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Form 10-K BrewBilt Manufacturing For: Dec 31

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UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

 

FORM
10-K

 

 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For
the fiscal year ended December 31, 2020

 

or

 

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

BrewBilt
Manufacturing Inc.
(Exact
name of registrant as specified in its charter)

 

(BREWBILT LOGO)

www.brewbilt.com

 

Florida   000-55787   47-0990750
(State
or other
jurisdiction of incorporation)
  (Commission
File Number)
  (I.R.S.
Employer
Identification No.)
         

110
Spring Hill Road #10
Grass Valley, CA 95945

(Address of principal executive offices)

 

(530)
802-5023
(Registrant’s telephone number, including area code)

 

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

Yes
o No
x

 

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 

Yes
o No
x

 

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.

 

Yes
x No
o

 

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes
x No
o

 

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.
x

 

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large
accelerated filer
o  Accelerated
filer                 
o
Non-accelerated
filer
o (Do not check if a smaller reporting
company)
Smaller
reporting company
x
Emerging
growth company
x    

 

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o

 

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes
o No
x

 

On
June 30, 2020, the last business day of the registrants most recently completed second quarter, the aggregate market value of
the Common Stock held by non-affiliates of the registrant was $4,633,777, based upon the closing price on that date of the Common
Stock of the registrant of $0.0088. For purposes of this response, the registrant has assumed that its directors, executive officers,
and beneficial owners of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of its Common Stock are deemed affiliates of the registrant.

 

Indicate
the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

 

As
of March 15, 2021, the Registrant had 4,211,058,579 shares of common stock issued and outstanding.

 

Documents
incorporated by reference: None

TABLE
OF CONTENTS

 

FORWARD-LOOKING
STATEMENTS

 

This
Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements. These statements relate to future
events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as
“may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology.

 

Forward
looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and
we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances
should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the
securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements
to actual results.

 

The
safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock.
As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth
under the Private Securities Litigation Reform Act of 1995 are unavailable to us.

 

Our
financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted
accounting principles.

 

In
this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to
“common stock” refer to the common shares in our capital stock.

 

As
used in this Annual Report, the terms “we,” “us,” “Company,” “our”, and “BrewBilt”
mean BrewBilt Manufacturing, Inc., unless otherwise indicated.

 

PART
I

 

ITEM
1. BUSINESS

 

Company
Overview

 

Located
in Grass Valley, CA, BrewBilt is one of the only California companies that custom designs, hand crafts, and integrates processing,
fermentation and distillation processing systems for the craft beer, cannabis and hemp industries using “Best in Class”
American made components integrated with stainless steel processing vessels using only American made steel. Founded in 2014, the
company began in a backyard shop by Jeff Lewis with a vision of creating a profitable company in “Rural America” by
hiring excellent personnel, designing and fabricating products to exceed customer’s expectations and compensating craftsmen
with living wages and profit sharing to financially sustain their families within the community. Mr. Lewis has 15+ years of experience
as a craft beer brewer, a custom tank/vessel designer, fabrication and integration expert and business owner who initially founded
Portland Kettle Works, a nationally recognized manufacturer of craft beer brewing equipment located in the Northwest. The Company
has grown from 3 employees in 2015 to 12 in 2020.

 

BrewBilt
has been built by having strong relationships with local suppliers of raw materials, equipment and services in California, an
aggressive referral network of satisfied customers nationwide, and an Advisory Board consisting of successful business leaders
that provide valuable product feedback and business expertise to management. The craft brewing & spirits industries continue
to grow worldwide. California is where craft brewing began and now has over 900 operating breweries – being centrally located
in this booming market was a large draw for BrewBilt to locate its manufacturing facility in the Sierra foothills.

All
BrewBilt products are designed and fabricated as “food grade” quality which enables the company to build vessels for
food & beverage processing, the company is now building systems that are pharmaceutical grade for clients involved in distillation
for the cannabis and hemp industries, thus making the revenue potential much greater. BrewBilt buys materials and components mostly
from California suppliers which enables them to closely monitor quality, while the company’s revenues are generated from
sales to customers throughout the country. The company is aggressively pursuing international orders and has held meetings with
the Center for International Trade Development and U.S. Commercial Service to develop international opportunities. Presently,
a great deal of sales interest in coming from Mexico, Japan, Europe, and Australia.

 

BrewBilt
competes against a number of companies, most of which are selling mass produced equipment from China made from less costly inferior
quality Chinese steel which often is neither food nor pharmaceutical grade quality. While this broader market is very competitive,
there continues to be little competition and strong market demand for higher quality, custom designed, hand crafted and integrated
systems that BrewBilt produces.

 

In
July of 2016, BrewBilt moved from the small facility in Nevada City, CA to lease an eight thousand (8,000) square foot manufacturing
facility in Grass Valley, CA. This facility was purchased by BrewBilt in January 2018 and upgraded with substantial tenant improvements.
BrewBilt is prepared to expand again by leasing an additional seventy-six hundred (7,600) square feet in the same facility. BrewBilt
obtains the majority of its leads through customer referrals and from online marketplaces. The company’s website is being
expanded for online sales to include online educational/marketing videos that feature the company and its expanded integrated
product line for the cannabis and hemp industries. BrewBilt has also created distribution sales agreements with individuals and
companies to represent BrewBilt in both the domestic and international markets.

 

Merger
Transaction

 

On
November 22, 2019, Vet Online Supply and Brewbilt Manufacturing (“BrewBilt”) entered into an Agreement and Plan of
Merger (the “Merger Agreement”) and completed a merger, whereby Brewbilt merged with and into Vet Online Supply, with
BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the
merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer.

 

Pursuant
with the Merger Asset Purchase Agreement, the Board of Directors has authorized that BrewBilt shall sell, assign and transfer
all of its right, title and interest to its IP, fixed assets and “know how” to the Company (collectively, the “Seller’s
Assets”). Vet Online Supply and BrewBilt mutually agree that BrewBilt will assign certain assets and provide the “Know-How”
regarding the designing and building of the finest craft brewing equipment in the industry today. As consideration for the IP,
fixed assets and the “Know -How”, the Company shall issue, or cause to be issued, $5,000,000 worth of Preferred Series
A Stock (PAR $.001) within thirty (30) days from the date of the agreement. The number of Preferred Series A shares to be issued
is 500,000 shares at a price of $10.00 per share and convertible pursuant the conversion rights as specified in the Articles of
Incorporation and certificate of designation for VTNL.
BrewBilt
has designated that the said stock be issued in the name of its President, Jeffrey Lewis.

 

The
Board of Directors dismissed Daniel Rushford as an officer and director, specifically as the Chief Executive Officer, Chairman
of the Board, and Corporate (President) of the Company effective November 22, 2019. Effective November 22, 2019, Daniel Rushford
had a new revised Employment Agreement which appointed him as Manager of the CBD Pet Supply Division, a non-director/officer position
which includes returning to Treasury 1,000 Preferred Series B Control Shares, and an annual salary of $36,000. Unpaid wages will
accrue interest at 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum and may be converted to restricted common stock at fair market value at the time of conversion.

 

The
Board of Directors appointed Jeffrey Lewis as the new Chief Executive Officer, Chairman of the Board, Corporate President, Secretary,
and Treasurer of the Company, effective November 22, 2019. Jeffrey was provided with an Employment Agreement that included the
issuance of 1,000 Preferred Series B Control Shares, and an annual salary of $200,000. Unpaid wages will accrue interest at 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
per annum and may be converted to restricted common stock at fair market value at the time of conversion.

 

Jeffrey
Lewis is 47 years old. As the founder of BrewBilt Manufacturing, LLC, a multiple million-dollar sales and manufacturing company,
he has 15 years of experience managing engineering, design and fabrication teams that custom design and fabricate integrated stainless
steel distillation and brewing systems for the beverage, pharmaceutical, cannabis and hemp industries. Mr. Lewis has been a part
of the design team which builds CBD cold-water and alcohol -based extraction systems in the US, and he will take charge of VTNL,
and continue to drive his products into both the cannabis and brewing markets.

Our
Market Opportunity

 

The
craft beer industry offers a value of $26 billion in the United States, yet it is still an area of the economy which offers untapped
potential. It is one of the fastest-growing segments of the beverage manufacturing industry today. The amount of consumer interest
has been nothing short of incredible. Growth rates in sales, employment opportunities, and the total volume of beer produced have
all been in double-digit percentages since 2010.

 

At
a time when the overall beer industry saw a decrease in sales of 1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2020, the craft beer industry saw 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} growth. 70{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the
volume that is produced by active breweries for the industry provide regional sales in the United States. 22{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the organizations
are classified as microbreweries. Approximately 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} are brewpubs, while 1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} list themselves as a contract brewing organization.

 

In
2020, there were over 196 million barrels of beer produced for sale in the United States. This volume was a 1.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} decrease from
the year before. The craft beer industry still saw a 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} increase in volume as well, producing 24.8 million barrels of beer.

 

There
are four distinct craft beer industry market segments: microbreweries, brewpubs, contactor brewers, and regional crafters. Home-brewers
are sometimes grouped in with this data as well.

 

Essential
Craft Beer Industry Statistics

 

California
had the largest output for the craft beer industry and 2016, offering $7.3 billion in total impact. Pennsylvania finished in second
during the year, with a $5.8 billion impact. They were followed by Texas ($4.5 billion), New York ($3.4 billion), and Florida
($3.1 billion). The overall beer market in the United States has a value of $111.4 billion.
Although the craft beer segment has a 12.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} share of the total volume in the country, it represents over 20{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the total dollar
sales that were achieved in 2017.
The dollar sales growth of craft beer products in the United States was 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2017. In
2017, even though there were almost 1,000 new brewery openings which occurred in the United States, there were also 165 closures
that happened. This figure represents a closing rate of 2.6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, which is a 42{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} increase over 2016 figures one 116 craft breweries
shut their doors. Adults in the United States consume an average of 26.9 gallons of beer each year, according to the National
Beer Wholesalers Association. About one out of every four registered breweries in the United States are listed as a brewpub. That
means the products they create for consumers are meant for direct sales that occur on their premises. The average brewery with
this classification will produce about 1,000 barrels of beer each year. 95{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the breweries which are operating in the United
States today produced less than 15,000 barrels of beer each year. That classifies the operation as a microbrewery if 75{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more
of the beer the company produces is sold off-site About 40{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the sales that occur each year for the craft beer industry happen
during the months of June, July, or August. Almost 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of adults over the age of 21 in the United States live within 10 miles
of at least one brewery. Most of these operations qualify as a craft beer producer. There are more than 700 different craft breweries
operating in California right now, making it the largest source of products for the industry today.

 

The
most popular variety of craft beer that is currently produced by the industry is India Pale Ale, or IPA, which contributes over
$1 billion in sales each year. The top three craft beer brands in the United States in 2017 were Sierra Nevada, Samuel Adams,
and Blue Moon. The brands with the highest levels of sales growth were Deschutes, Lagunitas, and Goose Island. There are over
135,000 employees working right now in small brewing businesses which support the craft beer industry in the United States. That
was an increase of 6,000 positions from the year before. Vermont is the U.S. state with the highest number of craft beer breweries
per capita, with 11.5 currently listed as operational. 14{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of Americans say that they drink at least one beer every week. 57{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
of Millennials who count themselves as beer drinkers say that they consume a craft beer weekly. Colorado is the third-largest
provider of craft beer products in the United States. There are currently 348 craft breweries operational, creating an economic
impact of $3.03 billion each year. Over 1.5 million barrels of craft beer are produced there each year. 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of adults over the
age of 21 say that they consume at least one beer every day. 1 in 4 households which drink beer will include their favorite beverage
with their holiday meal plans, especially during Thanksgiving and Christmas. 1 in 5 households say that they like to include a
beer as their beverage when making a home cooked meal to consume. There are more than 4,000 different brewers in the United States
which have made the decision to adopt the independent craft brewer seal. This figure represents about 85{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the volume that the
craft beer industry produces each year at every level of sales, from local to national. Only 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the active breweries which
fit the definition of a craft beer producer are not reinvesting their tax savings from recent legislative changes into their business.
Most are trying to hire new employees, purchase equipment to expand their product line, or improve the benefits they have available
to their workers. Some are even increasing the amount of money they give to charity. There were almost 400 IPA entries in 2018
during the Great American Beer Festival®, making it one of the competition’s most popular categories. 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the breweries
that made the list of Top 50 beer producers in the United States qualify as being part of the craft beer industry. The three best
new craft breweries in terms of total dollar sales in 2016 all came from Texas. Austin Beer Works, Live Oak Brewing Company, and
Eighth Wonder Brewery combined to earn over $1.2 million in sales from their products. Half of adult beer drinkers in the United
States say that they make their purchasing decisions based on the quality of the products that are available to them instead of
shopping by price alone.

