TAUTACHROME INC. - Annual Report: 2021 (Form 10-K)

ttcm_10k.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2021

Commission file number 000-55721

TAUTACHROME, INC.

(Name of Small Business Issuer in Its Charter)

Delaware

84-2340972

(State or other jurisdiction of

incorporation or organization)

(Employer

Identification No.)

1846 e. Innovation Park Drive,

Oro Valley, Arizona 85755

(Address of principal executive offices, including zip code.)

(520) 318-5578

(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class

Trading

Symbol(s)

Name of Each Exchange

on Which Registered

None

N/A

SECURITIES REGISTERED PURSUAN T TO SECTION 12(g) OF THE ACT:

Title of Class

Common Stock, $0.00 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

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 ☐ No ☒

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 past 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)		Emerging growth company	☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2021, the last business day of the Registrant’s most recently completed second fiscal quarter, was approximately $36,783,125 (based on the closing price of $0.0082 on June 30, 2021 on the OTC Markets).

As of March 18, 2022, the registrant had 5,867,608,915 shares of its common stock outstanding.

Documents Incorporated by reference: None.

TAUTACHROME, INC.

FORM 10-K

For the Years Ended December 31, 2021 and 2020

TABLE OF CONTENTS

PART 1 – FINANCIAL INFORMATION

	Item 1. Business Factors	8
	Item 1A. Risk Factors	8
	Item 1B. Unresolved Staff Comments	8
	Item 2. Properties	8
	Item 3. Legal Proceedings	9
	Item 4. Mine Safety Disclosures	9

PART II - OTHER INFORMATION

	Item 5. Market for Common Equity and Related Stockholder Matters	10
	Item 6. Selected Financial Data	10
	Item 7. Management’s Discussion and A,5nalysis or Plan of Operation	11
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk	15
	Item 8. Financial Statements and Supplemental Data	16
	Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	34
	Item 9A. Controls and Procedures	34
	Item 9B. Other Information	35

PART III

	Item 11. Executive Compensation	39
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	41
	Item 13. Certain Relationships and Related Transactions, and Director Independence	42
	Item 14. Principal Accountant Fees and Services	42

PART IV

	Item 15. Exhibits, Financial Statement Schedules, Signatures	43

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PART 1 – FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described below and elsewhere in this report. Although the forward-looking statements herein reflect our focused actual intentions, and although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

All references in this Annual Report to the "Company," "we," "us" or "our" are to Tautachrome, Inc. and our wholly owned subsidiary(ies).

Since its public announcement on September 25, 2017 (via SEC form 8-K) that it would be using its Twitter site (@Tautachrome_Inc) (https://twitter.com/tautachrome_inc) to post important Company information, and finding this method of publicizing important Company information both fast and effective, the Company has continued to use this means of public communication almost exclusively, supplemented occasionally with Current Reports via SEC Form 8-Ks. Shareholders are advised to follow us on Twitter to be current on the Company’s disclosures in conformity with Regulation FD.

Item 1. Business Factors

History

The Company was formed in Delaware on June 5, 2006 as Caddystats, Inc.

On March 3, 2009, the Company acquired all of the voting shares of Roadships Holdings, Inc., a Florida Corporation, and Roadships America, Inc., also a Florida Corporation in exchange for an aggregate of 16,025,000 shares of the Company’s common stock. On March 4, 2009, the Company changed its name to Roadships Holdings, Inc.

On May 26, 2015, the Company acquired all the voting shares of Click Evidence Inc., an Arizona corporation. Effective November 2, 2015, the Company changed its name to Tautachrome Inc.

Our Business

Tautachrome operates in the internet applications space, a large business space we believe to be uniquely able to make possible fast growing and novel business. The iPhone, Google, Facebook, Amazon, Uber and numerous other examples are reminders of the ability of the internet applications business space to surprise us with new business universes “out of nowhere.” A recent arrival in the internet applications space is blockchain technology, a technology empowering entities to create ecosystems of trade based on self-introduced and globally useable secure trading currencies. Blockchain technology has added a significant element to Tautachrome’s business plans and activities. In addition, the subsequent development of a new patent pending technology dubbed ARknet technology that exploits augmented reality in a new solution to the purchasing interaction between global consumers and providers has been licensed by the Company for development.

Tautachrome is currently pursuing three main avenues of business activity based on our patented activated imaging technology, our blockchain trading currency, and the ARknet patent pending technology (together banded “KlickZie” technology):

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	1.	KlickZie ARknet technology business: Our licensed activity to develop and monetize a new augmented reality (“AR”) technology called “ARknet technology which permits goods and services providers to establish geolocated augmented reality interfaces, called ARks, allowing consumers to interact with inside info on the provider’s products, specials and discounts with live purchasing provided. A provider’s ARk may be located anywhere on earth, at a store location, or anywhere else the provider may desire. The ARknet is a fintech platform connecting consumers to providers in the global $48 trillion household purchasing market, using augmented reality as the medium of interaction.

	2.	KlickZie’s blockchain trading currency ecosystem: our recently added activity to create our own KlickZie blockchain and trading currency to incentivize consumer usage of the ARknet paltform, and

	3.	KlickZie Activated Digital Imagery business: our longstanding flagship activity to develop and monetize downloadable apps based on our patented KlickZie trusted imaging technology and based on our patented trusted image-based social interactions using the pictures and videos that smartphone users generate on the web using their KlickZie imaging app.

1. ARk Business Activity

On October 17, 2018, the Company licensed and is now developing the ARknet technology, a Fintech patent pending technology aimed at the global household goods and services market. ARks are floating interactive pictures (ARk Symbols) only visible around you in the Augmented Reality view provided by the ARknet app using the camera imager in your smartphone. ARks are intended for goods and service providers as a way to draw attention to customers in the vicinity of a provider’s ARk Symbol. Shoppers and buyers seeing a Symbol can interact with the provider’s goods or services via the ARk Symbol. The picture above is a shopping mall scene, where two stores, Claire’s on your right, and rue 21 etc! on your left, are shown displaying interactive ARk symbols. Claire’s ARk is a “standard” ARk symbol, while rue 21 etc! uses a picture of their “etc. Gold” perfume product as their ARk symbol. Either way, using their smartphone imager an ARknet app users can touch the store’s ARk Symbol and on their smartphone access the provider’s Ark page containing interest-grabbing information, including pictures or videos of today’s specials, in-ARk purchase and checkout features, reviews, links, menus, social media profiles or anything else the store wants to advertise.

Arks may be mobile ARks, using the app user’s mobile device to mobilize the ARk location, or stationary ARks, using a set geo location determined by coordinates or determined by fixing the ARk location by moving the ARk owner’s mobile device to a desired location and setting the stationary ARk’s location there.

Providers may create their ARks, decide on their ARk Symbol, choose their Symbol geolocations and provide for license payment to the Company, using features in the ARk app.

We intend the ARk app to be free to consumers and other users wishing to use the app to survey their environ for the presence of ARk symbols.

We envision a KlickZie ARknet with billions of users and ARks connecting humanity, commerce, information, crypto currency, and innovation in useful ways. Plus, we want to return the ownership of users’ information and valuable items such as images and video, back to where it rightfully belongs, the individual user.

For additional information, visit https://myarknet.io.

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2. KlickZie blockchain trading currency

In late 2017 we formed a development team of providers to develop a KlickZie blockchain (branded the “zChain”) to handle transactions using a cryptographically secured trading currency designated the “KLK” currency. The KLK is intended to be the currency of the imagery trading ecosystem allowing KlickZie users to monetize their pictures and videos and thereby enabling the ability to conduct widescale buying, selling and licensing of KlickZie pictures and videos.

Our development team consists of individuals from the blockchain development company Kelecorix, Inc., and individuals from the image storage company Honeycomb Digital, LLC. The team has developed the software and architecture for the implementation of a simple KlickZie app that seeks to implement the ownership properties of KlickZie imaging.

Like other blockchains, the zChain is intended to run in a decentralized manner. “Smart contracts” residing on the zChain would implement the buying, selling licensing and other trading features on the zChain. Such smart contracts would implement a commission on zChain transactions that involve participation by the Company to complete (for instance the certification of the validity of KlickZie imagery when requested).

Because KlickZie users own the imagery they create, the use of KlickZie imagery by others, including advertisers, could be done through the execution of a smart contract on the zChain transferring KLK currency from the advertiser to the user.

3. KlickZie technology-based business activity

Tautachrome’s KlickZie technology addresses two features of the internet age that create a new need and a new opportunity. The first is the need for a way to trust the pictures and videos you see on the web. Right now the trillions of pictures and frames of video on the web are so easily and often falsified that trustability of internet imagery is essentially zero. For this reason we believe that a universally available, downloadable system that turns the everyday pictures and videos we take from our smartphones into imagery that can be trustable to others seeing it, will have substantial value . We would like to see only two kinds of imagery come to exist on the web: imagery whose trustworthiness everybody can be certain of, and all the rest of the imagery for which the notion of trust is meaningless. The KlickZie system aims to satisfy the requirement of for universal trustability for the ordinary imagery it produces.

The technology required for trustability also opens the door to a new opportunity. This is the opportunity to enable people to use KlickZie pictures and videos on the web to readily and safely interact with each other via the imagery itself. It is frequently the case that when you run across interesting imagery on the web you cannot know anything about it, including who the author is, who else may have seen it, or what others may think or know about it. By allowing people to interact with interesting or important pictures or videos by using the imagery itself as the portal of communication, the KlickZie system can add the viewpoints and the information offerings of interacting people to the richness of pictures and videos. This can be carried by the system into the future along with the imagery, as an evolving information structure of interaction and imagery.

KlickZie imaging Platform

Users will download KlickZie’s free software into their mobile device (iPhone, Android or other smartphone). The software, an upgrade to the smartphone’s camera software, will activate the pictures and videos taken by their device using proprietary KlickZie marking technology. Behind the scenes, KlickZie will capture the imagery and available metadata related to the imaging event, and mark the imagery and its metadata with advanced and invisible KlickZie marking technology.

