The following discussion and analysis summarizes the significant factors affecting our consolidated results of operations, financial condition, and liquidity position for the three and three months ended March 31, 2022. This discussion and analysis should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for our year-ended December 31, 2021 and the consolidated unaudited financial statements and related notes included elsewhere in this filing. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.





                           FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events, or circumstances or to reflect the occurrence of unanticipated events.

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

The management's discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

As used in this quarterly report, the terms "we", "us", "our", and "our company" means BrewBilt Manufacturing, Inc., unless otherwise indicated.



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RESULTS OF OPERATIONS

Results for the Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021





Revenues:

The Company's revenues were $11,300 for the three months ended March 31, 2022 compared to $13,251 for the three months ended March 31, 2021. The decrease is due to fewer projects being completed and delivered to customers in Q1 2022.





Cost of Sales:

The Company's cost of materials was $5,773 for the three months ended March 31, 2022, compared to $7,614 for the three months ended March 31, 2021. The decrease is due to fewer completed jobs in Q1 2021.





Operating Expenses:

Operating expenses consisted primarily of consulting fees, professional fees, salaries and wages, office expenses and fees associated with preparing reports and SEC filings relating to being a public company. Operating expenses for the three months ended March 31, 2022, and March 31, 2021, were $601,781 and $404,001, respectively. The increase is due to an increase in salaries and wages and general and administrative expenses.





Other Expense:

Other expense for the three months ended March 31, 2022 and March 31, 2021 was $1,477,835 and $2,239,394, respectively. Other income (expense) consisted of losses on derivative valuation, losses on conversion on preferred stock to common stock and interest expense. The gain or loss on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms. The decrease primarily resulted from the fluctuation of the Company's stock price which impacted the valuation of the derivative liabilities on the convertible debt and a decrease in loss on Series A conversions.





Net Loss:

Net loss for the three months ended March 31, 2022 was $2,074,089 compared with $2,637,758 for the three months ended March 31, 2021. The decreased loss can be explained by the gain on the change in fair value of derivative liabilities and a decreased loss on preferred stock conversions.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of March 31, 2022, the Company has a shareholders' deficit of $15,989,607 since its inception, working capital deficit of $2,907,356, negative cash flows from operations, and has limited business operations, which raises substantial doubt about the Company's ability to continue as going concern. The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance the Company will be successful in achieving these goals.





                             March 31, 2022       December 31, 2021
                                   $                      $
Current Assets                     1,344,922               1,318,748
Current Liabilities                4,252,278               4,404,654
Working Capital (Deficit)         (2,907,356 )            (3,085,906 )

The overall working capital (deficit) decreased from $(3,085,906) at December 31, 2021 to $(2,907,356) at March 31, 2022 due to an increase in raw material purchases and a decrease in derivative liabilities and accrued liabilities.


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

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