Since
2014, craft beer production in the United States has risen in total sales by 5.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. Through 2018, the number of active businesses
in the industry has grown by 14.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, while the number of employment opportunities has increased by 9.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. Every one of the 50 states
in the U.S., and just over 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the 3,143 counties that are in the country have at least one operational brewery which supports
the craft industry. In Loudoun County, which is about 30 miles outside of Washington, DC, 10 of the 12 breweries that were in
business in 2016 had opened their doors since 2012. Out of the 2,802 craft breweries that were registered in the County Business
Patterns program as of 2016, over 2,600 of them had 49 or fewer employees. Not a single state in the U.S. saw a decline in the
overall number of breweries that were operational between 2012-2016.

 

Since
2016, the total number of breweries that are currently operational in California have doubled. Clark County, Washington saw the
largest overall increase of craft breweries in 2016, with 13 different businesses opening their doors to start production activities.
Adams County, Colorado came in second with 6, tied with Will County, Illinois, Hampshire County, Massachusetts, and Monmouth County,
New Jersey. Although the number of breweries and employment opportunities continue to rise in the United States, the average wages
for workers in this industry are declining. The average employee earned $969 per week in 2016 compared to $1,293 per week in 2006.
The craft beer industry, in combination with macrobreweries, were responsible for over 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the employment opportunities gained
in the area of beverage manufacturing in the United States between 2010-2016. 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the jobs which are available in the beverage
manufacturing sector involve craft beer or macrobrewery employment.

 

Approximately
240 million Americans are of legal drinking age today, which represents a potential market of 73{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of all individuals. About 36{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
of these adults say that they never consume alcohol. 83{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the beer that Americans drink each year comes from a domestic brewery.
In 2014, the craft beer industry was able to have its first year where it made an economic impact of over $1 billion. The average
craft brewery in the United States employs about 2 workers, earning revenues of approximately $1.4 million per year. Although
the states in the southeast represent 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the population base in the U.S., only 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of craft breweries decide to open their
doors in this region. In 2018, about 40{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of consumers said that they drink craft beer each year, with 68{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the customers being
men. Only 14{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the industry customers identify with a racial or ethnic minority, which means there are numerous opportunities
to expand into different demographics. 65{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of households in the United States say that they support the idea of having a craft
brewery in their neighborhood. Only 46{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of people say that they support extending the tax breaks for the craft brewing industry
beyond 2019 when they are scheduled to sunset. 38{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of people who are active in the craft beer industry said that the aluminum
tariffs implemented by the Trump administration will have a negative impact on their business. 13{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of industry professionals thought
that tariffs placed on China and Canada could actually benefit their business. 74{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of craft beer industry professionals say that
they are in favor of posting nutritional and calorie information for their products. 47{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of consumers who identify themselves
as craft beer drinkers say that they prefer a crisp beer which is balanced and clean between malt and hop flavors. American lager,
wheat ale, kolsch, and blonde ale represented 40{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the craft beer industry’s growth volume in 2018. When asked what type
of alcohol-based beverage that they preferred, 40{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of consumers in 2017 said that beer was their first choice. Wine has consistently
placed second since 2002. The craft a brewing industry in the United States contributed over $76 billion of economic impact to
the American economy in 2017. This figure represents direct and indirect employment opportunities for more than 500,000 people.
Wholesalers, retailers, and breweries are all included in this data. The top 5 states for output in the craft beer industry totaled
more than $27 billion in 2017.

Industry
Overview

 

In
2008, there were just over 1,500 breweries in the United States. As of late 2020, there were 7,450+ breweries in America. That’s
growth of nearly 500{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in ten years – for a market that had been stagnant for decades. Millennials interest in craft beer
and microbreweries in a staple of its generation and the trend isn’t slowing down. From 2017 to 2018, nearly 1,000 new breweries
opened in the US. Combine that with the rise of brewpubs, home-brewing kits, and the overall microbrewery culture and the numbers
become even more impressive.

 

Recent
U.S. Brewery Count
 
  2014 2015 2016 2017 2018 2017
to 2018 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Change
Craft 3,814 4,628 5,539 6,490 7,346 +13.2
Regional
Craft Breweries
135 178 186 202 230 +13.9
Micro
breweries
2,076 2,626 3,251 3,933 4,522 +15.0
Brewpubs 1,603 1,824 2,102 2,355 2,594 +10.1
Large/Non-Craft 46 44 67 106 104  
Total
U.S. Breweries
3,869 4,672 5,606 6,596 7,450 +12.9

 

Here
are the leading statistics that show the explosion and continued growth of craft beer and breweries in 2019:

 

Overall
U.S. beer volume sales were down 1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2018, whereas craft brewer sales continued to grow at a rate of 4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} by volume, reaching
13.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the U.S. beer market by volume. Craft production grew the most for microbreweries.

 

Retail
dollar sales of craft increased 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, up to $27.6 billion, and now account for more than 24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the $114.2 billion U.S. beer market.

 

These
statistics use the craft brewer definition of small and independent brewer. More up-to-date statistics and analysis
can be found in the insights and analysis section of the website.

(LINE GRAPH)

 

Craft
Beer Statistics

 

Craft
beer made up for 24 percent of the total US beer sales market in 2018. Retail craft beer sales hit $27.6B in 2018, up 7 percent
from the previous year. Craft beer sales by volume were up 3.9 percent in the previous year, while overall beer sales were slightly
down by .8 percent. Craft beer sales by volume made up 13.2 percent of the overall beer marketplace share. Blue Moon was the leading
craft-beer brand in 2018 at $338M. The most popular craft-beer type in the US is the IPA.

 

Microbrewery
Statistics

 

In
2018 there were 7,450 overall breweries in the US including brewpubs, microbreweries, and regional breweries. a 411{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} increase
in overall breweries in the US. In 2018 there were 4,522 microbreweries in the US, making up nearly 61{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the total brewery market
share. Since 2010, there has been a 729{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} increase in microbreweries in the US. In 2018, 1,049 new craft breweries opened while
219 closed. Almost a quarter of US breweries were classified as brewpubs that only brew beer for direct-to-consumer sale on brewery-restaurant
premises. California has the most active breweries of any state in the US at 1,236. California also led the US in terms of total
economic impact of their breweries at $7.3B. Mississippi has the fewest breweries of any state in the US at 19. Vermont has the
most breweries per capita at 11.5.  Vermont also produces most pints per capita at 151.2. Montana and Maine are tied at 2nd
on the list of most breweries per capita at 9.6. Colorado leads the US in terms of economic impact per capita $764, with Maine
in second at $667. Over 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of Americans live within 10 miles of a craft brewery.

 

(LINE GRAPH)

Craft
Beer Industry Trends and Analysis

 

Although
the interest in the craft beer industry is far from gone, the opportunities for growth for new businesses may have already peaked.
With thousands of new breweries operating across the United States and around the world, the market is becoming increasingly crowded
with multiple products in all economies. Although saturation may still be sometime away, it is inevitable that there will be an
increasing level of pullback that occurs as the industry matures.

 

The
amount of deceleration that the craft beer industry experiences will likely be dependent upon how many consumers decide to shift
from a macro-brewery to products to items produced by the firms which are able to survive. There is already a steep drop occurring
for the largest beverage manufacturers in the sector, which means the most established names and highest quality products have
an opportunity to continue growing at an impressive rate.

 

Industrial
brewers have already taken notice of this trend. Anheuser-Busch InBev purchased Goose Island in 2011 for about $39 million, which
was their first of numerous acquisitions that are similar. Large companies have numerous ways to push into the market instead
of only relying on the pull of consumers.

 

Even
then, we still anticipate a 5-year growth pattern averaging 4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} annually through 2024, with the potential to extend that influence
through to a 10-year forecast as well. Consumers are asking for better products with more flavor choices today, which means the
craft beer industry is in the perfect position to cash in on this trend.

 

(LINE GRAPH)

 

Current
Operations

 

Located
in Grass Valley, CA, BrewBilt is one of the only California companies that custom designs, hand crafts, and integrates processing,
fermentation and distillation processing systems for the craft beer, cannabis and hemp industries using “Best in Class”
American made components integrated with stainless steel processing vessels using only American made steel. Founded in 2014, the
company began in a backyard shop by Jeff Lewis with a vision of creating a profitable company in “Rural America” by
hiring excellent personnel, designing and fabricating products to exceed customer’s expectations and compensating craftsmen
with living wages and profit sharing to financially sustain their families within the community. Mr. Lewis has 15+ years experience
as a craft beer brewer, a custom tank/vessel designer, fabrication and integration expert and business owner who initially founded
Portland Kettle Works, a nationally recognized manufacturer of craft beer brewing equipment located in the Northwest. The Company
has grown from 3 employees in 2015 to 9 in 2017. Since inception, BrewBilt has successfully grown its business by closing sales
of approximately $350,000 in 2015, $900,000 in 2016, $1,500,000 in 2017, $1,800,000 in 2018 and $1,589,728 in 2019. In 2020, sales
dropped to $1,379,580, which was primary due to COVID-19.

BrewBilt
has been built by having strong relationships with local suppliers of raw materials, equipment and services in California, an
aggressive referral network of satisfied customers nationwide, and an Advisory Board consisting of successful business leaders
that provide valuable product feedback and business expertise to management. The craft brewing & spirits industries continue
to grow worldwide. California is where craft brewing began and now has over 900 operating breweries – being centrally located
in this booming market was a large draw for BrewBilt to locate its manufacturing facility in the Sierra foothills. All BrewBilt
products are designed and fabricated as “food grade” quality which enables the company to build vessels for food &
beverage processing , the company is now building systems that are pharmaceutical grade for clients involved in distillation for
the cannabis and hemp industries, thus making the revenue potential much greater. BrewBilt buys materials and components mostly
from California suppliers which enables them to closely monitor quality, while the company’s revenues are generated from
sales to customers throughout the country.

 

The
company is aggressively pursuing international orders and has held meetings with the Center for International Trade Development
and U.S. Commercial Service to develop international opportunities. Presently, a great deal of sales interest in coming from Mexico,
Japan, Europe and Australia. BrewBilt competes against a number of companies, most of which are selling mass produced equipment
from China made from less costly inferior quality Chinese steel which often neither food nor pharmaceutical grade quality. While
this broader market is very competitive, there continues to be little competition and strong market demand for higher quality,
custom designed, hand crafted and integrated systems that BrewBilt produces. In July of 2016, BrewBilt moved from the small facility
in Nevada City, CA to lease an eight thousand (8,000) square foot manufacturing facility in Grass Valley, CA. This facility was
purchased by BrewBilt in January 2018 and upgraded with substantial tenant improvements. BrewBilt is prepared to expand again
by leasing an additional seventy-six hundred (7,600) square feet in the same facility. BrewBilt obtains the majority of its leads
through customer referrals and from online marketplaces. The company’s website is being expanded for online sales to include
online educational/marketing videos that feature the company and its expanded integrated product line for the cannabis and hemp
industries. BrewBilt has also created distribution sales agreements with individuals and companies to represent BrewBilt in both
the domestic and international markets.
 

 

Products

 

BrewBilt
is one of the only California companies that custom designs, hand crafts, and integrates processing, fermentation and distillation
processing systems for the craft beer, cannabis and hemp industries using “Best in Class” American made components
integrated with stainless steel processing vessels using only American made steel.

 

All
BrewBilt products are designed and fabricated as “food grade” quality which enables the company to build vessels for
food & beverage processing , the company is now building systems that are pharmaceutical grade for clients involved in distillation
for the cannabis and hemp industries, thus making the revenue potential much greater. BrewBilt buys materials and components mostly
from California suppliers which enables them to closely monitor quality, while the company’s revenues are generated from
sales to customers throughout the country. The company is aggressively pursuing international orders and has held meetings with
the Center for International Trade Development and U.S. Commercial Service to develop international opportunities. Presently,
a great deal of sales interest in coming from Mexico, Japan, Europe and Australia.

 

Competition

 

BrewBilt
competes against a number of companies, most of which are selling mass produced equipment from China made from less costly inferior
quality Chinese steel which often is neither food nor pharmaceutical grade quality. While this broader market is very competitive,
there continues to be little competition and strong market demand for higher quality, custom designed, hand crafted and integrated
systems that BrewBilt produces.

 

Employees
and Consultants

 

As
of the date of this filing, BrewBilt as 12 employees. Samuel Berry is a Director. Our suppliers include various consultants for
manufacturing, new business development and marketing.