KlickZie activation seeks to add a new utility to ordinary pictures and videos. Other KlickZie users who come across an activated picture can communicate with the author of the picture, or with amenable others who have seen the picture or with the data stored in the picture by clicking or touching the picture (“touch-to-comm”). We intend the picture itself by click or touch to make the communication happen no matter where or how you come across an activated picture.

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What happens to an activated picture from its creation onward is intended to be added to the picture’s data for tracking into the future. Activated pictures seek to answer many questions. For example, in a group photo you could ask: Have any of the people in my contacts list interacted with this picture? Are any of them engaging it right now? Who else besides my contacts have already engaged this picture in some way? Who took it? Where? When?

The upshot is that activation seeks to allow effective touch to comm with the authors and viewers of smartphone pictures and videos, and to ensure that activated pictures and videos can be trusted.

KlickZie Product Rollout

	·	Phase 1: Build the minimal testable KlickZie system –including the Arknet app and trusted imaging app and the service cloud.

	·	Phase 2: Release the KlickZie system into a limited audience to optimize user experience and user interfaces, to set up the KlickZie cloud for global scale up, and to plan global rollout.

	·	Phase 3: Roll out the KlickZie system of ARks, trusted imaging, and the KLK trading currency, culture by culture and language by language, adding support staff and services as rollout moves forward.

Monetizing

As presently conceived, the KlickZie product aims at revenues from four primary sources:

	·	ARk licensing fees paid by ARk-using providers

	·	Well behaved advertising.

	·	User premium service fees.

	·	Enterprise revenue paid by entities licensing our technologies for enterprise usages.

Funding

We plan to continue raising funds to finance KlickZie product rollout.

Ongoing financing is currently being accomplished by equity sale, by incurring debt, and by other innovative means. There can be no assurances given that any of our funding efforts will be successful.

First KlickZie revenues

Our Plan of Operations for KlickZie based revenue looks for first revenues from ARk business app users coming on line within the first year after the receipt of funding sufficient to round out the KlickZie team. Preparations for other KlickZie revenue are geared for the two year and out timeframe.

Shelved business activity

General app development and digital design activities that were being carried out under our wholly-owned Polybia Studios subsidiary, and our acquisition activities that were being carried out under our Appquisitions Division have been shelved for the time being. Work on our PhotoSweep app has also been shelved in preference to a strict focusing on the KlickZie business activity.

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Competition

With regard to the internet applications in general, competition is intense. According to Statista there are millions of smartphone applications available to users. In spaces that are this crowded the principal matter of competition is about capturing user mind space, which for a given product consists of elements such as degree of product exposure to users, degree of product apparent desirability, pleasure of product usage, and persisting necessity for the product in a user’s life. These elements of competition are well known to our competitors which include the internet giants Google, Apple, Facebook and Amazon, all of whom have financial resources and operating staffs substantially larger than those of the Company, and all of whom can focus on the optimization of their products towards the same consumer and business arenas upon which we intend to focus.

With regard to the ARknet augmented reality space, while there is no direct competition in the space at the moment, that could change in a heartbeat with an interest taken by any of the internet giants mentioned above.

With regard to KlickZie’s technology for marking, storing and tracking digital imagery, there are many firms who mark, store and track digital imagery. Among these have been Digimarc, BatchPhoto, and Thirdlight who have marketed such processes for purposes of protecting intellectual property. To our knowledge none of these has turned the smartphone into a generally trustable imager or an advanced image-based communicator as envisioned here. This requires substantially more talent and development activity than required for marking, storing and tracking digital imagery. However, there is nothing stopping any firm, particularly the internet giants, from entering into similar activity. Moreover Truepic, which entered the arena of smartphone trusted imagery, also has patents related to trusted imagery. We have reviewed Truepic’s patent claims and believe that our planned applications do not infringe their claims.

Intangible Properties: issued and pending patents

The proprietary nature of, and protection for, our technologies, processes, and know-how are important to our business. Our success could substantially depend upon our ability to protect the proprietary nature of our technologies and know-how, to protect our technology from infringement, misappropriation, discovery and duplication, and to operate without infringing the proprietary rights of others.

We seek patent protection for our technologies. Our policy is to patent the technology, inventions and improvements that we consider important to the development of our business. We cannot be sure that any of our pending patent applications will be granted, or that any patents or licenses which we own or obtain in the future will fully protect our position. Our patent rights and the patent rights of technology companies in general, are highly uncertain and include complex legal and factual issues. We believe that our existing technology licensing, and the patents which we hold and for which we have applied, do not infringe anyone else's patent rights. We believe our technology and patent rights will provide meaningful protection against others duplicating our proprietary technologies. We cannot be sure of this, however, because of the complexity of the legal and scientific issues that could arise in litigation over these issues.

Despite these measures, any of our intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated, or such intellectual property and proprietary rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages.

As of the date of this annual report, our patent portfolio includes the patents and applications issued by and filed with the USPTO and the purchase technology licensing as described in the following table:

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Title	Status	Patent or Application Number	Grant or Application Date
License to commercialize the patent: Exploitation Of Augmented Reality And Cryptotoken Economics In An Information-Centric Network Of Smartphone Users And Other Imaging Cyborgs	Patent pending owned by Arknet Inc & licensed to Tautachrome	62/755589	11/05/18
Authentication And Validation Of Smartphone Imagery	Patent granted to & owned by Tautachrome	9582843	02/28/17
Authentication And Validation Of Smartphone Imagery	Patent granted to & owned by Tautachrome	10019774	07/10/18
Authentication And Validation Of Smartphone Imagery	Patent granted to & owned by Tautachrome	10019773	07/10/18
System And Method For Creating, Processing, And Distributing Images That Serve As Portals Enabling Communication With Persons Who Have Interacted With The Images	Patent granted to & owned by Tautachrome	9928352	03/27/18
System And Method For Creating, Processing, And Distributing Images That Serve As Portals Enabling Communication With Persons Who Have Interacted With The Images	Patent granted to & owned by Tautachrome	15/888381	02/05/18

We rely upon unpatented trade secrets, know-how, and continuing technological innovation to develop and maintain our competitive position. We seek to protect our ownership of know-how and trade secrets through an active program of legal mechanism including assignments, confidentiality agreements, material transfer agreements, research collaborations, and licenses.

Employees

Tautachrome, Inc. has no employees. Services are currently provided through independent contractors.

Item 1A. Risk Factors

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

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

Our principal business and corporate address is 1846 E Innovation Park Drive, Oro Valley, Arizona 85755 (Telephone: 520 318 5578).

We do not currently have any investments or interests in real estate, nor do we have investments or any interest in real estate mortgages or securities of entities engaged in real estate activities.

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Item 3. Legal Proceedings

United States District Court

On October 10, 2017, the Company received a letter from the lawyer of Eric L McRae (“McRae”) a person whose association with the Company was terminated by the Company on June 16, 2017. The letter demanded payment of 850,000,000 unrestricted Tautachrome common shares to forestall his filing a laundry list of complaints in a variety of government agencies including with the US District Court in Kansas with complaints of contract breaches and fraud by silence, with the EEOC with complaints of termination by racial discrimination, with the OSHA with complains of termination for reasons of his being a whistleblower under Sarbanes-Oxley provisions, and with various regulatory agencies with accusations of an unspecified nature.

On October 12, 2017, McRae filed a complaint, later amended twice, against the Company in the US District Court in Kansas. The amended complaint alleges 1) that the Company breached a written agreement in an alleged employment by failing to pay him 35,000,000 shares of the Company’s common stock and terminating his association with the Company on June 16, 2017 without proper notice. The complaint goes on to allege 2) that the Company committed fraud by silence for failing to inform him of an intent to receive the benefit of his services while harboring an intent to not compensate him, 3) that the Company breached an unwritten agreement with him to provide him with 185,000,000 shares of the Company’s common stock, and 4) that the Company breached a convertible promissory note by failing and refusing to repay him the principal and accrued interest thereunder. Complaint number 4 is now moot in the belief of the Company since after the lawsuit was filed the Company continued to repay McRae’s convertible promissory note on schedule with interest due until paid in full on October 1, 2018, thus extinguishing the note and making the matter moot. These matters remain before the Court.

On December 12, 2017, McRae brought the Company before the Kansas Human Rights Commission and the U.S. Equal Employment Opportunity Commission (EEOC) alleging that on June 16, 2017 he was terminated from an alleged employment by the Company on the basis of race and for retaliation, and that the Company discriminated against him in the terms of this alleged employment because of race. The Kansas Human Rights Commission dismissed this claim.

On December 8, 2017, McRae filed a complaint with the Occupational Safety and Health Administration (the “OSHA”), alleging that his “investigation and reporting” to the Company’s CEO was a contributing factor in the termination of his alleged employment by the Company in violation of the Sarbanes-Oxley Act whistleblower’s provisions. On January 2, 2018, the Company delivered its response to the complaint, denying each of McRae’s allegations and providing its own presentation of the facts. McRae dismissed the OSHA claim with prejudice, and the matter cannot be brought again.

On May 5, 2020 the Company settled with the McRae estate for 50 million common shares. We valued the shares at the settlement date (May 5, 2020 on which date our closing price was $0.0029) and recorded a Gain on Litigation in the amount of $105,000, a reduction of the amount of the liability to $145,000 as a result of that revaluation. We issued the shares on May 18, 2020.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II - OTHER INFORMATION

Item 5. Market for Common Equity and Related Stockholder Matters

Market Information

Our shares trade on the OTC PINK under the symbol “TTCM”. The following table sets forth the high and low closing bid prices of our common stock for the last two calendar years, as reported by OTC Markets Group Inc. and represents inter dealer quotations, without retail mark-up, mark-down or commission and may not be reflective of actual transactions:

Quarter Ended	High		Low
December 31, 2021	$	0.0070	$	0.0030
September 30, 2021		0.0095		0.0057
June 30, 2021		0.0140		0.0082
March 31, 2021		0.0195		0.0055
December 31, 2020	$	0.0080	$	0.0050
September 30, 2020		0.0065		0.0022
June 30, 2020		0.0065		0.0022
March 31, 2020		0.0134		0.0026

Holders

On December 31, 2021, the Company had approximately 580 stockholders of record, and approximately 7,358 beneficial owners of shares of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies, for a total of approximately 7,938 beneficial owners of shares of common stock.

Dividends

We have not declared or paid cash dividends on our common stock since inception and do not anticipate paying such dividends in the foreseeable future. The payment of dividends may be made at the discretion of the Board of Directors and will depend upon, among other factors, our operations, capital requirements, and overall financial condition.

Recent Sales of Equity Securities

	·	We issued 295,898,288 shares in conversion of outstanding convertible promissory notes.
	·	We issued 214,125,000 shares for services.
	·	We issued 6,600,000 shares as enticement for certain loans.
	·	We issued 1,379,510,380 shares for the conversion of Series D Preferred Stock to common.

Securities Authorized for Issuance under Equity Compensation Plans

None.

Item 6. Selected Financial Data

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.

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Item 7. Management’s Discussion and Analysis or Plan of Operation

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides information for the year ended December 31, 2021 and December 31, 2020. This MD&A should be read together with our audited consolidated financial statements and the accompanying notes for the fiscal years ended December 31, 2021 and December 31, 2020.

This discussion contains forward-looking statements that involve certain risks and uncertainties. See “Forward-Looking Statements” elsewhere in this report.

Overall Performance

We are an early stage internet applications company, engaged in advanced technology and business development in the internet applications space. We have incurred general and administrative costs, marketing expenses and research and development costs since we commenced our current operations in May 2015, against very little revenue.

The Company’s audited consolidated financial statements and the accompanying notes for the years ended December 31, 2021 and December 31, 2020, have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. We had negative cash flows from operations of $1,249,760 and $910,344 for the years ended December 31, 2021 and 2020, respectively, with recurring losses and negative working capital of $4,644,642 and $3,867,587 as at December 31, 2021 and 2020, respectively. These conditions raise substantial doubt as to our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

The continuing operations of the Company are dependent upon our ability to raise adequate financing and to commence profitable operations in the future. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through loans from related parties. We believe that actions presently being taken to obtain additional funding may provide the opportunity for the Company to continue as a going concern. There is no guarantee, however, that the Company will be successful in achieving these objectives.

Results of Operations for the Years ended December 31, 2021 and 2020

Net Comprehensive Loss

The Company realized a net comprehensive loss of 5,026,747 for the year ended December 31, 2021 compared to a net comprehensive loss of $2,874,525 for the year ended December 31, 2020.

Revenue and Cost of Sales

The Company recognized $262 in revenue for the year ended December 31, 2021 versus $1,015 in 2020. The company has two sources of revenues: the online sales platform in which we take a 2% fee for all merchant sales made on the platform and promotional products such a t-shirts. Cost of sales were $79 and $371 for the years ended December 31, 2021 and 2020, respectively.

Operating Expenses

The Company’s total operating expenses for the year ended December 31, 2021 were $4,267,148 compared to $1,625,789 for the year ended December 31, 2020, an increase of $2,641,359.

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For the year ended December 31, 2021, the Company incurred general and administrative expenses of $2,862,773 compared to $607,274 for the year ended December 31, 2020, an increase of $2,255,499 (371%).

The following table sets out the material components of the Company’s general and administrative expenses for the years ended December 31, 2021 and 2020.

	Year Ended December 31,
Category of General and Administrative Expense	2021		2020
Legal and accounting fees	$	132,486	$	129,329
Consulting		138,385		85,860
Other professional services		97,847		77,053
Office and occupancy costs		9,897		27,422
Arknet license fees		200,000		200,000
Advertising and promotion		2,261,963		64,764
Depreciation and amortization		14,482		3,621
Other		7,713		19,225
	$	2,862,773	$	607,274

The vast majority of change from 2020 to 2021 was in advertising and promotion (an increase of 2,197,199, or a 97% increase). Most of this increase resulted from our issuance of 198,000,000 shares issued to a supplier to pay for media buys which resulted in a charge to Advertising and Promotion of $1,980,000.

Research and development

Research and development costs were $1,239,133 in 2021 versus $1,014,894 in 2019 owing to increased development activity.

Bad Debt Expense

On June 8, 2021, we loaned a board member $150,000 on a promissory note which was due upon demand. The company made demand for re-payment and the board member defaulted on the note. At the time of default, $760, in interest had accrued. We charged the entirety of principal and interest to Bad Debt Expense. We had no such item in 2020.

Depreciation Expense

We had depreciation expense of $14,482 for the year ended December 31, 2021 as opposed to $3,621 for the previous year. The depreciation expense is due to our acquiring, in October, 2020, a hand-held self-positioning white light scanner system that we use to showcase products on our website.

Other Expenses

During the year ended December 31, 2020, we recorded a gain of $105,000 on our settlement of the McRae affair (See Note 6 to the financial statements). We had no such gains in the current year.

During the year ended December 31, 2021, we had losses on settlements of debt of $225. We had no such losses in the previous year.

The Company recorded $1,238,843 of interest expense during the year ended December 31, 2021 versus $1,021,100 during the previous year. Most of the increase is due to an increase in debt levels.

During the year ended December 31, 2020, we had $37,267 of losses on conversion of debt. During 2021, we had no such losses.

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During the year ended December 31, 2021, we recorded loss on changes in the value of our derivative liabilities in the amount of $1,238,843 compared to a loss of $1,021,100 for the year ended December 31, 2020.

Other Comprehensive Loss

At each balance sheet date, transactions and balances that are denominated in a currency other than U.S. dollars are adjusted to reflect the current exchange rate which may give rise to a foreign currency translation adjustment accounted for as a separate component of stockholders’ equity and included in other comprehensive income. The Company recorded a translation gain of $53,444 for the year ended December 31, 2021, compared to a loss of $80,201 for the year ended December 31, 2020. These amounts are included in the Company’s statement of operations as foreign currency gain (loss) for the respective years.

Liquidity and Capital Resources

As of the date of this report, the Company has generated only minimal revenues and is not profitable. The Company’s operations to date have been funded primarily by private placements of common stock and convertible notes, as well as by loans from its management and controlling stockholders.

As at December 31, 2021, the Company had $119,466 in cash and $4,764,108 in current liabilities resulting in a working capital deficit of $4,644,642. The Company is not currently able to maintain its operations through its existing cash balances and internally generated cash flows. Moreover, we have determined that the current capital structure of the Company is not adequate to fund its planned growth.

We intend to secure additional capital to fund the Company’s operations through the issuance of common stock, convertible debt instruments and loans from our management. There can be no assurance that we will be successful in obtaining the capital the Company requires to achieve its business objectives, or that such capital will be available on acceptable terms. Future cash flows are subject to a number of variables, including technology development costs, technology product rollout and support expense and the demand for the Company’s products and services.

Operating Activities

During the year ended December 31, 2021, the Company used net cash of $1,249,760 in operating activities compared to $910,344 for the year ended December 31, 2020. The decrease was primarily attributable to decreased net losses.

The Company’s average monthly cash burn rate was $104,000 during the year ended December 31, 2021, compared to $75,862 for the year ended December 31, 2020. Subject to the success of the Company’s financing activities, we expect to increase operating activities in the coming year with a concomitant increase in the Company’s monthly burn rate. We will not be able to predict the increase to our burn rate until we have determined the outcomes of our financing activities.

Investing Activities

The Company purchased on hend-held self-positioning white light scanner system during the year ended December 31, 2020. The original cost was $43,447.

Financing Activities

The Company received net cash of $1,439,902 from financing activities during the year ended December 31, 2021, consisting primarily from the issuance of convertible notes. During the year ended December 31, 2020, we received a net of $1,125,215 from financing activities which, again, we primarily from the issue of convertible notes. We expect to continue our financing activities to fund our operations until such time as the Company’s technologies are commercialized and we generate revenue on a profitable basis.

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Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations is based upon its financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of the Company’s financial statements is critical to an understanding of its financial statements.

We adopted ASC 606 effective January 1, 2018 using the modified retrospective method. Under this method, the Company follows the five-step model provided by ASC Topic 606 in order to recognize revenue in the following manner: 1) Identify the contract; 2) Identify the performance obligations of the contract; 3) Determine the transaction price of the contract; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue. An entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company’s revenue recognition policies remained substantially unchanged as a result of the adoption of ASC 606, and there were no significant changes in business processes or systems.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” and subsequent amendments, which replaced existing lease accounting guidance in GAAP and requires lessees to recognize right-of-use assets and corresponding lease liabilities on the balance sheet for all in-scope leases with a term of greater than 12 months and requires disclosure of certain quantitative and qualitative information pertaining to an entity’s leasing arrangements. The Company adopted the standard as of January 1, 2019. The adoption of the standard did not have a material impact on the Company’s consolidated statements of operations or consolidated statements of cash flows.

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions related to the recoverability of long-lived assets, valuation of convertible debentures, assumptions used to determine the fair value of stock-based compensation and derivative liabilities, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

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Fair Value of Financial Instruments

We adopted the Financial Accounting Standards Board’s (FASB) Accounting Codification Standard No. 820 (“ASC 820), Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. ASC 820 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - Observable inputs such as quoted prices in active markets;

Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable, and accrued liabilities, due to related parties and convertible notes. Pursuant to ASC 820, the fair value of the Company’s cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of the Company’s other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Recent Accounting Pronouncements

We have reviewed the FASB issue Accounting Standards Update, (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

A smaller reporting company is not required to provide the information required by this item.

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Item 8. Financial Statements and Supplemental Data

Reference is made to the following in the Financial Section of this report:

* Consolidated financial statements, together with the report thereon of M&K CPAS, PLLC dated March 24, 2022 (PCAOB ID 2738), beginning with the section entitled "Report of Independent Registered Public Accounting Firm" and continuing through "Note 8 - Subsequent Events"

* Financial Statement Schedules have been omitted because they are not applicable, or the required information is shown in the consolidation financial statements or notes thereto.

INDEX TO FINANCIAL STATEMENTS

		PAGE

Report of Independent Registered Public Accounting Firm		17

Consolidated Balance Sheets – December 31, 2021 and 2020		18

Consolidated Statements of Operations for the years Ended December 31, 2021 and 2020		19

Consolidated Statement of Changes in Stockholders’ Deficit from December 31, 2019 to December 31, 2021		20

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020		21

Notes to Consolidated Financial Statements		22

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To the Board of Directors and

Stockholders of Tautachrome, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tautachrome, Inc. (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

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 audits. 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 audits 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 audits 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 audits 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 audits provide a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the Company will continues as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ M&K CPAS, PLLC

We have served as the Company’s auditor since 2008.

Houston, TX

March 24, 2022

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TAUTACRHOME, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Balance Sheets

	12/31/2021			12/31/2020
ASSETS
Current assets:
Cash	$	119,466		$	114,527
Total current assets		119,466			114,527

Non-current assets:
Property, plant and equipment, net		25,344			39,826
TOTAL ASSETS	$	144,810		$	154,353

LIABILITIES
Accounts payable and accrued expenses	$	813,024		$	789,052
Accounts payable - related party		706,476			510,313
Loans from related parties		103,640			104,762
Convertible notes payable - related party, net		70,392			50,094
Short-term convertible notes payable, net		1,637,812			999,406
Convertible notes payable in default		32,000			32,000
Short-term notes payable		15,989			16,957
Derivative liability		1,384,775			1,479,530
Total current liabilities		4,764,108			3,982,114

Long-term convertible notes payable, related party, net		14,996			10,080
Total non-current liabilities		14,996			10,080

TOTAL LIABILITIES		4,779,104			3,992,194
STOCKHOLDERS' DEFICIT
Series D Convertible Preferred, par value $0.0001. 13,795,104 shares authorized, zero and 13,795,104 shares issued and outstanding at December 31, 2021 and 2020, respectively.		-			1,380
Series E Convertible Preferred Stock, par value $0.0001. 40,000 shares authorized, 40,000 shares outstanding at December 31, 2021 and 2020, respectively		4			4
Series F Convertible Preferred Stock, par value $0.00001. 290,400 shares authorized, 290,400 shares issued and outstanding at December 31, 2021 and 2020, respectively		30			30
Common stock, $0.00001 par value. 6.5 billion shares authorized. 5,866,608,915 and 4,120,475,247 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively		58,666			41,205
Additional paid in capital		15,337,300			11,427,087
Common stock payable		640,584			336,584
Accumulated deficit		(20,742,160	)		(15,661,969	)
Effect of foreign currency exchange		71,282			17,838
TOTAL STOCKHOLDERS' DEFICIT		(4,634,294	)		(3,837,841	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	144,810		$	154,353

The accompanying notes are an integral part of these financial statements.

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TAUTACHROME, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Operations

	Year Ended December 31,
	2021			2020

REVENUES
Online sales platform	$	22		$	149
Products		240			866
Total revenues		262			1,015
Cost of sales		79			371
Gross profit		183			644

OPERATING EXPENSES
General and administrative	$	2,862,773		$	607,274
Bad debt expense		150,760			-
Depreciation expense		14,482			3,621
Research and development		1,239,133			1,014,894
Total operating expenses		4,267,148			1,625,789

Operating loss		(4,266,965	)		(1,625,145	)

OTHER INCOME / (EXPENSE)
Gain on litigation		-			105,000
Loss on settlement of debt		(225	)		-
Interest expense		(1,238,843	)		(1,021,100	)
Change in value of derivatives		425,842			(215,812	)
Loss on conversion of debt		-			(37,267	)
Total other		(813,226	)		(1,169,179	)
Net loss	$	(5,080,191	)	$	(2,794,324	)

OTHER COMPREHENSIVE INCOME (LOSS)
Effect of foreign currency exchange		53,444			(80,201	)
Net comprehensive income or (loss)	$	(5,026,747	)	$	(2,874,525	)

Net (loss) or income per common share
Basic and fully diluted	$	(0.00	)	$	(0.00	)

Weighted average shares outstanding
Basic and fully diluted		4,721,741,017			3,891,303,488

The accompanying notes are an integral part of these financial statements.

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TAUTACHROME, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Deficit

From December 31, 2019 to December 31, 2021

	Common Stock						Preferred Stock Series D						Preferred Stock Series E				Preferred Stock Series F				Additional Paid in			Stock			Other Comprehensive			Accumulated
	Shares			Amount			Shares			Amount			Shares		Amount		Shares		Amount		Capital			Payable			Income (Loss)			Deficit			Total
Balance, 12/31/19		3,504,460,889		$	35,045			13,795,104		$	1,380			-	$	-		-	$	-	$	6,095,053		$	2,066,584		$	98,039		$	(12,867,645	)	$	(4,571,544	)

Shares issued for conversion of debt		560,931,025			5,609			-			-			-		-		-		-		843,752			-			-			-			849,361
Shares issued for services		3,333,333			33			-			-			-		-		-		-		19,967			-			-			-			20,000
Shares issued for cash		1,750,000			18			-			-			-		-		-		-		3,482			-			-			-			3,500
Shares issued to settle legal claim		50,000,000			500			-			-			-		-		-		-		144,500			-			-			-			145,000
Issue Series E preferred shares		-			-			-			-			40,000		4		-		-		1,836,996			(1,837,000	)		-			-			-
Issue Series F preferred shares		-			-			-			-			-		-		290,397		30		625,235			-			-			-			625,265
Derivative associated with early debt retirement		-			-			-			-			-		-		-		-		1,844,424			-			1,837			-			1,844,424
Shares earned by consultants		-			-			-			-			-		-		-		-		-			107,000			-			-			107,000
Imputed interest		-			-			-			-			-		-		-		-		13,678			-			-			-			13,678
Effect of foreign currency exchange		-			-			-			-			-		-		-		-		-			-			(80,201	)		-			(80,201	)
Net loss		-			-			-			-			-		-		-		-		-			-			-			(2,794,324	)		(2,794,324	)
Balance, December 31, 2020		4,120,475,247		$	41,205			13,495,104		$	1,380			40,000		4		290,397		30	$	11,427,087		$	336,584		$	17,838		$	(15,661,969	)	$	(3,837,841	)

Shares issued for conversion of debt		295,898,288			2,959			-			-			-		-		-		-		1,087,086			-			-			-			1,090,045
Derivative associated with early debt retirement		-			-			-			-			-		-		-		-		650,208			-			-			-			650,208
Shares issued for services		214,125,000			2,141			-			-			-		-		-		-		2,116,384			(2,111,400	)		-			-			7,125
Shares issued as enticement for loan		6,600,000			66			-			-			-		-		-		-		56,749			-			-			-			56,815
Shares issued to convert Series D preferred to common		1,379,510,380			13,795			(13,795,104	)		(1,380	)		-		-		-		-		(12,415	)		-			-			-			-
Shares retired by Chief Executive Officer		(150,000,000	)		(1,500	)		-			-			-		-		-		-		1,500			-			-			-			-
Stock payable for services		-			-			-			-			-		-		-		-		-			2,415,400			-			-			2,415,400
Imputed interest		-			-			-			-			-		-		-		-		10,701			-			-			-			10,701
Effect of foreign currency exchange		-			-			-			-			-		-		-		-		-			-			53,444			-			53,444
Net loss		-			-			-			-			-		-		-		-		-			-			-			(5,080,191	)		(5,080,191	)
Balance, December 31, 2021		5,866,608,915		$	58,666			-		$	-			40,000	$	4		290,397	$	30	$	15,337,300		$	640,584		$	71,282		$	(20,742,160	)	$	(4,634,294	)

The accompanying notes are an integral part of these financial statements.

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TAUTACHROME, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Cash Flows

	Year Ended December 31,
	2021			2020

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(5,080,191	)	$	(2,794,324	)
Stock-based compensation		2,422,525			127,000
Depreciation, depletion and amortization		14,482			3,621
Loss on debt conversions		-			37,267
Gain on litigation		-			(105,000	)
Change in fair value of derivative		(425,842	)		215,812
Loss on debt settlements		225
Amortization of discounts on notes payable		1,092,397			902,653
Imputed interest		10,701			13,678
Bad debt expense		150,760			-

Changes in operating assets and liabilities:
Prepaid expenses		-			403
Accounts receivable		(760	)		-
Accounts payable and accrued expenses		368,943			428,546
Accounts payable - related party		197,000			260,000
Net cash used in operating activities		(1,249,760	)		(910,344	)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Accumen		(150,000	)		-
Acquisitions of property, plant and equipment		-			(43,447	)
Net cash used in investing activities		(150,000	)		(43,447	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of stock		-			3,500
Proceeds from convertible notes payable		1,416,000			660,000
Proceeds from convertible notes payable, related party		40,000			488,000
Payment of expenses by related parties		6,000			36,172
Proceeds from related-party loans		-			2,417
Principal payments on related-party loans		(22,098	)		(64,874	)
Net cash provided by financing activities		1,439,902			1,125,215

Effect of exchange rate changes on cash and cash equivalents		(35,203	)		(88,263	)

Net increase/(decrease) in cash		4,939			83,161
Cash and equivalents - beginning of period		114,527			31,366
Cash and equivalents - end of period	$	119,466		$	114,527

SUPPLEMENTARY INFORMATION
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING TRANSACTIONS
Discounts on convertible notes	$	1,102,110		$	617,400
Conversion of debt to common stock	$	1,090,045		$	812,094
Settlement of derivative liability	$	650,208		$	1,844,424
Shares issued for trade debts	$	-		$	145,000
Shares issued for stock payable	$	2,111,400		$	1,837,000
Conversion of debt to preferred stock, related party	$	-		$	625,265
Shares for debt enticement	$	56,815		$	-
Preferred for common shares	$	13,795		$	-
Shares retired	$	1,500		$	-
Accounts payable settled with convertible note	$	247,426		$	-
Initial derivative	$	981,295		$	-

The accompanying notes are an integral part of these financial statements.

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TAUTACHROME, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

Organization and Nature of Business

History

Tautachrome, Inc. was formed in Delaware on June 5, 2006 as Caddystats, Inc. and hereinafter collectively referred to as “Tautachrome”, the “Company”, “we’ or “us”).

The Company adopted the accounting acquirer’s year end, December 31.

Our Business

Tautachrome operates in the internet applications space, uniquely exploiting the technologies of the Augmented Reality sector, the blockchain/cryptocurrency sector and the smartphone picture and video technology sector. We have high-speed blockchain concepts under development aiming to couple with the Company’s revolutionary patents and licensing in augmented reality, smartphone-image authentication and imagery-based social networking interaction.

Tautachrome is currently pursuing three main avenues of business activity based on our patented activated imaging technology, our blockchain cryptocurrency products, and our licensing of the patent pending ARk technology (together banded “KlickZie” technology):

	1.	KlickZie ARk technology business: The Company has licensed and is developing a new KlickZie augmented reality (“AR”) platform branded ARknet. ARknet enables goods and services providers to establish geolocated augmented reality interfaces, called ARks, allowing consumers to purchase the provider’s products and take advantage of is specials and discounts, using the ARk. A provider’s ARk may be located anywhere in the world, from a store location to anyplace else the provider may desire. The ARknet is a fintech platform connecting consumers to providers in the global $48 trillion household goods market, using augmented reality as the medium of interaction.

	2.	KlickZie’s blockchain cryptocurrency-based ecosystem: The Company has developed its own digital currency (“KLK”), smart contracts using KLKs, and high speed blockchain concepts aimed at supporting fast frictionless transactions within the ARknet as well as incentivizing user download and use of KlickZie products.

	3.	KlickZie Activated Digital Imagery business: The Company is developing downloadable apps based on our patented KlickZie trusted imaging technology and based on our patented trusted image-based social interactions using the pictures and videos that smartphone users create. Trusted imagery and user imagery-based interaction is expected to be widely used within the ARknet.

Basis of Presentation

The Company’s financial statements are presented in accordance with accounting principles generally accepted (GAAP) in the United States. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.

Principles of Consolidation

Our consolidated financial statements include Tautachrome, Inc. and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

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Use of Estimates

Cash and Cash Equivalents

The Company considers all highly liquid investments with an initial maturity of 3 months or less to be cash equivalents. The Company maintains its deposits with high quality financial institutions and, accordingly, believes its credit risk exposure associated with cash is remote. There were no cash equivalents as of December 31, 2021 and 2020.

Earnings Per Share

Basic earnings per common share is computed by dividing net earnings or loss (the numerator) by the weighted average number of common shares outstanding during each period (the denominator). Diluted earnings per common share is similar to the computation for basic earnings per share, except that the denominator is increased by the dilutive effect of stock options outstanding and unvested restricted shares and share units, computed using the treasury stock method. There are currently no common stock equivalents.

Fair Value of Financial Instruments

Level 1 - Observable inputs such as quoted prices in active markets;

Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

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At December 31, 2021 and 2020, we had total liabilities of $4,779,104 and $3,992,194, respectively. Of this amount, only the derivative liabilities of $1,384,775 and 1,479,530, respectively ,were calculated using level 3 inputs. All other liabilities were calculated using level 1 inputs.

Income Taxes

We recognize deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates that are expected to be in effect when the differences are expected to be recovered. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

See Note 7 for our reconciliation of income tax expense and deferred income taxes as of and for the years ended December 31, 2021 and 2020.

Note 2 – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, we had negative cash flows from operations of $1,249,760 and $910,344 for the years ended December 31, 2021 and 2020, respectively, and have experienced recurring losses, and negative working capital at December 31, 2020 and 2019. These conditions raise substantial doubt as to our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. Management believes that actions presently being taken to obtain additional funding may provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.

Note 3 – Related Party Transactions

For the year ended December 31, 2021, we accrued $4,901 of interest to the 22^nd Trust (the “Trust”), the trustee of whom is Sonny Nugent, the son of our former Chief Executive Officer, Micheal Nugent. The outstanding balances of unpaid principal and interest at December 31, 2021 and 2020 were $99,059 and $35,208, respectively.

Additionally, we owe the Trust $17,857 in expense advances made in previous fiscal years which are not accruing interest.

According to our agreement with Mr. Nugent, we accrue interest on all unpaid amounts at 5%. Principal and interest are callable at any time. If principal and interest are called and not repaid, the loan is considered in default after which interest is accrued at 10%.

On October 17, 2018, we signed an agreement with Arknet to license certain technologies related to the Klickzie ArK.. The initial license fee is $100,000.

The annual maintenance fees are:

	·	$200,000 for the calendar years 2020 and 2021
	·	$300,000 for the calendar years 2022 and 2023 and
	·	$400,000 for the calendar year 2024 and each subsequent calendar year during the term of the agreement.
	·	7.5% of net sales.

As of December 31, 2021, we have accrued the $500,000 initial license and annual maintenance fees.

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During the year ended December 31, 2019, the company entered into an arrangement with a ARknet whereby the holder of the Crypto-note was paid in common shares of Arknet. We reclassified the $100,000 Crypto-note to an advance by the Company to ARknet.

The Company has an employment agreement with Dr. Jon Leonard, the Company’s Chief Executive Officer at a compensation rate of $60,000 (which increases 5% per year) and six weeks per year of paid vacation. Payment and vacation benefits began to accrue in June, 2019. For the year ended December 31, 2021, we accrued $60,000 pursuant to this employment agreement, made cash compensation payments of $43,000 and owe him $92,000 of unpaid compensation at December 31, 2021.

Between October 1, 2019 and July 15,2020, we borrowed $610,500 from Arknet, a related party. On September 1, 2020, we retired all twelve Arknet convertible notes by issuing 290,397 F Series Convertible Preferred shares (see Note 3). We reduced our liability to Arknet in the amount of $610,500 in principal and $14,735 in interest.

At December 31, 2020, Accounts Payable – Related Party was comprised of the following:

	·	$95,000 of accrued salary owed to our Chief Executive Officer.
	·	$400,000 due to Arknet. $300,000 of this amount was due to our technology lease obligations to them and $100,000 was due to the conversion of a crypto-note payable, written in 2018 and converted to Arknet debt in 2019.
	·	$13,998 of unreimbursed expenses paid on behalf of the Company by the 22nd Trust in previous years.
	·	$1,315 of other accrued related-party expenses.

At December 31, 2021, Accounts Payable – Related Party was comprised of the following:

	·	$92,000 of accrued salary owed to our Chief Executive Officer
	·	$600,000 due to Arknet. $500,000 of this amount was due to our technology lease obligations to them and $100,000 was due to the conversion of a crypto-note payable, written in 2018 and converted to Arknet debt in 2019
	·	$12,392 of unreimbursed expenses paid on behalf of the Company by the 22^nd Trust in previous years.
	·	$2,084 of other accrued related-party expenses.

At December 31, 2020, Loans from Related Parties was comprised of the following:

	·	A $5,000 advance to the Company in 2018 that has not been formalized into a promissory note.
	·	$80,107 of debts to Michael Nugent, our former Chief Executive Officer for conversion of 39,312 Convertible Preferred Class B shares in 2015.
	·	Cash Loans from the 22nd Trust in the amount of $19,655 made through 2015.

At December 31, 2021, Loans from Related Parties was comprised of the following:

	·	A $5,000 advance to the Company in 2018 that has not been formalized into a promissory note.
	·	$80,107 of debts to Michael Nugent, our former Chief Executive Officer for conversion of 39,312 Convertible Preferred Class B shares in 2015.
	·	Cash Loans from the 22^nd Trust in the amount of $18,533 made through 2015.

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Convertible note payable, related party

On May 5, 2013 (and on August 8, 2013 with an enlargement amendment) the Company entered into a no interest demand-loan agreement with our current Chairman, Jon N. Leonard under which the Company may borrow such money from Dr. Leonard as Dr. Leonard in his sole discretion is willing to loan.

The terms of the note provide that at the Company’s option, the Company may make repayments in stock, at a fixed share price of $1.00 per share. Also, because this loan is a no-interest loan, an imputed interest expense of $177 was recorded as additional paid-in capital for the year ended December 31, 2021. The Company evaluated Dr. Leonard’s note for the existence of a beneficial conversion feature and determined that none existed.

During the year ended December 31, 2021, we repaid $22,098 to Dr. Leonard. Dr. Leonard also paid company expenses of $6,000. At December 31, 2021, the balanced owed Dr. Leonard was $419.

Ending balances in related party accounts payable is $706,476.

For ending balances in this category, see Note 5.

We issued 1,379,510,380 common shares to insiders retiring 13,795,104 shares of Series D preferred stock (see Note 4).

At December 31, 2021, we owed $70,392 of related-party notes which are convertible into common stock, of which $69,973 is owed to David LaMountain, Our Chief Operating Officer and $419.. to Dr. Jon Leonard, our Chief Executive Officer. As of December 31, 2021, all discounts on this items had been fully amortized. During the year ended September 30, 2021, we amortized $26,316 of discounts to interest expense from this category.

