Consolidation

Our consolidated financial statements include

our accounts and the accounts of our 100% owned subsidiary, Clearwater Gold Mining Corporation and M Gold Royalty.

All intercompany transactions

and balances have been eliminated.

Our consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

We do not have

and have never had any off-balance sheet arrangements.

Summary of Significant

Accounting Policies

Presentation and Principles of Consolidation

Our consolidated

financial statements include our accounts and the accounts of our 100% owned subsidiary, Clearwater Gold Mining Corporation and M Gold

All intercompany transactions and balances have been eliminated.

Our consolidated financial statements have been prepared in

accordance with accounting principles generally accepted in the United States of America (“U.S.

Use of Estimates

The preparation of financial statements in conformity

GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during

the period presented.

We make our estimate of the ultimate outcome for

these items based on historical trends and other information available when the financial statements are prepared.

Changes in estimates

are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes

We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the

time they were made.

Actual results could differ from these estimates, making it possible that a change in these estimates could occur

in the near term.

Fair Value of Financial Instruments

We value our financial assets and liabilities

using fair value measurements.

Our financial instruments primarily consist of cash and cash equivalents, accounts payable, accrued liabilities,

amounts due to related parties and notes payable to related parties.

Fair value is based on the price that would be received to sell an

asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The carrying amount

of cash and cash equivalents, accounts payable, accrued liabilities, notes payable to related parties and other amounts due to related

parties approximates fair value because of the short-term nature of these financial instruments.

Concentrations of Credit Risk

Our financial instruments which potentially subject

us to credit risk are our cash.

We maintain our cash at reputable financial institutions and currently, we are not exposed to significant

Cash and Cash Equivalents

We consider all amounts on deposit with financial

institutions and highly liquid investments with an original maturity of three months or less to be cash equivalents at the date of purchase.

Notes Payable – Related Parties

Notes payable to related parties are classified

as current liabilities as the note holders either have the ability to control the repayment dates of the notes or the notes are due within

twelve months of the balance sheet date.

Net Loss per Common Share

We compute basic net loss per common share by

dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period.

Computation of diluted net loss per common share adds the weighted-average number of potential common shares outstanding to the weighted-average

common shares outstanding, as calculated for basic net loss per share, except for instances in which there is a net loss.

months ended June 30, 2021 and 2020, potential common shares associated with convertible notes payable and outstanding warrants to purchase

common stock have been omitted from the net loss per common share computation as they are anti-dilutive due to the net loss for these

Stock-based Compensation

The Company measures the cost of employee services

received in exchange for an award of equity instruments (share-based payments, or SBP) based on the grant-date fair value of the award.

That cost is recognized over the period during which an employee is required to provide service in exchange for the SBP award—the

requisite service period (vesting period).

For SBP awards subject to conditions, compensation is not recognized until the performance

condition is probable of occurrence.

The grant-date fair value of share options is estimated using the Black-Scholes-Merton option-pricing

The Company adopted ASU 2018-07 which aligns the accounting for share-based payment awards issued to employees and nonemployees.

Recently Adopted Accounting Standards

The Company does not believe that any recently

issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying

financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

The preparation

of financial statements in conformity with U.S.

GAAP requires us to make estimates, assumptions and judgments that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and

the reported amounts of expenses during the period presented.

We make our estimate

of the ultimate outcome for these items based on historical trends and other information available when the financial statements are

Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period

when new information becomes available.

We believe that our significant estimates, assumptions and judgments are reasonable, based upon

information available at the time they were made.

Actual results could differ from these estimates, making it possible that a change

in these estimates could occur in the near term.

of Financial Instruments

We value our financial

assets and liabilities using fair value measurements.

Our financial instruments primarily consist of cash and cash equivalents, accounts

payable, accrued liabilities, amounts due to related parties and notes payable to related parties.

Fair value is based on the price that

would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

The carrying amount of cash and cash equivalents, accounts payable, accrued liabilities, notes payable to related parties and other

amounts due to related parties approximates fair value because of the short-term nature of these financial instruments.

Concentrations

of Credit Risk

Our financial instruments

which potentially subject us to credit risk are our cash.

We maintain our cash at reputable financial institutions and currently, we

are not exposed to significant credit risk.

Cash Equivalents

We consider all

amounts on deposit with financial institutions and highly liquid investments with an original maturity of three months or less to be

cash equivalents at the date of purchase.

Notes Payable

– Related Parties

Notes payable to

related parties are classified as current liabilities as the note holders either have the ability to control the repayment dates of the

notes or the notes are due within twelve months of the balance sheet date.

per Common Share

We compute basic

net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of common shares

outstanding during the period.

Computation of diluted net loss per common share adds the weighted-average number of potential common

shares outstanding to the weighted-average common shares outstanding, as calculated for basic net loss per share, except for instances

in which there is a net loss.

For the nine months ended September 30, 2021 and 2020, potential common shares associated with convertible

notes payable and outstanding warrants to purchase common stock have been omitted from the net loss per common share computation as they

are anti-dilutive due to the net loss for these periods.

The Company measures

the cost of employee services received in exchange for an award of equity instruments (share-based payments, or SBP) based on the grant-date

fair value of the award.

That cost is recognized over the period during which an employee is required to provide service in exchange

for the SBP award—the requisite service period (vesting period).

For SBP awards subject to conditions, compensation is not recognized

until the performance condition is probable of occurrence.

The grant-date fair value of share options is estimated using the Black-Scholes-Merton

option-pricing model.

The Company adopted ASU 2018-07 which aligns the accounting for share-based payment awards issued to employees

and nonemployees.

Adopted Accounting Standards

The Company does

not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have

a material effect on the accompanying financial statements.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis