The following discussion should be read in conjunction with our Consolidated Financial Statements and notes thereto included in Part II, Item 8 of this Report. The results shown herein are not necessarily indicative of the results to be expected in any future periods. This discussion contains forward-looking statements based on current expectations that involve risks and uncertainties. Actual results and the timing of events could differ materially from the forward-looking statements as a result of a number of factors. For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see "Item 1A. Risk Factors" and our other periodic reports and documents filed with the SEC.





Overview

We are an integrated communications provider. Through our subsidiaries, we provide high quality, reliable and scalable Internet access, web hosting, equipment colocation, customized live help desk outsourcing services, mass notification services using text messages and automated telephone calls, as well as advanced voice and data solutions.

All of the markets that we are active in are extremely competitive. We anticipate that competition will continue to intensify. The tremendous growth and potential market size of these markets has attracted many new start-ups as well as existing businesses from a variety of industries. We believe that extensive easy-to-use features, a reliable network, knowledgeable salespeople and the quality of technical support are currently the primary competitive factors in our targeted market and that price is usually secondary to these factors.

As long as we are a provider of telecommunications related services, we are affected by regulatory proceedings in the ordinary course of our business at the state and Federal levels. These include proceedings before both the Federal Communications Commission and the Oklahoma Corporation Commission ("OCC"). In addition, in our operations we rely on obtaining many of our underlying telecommunications services and/or facilities from incumbent local exchange carriers or other carriers pursuant to interconnection or other agreements or arrangements.





Results of Operations

The following table sets forth certain statement of operations data as a percentage of revenues for the years ended December 31, 2021 and 2020:



                                         For the Years Ended December 31,
                                         2021                       2020
                                             Percentage                 Percentage
                                  Amount     of revenue     Amount      of revenue
REVENUE                         4,135,516    100.0        3,502,499     100.0
COST OF REVENUE                 741,127      17.9         502,504       14.3
Gross Profit                    3,394,389    82.1         2,999,995     85.7

OPERATING EXPENSES
Sales and marketing             488,065      11.8         678,185       19.4

General and administrative 1,723,131 41.7 1,582,706 45.2 Depreciation and amortization 10,213 0.2 8,969 0.3



Total operating expenses        2,221,409    53.7         2,269,860     64.9

Income from operations          1,172,980    28.4         730,135       20.8
Other Income                    20,835       0.5          3,154         0.1

Income tax benefit (expense) (300,838) (7.3) 339,197 9.7 Net income from operations $892,977 21.6% $1,072,486 30.6%






     Year Ended December 31, 2021 Compared to Year Ended December 31, 2020



Revenue

Revenue increased $633,017 or 18.1% to $4,135,516 for the year 2021 from $3,502,499 for the year 2020. This increase was primarily attributable to the net addition of new customers and the sale of additional services to existing customers and reflects an increased interest in our automated group text and voice message delivery

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service, some of which may be attributable to changes in human interactions and communications during the COVID-19 pandemic. If so, this rate of increase may not continue once the COVID-19 pandemic subsides.

In 2021, we had other income of $20,835, which included $728 from interest on investment bank accounts and $107 from interest received from employee notes receivable. In 2020, we had other income of $3,154, which included $2,062 from interest on investment bank accounts and $92 from interest received from employee notes receivable.





Cost of Revenue

Cost of revenue increased $238,623 or 47.5% to $741,127 for the year 2021 from $502,504 for the year 2020. This increase was primarily related to increases in costs of servicing new customers added through growth of business and price increases from our vendors.





Gross Profit

Gross profit as a percentage of revenue decreased 3.6% to 82.1% for the year 2021 from 85.7% for the year 2020. This decrease was primarily related to increased utilization of higher cost components of our service offerings combined with price increases from our vendors.





Operating Expenses

Sales and marketing expenses decreased $190,120 or 28% to $488,065 for the year 2021 from $678,185 for the year 2020. This decrease was primarily a result of decreases in advertising, professional consulting services, and agent commissions of $157,950, $31,500, and $670, respectively. Sales and marketing expense as a percentage of total revenues decreased to 11.8% for the year 2021 compared to 19.4% for the year 2020.

General and administrative expenses increased $140,425 or 8.9% to $1,723,131 for the year 2021 from $1,582,706 for the year 2020. This increase was primarily a result of increases in employee costs, bank and credit card fees, rent, transfer agent fees, business insurance, and legal fees of $129,566, $20,400, $7,417, $4,915, $3,756, $3,655, respectively. These increases were offset by decreases in miscellaneous expenses, utilities, supplies, and property taxes of $17,188, $6,643, $3,745, and $1,445, respectively. General and administrative expenses as a percentage of total revenues decreased to 41.7% for the year 2021 compared to 45.2% for the year 2020.

Depreciation and amortization expense increased $1,244 or 13.9% to $10,213 for the year 2021 from $8,969 for the year 2020 primarily related to the purchase of computer equipment in the first quarter of 2021.





Income Taxes

Our deferred tax assets relate primarily to net operating loss carryforwards for income tax purposes at December 31, 2021, totaling approximately $1,194,000 which will begin to expire in 2023. On a regular basis, we evaluate all available evidence, both positive and negative, regarding the ultimate realization of the tax benefits of our deferred tax assets. Based upon the historical trend of increasing earnings we concluded that it is more likely than not that a tax benefit will be realized from our deferred tax assets and therefore eliminated the previously recorded valuation allowance for our deferred tax assets in the fourth quarter of 2020. Elimination of the valuation allowance resulted in a deferred tax asset at December 31, 2020, of approximately $339,197 and a corresponding tax benefit for the fiscal year ended December 31, 2020. For the year ending December 31, 2021, income tax expense was $300,838, and the deferred tax asset balance was $38,359.