At December 31, 2021 we owed a convertible note to ArKnet (the only note classified as long-term) in the amount of $40,000, which is reported net of unamortized discounts of $25,004 or $14,996. The note is convertible at $0.006.

Common Stock

On December 29, 2021, Dr. Jon Leonard, our Chief Executive Officer, retired 150,000,000 shares of common stock.

Note 4 – Capital

Common Stock

During the year ended December 31, 2020, we issued 616,014,358 shares as follows:

	·	We issued 560,931,025 shares in conversion of outstanding convertible promissory notes. We recorded a reduction of the balance of these notes of $770,081 of principal, $42,016 of interest, and recorded a loss on conversion of $37,267. As part of these conversions, we retired $782,972 of associated derivative liabilities which we included in Additional Paid in Capital.
	·	1,750,000 shares of common stock for $3,500 in cash.
	·	50,000,000 shares of common stock to settle the McRae lawsuit (see Note 6).
	·	3,333,333 shares of common stock for services. We valued the shares at their grant date fair values and included $20,000 in general and administrative expenses.

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During the year ended December 31, 2021, we issued

	·	295,898,288 shares in conversion of $1,045,000 of principal and $45,045 of interest. We realized no gain or loss on the conversions.
	·	214,125,000 shares to pay contractors for marketing campaigns. As a result, we charged general and administrative expenses with $2,118,525. We valued the issuances at the fair-value grant date. Of the $2,118,525 charged to general and administrative expenses, $2,111,400 we charged to expense in previous periods.
	·	6,600,000 to a creditor as an enticement to enter into three convertible promissory notes whose principal amounts were $1,125,000 in the aggregate. The grant-date fair value of these enticements were $56,815 and are accounted for as debt discounts.
	·	1,379,510,380 shares to convert all of the issued and outstanding Preferred D series shares into common stock according to the terms of the agreement. We recognized no gain or loss on the conversion.
	·	A negative 150,000,000 shares which were retired from our Chief Executive Officer, Jon Leonard.

Stocks Payable

	·	We maintain a stock payable for an individual who wished to convert to 2,142,857 shares but is delaying receipt for tax reasons. The dollar balance in the Stock Payable account for this individual is $10,586.
	·	We owe 3,655,666 shares to a consultant for work performed during 2019 and 2020. The balance in this Stock Payable account is $28,300.
	·	We owe 3,500,000 to a consultant who did work during 2017 and 2018. That amount in the Stock Payable category is represented as $46,060.
	·	We owe 83,351,522 shares to one of our two software development groups pursuant to our agreement with them. This amount is represented in the Stock Payable category as $526,075.
	·	We owe $4,563 in common stock to our other software development group for work performed in 2020. The number of shares is contingent upon the stock price at the time of payout.
	·	We owe $25,000 in stock to a marketing consultant whose number of shares is contingent upon the stock price at the time of payout.

Imputed Interest

Several of our loans were made without any nominal interest. As such, we imputed interest at 8% to these loans, crediting Additional Paid in Capital and charging Interest Expense. For the year ended December 31, 2021 and 2020, these amounted to $10,701 and $13,678, respectively.

Preferred Stock

During the year ended December 31, 2018, we accrued $1,837,000 in costs related to the 40,000 Series E Preferred shares issued in accordance with our ARknet contract (see Note 4) containing a par value of $0.0001. This series of preferred shares have the following rights, limitations, restrictions and privileges:

	·	They are not entitled to dividends,
	·	They are entitled to no liquidation rights,
	·	Each share has the voting rights of all other voting shares combined, multiplied by 0.00001, and
	·	They have no conversion or redemption rights.

In September, 2020 we issued 290,397 Series F Preferred shares in retirement of twelve convertible promissory notes to Arknet. In so doing, we reduced our liability to them in the amount of $610,500 of principal and $14,735 in interest. Each share of Series F preferred is convertible into 1,000 shares of common stock. This series of preferred shares have the following rights, limitations, restrictions and privileges:

	·	They are not entitled to dividends unless all other classes of dividends have been paid,
	·	They are entitled to no liquidation rights.

In October, 2016 we issued 13,795,104 shares of Series D preferred stock to our (then) directors in exchange for 1,379,510,380 shares of common stock. This series of preferred stock was subject to two separate rights to convert to common stock. The first could be elected by the shareholder if the stock sold for greater than $3 per share. The second was automatic and would not be trigger until October 5, 2021. On that date, the original 1,379,510,380 common shares were issued retiring the Series D preferred stock. There was no gain or loss on the conversion because the value of the common shares issued equaled the value of the Series D Preferred shares.

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Note 5 - Debt

Our debt in certain categories went from $2,692,829 at December 31, 2020 to $3,259,604 at December 31, 2021 as follows:

	12/31/21		12/31/20
Loans from related parties	$	103,640	$	104,762
Convertible notes payable, related party		70,392		50,094
Short-term convertible notes payable, net		1,637,812		999,406
Convertible notes payable in default		32,000		32,000
Short-term notes payable		15,989		16,957
Derivative liability		1,384,775		1,479,530
Long-term convertible notes payable, related party		14,996		10,080
Totals	$	3,259,604	$	2,692,829

Loans from related parties

2020

Loans from related parties consists of a $5,000 advance made by an officer of the Company and $99,762 owed to the Twenty-Second Trust.

We also owe $69,973 to another officer for loans he made to the company. The notes bear interest at 5% and may convert at $0.0025 per share.

2021

Loans from related parties consists of a $5,000 advance made by an officer of the Company and $98,640 owed to the Twenty-Second Trust.

Convertible notes payable – related party, net

2020

At December 31, 2020 we owed $50,318 of related-party notes which are convertible into common stock, of which $33,801 is owed to David LaMountain, Our Chief Operating Officer and $16,517 to Dr. Jon Leonard, our Chief Executive Officer. At December 31, 2020, unamortized discounts amounted to $224.

2021

Short-term portion - At December 31, 2021, we owed $70,392 of related-party notes which are convertible into common stock, of which $69,973 is owed to David LaMountain, Our Chief Operating Officer and $419 to Dr. Jon Leonard, our Chief Executive Officer. As of December 31, 2021, all discounts on this items had been fully amortized. During the year ended December 31, 2021, we amortized $26,316 of discounts to interest expense from this category.

Long-term portion - Additionally at December 31, 2021, we owed $40,000 to ArKnet. Unamortized discounts at December 31, 2021 was $25,004 (for a net of $14,996). During the year ended December 31, 2021, we amortized $7,662 from this category.

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Short-term convertible notes payable – third-party, net

2020

Unpaid principal on short-term convertible notes payable at December 31, 2020 was $1,487,919, net of discounts of $488,513 (or $999,406).

We had three convertible promissory notes which are in default at December 31, 2020 totaling $32,000. There are no discount balances on these notes.

During the year ended December 31, 2020 we had the following debt activity:

	·	We issued ten convertible promissory notes to a Arknet, a related party, with aggregate proceeds of $488,000. The notes mature at various times during 2021 and bear interest at 5%. In September 2020, we issued 290,397 Series F Preferred Stock (See Note 4) in retirement of all ten of these promissory notes, plus two written in 2019 in the aggregate amount of $122,500.

	·	We issued two convertible promissory notes to a related party in the aggregate amount of $36,172 in exchange for expenses paid on behalf of the Company. The notes mature on October 2, 2021 and bear interest at 5% (rate upon default: 10%). These notes have a conversion price of $0.002 per share.

	·	On July 21, September 2 and December 10, 2020, we issued three convertible promissory notes in the aggregate amount of $660,000, receiving $600,000 in proceeds. The notes mature on July 27, September 2 and December 10, 2021 and bear interest at 8% (24% default rate). They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion.

2021

Unpaid principal on short-term convertible notes payable at December 31, 2021 was $2,137,349, net of discounts of $499,537 (or $1637,812).

We have three convertible promissory notes which are in default at December 31, 2021 totaling $32,000. There are no discount balances on these notes.

During the year ended December 31, 2021 we issued 220,978,521 shares to convert five outstanding convertible notes in their entirety and 220,978,521 shares to convert a portion of another. We reduced unpaid principal by $1,045,000 and unpaid interest by $45,045. There was no gain or loss related to the conversions.

During the year ended December 31, 2021, we issued the following promissory notes:

	·	we issued a promissory note in the amount of $220,000, receiving proceeds of $208,000. The note matures February 17, 2022 and bears interest at 8% (24% default rate). They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion.

	·	we issued a promissory note in the amount of $520,000, receiving proceeds of $500,000 with a discount of $136,844. The note matures September 3, 2022 and bears interest at 8%. They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. We recorded a discount of $344,816 upon issuance consisting of 28,875 for the fair value of the 2,750,000 shares issued to entice the lender, an original issue discount of $20,000 and the initial derivative of $295,941. We amortized $283,590 of this discount to interest expense during the year ended December 31, 2021.

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	·	we issued a convertible note to a software developer to convert $247,426 of outstanding accounts payable into a convertible note. The initial derivative associated with this instrument was $109,247 of which we have amortized $55,248 as of December 31, 2021. The note is convertible at $0.008265 and is due September 3, 2022.

	·	we issued a promissory note in the amount of $520,000, receiving proceeds of $500,000. The note matures August 17, 2022 and bears interest at 8%. They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. We recorded a discount of $338,842 upon issuance consisting of 23,650 for the fair value of the 2,750,000 shares issued to entice the lender, an original issue discount of $20,000 and the initial derivative of $295,192. We amortized $87,035 of this discount to interest expense during the year ended December 31, 2021.