ITEM
1A. RISK FACTORS

 

The
Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to
provide the information under this item.

 

ITEM
1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM
2. PROPERTIES

 

In
January 2018, BrewBilt began leasing an eight thousand square foot manufacturing facility located at 110 Spring Hill Dr #10, Grass
Valley, CA 95945. The Company is preparing to expand again by leasing an additional seventy-six hundred (7,600) square feet in
the same facility.

 

ITEM
3. LEGAL PROCEEDINGS

 

In
the ordinary course of business, the Company may become involved in legal proceedings from time to time. The Company is not currently
party to any legal proceedings, nor is it aware of any material pending legal proceedings.

 

ITEM
4. MINE SAFTEY DISCLOSURES

 

Not
applicable to our operations.

 

PART
II

 

ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Common
Stock

 

Our
common stock is currently quoted on the OTC Markets. Our common stock has been quoted on the OTC Markets under the symbol “BBRW”.
Because we are quoted on the OTC Markets, our securities may be less liquid, receive less coverage by security analysts and news
media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

 

The
following table sets forth the high and low closing prices for our common stock per quarter as reported by the OTCQB for the period
from January 1, 2020 through December 31, 2020, and January 1, 2019 through December 31, 2019, based on our fiscal year end December
31. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not
represent actual transactions.

 

    For the Year Ended December 31
    2020   2019
    High   Low   High   Low
First Quarter   0.1000   0.0010   0.0002   0.0001
Second Quarter   0.0300   0.0007   0.0001   0.0001
Third Quarter   0.0010   0.0002   0.0001   0.0001
Fourth Quarter   0.0007   0.0001   0.3030   0.0030

Penny
Stock Regulations Restrictions on Marketability

 

The
SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Penny stocks
are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such
securities is provided by the exchange or system.  The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of
the nature and level of risk in the market for penny stocks in both public offerings and secondary trading, (b) contains a description
of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a
violation of such duties or other requirements of the securities laws, (c) contains a brief, clear, narrative description of a
dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price,
(d) contains a toll-free telephone number for inquiries on disciplinary actions, (e) defines significant terms in the disclosure
document or in the conduct of trading in penny stocks, and (f) contains such other information and is in such form, including
language, type size and format, as the SEC shall require by rule or regulation.

 

The
broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations
for the penny stock, (b) the compensation of the broker-dealer and its salesperson in the transaction, (c) the number of shares
to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for
such stock, and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

 

In
addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the
broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive
the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.

 

These
disclosure requirements may have the effect of reducing the trading activity for our common stock once we obtain a listing on
a regulated market.  Therefore, stockholders may have difficulty selling their shares of our common stock.

 

Record
Holders

 

The
Company’s common shares are issued in registered form. Vstock Transfer LLC,
18
Lafayette Place Woodmere, NY, 11598, (212) 828-8436, is
the registrar and transfer agent for the Company’s common shares.

 

As
of December 31, 2020, there were 3,534,022,455 shares of the registrant’s $0.001 par value common stock issued and outstanding,
which were held by 32 shareholders of record.

 

Dividends

 

The
Company has not declared any dividends on its common stock since the Company’s inception. There is no restriction in the
Company’s Articles of Incorporation and Bylaws that will limit its ability to pay dividends on its common stock. However,
the Company does not anticipate declaring and paying dividends to its shareholders in the near future.

 

Securities
authorized for issuance under equity compensation plans

 

We
have no compensation plans under which our equity securities are authorized for issuance.

 

Performance
graph

 

We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required
under this item.

Recent
Sales of Unregistered Securities

 

During
the year ended December 31, 2020, 734,000 shares of Series A Preferred stock were converted to 2,416,667,054 common shares in
accordance with the conversion terms. The issuances resulted in a loss on conversion of $1,572,272 which was recorded to the statement
of operations.

 

During
the year ended December 31, 2020, the holders of a convertible notes converted $1,388,809 of principal, $351,376 of accrued interest
and $39,275 in conversion fees into 1,023,817,685 shares of common stock. The common stock was valued at $8,141,166 based on the
market price of the Company’s stock on the date of conversion.

 

Recent
issuances of unregistered securities subsequent to our fiscal year ended of December 31, 2020

 

On
January 1, 2021, the Company issued 10,000 Series A Preferred Shares at $10 per share to Bennett Buchanan pursuant to a Consulting
Agreement.

 

On
January 5, 2021, 7,500 shares of Preferred Series A stock was converted into 93,750,000 shares of common stock.

 

On
January 13, 2021, 20,000 shares of Preferred Series A stock was converted into 100,000,000 shares of common stock.

 

On
January 19, 2021, 20,000 shares of Preferred Series A stock was converted into 76,923,077 shares of common stock.

 

On
January 28, 2021, 20,000 shares of Preferred Series A stock was converted into 40,000,000 shares of common stock.

 

On
January 29, 2021, 12,360 shares of Preferred Series A stock was converted into 82,400,000 shares of common stock.

 

On
February 1, 2021, the holder of a convertible note converted a total of $26,315 of principal and interest into 29,835,680 shares
of our common stock.

 

On
February 3, 2021, the holder of a convertible note converted a total of $45,150 of principal and interest into 34,730,769 shares
of our common stock.

 

On
February 5, 2021, 20,000 shares of Preferred Series A stock was converted into 30,769,231 shares of common stock.

 

On
February 11, 2021, the holder of a convertible note converted a total of $39,837 of principal and interest into 29,862,679 shares
of our common stock.

 

On
February 17, 2021, the holder of a convertible note converted a total of $21,924 of principal, interest, and fees and into 18,000,000
shares of our common stock.

 

On
February 22, 2021, the holder of a convertible note converted a total of $86,591 of principal, interest, and fees into 45,240,835
shares of our common stock.

 

On
February 23, 2021, 20,000 shares of Preferred Series A stock was converted into 21,739,131 shares of common stock.

 

On
February 26, 2021, 20,000 shares of Preferred Series A stock was converted into 34,722,222 shares of common stock.

 

On
February 26, 2021, 25,000 shares of Preferred Series A stock was converted into 39,062,500 shares of common stock.

 

Issuer
Repurchases of Equity Securities

 

None.

ITEM
6. SELECTED FINANCIAL DATA

 

We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.

 

ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This
Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates
and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,”
“believe,” “foresee,” “estimate” and variations of these words and similar expressions to
identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks,
uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results
to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that
actual future results may be materially different from what we expect. The forward-looking statements included in this report
are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this
Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation
to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Results
for the Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019

 

Revenues:

 

The
Company’s revenues were $1,379,580 for the year ended December 31, 2020 compared to $1,589,728 for the year ended December
31, 2019. The decrease was due to the impact of COVID-19.

 

Cost
of Sales:

 

The
Company’s cost of materials was $455,360 for the year ended December 31, 2020, compared to $1,209,341 for the year ended
December 31, 2019. The decrease was due to the impact of COVID-19.

 

Operating
Expenses
:

 

Operating
expenses consisted primarily of consulting fees, professional fees, salaries and wages, office expenses and fees associated with
preparing reports and SEC filings relating to being a public company. Operating expenses for the year ended December 31, 2020,
and December 31, 2019, were $9,905,885 and $974,624, respectively. The increase was primarily attributable to share-based compensation
pursuant to Licensing and Distribution Agreements.

 

Other
Income (Expense)
:

 

Other
income (expense) for the years ended December 31, 2020 and 2019 was $(7,343,185) and $10,685,542, respectively. Other income (expense)
consisted of gain or loss on derivative valuation, gain or loss on disposal of assets, goodwill impairment and interest expense.
The gain or loss on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest
expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance
and the accretion of the convertible debentures over their respective terms. The variance primarily resulted from the fluctuation
of the Company’s stock price which impacted the valuation of the derivative liabilities on the convertible debt.

Net
Profit (Loss):

 

Net
profit (loss) for the year ended December 31, 2020 was $(16,324,850), compared with $10,091,305 for the year ended December 31,
2019. The decreased profit can be explained by the increase in share-based consulting fees and the loss in fair value of the derivative
instruments in the year ended December 31, 2020.

 

Impact
of Inflation

 

We
believe that the rate of inflation has had a negligible effect on our operations.

 

Liquidity
and Capital Resources

 

    December 31, 2020     December 31, 2019  
    $     $  
Current Assets     223,729       435,164  
Current Liabilities     4,281,072       6,142,765  
Working Capital (Deficit)     (4,057,343 )     (5,057,601 )

 

As
of December 31, 2020, the Company had $72,764 and $597,016 in cash and total assets, as well as $4,766,420 in total liabilities
as compared to $1,444 and $949,010 in cash and total assets, and $6,810,483 in total liabilities as of December 31, 2019. The
decrease in assets was due to a decrease in accounts receivable. The decrease in total liabilities was primarily attributed to
a decrease in notes payable and interest due to note holder conversions to common stock.

 

The
Company requires additional capital to fully execute its marketing program and increase revenues. Presently we are relying on
short term loans from our sole officer and director to meet operational shortfalls. There can be no assurance that continued funding
will be available on satisfactory terms. We intend to raise additional capital through the sale of equity, loans or other short-term
financing options.

 

    December 31, 2020
$
    December 31, 2019
$
 
Cash Flows from (used in) Operating Activities     (964,667 )     (68,516 )
Cash Flows from (used in) Investing Activities     (33,823 )     22,408  
Cash Flows from (used in) Financing Activities     1,069,810       4,267  
Net Increase (decrease) in Cash During Period     71,320       (41,841 )

 

During
the year ended December 31, 2020, cash from (used in) operating activities was $(964,667) compared to $(68,516) for the year ended
December 31, 2019. The variance is primarily resulted from the loss on derivative liabilities, loss on conversions and share-based
compensation reported in 2020.

 

During
the year ended December 31, 2020 cash from (used in) investing activities was $(33,823) compared to $22,408 for the year ended
December 30, 2018. The variance is primary due to fixed asset additions in 2020 and fixed asset disposals in 2019.

 

During
the year ended December 30, 2020, cash from financing activity was $1,069,810 compared to $4,267 for the year ended December 30,
2019. The variance primarily resulted from an increase in proceeds from convertible and promissory notes during the year ended
December 30, 2020.

Off-Balance
Sheet Arrangements

 

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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

 

Significant
Accounting Policies

 

Our
discussion and analysis of our results of operations and liquidity and capital resources are based on our financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of
these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and
judgments, including those related to revenue recognition, allowance for doubtful accounts, warranty liabilities, share-based
payments, income taxes and litigation. We base our estimates on historical and anticipated results and trends and on various other
assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results that differ from our estimates
could have a significant adverse effect on our operating results and financial position. We believe that the significant accounting
policies and assumptions as detailed in Note 1 to the financial statements contained herein may involve a higher degree of judgment
and complexity than others.

 

Emerging
Growth Company

 

We
qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely
on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required
to:

 

have
an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 

comply
with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation
or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e.,
an auditor discussion and analysis);

 

submit
certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;”
and

 

disclose
certain executive compensation related items such as the correlation between executive compensation and performance and comparisons
of the CEO’s compensation to median employee compensation.

 

In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words,
an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements
may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

We
will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first
fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated
filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our
ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed
second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding
three year period.

 

Contractual
Obligations

 

We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.

 

ITEM
7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The
Company does not hold any assets or liabilities requiring disclosure under this item.

ITEM
8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

BREWBILT
MANUFACTURING INC.

FINANCIAL
STATEMENTS

 

Table
of Contents

 

Report
of Independent Registered Public Accounting Firm

 

To
the shareholders and the board of directors of BrewBilt Manufacturing, Inc.

 

Opinion
on the Financial Statements

 

We
have audited the accompanying consolidated balance sheets of BrewBilt Manufacturing, Inc. as of December 31, 2020 and 2019, 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, 2020 and 2019, 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.

 

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 the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged 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 over financial reporting.
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.

 

Substantial
Doubt about the Company’s Ability to Continue as a Going Concern

 

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 significant operating losses 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.