Liquidity and Capital Resources

As of December 31, 2021, we had $2,655,112 in cash and $1,595,593 in current liabilities. Current liabilities consist primarily of $514,165 in accrued and other liabilities, of which $269,238 is owed to our officers and directors, and $905,496 represents deferred revenue. Our officers and directors, who are also major shareholders, have informally agreed to not seek payment of any of the amounts owed to them if such payment would jeopardize our ability to continue as a going concern. The deferred revenue represents advance payments for services from our customers which will be satisfied by our delivery of services in the normal course of business and will not require settlement in cash.

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At December 31, 2021, we had positive working capital of $1,114,566. At December 31, 2020, we had a working capital deficit of $38,870. We do not have a line of credit or credit facility to serve as an additional source of liquidity. Historically we have relied on shareholder loans as an additional source of funds.

At December 31, 2021, of the $53,148 we owed to our trade creditors, $46,763 was past due. At December 31, 2021, no amounts were owed to related parties.





Cash flows for the years ended December 31, 2021 and 2020, consist of the
following:



                                                            For the Years Ended
                                                                December 31
                                                             2021          2020

Net cash flow provided by operating activities           $1,419,055     $988,097
Net cash flow used in investing activities                   (5,847)    (14,185)

Net cash flow provided by (used in) financing activities (166,013) (178,000)

Cash used for the purchases of equipment was $5,847 and $14,185, respectively, for the years ended December 31, 2021 and 2020.

No intangible assets were purchased in 2021 and 2020.

On January 4, 2021, we paid the December 7, 2020 dividends declared on our Series A convertible preferred stock of $168,079.

During June 2020, we repurchased 356,797 shares of our Series A convertible preferred stock in return for the issuance of 392,477 shares of our common stock with a fair value of $19,624 and a payment of $178,400. We assigned 50,000 shares of the repurchased Series A convertible preferred stock to settle a related party liability of $53,825, and the remaining 306,797 shares were cancelled. Also during June 2020, an additional 65,597 shares of common stock with a fair value of $3,280 were issued and $9,541 was paid to a former preferred shareholder to equitably adjust the repurchase price of the Series A convertible preferred shares at the end of 2019 to those made in the second quarter of 2020.

On August 27, 2020, 100,000 warrants with an exercise price of $.004 per share were exercised for 100,000 restricted shares of common stock, par value $.0001 per share. Proceeds from the exercise of the warrants were $400.

During the year ended December 31, 2021, employee stock options for 689,000 shares of our common stock were exercised for $2,067. During the year ended December 31, 2020, employee stock options for 1,359,372 shares of our common stock were exercised by reducing deferred compensation payable by $18,687.

The planned expansion of our business will require significant capital to fund capital expenditures, working capital needs, and debt service. Our principal capital expenditure requirements will include:

•mergers and acquisitions;

•improvement of existing services, development of new services; and

•further development of operations support systems and other automated back-office systems.

Because our cost of developing new networks and services, funding other strategic initiatives, and operating our business depend on a variety of factors (including, among other things, the number of customers and the service for which they subscribe, the nature and penetration of services that may be offered by us, regulatory changes, and actions taken by competitors in response to our strategic initiatives), it is almost certain that actual costs and revenues will materially vary from expected amounts and these variations are likely to increase our future capital requirements.

Our ability to fund the capital expenditures and other costs contemplated by our business plan in the near term will depend upon, among other things, our ability to generate consistent net income and positive cash flow from operations as well as our ability to seek and obtain additional financing. Capital will be needed in order to implement our business plan, deploy our network, expand our operations and obtain and retain a significant

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number of customers in our target markets. Each of these factors is, to a large extent, subject to economic, financial, competitive, political, regulatory, and other factors, many of which are beyond our control.





As of December 31, 2021, our material contractual obligations and commitments
were:



                                              Payments Due By Period
                                    Less than 1           1 - 3         3 - 5       More than 5
                     Total              Year              Years         Years          Years
Operating
leases             $456,696        $152,232             $304,464        $-          $-

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect certain reported amounts and disclosures. In applying these accounting principles, we must often make individual estimates and assumptions regarding expected outcomes or uncertainties. As might be expected, the actual results or outcomes are generally different than the estimated or assumed amounts. These differences are usually minor and are included in our consolidated financial statements as soon as they are known. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

We periodically review the carrying value of our intangible assets when events and circumstances warrant such a review. One of the methods used for this review is performed using estimates of future cash flows. If the carrying value of our intangible assets is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the intangible assets exceeds the fair value. We believe that the estimates of future cash flows and fair value are reasonable. Changes in estimates of these cash flows and fair value, however, could affect the calculation and result in additional impairment charges in future periods.

We periodically review the carrying value of our property and equipment whenever business conditions or events indicate that those assets may be impaired. If the estimated future undiscounted cash flows to be generated by the property and equipment are less than the carrying value of the assets, the assets are written down to fair market value and a charge is recorded to current operations. Significant and unanticipated changes in circumstances, including significant adverse changes in business climate, adverse actions by regulators, unanticipated competition, loss of key customers and/or changes in technology or markets, could require a provision for impairment in a future period.

We review loss contingencies and evaluate the events and circumstances related to these contingencies. We disclose material loss contingencies that are possible or probable, but cannot be estimated. For loss contingencies that are both estimable and probable the loss contingency is accrued and expense is recognized in the financial statements.

All of our revenues are recognized over the life of the contract as services are provided. Revenue that is received in advance of the services provided is deferred until the services are provided. Revenue related to set up charges is also deferred and amortized over the life of the contract. We classify certain taxes and fees billed to customers and remitted to governmental authorities on a net basis in revenue.

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