	·	we issued a promissory note in the amount of $220,000, receiving proceeds of $208,000. The note matures December 28, 2022 and bears interest at 8%. They are convertible at 63% of the lowest closing bid price during the twenty days preceding the conversion. We recorded a discount of $139,695 upon issuance consisting of $4,290 for the fair value of the 1,100,000 shares issued to entice the lender, an Original issue discount of $7,000, $5,000 of associated legal fees and the initial derivative of $123,405. We amortized $7,189 of this discount to interest expense during the year ended December 31, 2021.

During the years ended December 31, 2020 and 2021, we amortized a total of $902,653 and $1,051,230, respectively, to interest expense from this category.

Changes in Short-term convertible notes payable, net is as follows:

	US Dollar Denominated Notes			US Dollar Denominated Discounts			AU$ Denominated Notes			Total
Balance, December 31, 2020	$	910,030		$	(488,513	)	$	577,889		$	999,406
Proceeds from new debt		1,416,000			-			-			1,416,000
Original issue discounts		64,000			-			-			64,000
Conversion to common stock		(1,045,000	)		-			-			(1,045,000	)
Conversion from accounts payable to note payable		247,426			-			-			247,426
New discounts		-			(1,069,443	)		-			(1,069,443	)
Discount amortization		-			1,058,419			-			1,058,419
Effect of changes in foreign currency		-			-			(32,996	)		(32,996	)
Balance, December 31, 2021	$	1,592,456		$	(499,537	)	$	544,893		$	1,637,812

Short-term notes payable

At December 31, 2021, we owed AU$22,000 (US$15,989) to three Australian investors on promissory notes which contain no conversion privileges.

Long-term convertible notes payable, net

There are no long-term convertible notes payable as all convertible notes have been reclassified either to short-term or in-default.

Imputed Interest

Certain of our promissory notes bear no nominal interest. We therefore imputed interest expense and increased Additional Paid in Capital. For the year ended December 31, 2021, we imputed 10,701 of such interest. Of this amount, $179 is imputed on amounts owed to Jon Leonard, our Chief Executive Officer, and $10,522 was imputed on twenty eight outstanding loans in Australia.

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Derivative liabilities

The above-referenced convertible promissory notes issued during the year ended December 31, 2021 were analyzed in accordance with EITF 07–05 and ASC 815. EITF 07–5, which is effective for fiscal years beginning after December 15, 2009, and interim periods within those fiscal years. The objective of EITF 07–5 is to provide guidance for determining whether an equity–linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception under Paragraph 11(a) of ASC 815 which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non–derivative instrument that falls within the scope of EITF 00–19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non–derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. The EITF reached a consensus that would establish a two–step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument’s contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument’s settlement provisions.

Derivative financial instruments should be recorded as liabilities in the consolidated balance sheet and measured at fair value. For purposes of this engagement and report, we utilized fair value as the basis for formulating our opinion which has been defined by the Financial Accounting Standards Board (“FASB”) as “the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion”. The FASB has provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59–60.

The Company issued certain fixed-rate convertible Subscription Notes from 2015 through December 31, 2021 in the United States and Australia These convertible notes have become tainted (“The Tainted Notes”) as a result of the issuance of convertible promissory notes issued in the United States since there is a possibility (however remote) that the Company would not have enough shares in the Treasury to satisfy all possible conversions.

The Convertible Note derivatives were valued as of issuance; conversion; redemption/settlement; and each quarterly period from March 31, 2018 through December 31, 2021. The following assumptions were used for the valuation of the derivative liability related to the Notes:

	·	The stock price of $0.0060 to $0.00450 in this period would fluctuate with the Company projected volatility.
	·	The notes convert with variable conversion prices based on the percentages of the low or average trades or bids over 20 to 25 trading days.
	·	The effective discounts rates estimated throughout the periods are 37%.
	·	The Holder would automatically convert the note before maturity if the registration was effective and the company was not in default.
	·	The projected annual volatility for each valuation period was based on the historic volatility of the company are 143.0% – 178% (annualized over the term remaining for each valuation).
	·	An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 20%.
	·	The Holders would redeem the notes (with penalties up to 50% depending on the date and full–partial redemption) based on availability of alternative financing of 0% of the time, increasing 1.00% per month to a maximum of 5%.
	·	The Holder would automatically convert the note at the maximum of 2 times the conversion price or the stock price on the date of valuation.
	·	The Holder would automatically convert the note based on ownership or trading volume limitations.

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We recorded the initial derivative as both a derivative liability and a debt discount (or initial reduction in carrying value of the debt). We then amortized the debt discounts using the Effective Interest Method which recognizes the cost of borrowing at a constant interest rate throughout the contractual term of the obligation. The effective interest rates on the six instruments issued during the year ended December 31, 2021 range from 7% to 564%. The effective interest rates for the fifteen instruments issued during the year ended December 31, 2020 range from 49% to 132%.

At each reporting date, we determine the fair market value for each derivative associated with each of the above instruments. At December 31, 2021, we determined the fair value of these derivatives were $1,384,775.

Changes in outstanding derivative liabilities are as follows:

Balance, December 31, 2019	$	1,479,530
Changes due to new issuances		981,295
Changes due to extinguishments		(650,208	)
Changes due to adjustment to fair value		(425,842	)
Balance, December 31, 2019	$	1,384,775

Note 6 – Litigation Gains and Losses

McRae Lawsuit

This history of the legal proceedings in this case are described in Note 7 to the financial statements filed with Form 10-K on March 30, 2020 and are herewith included by reference.

Note 7 – Income Taxes

Deferred income taxes reflect the tax consequences on future years of differences between the tax bases:

	12/31/21			12/31/20
Net operating loss carry-forward	$	8,095,091		$	6,114,681

Deferred tax asset	$	1,699,969		$	1,284,083
Valuation allowance		(1,699,969	)		(1,284,083	)
Net future income taxes	$	-		$	-

Deferred taxes for 2021 and 2020 are calculated using a marginal tax rate of 21%.

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In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of future tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management has provided for a valuation allowance on all of its losses as there is no assurance that future tax benefits will be realized.

Our tax loss carry-forwards will begin to expire in 2022.

Note 8 – Subsequent Events

On January 13, 2022, we issued 1,000,000 shares in conversion of one Australian convertible promissory note.

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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

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 in Rule 13a-15(f) under the Securities Exchange Act, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the 2013 criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“2013 Framework”) in Internal Control-Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses.

As of December 31, 2021, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

As of December 31, 2021, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

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As of December 31, 2021, the Company did not establish a formal written policy for the approval, identification and authorization of related party transactions.

Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2020, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.

Change in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during quarterly period ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Item 9B. Other Information

None

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PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act

The following sets forth our directors, executive officers, promoters and control persons, their ages, and all offices and positions held. Directors are elected for a period of one year and thereafter serve until the stockholders duly elect their successor. Officers serve at the will of the Board.

Name	Position(s)	Age		Held Position(s) Since

Dr. Jon N. Leonard	President		81	May 21, 2015
	Chief Executive Officer Director
	Chief Financial Officer
	Director

David LaMountain	Director		36	October 10, 2019
	Chief Operations Operator

Frank R. Antenori	Director	39		September 17, 2021

Dr. Jon N. Leonard, Ph.D., M.S., B.S.

Dr. Jon N. Leonard has been the President, CEO, CFO and a director of the Company since May 21, 2015.

From June 2012 until November 2015, he was the President, Chief Executive Officer and a director of Click Evidence Inc., an Arizona corporation that he co-founded, which developed our KlickZie smartphone trustable imaging technology. Prior to that he directed counterterrorism technology development for the Raytheon Missile Company in Tucson, Arizona and before that was the Chief Scientist of the Strategic Systems Division of the Hughes Aircraft Company in El Segundo, California. Dr. Leonard holds a Ph.D. in mathematics from the University of Arizona, an M.S. in engineering from U.C.L.A. and a B.S. in physics from the University of Arizona

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David LaMountain

Mr. LaMountain has been a Tautachrome director and the Corporation’s Chief Operating Officer (COO) since his appointment in October 10, 2019. As COO he is responsible for overseeing the overall business operations strategy for achieving the Company’s global growth and success goals. With great people skills he has directed the Company’s social network activities since November 2016, providing strategic Investor Relations functions integrating communication, marketing and securities compliance enabling effective two-way communication between Tautachrome and its constituencies, contributing to achieving fair valuation of Tautachrome’s shares. Mr. LaMountain has been a successful business owner and investor/trader in public and private entities since 1999 and is a uniquely talented and driven individual with outstanding work ethics. He is also an inventor on KlickZie’s pending ARk patent.

Frank R. Antenori

Mr. Antenori is a decorated U.S. Army Special Forces Green Beret and highly qualified executive manager with more than 37 years of combined experience in private and government Program Management, Business Development, Financial Management and Public Relations. He is as an internationally known author of the book “Roughneck Nine-One: The extraordinary Story of a Special Forces A-Team at War,” based on his engagement in the Battle of Debecka Pass in the First Iraq War. He has served as an Arizona State Senator and the Arizona Senate Majority Whip. He is also a highly sought-after public speaker. Frank has a Master’s of Business Administration from the Grand Canyon University in Phoenix, and the Pre-Med Bachelors of Health Sciences and Biology from Campbell University in North Carolina. Frank also has numerous corporate, legislative and military honors and awards.

Family Relationships

There are no family relationships between any of our executive officers and director

Involvement in Certain Legal Proceedings

Except as noted herein or below, during the last ten years none of our directors or officers have:

1.	had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2.	been convicted in a criminal proceeding or subject to a pending criminal proceeding;

3.	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

4.	been 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 securities or banking activities, or to be associated with persons engaged in any such activity;

5.	been 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.	been 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;

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7.	been 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; o

8.	been 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, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Board of Directors and Committees

At December 31, 2020, our Board of Directors presently consisted of three members: Dr. Jon Leonard, David LaMountain and Frank Antenori. Our Bylaws generally provide for majority approval of directors in order to adopt resolutions, and provide that the Board of Directors may be expanded by Board action. All executive officer compensation, including payroll expenditures, salaries, stock options, stock incentives, and bonuses, must be approved by the unanimous consent of the Board of Directors. The entire Board of Directors acts as the Audit Committee and the Compensation Committee.