 

/S/
BF Borgers CPA PC
BF Borgers CPA PC

 

We
have served as the Company’s auditor since 2015
Lakewood, CO
March 31, 2021

BREWBILT MANUFACTURING INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

    December 31,  
    2020     2019  
ASSETS                
Current Assets                
Cash   $ 72,764     $ 1,444  
Accounts receivable     97,701       323,779  
Earnings in excess of billings     489       53,038  
Inventory     44,223       47,280  
Prepaid expenses     8,552       9,467  
Other current assets           156  
Total current assets     223,729       435,164  
                 
Property, plant and equipment, net     109,339       116,202  
Right-of-use asset     246,968       392,664  
Security deposit     16,980       4,980  
                 
TOTAL ASSETS   $ 597,016     $ 949,010  
                 
LIABILITIES                
Current Liabilities:                
Accounts payable   $ 843,882     $ 947,655  
Accrued interest     106,639       250,592  
Accrued liabilities     286,997       62,539  
Billings in excess of revenue     71,280       1,511,096  
Current operating lease liabilities     42,977       32,833  
Convertible notes payable, net of discount     149,988       829,384  
Derivative liabilities     2,373,176       2,273,269  
Liability for unissued shares     150,825       151,325  
Promissory notes payable, net of discount     101,056        
Related party liabilities     154,252       84,072  
Total Current Liabilities     4,281,072       6,142,765  
                 
Long term debt     281,357       307,887  
Non-current operating lease liabilities     203,991       359,831  
                 
Total liabilities     4,766,420       6,810,483  
                 
Commitments and contingencies            
                 
SHAREHOLDERS’ EQUITY                
Preferred stock, Series A: $0.001 par value; 30,000,000 shares authorized     1,120       400  
1,120,000 shares issued and outstanding at December 31, 2020                
400,000 shares issued and outstanding at December 31, 2019                
Preferred stock, Series B: $0.001 par value; 1,000 shares authorized     1       1  
1,000 shares issued and outstanding at December 31, 2020                
1,000 shares issued and outstanding at December 31, 2019                
Common stock, $0.001 par value; 20,000,000,000 authorized     3,534,022       10,343  
3,534,022,455 shares issued and outstanding at December 31, 2020                
10,343,330 shares issued and outstanding at December 31, 2019                
Additional paid in capital     (748,254 )     (15,240,774 )
Retained earnings     (6,956,293 )     9,368,557  
Total shareholders’ equity (deficit)     (4,169,404 )     (5,861,473 )
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)   $ 597,016     $ 949,010  

 

The
accompanying notes are an integral part of these financial statements

BREWBILT MANUFACTURING INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

    Years ended  
    December 31,  
    2020     2019  
Sales   $ 1,379,580     $ 1,589,728  
Cost of sales     455,360       1,209,341  
Gross profit     924,220       380,387  
                 
Operating expenses:                
Consulting fees     9,069,113       65,300  
G&A expenses     334,175       378,147  
Professional fees     238,397       15,539  
Salaries and wages     264,200       515,638  
Total operating expenses     9,905,885       974,624  
                 
Loss from operations     (8,981,665 )     (594,237 )
                 
Other income (expense):                
Debt forgiveness           3,822  
Gain (loss) on derivative liability valuation     (4,147,008 )     13,068,808  
Gain (loss) on disposal of asset           (13,769 )
Goodwill impairment           (2,289,884 )
Loss on conversion     (1,986,272 )      
Interest expense     (1,209,905 )     (83,435 )
Total other expenses     (7,343,185 )     10,685,542  
                 
Net loss before income taxes     (16,324,850 )     10,091,305  
Income tax expense            
Net loss   $ (16,324,850 )   $ 10,091,305  
                 
Per share information                
Weighted number of common shares outstanding, basic     1,073,467,865       2,827,388  
Net income (loss) per common share   $ (0.01521 )   $ 3.5691  
Weighted number of common shares outstanding, diluted     1,073,467,865       192,762,345  
Net income (loss) per common share   $ (0.01521 )   $ 0.0524  

 

The
accompanying notes are an integral part of these financial statements

BREWBILT MANUFACTURING INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIT)
For the Years Ended December 31, 2020 and 2019

 

    Preferred Stock     Preferred Stock                 Additional           Total  
    Series A     Series B     Common Stock     Paid-In     Accumulated     Shareholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
Balance as of December 31, 2018                                         (303,375 )     (722,748 )     (1,026,123 )
                                                                         
Capital distributions                                         (65,671 )           (65,671 )
Effect of reverse merger     400,000       400       1,000       1       9,943,330       9,943       (14,878,053 )           (14,867,709 )
Conversion of promissory notes to stock                             400,000       400       9,000             9,400  
Derivative settlements                                         (2,675 )           (2,675 )
Net profit                                               10,091,305       10,091,305  
Balance as of December 31, 2019     400,000     $ 400       1,000     $ 1       10,343,330     $ 10,343     $ (15,240,774 )   $ 9,368,557     $ (5,861,473 )
                                                                         
Conversion of promissory notes to stock                             1,023,817,685       1,023,818       7,117,348             8,141,166  
Derivative settlements                                         (1,131,095 )           (1,131,095 )
Preferred stock converted to common stock     (734,000 )     (734 )                 2,416,667,054       2,416,667       (843,662 )           1,572,271  
Common stock converted to preferred stock     54,000       54                   (70,000,000 )     (70,000 )     483,946             414,000  
Preferred stock issued per agreement     500,000       500                                           500  
Preferred stock issued for services     900,000       900                               8,999,100             9,000,000  
Cancellation of stock issued for services                             (8,008,334 )     (8,008 )     (42,257 )           (50,265 )
Preferred stock transferred from related party to settle debt                                         20,000             20,000  
Related party debt settled to additional paid in capital                                         50,342             50,342  
Warrant exercise                             161,202,720       161,202       (161,202 )            
Net loss                                               (16,324,850 )     (16,324,850 )
Balance as of December 31, 2020     1,120,000     $ 1,120       1,000     $ 1       3,534,022,455     $ 3,534,022     $ (748,254 )   $ (6,956,293 )   $ (4,169,404 )

 

The
accompanying notes are an integral part of these financial statements

BREWBILT
MANUFACTURING INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    Years ended  
    December 31,  
    2020     2019  
Cash flows from operating activities:                
Net loss   $ (16,324,850 )   $ 10,091,305  
Adjustments to reconcile net income to net cash
provided by operating activities:
               
Amortization of convertible debt discount     755,428       15,676  
Change in derivative liability     4,147,008       (13,068,808 )
Depreciation and amortization of fixed assets     40,685        
Goodwill impairment           2,289,884  
Loss on conversion     1,986,272        
Loss on disposal of asset           13,769  
Gain on obsolete inventory     17,375        
Common stock issued for services     25,342        
Preferred stock issued for services     9,000,000        
Liability for unissued shares due to agreements           500  
Decrease (increase) in operating assets                
Accounts receivable     226,078       663,675  
Deposits     (12,000 )      
Earnings in excess of billings     52,549       291,096  
Inventory     (14,318 )     5,608  
Prepaid expenses     915       (6,900 )
Other assets     156       2,246  
Increase (decrease) in operating liabilities                
Accounts payable     (65,038 )     76,274  
Accrued interest     441,619       33,594  
Accrued liabilities     224,458       (31,653 )
Earnings in excess of revenues     (1,439,816 )     (394,250 )
Long term debt     (26,530 )     (50,532 )
Net cash (used in) provided by operating activities     (964,667 )     (68,516 )
                 
Cash flows from investing activities                
Effect of reverse merger           (64,433 )
Property, plant and equipment, additions     (33,823 )     (20,968 )
Property, plant and equipment, reductions           107,809  
Net cash (used in) provided by investing activities     (33,823 )     22,408  
                 
Cash flows from financing activities:                
Proceeds from convertible debt     906,540        
Proceeds from promissory notes     93,090        
Related party liabilities     70,180       4,267  
Net cash (used in) provided for financing activities     1,069,810       4,267  
                 
Net increase (decrease) in cash     71,320       (41,841 )
                 
Cash, beginning of period     1,444       43,285  
Cash, end of period   $ 72,764     $ 1,444  
                 
Supplemental disclosures of cash flow information:                
Cash paid for income taxes   $     $  
Cash paid for interest   $ 11,072     $  
                 
Schedule of non-cash investing & financing activities                
Lease adoption recognition   $     $ 423,360  
Stock issued for debt conversion   $ 6,873,101     $ 1,148  
Discount from derivative   $ 1,183,510     $  
Preferred stock converted to common stock   $ 2,416,667     $  
Common stock converted to preferred stock   $ 70,000     $  
Cashless warrant exercise   $ 161,202     $  

 

The
accompanying notes are an integral part of these financial statements

NOTE
1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization
and Description of Business

 

Located
in Grass Valley, CA, BrewBilt is one of the only California companies that custom designs, hand crafts, and integrates processing,
fermentation and distillation processing systems for the craft beer, cannabis and hemp industries using “Best in Class”
American made components integrated with stainless steel processing vessels using only American made steel. Founded in 2014, the
company began in a backyard shop by Jeff Lewis with a vision of creating a profitable company in “Rural America” by
hiring excellent personnel, designing and fabricating products to exceed customer’s expectations and compensating craftsmen
with living wages and profit sharing to financially sustain their families within the community. Mr. Lewis has 15+ years of experience
as a craft beer brewer, a custom tank/vessel designer, fabrication and integration expert and business owner who initially founded
Portland Kettle Works, a nationally recognized manufacturer of craft beer brewing equipment located in the Northwest. The Company
has grown from 3 employees in 2015 to 9 in 2017.

 

BrewBilt
has been built by having strong relationships with local suppliers of raw materials, equipment and services in California, an
aggressive referral network of satisfied customers nationwide, and an Advisory Board consisting of successful business leaders
that provide valuable product feedback and business expertise to management. The craft brewing & spirits industries continue
to grow worldwide. California is where craft brewing began and now has over 900 operating breweries – being centrally located
in this booming market was a large draw for BrewBilt to locate its manufacturing facility in the Sierra foothills.

 

All
BrewBilt products are designed and fabricated as “food grade” quality which enables the company to build vessels for
food & beverage processing , the company is now building systems that are pharmaceutical grade for clients involved in distillation
for the cannabis and hemp industries, thus making the revenue potential much greater. BrewBilt buys materials and components mostly
from California suppliers which enables them to closely monitor quality, while the company’s revenues are generated from
sales to customers throughout the country. The company is aggressively pursuing international orders and has held meetings with
the Center for International Trade Development and U.S. Commercial Service to develop international opportunities. Presently,
a great deal of sales interest in coming from Mexico, Japan, Europe and Australia.

 

BrewBilt
competes against a number of companies, most of which are selling mass produced equipment from China made from less costly inferior
quality Chinese steel which often is neither food nor pharmaceutical grade quality. While this broader market is very competitive,
there continues to be little competition and strong market demand for higher quality, custom designed, hand crafted and integrated
systems that BrewBilt produces.

 

In
July of 2016, BrewBilt moved from the small facility in Nevada City, CA to lease an eight thousand (8,000) square foot manufacturing
facility in Grass Valley, CA. This facility was purchased by BrewBilt in January 2018 and upgraded with substantial tenant improvements.
BrewBilt is prepared to expand again by leasing an additional seventy-six hundred (7,600) square feet in the same facility. BrewBilt
obtains the majority of its leads through customer referrals and from online marketplaces. The company’s website is being
expanded for online sales to include online educational/marketing videos that feature the company and its expanded integrated
product line for the cannabis and hemp industries. BrewBilt has also created distribution sales agreements with individuals and
companies to represent BrewBilt in both the domestic and international markets.

 

Financial
Statement Presentation

 

The
audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in
the United States of America (“U.S. GAAP”).

 

Fiscal
year end

 

The
Company has selected December 31 as its fiscal year end.

 

Use
of Estimates

 

The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future
periods may be based upon amounts that differ from these estimates.

Cash
Equivalents

 

The
Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.

 

COVID-19

 

The
Company began seeing the impact of the COVID-19 pandemic on its business in early March 2020. The direct financial impact of the
pandemic has primarily shown in significantly reduced production from the on-premises channel and higher labor and safety-related
costs at the Company’s manufacturing facility. In addition to these direct financial impacts, COVID-19 related safety measures
resulted in a reduction of manufacturing productivity. The Company will continue to assess and manage this situation and will
provide a further update in each quarterly earnings release, to the extent that the effects of the COVID-19 pandemic are then
known more clearly.

 

Revenue
Recognition and Related Allowances

 

The
Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs
with the transfer of control of its products. Revenue is measured as the amount of consideration expected to be received in exchange
for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue and related cost
of sales until all conditions are met. As of December 31, 2020 and December 31, 2019, the Company has deferred $71,280 and $1,511,096,
respectively, in revenue, and $489 and $53,038 in cost of sales, respectively, related to customer orders in progress. These amounts
are recorded as billings in excess of revenues and earnings in excess of billings in the accompanying balance sheets.

 

Accounts
Receivable and Allowance for Doubtful Accounts

 

Accounts
receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are
provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates
past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts
at December 31, 2020 and December 31, 2019 is $0.