On future compensation matters, the Board will consider and recommend payroll expenditures, salaries, stock options, stock incentive and bonus proposals for our employees (if any). Acting in its audit committee function, the Board reviews, with our independent accountants, our annual financial statements prior to publication, and reviews the work of, and approves non-audit services performed by, such independent accountants. The Board appoints the independent public accountants for the ensuing year. The Board also reviews the effectiveness of the financial and accounting functions and the organization, operation and management of our Company.

Delinquent Section 16(a) Reports

The following table identifies each person who, at any time during the fiscal year ended December 31, 2020, was a director, executive officer, or beneficial owner of more than 10% of our common stock that failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year:

Name	Number of Late Reports		Number of Transactions Not Reported on a Timely Basis		Reports Not Filed
Dr. Jon Leonard		0		0		0
David LaMountain		0		0		0
Frank Antenori		0		0		0

Code of Ethics

We do not currently have a Code of Ethics, because we have only limited business operations, have a limited number of officers and directors, and believe a Code of Ethics would, at the present time, have limited utility. We intend to adopt such a Code of Ethics as our business operations expand and we have more directors, officers and employees.

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Procedure for Nominating Directors

We have not made any material changes to the procedures by which security holders may recommend nominees to our board of directors.

The board does not have a written policy or charter regarding how director candidates are evaluated or nominated for the board. Additionally, the board has not created particular qualifications or minimum standards that candidates for the board must meet. Instead, the board considers how a candidate could contribute to the Company’s business and meet the needs of the Company and the board.

Indemnification

Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Delaware.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Delaware law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

Item 11. Executive Compensation

Summary Compensation

Except for the employment agreement for CEO Dr. Jon N Leonard described below, during the years ended December 31, 2021 and 2020, no salary, bonus or other compensation was awarded or earned. However, Jon Leonard was partially paid his accrued salary. Payments to him during 2021 amounted to $43,000.

We intend to adopt a compensation plan for executive officers when we have positive and stable cash flows for the purpose of: (a) attracting and retaining talented executive officers who can assist with our business strategy; (b) aligning the interests of those executive officers with those of the Company; and (c) linking individual compensation to the performance of the Company. Any such plan that we may adopt will be designed to provide compensation that is both in line with our fiscal resources and competitive with companies at a similar stage of development.

The elements of compensation to be awarded to, earned by, paid to, or payable to our executive officers are currently expected to be composed of: (i) base salary (or consulting fees); (ii) option-based awards; and (iii) cash bonuses or share-based awards for exceptional performance that results in a significant increase in stockholder value.

Base salary will be a fixed element of compensation payable to executive officers for performing the specific duties of their respective positions. The amount of base salary for each executive officer will be reviewed and set annually by the Board of Directors. While base salary is intended to fit into our overall compensation objectives by serving to attract and retain talented executive officers, the size of the Company and the nature and stage of its business will also impact the level of base salary.

We intend to use option-based awards as a variable element of compensation to attract and reward talented executives and professionals. Option-based awards are intended fit into our overall compensation objectives by aligning the interests of executive officers with those of the Company and linking individual compensation to its performance. The Board of Directors will be responsible for setting and amending any equity incentive plan under which an option based award would be granted. Previous grants of stock options will be taken into account when considering new grants.

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We intend to award bonuses at our sole discretion and do not have any pre-existing performance criteria or objectives.

At this time we do not provide medical, dental, pension or other benefits to our executive officers.

Employment Agreements

Other than the agreement in the previous paragraph, there are no employment agreements or arrangements, whether written or unwritten, between the Company and any of its executive officers. We do not contemplate entering into any other employment agreements with our executive officers until the Company has positive and stable cash flows.

Incentive Plans

The Company does not have any plan or arrangement providing compensation to executive officers or directors intended to serve as an incentive for performance to occur over any period.

Equity Compensation Plans

The Company does not have any stock option plans, stock appreciation rights or any other plan, contract, authorization or arrangement pursuant to which the executive officers or directors of the Company may receive equity-based compensation for their services to the Company.

Outstanding Equity Awards

No executive officer or director of the Company had any unexercised option, stock that had not vested or equity incentive plan award as at the end of the Company’s last completed fiscal year.

Pension and Retirement Plans

The Company does not have any plan or arrangement by which to provide pension, retirement or similar benefits to its executive officers or directors, and we do not currently intend to offer such any such plan or arrangement until we have positive and stable cash flows

Termination, Resignation or Change of Control

The Company is not a party to any contract or agreement, and has not entered into any plan or arrangement that may provide for payment to an executive officer or a director at, following, or in connection with the resignation, retirement or other termination of an executive officer or director, or a change of control of the Company or a change in the responsibilities of an executive officer following a change of control.

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Compensation of Directors

The members of the Board of Directors do not receive compensation for their services as directors, but they are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. We may pay cash compensation to an executive officer who is also a director, but only in his or her capacity as an executive officer. We do not currently have an established policy to provide compensation to directors for their services in that capacity.

Director Independence

Our Board of Directors has determined that none of our directors is “independent” as defined under the standards set forth in Section 303A.02 of the NYSE Listed Company Manual. In making this determination, the Board of Directors considered all transactions set forth in the section titled “Certain Relationships and Related Transactions,” elsewhere in this prospectus.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of March 4, 2022, information concerning ownership of our voting shares by (i) each director, (ii) each executive officer, (iii) all directors and executive officers as a group, and (iv) each person known to us to be the beneficial owner of more than five percent of each class. The number and percentage of shares beneficially owned includes any shares as to which the named person has sole or shared voting power or investment power and any shares that the named person has the right to acquire within 60 days.

	Common					Preferred E³					Preferred F⁵					% Total Voting, All
	Shares²		%¹			Shares		%			Shares		%⁴			Classes

Name of Beneficial Owner

5% Owners
Michael Nugent		392,613,893		6.7	%												6.7	%
Arknet, Inc. (AZ Corp.)							40,000		100.0	%		290,397		100.0	%		40.0	%

Officers and Directors
Dr. Jon Leonard		1,237,829,545		21.1	%												21.1	%
David LaMountain		43,177,151		0.7	%												0.7	%
Frank Antenori		1,000,000		0.0	%												0.0	%

Directors and Officers and as Group		1,282,006,696		21.8	%		-		0.0	%		-		0.0	%		21.8	%

(1)	Based on an aggregate of 5,867,608,915 shares of common stock outstanding at March 4, 2022.
(2)	Common stock holdings includes 126,166,322 shares of common stock held by California Molecular Electronics Corp., of which Dr. Leonard is the sole officer and director.
(3)	Each Preferred E share has the voting rights of all other voting shares combined, multiplied by 0.00001.
(4)	Based on an aggregate of 40,000 shares of preferred E stock outstanding at March 4, 2022.
(5)	Based on an aggregate of 290,397 shares of preferred F outstanding at March 21, 2021.

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The mailing address for all directors, executive officers and beneficial owners of more than five percent of our common stock is 1846 E. Innovation Park Drive, Oro Valley, Arizona 85755.

Unless otherwise stated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of our common and preferred stock beneficially owned by them. For purposes hereof, a person is considered to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof, upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that any such warrants, options or convertible securities that are held by such person (but not those held by any other person) and which can be exercised within 60 days from the date hereof, have been exercised.

Changes in Control

We are not aware of any arrangement, the operation of which may at a subsequent date result in a change of control of the Company.

Item 13. Certain Relationships and Related Transactions, and Director Independence

For the years ended December 31, 2020 and 2019, certain related parties made cash payments to the Company and the Company made cash payments to the related parties (see Note 3 to the financial statements).

Director Independence

As our common stock is currently traded on the OTC Bulletin Board, we are not subject to the rules of any national securities exchange which require that a majority of a listed company’s directors and specified committees of the board of directors meet independence standards prescribed by such rules.

Item 14. Principal Accountant Fees and Services

Audit and Review Fees. We paid M&K, CPAS, PLLC for audit and review fees of $29,550 for 2020 and $28,500 for 2021.

Tax Fees. We have not paid any money for tax related services.

All Other Fees. We have not paid any money for other fees.

Audit Committee pre-approval policies and procedures. The entire Board of Directors, which acts as our audit committee, approved the engagement of M&K, CPAS, PLLC.

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PART IV

Item 15. Exhibits, Financial Statement Schedules, Signatures

Exhibit No.		Description of Exhibit
3.1		Articles of Incorporation of Roadships Holdings, Inc. filed as exhibit 3.1 with our Form 8-K/A filed April 20, 2009 and incorporated herein by reference
3.2		Bylaws of Roadships Holdings, Inc. filed as exhibit 3.2 with our Form 8-K/A filed April 20, 2009 and incorporated herein by reference
3.3		Amended and Restated Certificate of Incorporation filed with our Form 8-K filed November 5, 2015 and incorporated herein by reference.
21.1*		Subsidiaries of the registrant
31.1*		Certification pursuant to Section 302 of the Sarbanes-Oxley act of 2002
32.1*		Certification of Officers pursuant to Section 906 of the Sarbanes-Oxley act of 2002 (18 U.S.C. section 1350)
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

*Filed herewith

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SIGNATURES

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

		Tautachrome, Inc.

/s/ Dr. Jon Leonard
Dr. Jon Leonard		Date: March 24, 2022
Chairman, Chief Executive Officer and Chief Financial Officer

/s/ David LaMountain
David LaMountain		Date: March 24, 2022
Director, Chief Operating Officer

In accordance with the Securities Exchange Act of 1934, this report has been duly signed by the following persons on behalf of the Company and in the capacities and on the dates indicated.