 

Inventories

 

Inventories
consist of raw materials, work in process and finished goods. Raw materials, which principally consist of raw stainless steel,
raw stainless tubing, motors, pumps, and fittings, are stated at the lower of cost, determined on the first-in, first-out basis,
or net realizable value. During the year ended December 31, 2021, the Company wrote off $17,246 in obsolete inventory to the statement
of operations.

 

Goodwill

 

The
excess of the cost over the fair value of net assets of acquired in the Merger is recorded as goodwill. Goodwill is not subject
to amortization, but is reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate
the carrying value of goodwill may not be recoverable. An impairment charge would be recorded to the extent the carrying value
of goodwill exceeds its estimated fair value. The testing of goodwill under established guidelines for impairment requires significant
use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated
fair values. Changes in business conditions could potentially require adjustments to these asset valuations. During the year ended
December 31, 2019, the Company reviewed the goodwill recorded in the Merger and determined that an impairment expense of $2,289,884
was required.

 

Warranty

 

The
Company is a manufacturer of products which are shipped to our customers directly from the Company. For products that are made
from raw materials, the Company offers a 6-year limited warranty. The parts provided by outside vendors as finished goods that
are added to a system produced by the Company as components, have a manufacturers’ warranty that is passed on to the end
user of the complete system. To date, BrewBilt has spent less than $5,000 over the past 5 years for repairs (under warranty) on
products they have built, with most of the costs going to cover travel and lodging expenses. As of December 31, 2020 and December
31, 2019, the Company has recorded a liability of $5,000 and $5,000, respectively, for warranties, which is included in accrued
liabilities in the accompanying balance sheet.

Accounts
Payable and Accrued Expenses

 

Accounts
payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company
prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect
of the purchase of these goods and services.

 

Fair
Value of Financial Instruments

 

Fair
value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly
transaction between market participants at the measurement date and in the principal or most advantageous market for that asset
or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset
or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration
of non-performance risk including our own credit risk.

 

In
addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value
hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which
inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three
levels and which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

 

These
levels are:

 

Level
1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

 

Level
2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments
in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the
market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level
3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants
would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include
option pricing models, discounted cash flow models, and similar techniques.

 

Financial
assets and liabilities measured at fair value on a recurring basis:

  

    Input     December 31, 2020     December 31, 2019  
    Level     Fair Value     Fair Value  
Derivative Liability   3     $ 2,373,176     $ 2,273,269  
Total Financial Liabilities         $ 2,373,176     $ 2,273,269  

 

In
management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value
as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current
market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange
or credit risks arising from these financial instruments. As of December 31, 2020 and December 31, 2019, the balances reported
for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because
of their short maturities.

Income
Taxes

 

The
Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts
of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized
in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred
tax asset will not be realized.

 

As
of the date of this filing, the Company is current in filing their tax returns. The last return filed by the Company was December
31, 2019, and the Company has not accrued any potential penalties or interest from that period forward.

 

Basic
and Diluted Loss Per Share

 

In
accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing
net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common
share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares
were dilutive.

 

Recent
Accounting Pronouncements

 

In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which replaces existing revenue
recognition guidance. The updated guidance requires companies to recognize revenue in a way that depicts the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing
and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the standard on January 1,
2018, using a modified retrospective approach, with the cumulative effect of initially applying the standard recognized in retained
earnings at the date of adoption.

 

In
February 2016, the FASB issued ASU 2016-02 (ASC Topic 842), Leases. The ASU amends a number of aspects of lease accounting,
including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use
asset and corresponding lease liability, measured at the present value of the lease payments. The amendments in this ASU are effective
for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is
permitted. The Company adopted the new lease guidance on January 1, 2019.

 

In
June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments. The guidance requires companies to measure credit losses utilizing a methodology that reflects
expected credit losses and requires the consideration of a broader range of reasonable and supportable information to inform credit
loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within
those fiscal years. The Company adopted the standard in the first quarter of fiscal 2020 and there was no material impact.

 

NOTE
2 – GOING CONCERN

 

The
Company has experienced net losses to date, and it has not generated sufficient revenue from operations to meet our operational
overhead. We will need additional working capital to service debt and for ongoing operations, which raises substantial doubt about
our ability to continue as a going concern. Management of the Company is preparing a strategy to meet operational shortfalls which
may include equity funding, short term or long-term financing or debt financing, to enable the Company to reach profitable
operations. Historically, the Company’s sole officer and director has provided short term loans to meet working capital
shortfalls. We have recently entered into financing agreements with various third parties to meet our capital needs in fiscal
2020.

 

The
accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying
amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

NOTE
3 – MERGER TRANSACTION

 

On
November 22, 2019, Vet Online Supply and Brewbilt Manufacturing (“BrewBilt”) entered into an Agreement and Plan of
Merger (the “Merger Agreement”) and completed a merger, whereby Brewbilt merged with and into Vet Online Supply, with
BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the
merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer.

 

Pursuant
with the Merger Asset Purchase Agreement, the Board of Directors has authorized that BrewBilt shall sell, assign and transfer
all of its right, title and interest to its IP, fixed assets and “know how” to the Company (collectively, the “Seller’s
Assets”). Vet Online Supply and BrewBilt mutually agree that BrewBilt will assign certain assets and provide the “Know-How”
regarding the designing and building of the finest craft brewing equipment in the industry today. As consideration for the IP,
fixed assets and the “Know -How”, the Company shall issue, or cause to be issued, $5,000,000 worth of Preferred Series
A Stock (PAR $.001) within thirty (30) days from the date of the agreement. The number of Preferred Series A shares to be issued
is 500,000 shares at a price of $10.00 per share and convertible pursuant the conversion rights as specified in the Articles of
Incorporation and certificate of designation for VTNL.
BrewBilt
has designated that the said stock be issued in the name of its President, Jeffrey Lewis.

 

The
Board of Directors dismissed Daniel Rushford as an officer and director, specifically as the Chief Executive Officer, Chairman
of the Board, and Corporate (President) of the Company effective November 22, 2019. Effective November 22, 2019, Daniel Rushford
had a new revised Employment Agreement which appointed him as Manager of the CBD Pet Supply Division, a non-director/officer position
which includes returning to Treasury 1,000 Preferred Series B Control Shares, and an annual salary of $36,000. Unpaid wages will
accrue interest at 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum and may be converted to restricted common stock at fair market value at the time of conversion.

 

NOTE
4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

 

Prepaid
fees represent amounts paid in advance for future contractual benefits to be received. Contracting expenses paid in advance are
recorded as a prepaid asset and then amortized to the statements of operations when services are rendered, or over the life of
the contract using the straight-line method.

 

Prepaid
expenses and other current assets consisted of the following:

 

    December 31  
    2020     2019  
Prepaid insurance expense   $ 3,691     $ 8,467  
Prepaid rent expense     4,861        
Prepaid wages           1,000  
Other assets           156  
    $ 8,552     $ 9,623  

 

NOTE
5 – PROPERTY AND EQUIPMENT

 

Property
and equipment consisted of the following at December 31, 2020 and December 31, 2019:

 

    December 31,     December 31,  
    2020     2019  
Computer Equipment   $ 23,876     $ 18,313  
Leasehold Improvements     59,121       48,549  
Machinery     250,762       250,762  
Software     17,688        
Vehicles     6,717       6,717  
      358,164       324,341  
Less accumulated amortization     (702 )      
Less accumulated depreciation     (248,123 )     (208,139 )
    $ 109,339     $ 116,202  

NOTE
6 – LEASES

 

The
Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying
the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently,
financial information will not be updated, and the disclosures required under the new standard will not be provided for dates
and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether
any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and
(3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient
which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard
did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment
to opening equity. The adoption of the new guidance resulted in the recognition of ROU assets of $423,360 and lease
liabilities of $423,360.

 

The
interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental
borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease
payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize
its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date.

 

Operating
lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments
over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes
lease incentives and initial direct costs incurred, if any. Our lease terms may include options to extend or terminate the lease
when it is reasonably certain that we will exercise that option. Our current lease has a remaining lease term of four years.

 

The
Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease
expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as
right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

 

The
new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected
the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term
is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities.
Those leases are expensed on a straight-line basis over the term of the lease.

 

Operating
Leases

 

On
January 1, 2018, the Company entered into a standard office lease for approximately 8,000 square feet of space, located in the
Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of 10 years, from January
1, 2018 through January 1, 2028, with a monthly rent of $4,861.

 

On
January 1, 2020, the Company terminated the lease agreement dated January 1, 2018, and entered into a new office lease for the
same space located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term
of 5 years, from January 1, 2020 through December 31, 2025, with a monthly rent of $4,861.

ROU
assets and lease liabilities related to our operating lease is as follows:

 

    December 31,  
    2020     2019  
Right-of-use assets   $ 246,968     $ 392,664  
Current lease liabilities     42,977       32,833  
Non-current lease liabilities     203,991       359,831  

 

NOTE
7 – ACCURED LIABILITIES

 

As
of December 31, 2020 and December 31, 2019, accrued liabilities were comprised of the following:

 

    December 31,  
    2020     2019  
Accrued liabilities                
Accrued wages   $ 123,663     $ 5,784  
Credit card     19,893       16,659  
Customer deposits     103,550        
Payroll liabilities           (644 )
Sales tax payable     34,891       35,740  
Warranty     5,000       5,000  
Total accrued expenses   $ 286,997     $ 62,539  

 

NOTE
8 – BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS

 

Billings
in excess of revenue is related to contracted amounts that have been invoiced to customers for which remaining performance obligations
must be completed before the Company can recognize the revenue. Earnings in excess of billings is related to the cost of sales
associated with the customer products that are incomplete.

 

Changes
in unearned revenue for the periods ended December 31, 2020 and December 31, 2019 were as follows:

 

    December 31,  
    2020     2019  
Unearned revenue, beginning of the period   $ 1,511,096     $ 1,905,346  
Billings in excess of revenue during the period     71,280       536,420  
Recognition of unearned revenue in prior periods     (1,511,096 )     (930,670 )
Unearned revenue, end of the period   $ 71,280     $ 1,511,096  

 

As
of December 31, 2020 and December 31, 2019, the Company has recorded $489 and $53,038, respectively in earnings in excess of billings
for the cost of sales related to customer orders in progress.

NOTE
9 – CONVERTIBLE NOTES PAYABLE

 

As
of December 31, 2020 and December 31, 2019, notes payable were comprised of the following: 

 

    Original     Original   Due   Interest   Conversion   December 31,     December 31,  
    Note Amount     Note Date   Date   Rate   Rate   2020     2019  
APG Capital #2     31,500     6/25/2018   6/25/2019   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           31,500  
Auctus Fund #2     84,000     1/10/2018   10/10/2018   24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           31,285  
Auctus Fund #3     175,000     2/6/2018   11/6/2018   24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           175,000  
Auctus Fund #4     90,000     3/6/2018   12/6/2018   24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           90,000  
Auctus Fund #5     100,000     6/14/2018   3/14/2019   24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           100,000  
Auctus Fund #6     75,000     8/13/2018   5/13/2019   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           75,000  
Auctus Fund #7     25,000     10/11/2018   7/11/2019   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           25,000  
Auctus Fund #8     25,750     12/20/2018   9/20/2019   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           25,750  
Auctus Fund #9     57,000     4/12/2019   1/12/2020   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           57,000  
Auctus Fund #10     31,000     7/22/2019   7/22/2020   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           31,000  
Auctus Fund #11     113,000     8/19/2020   8/19/2021   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     113,000        
CBP #3     30,000     5/1/2020   5/1/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     30,000        
CBP #4     30,000     7/23/2020   7/23/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     30,000        
EMA Financial #2     50,000     12/15/2017   12/15/2018   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           8,474  
EMA Financial #3     100,000     3/5/2018   3/5/2019   24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           73,305  
EMA Financial #4     25,000     10/10/2018   7/10/2019   24{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable           25,000  
EMA Financial #6     80,500     8/17/2020   5/17/2021   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     80,500        
EMA Financial #7     50,000     10/21/2020   7/21/2021   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     50,000        
Emerging Corp Cap #1     83,333     2/12/2018   2/11/2019   22{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     34,857       74,933  
Emerging Corp Cap #2     110,000     10/31/2018   10/31/2019   12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     110,000       110,000  
GPL Ventures     25,000     10/14/2020   10/14/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     25,000        
Mammoth Corp     33,000     11/19/2020   8/19/2021   0{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     33,000        
Optempus #1     25,000     7/2/2020   7/2/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     25,000        
Optempus #2     25,000     7/7/2020   7/2/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     25,000        
Optempus #3     15,000     11/24/2020   11/24/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     15,000        
Optempus #4     40,000     12/29/2020   12/29/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     40,000        
Power Up Lending #14     43,000     7/30/2020   7/30/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     43,000        
Power Up Lending #15     53,000     9/21/2020   9/21/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     53,000        
Power Up Lending #16     43,000     10/14/2020   10/14/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     43,000        
Power Up Lending #17     43,500     12/7/2020   12/7/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     43,500        
Tri-Bridge #1     15,000     5/26/2020   5/26/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     15,000        
Tri-Bridge #2     25,000     7/24/2020   7/24/2021   10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}   Variable     10,000        
                            $ 818,857     $ 933,247  
Debt discount             (597,670 )     (100,137 )
Financing costs/Original issue discount             (71,199 )     (3,726 )
Notes payable, net of discount           $ 149,988     $ 829,384  

 

During
the year ending December 31, 2020, the Company received proceeds from new convertible notes of $906,540, and reclassified accounts
payable of $44,000 into convertible notes payable. The Company recorded no payments on their convertible notes, default penalties
of $194,920, and conversions of $1,388,809 of convertible note principal. The Company recorded loan fees on new convertible notes
of $128,960, which increased the debt discounts recorded on the convertible notes during the year ending December 31, 2020. All
of the Company’s convertible notes have a conversion rate that is variable, and therefore, the Company has accounted for
their conversion features as derivative instruments (see Note 10). The Company also recorded amortization of $755,428 on their
convertible note debt discounts and loan fees. As of December 31, 2020, the convertible notes payable are convertible into 1,033,763,211
 shares of the Company’s common stock.

During
the year ended December 31, 2019, the Company’s convertible notes had a variable conversion rate, and therefore, the Company
accounted for their conversion features as derivative instruments (see Note 10). The Company recorded amortization of $13,796
on their convertible note debt discounts and $1,880 on loan fees. As of December 31, 2019, the convertible notes payable were
convertible into 136,100,371 shares of the Company’s common stock.

 

During
the year ended December 31, 2020, the Company recorded interest expense of $180,599 on its convertible notes payable. During the
year ended December 31, 2020, the Company recorded conversions of $351,376 of note interest and $39,275 in conversion fees. As
of December 31, 2020, the accrued interest balance was $69,931.

 

During
the year ended December 31, 2019, the Company recorded interest expense of $23,211 on its convertible notes payable. During the
year ended December 31, 2019, the Company recorded conversions of $1,148 of convertible note interest and $500 in conversion fees.
As of December 31, 2019, the accrued interest balance was $240,709.

 

As
of December 31, 2020, we have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive
acquisitions and activities.

 

NOTE
10 – DERIVATIVE LIABIITIES

 

The
following table represents the Company’s derivative liability activity for the embedded conversion features for convertible
notes and warrants for the period ending December 31, 2020 and December 31, 2019:

 

    December 31,     December 31,  
    2020     2019  
Balance, beginning of period   $ 2,273,269     $ 15,347,154  
Initial recognition of derivative liability     4,142,864        
Conversion of derivative instruments to Common Stock     (5,230,611 )     (5,077 )
Mark-to-Market adjustment to fair value     1,187,654       (13,068,808 )
Balance, end of period   $ 2,373,176     $ 2,273,269  

 

During
the period ended December 31, 2020 and December 31, 2019, the Company recorded derivative liabilities for embedded conversion
features related to convertible notes payable and warrants of $4,142,864 and $0, respectively.

 

During
the period ended December 31, 2020 and December 31, 2019, in conjunction with convertible notes payable principal and accrued
interest being converted into common stock of the Company and cashless exercise of warrants, derivative liabilities were reduced
by $5,230,611 and $5,077, respectively.

 

For
the period ended December 31, 2020 and December 31, 2019, the Company performed a final mark-to-market adjustment for the derivative
liability related to the convertible notes and warrants, and the carrying amount of the derivative liability related to the conversion
feature and recognized a loss of $1,187,654 and a gain on the derivative liability valuation of $13,068,808, respectively.

 

The
Company uses the Black-Scholes option pricing model to estimate fair value for those instruments convertible into common shares
at inception, at conversion or extinguishment date, and at each reporting date. During the year ended December 31, 2020, the company
used the following assumptions in their Black-Scholes model: (1) risk free interest rate .08{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} – .37{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, (2) term of 0.12 years –
4.64 years, (3) expected stock volatility of 162.98{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} – 1,563.40{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, (4) expected dividend rate of 0{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, (5) common stock price of
$0.001 – $0.03, and (6) exercise price of $0.0007 – $0.03.

 

These
instruments were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability, or
any net investment in a foreign operation. The instruments do not qualify for hedge accounting, and as such, all future changes
in the fair value will be recognized in earnings until such time as the instruments are exercised, converted, or expire.

NOTE
11 – RELATED PARTY TRANSACTIONS

 

Mr.
Jef Lewis, Chief Executive Officer, Chairman of the Board, President, Secretary, and Treasurer

 

On
November 22, 2019, the Company appointed Jeffrey Lewis as the new Chief Executive Officer, Chairman of the Board, Corporate President,
Secretary, and Treasurer of the Company. The Company and Mr. Lewis entered into an Employee Agreement that included the issuance
of 1,000 Preferred Series B Control Shares, and an annual salary of $200,000. Unpaid wages will accrue interest at 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum
and may be converted to restricted common stock at fair market value at the time of conversion. During the year ended December
31, 2020, the Company accrued wages of $200,000, interest of $4,815 and made payments of $113,415.

 

Pursuant
to the Merger Agreement, Mr. Lewis is to receive 500,000 shares of Preferred Series A shares, valued at $5,000,000. The shares
are convertible pursuant the conversion rights as specified in the Articles of Incorporation and Certificate of Designation for
the Company. As of December 31, 2019, the shares had not been issued, and the Company recorded a liability for unissued shares
in the amount of $500, goodwill of $2,289,884 and $2,289,334 to additional paid in capital. On March 1, 2020, the Company issued
500,000 shares of Preferred Series A to Mr. Lewis and $500 was reclassed from liabilities for unissued shares to equity.

 

On
May 22, 2020, Mr. Lewis converted 49,000 Preferred Series A Shares at a price of $10 per share into 70,000,000 shares of common
stock at a price of $.0077 per share. The conversion resulted in a loss of $49,000 which was recorded to the statement of operations.

 

On
November 20, 2020, Mr. Lewis converted 70,000,000 common shares at a price of $.0018 per share into 54,000 Preferred Series A
Shares at a price of $10 per share. The conversion resulted in a loss of $414,000 which was recorded to the statement of operations.

 

The
Company is periodically advanced noninterest bearing operating funds from related parties. The advances are due on demand and
unsecured. During the year ended December 31, 2020, the Company made payments of $27,900 to amounts due to Mr. Lewis and $22,838
was advanced to the Company by Mr. Lewis. As of December 31, 2020 and December 31, 2019, the Company owed Mr. Lewis $743 and $5,805,
respectively for advances to the Company.

 

Mr.
Samuel Berry, Director

 

On
November 22, 2019, the Company entered into a Consulting Agreement with Mr. Samuel Berry. Mr. Berry will receive an annual salary
of $50,000, payable in quarterly installments at $12,500 per quarter.
During
the year ended December 31, 2020, the Company accrued $50,000 in consulting fees in connection to his agreement.

 

Mr.
Daniel Rushford, former President

 

On
March 17, 2020, the Company’s former President cancelled 8,008,334 shares of common stock issued to settle debt of $25,342
and $25,000 in stock based compensation pursuant to an employee agreement. The cancellation resulted in a liability of unissued
shares of $25,000 and an increase in related party liabilities of $25,342. On December 31, 2020, Mr. Rushford agreed to forgive
the debt and $50,342 was recorded to additional paid in capital.

 

NOTE
12 – LONG TERM DEBT

 

As
of December 31, 2020 and December 31, 2019, long term debt was comprised of the following:

 

    December 31,  
    2020     2019  
Long term debt                
Equipment lease   $     $ 1,952  
Equipment loan     115,614       115,614  
Line of credit     104,155       96,664  
Other loans     61,588       93,657  
Total long term debt   $ 281,357     $ 307,887  

Paycheck
Protection Program Loan

 

On
May 11, 2020, the Company was granted a loan (the “Loan”) from BSD Capital, LLC dba Lendistry, in the amount of $61,558,
pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted
March 27, 2020.

 

The
Loan, which was in the form of a Note dated May 11, 2020, issued by the Borrower, matures on May 11, 2022, and bears interest
at a rate of 1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum, payable monthly commencing on November 11, 2020. The Note may be prepaid by the Borrower at any time
prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue
group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations. The Company intends to
use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if
they are used for qualifying expenses as described in the CARES Act.

 

NOTE
13 – PREFERRED STOCK

 

On
March 28, 2017, the Company filed an amendment to its articles of incorporation designating 20,000 shares of its authorized preferred
stock, par value $0.001 as Series B Voting Preferred Stock. The Series B Voting Preferred Stock shall have the right to vote the
shares on any matter requiring shareholder approval on the basis of 4 times the votes of all the issued and outstanding shares
of common stock, as well as any issued and outstanding preferred stock.

 

On
July 1, 2019, the Company filed a Certificate of Amendment to increase the number of authorized Series A Preferred Stock to 30,000,000,
with a par value of $0.001. Each share of Preferred Series A Stock shall have a value of $10 per share and will convert into common
stock at the closing price of the common stock on the date of conversion. The Series A stock shall have no voting rights on corporate
matters, unless and until the Series A shares are converted into Common Shares, at which time they will have the same voting rights
as all Common Shareholders have; their consent shall not be required for taking any corporate action.

 

Pursuant
to the Merger Agreement dated November 22, 2019, the Company will issue $5,000,000 worth of Preferred Series A Stock to Mr. Lewis.
The number of Preferred Series A shares to be issued is 500,000 shares at a price of $10.00 per share and convertible pursuant
the conversion rights as specified in the Articles of Incorporation and Certificate of Designation for the Company. As of December
31, 2019, the shares had not been issued, and the Company recorded a liability for unissued shares in the amount of $500, goodwill
of $2,289,884 and $2,289,334 to additional paid in capital.

 

On
March 1, 2020, 500,000 shares of Preferred Series A Shares were issued pursuant to the Merger Agreement, and a $500 liability
for unissued shares was reclassed to equity.

 

On
April 6, 2020, the Company executed an addendum to the Distribution & Licensing Agreement dated November 19, 2019, with Bgreen
Partners, Inc. The Company issued 400,000 Preferred Series A shares at a price of $10.00 per share which are convertible pursuant
the conversion rights as specified in the Articles of Incorporation and certificate of designation for the Company.

 

On
October 15, 2020, the Company entered into an IP Purchase and License Agreement with Maguire & Associates, LLC in the amount
of $5,000,000. The Company issued 500,000 Preferred Series A shares at a price of $10.00 per share which are convertible pursuant
the conversion rights as specified in the Articles of Incorporation and certificate of designation for the Company.

On
November 20, 2020, Mr. Lewis converted 70,000,000 common shares at a price of $.0018 per share into 54,000 Preferred Series A
Shares at a price of $10 per share. The conversion resulted in a loss of $414,000 which was recorded to the statement of operations.

 

During
the year ended December 31, 2020, 734,000 shares of Series A Preferred stock were converted to 2,416,667,054 common shares in
accordance with the conversion terms. The issuances resulted in a loss on conversion of $1,572,272 which was recorded to the statement
of operations.

 

As
of December 31, 2020, 30,000,000 Series A Preferred shares and 1,000 Series B Preferred shares were authorized, of which 1,120,000
Series A shares were issued and outstanding, and 1,000 Series B shares were issued and outstanding.

 

NOTE
14 – COMMON STOCK

 

On
April 22, 2019, the Company approved the authorization of a 1 for 3,000 reverse stock split of the Company’s outstanding
shares of common stock. The Company’s financial statements have been retroactively adjusted for this stock split for all
periods presented.

 

During
the year ended December 31, 2019, the holder of a convertible note converted $1,148 of accrued interest and $500 in conversion
fees into 400,000 shares of common stock. The common stock was valued at $5,077 based on the market price of the Company’s
stock on the date of conversion.

 

On
March 17, 2020, the Company’s former President cancelled 8,008,334 shares of common stock issued to settle debt of $25,342
and $25,000 in stock based compensation pursuant to an employee agreement. The cancellation resulted in a liability of unissued
shares of $25,000 and an increase in related party liabilities of $25,342. On December b31, 2020, Mr. Rushford agreed to forgive
the debt and $50,342 was recorded to additional paid in capital.

 

On
March 25, 2020, the Company filed a Certificate of Amendment to increase the number of authorized common shares from 5,000,000,000
to 10,000,000,000 with a par value of $0.001.

 

On
November 20, 2020, Mr. Lewis converted 70,000,000 common shares at a price of $.0018 per share into 54,000 Preferred Series A
Shares at a price of $10 per share. The conversion resulted in a loss of $414,000 which was recorded to the statement of operations.

 

On
December 4, 2020, the Company filed a Certificate of Amendment to increase the number of authorized common shares from 10,000,000,000
to 20,000,000,000 with a par value of $0.001.

 

During
the year ended December 31, 2020, 734,000 shares of Series A Preferred stock were converted to 2,416,667,054 common shares in
accordance with the conversion terms. The issuances resulted in a loss on conversion of $1,572,272 which was recorded to the statement
of operations.

 

During
the year ended December 31, 2020, the holders of a convertible notes converted $1,388,809 of principal, $351,376 of accrued interest
and $39,275 in conversion fees into 1,023,817,685 shares of common stock. The common stock was valued at $8,141,166 based on the
market price of the Company’s stock on the date of conversion.

 

As
of December 31, 2020, 20,000,000,000 were authorized, of which 3,534,022,455 shares are issued and outstanding.

 

Warrants

 

We
account for common stock purchase warrants as derivative liabilities and debt issuance costs on the balance sheet at fair value,
and changes in fair value during the periods presented in the statement of operations, which is revalued at each balance sheet
date subsequent to the initial issuance of the warrant.

During
the year ended December 31, 2020, warrant holders exercised the warrants and the Company issued 161,202,720 shares of common stock
through a cashless exercise of the warrants in accordance with the conversion terms.

 

NOTE
15 – INCOME TAX

 

Deferred
income taxes are determined using the liability method for the temporary differences between the financial reporting basis and
income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to
be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are
recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts
of assets and liabilities and their respective tax bases.

 

The
deferred tax asset and the valuation allowance consist of the following at December 31, 2020: 

 

    December 31,  
    2020  
Net operating loss   $ 1,418,471  
Statutory rate     21 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Expected tax recovery     297,879  
Change in valuation allowance     (297,879 )
Income tax provision   $  
         
Components of deferred tax asset:        
Non-capital tax loss carry-forwards     297,879  
Less: valuation allowance     (297,879 )
Net deferred tax asset   $  

 

As
of the date of this filing, the Company is current in filing their tax returns. The last return filed by the Company was December
31, 2019, and the Company has not accrued any potential penalties or interest from that period forward.

 

NOTE
16 – COMMITMENTS AND CONTINGENCIES

 

Distribution
& Licensing Agreement

 

On
November 19, 2019, the Company entered into a Distribution & Licensing Agreement with Bgreen Partners, Inc., a California
Corporation. The Agreement provides exclusive rights to various cannabis and agricultural products inclusive of grow-containers
and CBD Extraction Systems to be used for mobile processing. The IP and rights are valued
at $4,000,000, based upon a five-year term. As consideration for the IP and rights, the Company issued 400,000 Preferred Series
A shares at a price of $10.00 per share and convertible pursuant the conversion rights as specified in the Articles of Incorporation
and certificate of designation for the Company.

 

On
April 6, 2020, the Company executed an addendum to the Distribution & Licensing Agreement dated November 19, 2019, with Bgreen
Partners, Inc. The Company issued 400,000 Preferred Series A shares at a price of $10.00 per share convertible pursuant the conversion
rights as specified in the Articles of Incorporation and certificate of designation for the Company.

On
October 15, 2020, the Company entered into an IP Purchase and License Agreement with Maguire & Associates, LLC (“Maguire”)
in the amount of $5,000,000. The Company issued 500,000 Preferred Series A shares at a price of $10.00 per share which are convertible
pursuant the conversion rights as specified in the Articles of Incorporation and certificate of designation for the Company. The
Company is responsible to pay Maguire an Annual License Maintenance Fee that is a non-refundable, non-recoverable and non-creditable
annual license maintenance fee of $250,000 for each of the calendar years during the term of this Agreement, starting on October
15, 2021. The Annual License Maintenance Fees payment may be paid in either cash or in the form of Preferred Series A shares,
whereas both Licensee and Maguire agree that the Company will issue 25,000 Preferred Series A shares in value of $10.00 per share.
Maguire reserves the rights to sell said stock pursuant the Certificate of Designation of the Preferred Series A Stock.

 

Employee
Agreement

 

On
November 22, 2019, the Company entered into an Employment Agreement with Mr. Daniel Rushford. Mr. Rushford will receive an annual
salary of $36,000 to be paid in equal monthly installments. Unpaid amounts will accrue annual interest of 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. The term of the
Agreement is for one year and is renewable upon mutual consent. As of December 31, 2020, the parties elected to not renew the
Agreement.

 

Lease

 

On
January 1, 2018, the Company entered into a standard office lease for approximately 8,000 square feet of space, located in the
Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of 10 years, from January
1, 2018 through January 1, 2028, with a monthly rent of $4,861.

 

Service
Agreement

 

On
June 12, 2018, the Company entered into a preventative maintenance service agreement with Atlas Copco Compressions LLC. The agreement
is for a period of 5 years, at a cost of $145.13 per month.

 

NOTE
17 – SUPPLEMENTAL CASH FLOW INFORMATION

 

During
the year ending December 31, 2020 , the Company had the following non-cash investing and financing activities: 

 


Issued
stock for debt increasing common stock by $1,023,818, increasing additional paid in capital by $5,849,283, reducing notes
payable by $1,388,809, reducing accrued interest by $351,376, and reducing derivative liability by $5,093,641.
   

Increased
debt discount and increased derivative liability by $1,183,510 to record derivative liabilities at the inception of new notes.
   

Increased
common stock by $2,416,667 and decreased preferred stock and additional paid in capital by $734 and $2,415,933, respectively,
to record preferred stock converted to common stock.
   

Increased
preferred stock and additional paid in capital by $54 and $69,946, respectively, and decreased common stock by $70,000, to
record common stock converted to preferred stock.
   

Increased
common stock by $161,202 and decreased additional paid in capital and derivative liabilities by $24,231 and $136,971, respectively,
to record warrants exercised.

 

NOTE
18 – SUBSEQUENT EVENTS

 

Consulting
Agreement

 

On
January 1, 2021, the Company entered into a Consulting Agreement with Bennett Buchanan to assist with marketing, advertising,
customer relations, and licensing and compliance regulatory requirements. The term of the Agreement is for two years and may be
terminated or extended upon mutual agreement of both parties pursuant with a thirty-day written notice. The Company will pay the
Consultant a monthly fee of $3,000 and $100,000 in Series A Stock during the term of the agreement. In addition, the Consultant
will receive a 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} commission on gross sales for each customer sale closed by the Consultant.

Notes
Payable

 

On
January 5, 2021, the Company entered into a Promissory Note in the amount of $50,000. The note is unsecured, bears interest at
12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum, and matures on January 5, 2022.

 

On
January 14, 2021, the Company entered into a Convertible Promissory Note in the amount of $43,500. The note is unsecured, bears
interest at 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum, and matures on January 14, 2022.

 

On
January 14, 2021, the Company entered into a Convertible Promissory Note in the amount of $25,000. The note is unsecured, bears
interest at 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum, and matures on July 14, 2021.

 

On
February 10, 2021, the Company entered into a Convertible Promissory Note in the amount of $73,500. The note is unsecured, bears
interest at 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum, and matures on February 10, 2022.

 

Subsequent
Issuances

 

On
January 1, 2021, the Company issued 10,000 Series A Preferred Shares at $10 per share to Bennett Buchanan pursuant to a Consulting
Agreement.

 

On
January 5, 2021, 7,500 shares of Preferred Series A stock was converted into 93,750,000 shares of common stock.

 

On
January 13, 2021, 20,000 shares of Preferred Series A stock was converted into 100,000,000 shares of common stock.

 

On
January 19, 2021, 20,000 shares of Preferred Series A stock was converted into 76,923,077 shares of common stock.

 

On
January 28, 2021, 20,000 shares of Preferred Series A stock was converted into 40,000,000 shares of common stock.

 

On
January 29, 2021, 12,360 shares of Preferred Series A stock was converted into 82,400,000 shares of common stock.

 

On
February 1, 2021, the holder of a convertible note converted a total of $26,315 of principal and interest into 29,835,680 shares
of our common stock.

 

On
February 3, 2021, the holder of a convertible note converted a total of $45,150 of principal and interest into 34,730,769 shares
of our common stock.

 

On
February 5, 2021, 20,000 shares of Preferred Series A stock was converted into 30,769,231 shares of common stock.

 

On
February 11, 2021, the holder of a convertible note converted a total of $39,837 of principal and interest into 29,862,679 shares
of our common stock.

 

On
February 17, 2021, the holder of a convertible note converted a total of $21,924 of principal, interest, and fees and into 18,000,000
shares of our common stock.

 

On
February 22, 2021, the holder of a convertible note converted a total of $86,591 of principal, interest, and fees into 45,240,835
shares of our common stock.

 

On
February 23, 2021, 20,000 shares of Preferred Series A stock was converted into 21,739,131 shares of common stock.

 

On
February 26, 2021, 20,000 shares of Preferred Series A stock was converted into 34,722,222 shares of common stock.

On
February 26, 2021, 25,000 shares of Preferred Series A stock was converted into 39,062,500 shares of common stock.

 

ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

 

There
are no changes in or disagreements with accountants on accounting and/or financial disclosure.

 

ITEM
9A. CONTROLS AND PROCEDURES

 

Evaluation
of Disclosure Controls and Procedures

 

Our
management, under supervision and with the participation of the Company’s Principal Executive Officer and Principal Financial
Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e).
Based upon this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of December 31,
2020, because of the material weakness in our internal control over financial reporting (“ICFR”) described below,
our disclosure controls and procedures were not effective.

 

Disclosure
controls and procedures are controls and other procedures that are designed to ensure that required information to be disclosed
in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that required information to be disclosed in our reports filed
under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Management’s
Report on Internal Control over Financial Reporting

 

Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under
Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.

 

All
internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting
reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness
to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of
compliance with the policies or procedures may deteriorate.

 

Management
assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making the assessment,
management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework 2013. Based on its assessment, management concluded that, as of December 31, 2020, our internal control
over financial reporting was not effective and that material weaknesses in ICFR existed as more fully described below.

 

As
defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit
of Financial Statements” established by the Public Company Accounting Oversight Board (“PCAOB”), a material
weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement
of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above,
management identified the following control deficiencies that represent material weaknesses as of December 31, 2020: 

 

1) Lack
of an independent audit committee or audit committee financial expert, and no independent directors. We do not have any members
of the Board who are independent directors and we do not have an audit committee. We have a single officer and director. These
factors may be counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision
over management;

2) Insufficient
written policies and procedures for accounting and financial reporting with respect to the requirements and application of US
GAAP and SEC disclosure requirements;

 

Management’s
Remediation Initiatives

 

As
of December 31, 2020, management assessed the effectiveness of our internal control over financial reporting. Based on that evaluation,
it was concluded that during the period covered by this report, the internal controls and procedures were not effective due to
deficiencies that existed in the design or operation of our internal controls over financial reporting. However, management believes
these weaknesses did not have an effect on our financial results. During the course of our evaluation, we did not discover any
fraud involving management or any other personnel who play a significant role in our disclosure controls and procedures or internal
controls over financial reporting.

 

Due
to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate
these material weaknesses. We will not be able to do so until, if ever, we acquire sufficient financing and staff to do so. We
will implement further controls as circumstances, cash flow, and working capital permits. Notwithstanding the assessment that
our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial
statements contained in our Annual Report on Form 10-K for the period ended December 31, 2020, fairly presents our financial position,
results of operations, and cash flows for the periods covered, as identified, in all material respects.

 

Management
believes that the material weaknesses set forth above were the result of the scale of our operations and intrinsic to our small
size. Management also believes that these weaknesses did not have an effect on our financial results.

 

This
Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public
accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s
report in this annual report.

 

Changes
in Internal Control over Financial Reporting

 

During
the period covered by this report, there were no changes (including corrective actions with regard to significant deficiencies
or material weaknesses) in our internal controls over financial reporting that occurred that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM
9B. OTHER INFORMATION

 

None.

 

PART
III

 

ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

There
are no family relationships among our directors and executive officers. Each director is elected at our annual meeting of shareholders
and holds office until the next annual meeting of shareholders, or until his successor is elected and qualified. Also provided
herein are brief descriptions of the business experience of each director, executive officer and advisor during the past five
years and an indication of directorships held by each director in other companies subject to the reporting requirements under
the Federal securities laws. None of our officers or directors is a party adverse to us or has a material interest adverse to
us. Our Board of Directors is comprised of only one class of director.

The
following table and text set forth the names and ages of all directors and executive officers as of December 31, 2020: 

 

Name Age Position
with the Company
Position
Held Since
Jef
Lewis
49 President,
Chief Executive Officer, Secretary, Treasurer and Director
November
22, 2019
Samuel
Berry
42 Director November
22, 2019

 

The
term of office for each director is one year, or until the next annual meeting of the shareholders.

 

Biographical
Information

 

Mr.
Jef Lewis

 

Jeffrey
Lewis is 47 years old. As the founder of BrewBilt Manufacturing, LLC, a multiple million-dollar sales and manufacturing company,
he has 15+ years of experience managing engineering, design and fabrication teams that custom design and fabricate integrated
stainless-steel distillation and brewing systems for the beverage, pharmaceutical, cannabis and hemp industries. Mr. Lewis has
been a part of the design team which builds CBD cold-water and alcohol -based extraction systems in the US, and he will continue
to drive his products into both the cannabis and brewing markets.

 

Mr.
Samuel L. Berry

 

As
a member of the Board of Directors of the Company, Samuel Berry resides in San Diego, California. A graduate from Keene State
College in New Hampshire with a Bachelor of Science, and a graduate from Florida International University with his Master of Science,
Mr. Berry offers the Company over 10 years of business experience in management related to fitness and health. Mr. Berry will
take charge in new business development and oversight management for all products.

 

Significant
Employees

 

We
do not employ any non-officers who are expected to make a significant contribution to our business.

 

Involvement
in Certain Legal Proceedings

 

To
the best of the Company’s knowledge, other than as set forth herein, none of the following events occurred during the past ten
years that are material to an evaluation of the ability or integrity of any of our executive officers or directors:

  

1.
A
petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent
or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was
a general partner at or within two years before the time of such filing, or any corporation or business association of which
he was an executive officer at or within two years before the time of such filing;

 

2.
Such
person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses);

 

3.
Such
person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

 

i.
Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any
of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

ii.
Engaging
in any type of business practice; or

 

iii.
Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
Federal or State securities laws or Federal commodities laws;

 

4.
Such
person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or
State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any
activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity;

 

5.
Such
person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal
or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed,
suspended, or vacated;

 

6.
Such
person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to
have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or vacated;

 

7.
Such
person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding,
not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 

i.
Any
Federal or State securities or commodities law or regulation; or

 

         ii.
Any
law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order; or

 

         iii.
Any
law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

8.
Such
person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or
any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated
with a member.

 

Committees
of the Board of Directors

 

We
do not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee
or any other committee of our Board of Directors. As such, our entire Board of Directors acts as our audit committee.

 

Audit
Committee Financial Expert

 

Our
Board of Directors does not currently have any member who qualifies as an audit committee financial expert. We believe that the
cost of retaining such a financial expert at this time is prohibitive. Further, because we are a development stage business, we
believe the services of an audit committee financial expert are not necessary at this time.

Code
of Ethics

 

We
do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers.

 

Potential
Conflict of Interest

 

Since
we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed
by such committees are performed by our Board of Directors. Thus, there is a potential conflict of interest in that our sole director
has the authority to determine issues concerning management compensation, including his own, and audit issues that may affect
management decisions. We are not aware of any other conflicts of interest with any of our officers or sole director.

 

Board
of Director’s Role in Risk Oversight

 

The
Board of Directors assesses on an ongoing basis the risks faced by the Company. These risks include financial, technological,
competitive and operational risks. The Board of Directors dedicates time at each of its meetings to review and consider the relevant
risks faced at that time. In addition, since the Company does not have an Audit Committee, the Board of Directors is also responsible
for the assessment and oversight of the Company’s financial risk exposures.

 

ITEM
11. EXECUTIVE COMPENSATION

 

The
table set forth below summarizes the annual and long-term compensation for services in all capacities to us payable to our officers
and directors for the fiscal years ended December 31, 2018 and December 31, 2017. Our Board of Directors may adopt an incentive
stock option plan for our executive officers that would result in additional compensation.

 

Summary
Compensation Table 

 

                                      Nonqualified              
                                Non-Equity     Deferred              
                    Stock     Option     Incentive
Plan
    Compensation     All Other        
Name and       Salary     Bonus     Awards     Awards     Compensation     Earnings     Compensation     Total  
principal
position
  Year   ($)     ($)     ($)     ($)     ($)     ($)     ($)     ($)  
Jef Lewis   2020     200,000                                           200,000  
President, CEO, Secretary,   2019     16,667                                           16,667  
Treasurer and Director                                                                    
Sam Berry   2020     50,000                                           50,000  
Director   2019     4,167                                           4,167  

 

Narrative
Disclosure to Summary Compensation Table

 

Mr.
Jef Lewis, Chief Executive Officer

 

On
November 22, 2019, the Company appointed Jeffrey Lewis as the new Chief Executive Officer, Chairman of the Board, Corporate President,
Secretary, and Treasurer of the Company. The Company and Mr. Lewis entered into an Employee Agreement that included the issuance
of 1,000 Preferred Series B Control Shares, and an annual salary of $200,000. Unpaid wages will accrue interest at 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum
and may be converted to restricted common stock at fair market value at the time of conversion. During the year ended December
31, 2020, the Company accrued wages of $200,000, interest of $4,815 and made payments of $113,415.

 

Mr.
Samuel Berry, Director

 

On
November 22, 2019, the Company entered into a Consulting Agreement with Mr. Samuel Berry. Mr. Berry will receive an annual salary
of $50,000, payable in quarterly installments at $12,500 per quarter.
During
the year ended December 31, 2020, the Company accrued $50,000 in consulting fees in connection to his agreement.

Long-Term
Incentive Plan Awards

 

We
do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

 

Officer
Compensation

 

Described
above.

 

Director
Compensation

 

Described
above.

 

ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

Security
Ownership of Management

 

The
following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of December
31, 2020 by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us
to beneficially own more than 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed
below possess sole voting and investment power with respect to the shares they own. 

 

    Amount
and
 
    Nature
of
 
Name
and Address of Beneficial
Title
of
Beneficial {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
of Common
Owners
of Common Stock
Class Ownership
(1)
Stock
(2)
Sam
Berry
Common  25,000
0.001{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
57
Muddy River Ln.
Stock    
Bowdoinham,
ME 04008
     
Total
Officers and Directors
   25,000
0.00{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
       
5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Shareholders
Common    
  Stock 0 0.00{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

  1. The
number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to
which the individual has sole or shared voting power or investment power and also any shares which the individual has the
right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have
sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to
community property laws where applicable and the information contained in the footnotes to this table.

 

  2. The
percentage shown is based on denominator of 3,534,022,455 shares of common stock issued and outstanding for the company as
of December 31, 2020.

 

Securities
Authorized for Issuance Under Equity Compensation Plans

 

As
of December 31, 2020, we did not have any authorized Equity Compensation Plans. Further, we have no plans to create any such plan
or plans during the fiscal year ending December 31, 2020.

 

Changes
in Control

 

We
are unaware of any contract or other arrangement that could result in a change of control of the Company.

ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Related
Party Transactions

 

Mr.
Jef Lewis

 

On
November 22, 2019, the Company appointed Jeffrey Lewis as the new Chief Executive Officer, Chairman of the Board, Corporate President,
Secretary, and Treasurer of the Company. The Company and Mr. Lewis entered into an Employee Agreement that included the issuance
of 1,000 Preferred Series B Control Shares, and an annual salary of $200,000. Unpaid wages will accrue interest at 6{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum
and may be converted to restricted common stock at fair market value at the time of conversion. During the year ended December
31, 2020, the Company accrued wages of $200,000, interest of $4,815 and made payments of $113,415.

 

Pursuant
to the Merger Agreement, Mr. Lewis is to receive 500,000 shares of Preferred Series A shares, valued at $5,000,000. The shares
are convertible pursuant the conversion rights as specified in the Articles of Incorporation and Certificate of Designation for
the Company. As of December 31, 2019, the shares had not been issued, and the Company recorded a liability for unissued shares
in the amount of $500, goodwill of $2,289,884 and $2,289,334 to additional paid in capital. On March 1, 2020, the Company issued
500,000 shares of Preferred Series A to Mr. Lewis and $500 was reclassed from liabilities for unissued shares to equity.

 

On
May 22, 2020, Mr. Lewis converted 49,000 Preferred Series A Shares at a price of $10 per share into 70,000,000 shares of common
stock at a price of $.0077 per share. The conversion resulted in a loss of $49,000 which was recorded to the statement of operations.

 

On
November 20, 2020, Mr. Lewis converted 70,000,000 common shares at a price of $.0018 per share into 54,000 Preferred Series A
Shares at a price of $10 per share. The conversion resulted in a loss of $414,000 which was recorded to the statement of operations.

 

The
Company is periodically advanced noninterest bearing operating funds from related parties. The advances are due on demand and
unsecured. During the year ended December 31, 2020, the Company made payments of $27,900 to amounts due to Mr. Lewis and $22,838
was advanced to the Company by Mr. Lewis. As of December 31, 2020 and December 31, 2019, the Company owed Mr. Lewis $743 and $5,805,
respectively for advances to the Company.

 

Mr.
Samuel Berry, Director

 

On
November 22, 2019, the Company entered into a Consulting Agreement with Mr. Samuel Berry. Mr. Berry will receive an annual salary
of $50,000, payable in quarterly installments at $12,500 per quarter.
During
the year ended December 31, 2020, the Company accrued $50,000 in consulting fees in connection to his agreement.

 

Other
than the foregoing, none of the following persons has any direct or indirect material interest in any transaction to which
we were or are a party since the beginning of our last fiscal year, or in any proposed transaction to which we propose to be a
party: 

 

  (A)  any
of our director(s) or executive officer(s);
     
  (B)  any
nominee for election as one of our directors;
     
  (C)  any
person who is known by us to beneficially own, directly or indirectly, shares carrying more than 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the voting rights attached
to our Common Stock; or
     
  (D)  any
member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons
named in paragraph (A), (B) or (C) above.

Director
Independence

 

For
purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on
which shares of Common Stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent
Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship,
which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. According to the NASDAQ definition, we have no independent directors.

 

Review,
Approval or Ratification of Transactions with Related Persons

 

We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.

 

ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

During
the year ended December 31, 2020, the Company incurred auditing expenses of approximately $45,000, which includes audit and review
engagement services. There were not other audit related services or tax fees incurred. There were no other audit related services
or tax fees incurred.

 

PART
IV

 

ITEM
15. EXHIBITS

  

 

SIGNATURES

 

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

  BrewBilt
Manufacturing Inc.
   
Date:
March 31, 2021
By:
/s/ Jef Lewis
   
  Chief
Executive Officer

 

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated. 

 

/s/
Jef Lewis
  Chief
Executive Officer and Director
  March
31, 2021
Jef
Lewis
       
         
/s/
Jef Lewis
  Chief
Financial Officer
  March
31, 2021
Jef
Lewis
       


CERTIFICATION
OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

 

I,
Jef Lewis, certify that:

  

1.
I have reviewed this Annual Report on Form 10-K of BrewBilt Manufacturing Inc.;

 

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;

 

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;

 

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;

 

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and

 

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and

 

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):

 

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

 

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.

 

  Date: March 31, 2021
  /s/ Jef Lewis
  By: Jef Lewis
  Its: Principal Executive Officer


CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

 

I,
Jef Lewis, certify that:

 

1.
I have reviewed this Annual Report on Form 10-K of BrewBilt Manufacturing, Inc.;

 

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;

 

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;

 

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;

 

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and

 

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and

 

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):

 

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

 

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.

 

  Date: March 31, 2021
  /s/ Jef Lewis
  By: Jef Lewis
  Its: Principal Financial Officer


CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT
TO

18
U.S.C. SECTION 1350,

AS
ADOPTED PURSUANT TO

SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002

 

In
connection with the Annual Report of BrewBilt Manufacturing Inc. (the “Company”) on Form 10-K for the fiscal year
ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,
Jef Lewis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)   The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)   The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.

 

March
31, 2021
By: /s/ Jef
Lewis
 
    Jef
Lewis
 
   

Chief
Executive Officer

(Principal
Executive Officer)

 


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