February 22, 2024

Housing Finance Development

It's Your Housing Finance Development

NOTE 2 – GOING CONCERN AND PLAN OF OPERATION

The Company’s financial statements have been presented on the basis that it will
continue as a going concern. The Company has not generated revenues from
construction related operations to date. The Company has an Accumulated deficit
of $13,258,835 as of September 30, 2022 which raises substantial doubt about the
Company’s ability to continue as a going concern.

The Company will use additional funds through equity and debt financing,
collaborative or other arrangements with corporate partners, licensees or
others, and from other sources, which may have the effect of diluting the
holdings of existing shareholders. The Company has subsequent current
arrangements with respect to, or sources of, such additional financing and the
Company does not anticipate that existing shareholders will be required to
provide any portion of the Company’s future financing requirements.

No assurance can be given that additional financing will be available when
needed or that such financing will be available on terms Acceptable to the
Company. If adequate funds are not available, the Company may be required to
delay or terminate expenditures for certain of its programs that it would
otherwise seek to develop and commercialize. This would have a material adverse
effect on the Company and raise doubt about the Company’s ability to continue as
a going concern. The accompanying financial statements do not include any
adjustments that may result from the outcome of this uncertainty.

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

Update 2020-06-Debt-Debt with Conversion and Other Options (Subtopic 470-20) and
Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
This was issued in August of 2020 and will become effective for fiscal years
beginning after December 15, 2023, including interim periods within those fiscal
years. We are in the process of evaluating the impact to the company.




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NOTE 4 – RELATED PARTY TRANSACTIONS

Though the company has established banking credit cards to assist with the
normal everyday purchases and payments of corporate needs such as utilities
etc., The CEO and other involved parties often use their own cards for this
purpose and, to represent this, the company has a continuous Related Party
Advances section in its financial statements. This is adjusted typically at the
end of each reporting period.

As of September 30, 2022, and December 31, 2021 the balance owed to John
Sprovieri
was $0 and $0 respectively.

NOTE 5 – PROPERTY, INVENTORY AND EQUIPMENT

Notes to Inventory Type and Value:

Inventory consists of Finished Product and Raw Materials that are valued at the
lower of cost or market.



Raw Materials:


Raw materials consist of rebar, insulation, surfactant, powdered cement,
threaded inserts and sundry items. The cost is based on the cost of purchase
from a non-related supplier. As of September 30, 2022 and December 31, 2021 the
inventory value was $6,197 and $6,197 respectively.

Property and Equipment at September 30, 2022 were comprised of the following at:




                            September 30,       December 31,
                                2022                2021
Capital Equipment          $        80,554     $       80,554
Vehicles                             6,344              6,344
Accumulated Depreciation           (55,661 )          (46,705 )
Net Fixed Assets           $        31,237     $       40,193



Depreciation expense for the three months ended September 30, 2022 and 2021 was
$2,985 and $2,985 respectively.

Depreciation expense for the nine months ended September 30, 2022 and 2021 was
$8,955 and $8,955 respectively.



NOTE 6 - EQUITY



Common Stock:


During the Period January 1, 2021 to September 30, 2022, the Company
issued 1,882,899 shares for convertible note conversions.

On February 22 of 2021 the company performed a 40 for 1 reverse stock split. All
share amounts have been adjusted retroactively to reflect the split and
adjustments have been made to reflect the par value and adjusted to additional
paid in capital.




The following table is a list of the foremost 6 shareholders of the Company as
of September 30, 2022.



NAME ADDRESS                                                     Number of Shares
1. John Sprovieri PO Box 813, Rufus, OR 97050                           40,675,897

2. CEDE & Company 570 Washington Blvd. 5th. Floor, Jersey
City, NJ
07310

                                                           2,084,557

3. Kathleen D Jett PO Box 846, 618 W. First Street, Rufus, OR
97050.

                                                                   6,025,352
4. Kimberly Grimm 15011 SE Mt Royale Ct. Milwaukie, OR 97267.            3,275,120
5. Michael Young 4405 H'way 30, The Dalles, OR..                         1,100,000
6. William S Beers PO Box 825, Rufus, OR 97058                           1,110,200





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Warrants


On May 28, 2019 we issued 2,000,000 in cashless warrants in connection with the
issuance of the convertible promissory note dated May 29, 2019 with Crown Bridge
Partners, LLC
in the amount of $27,500.



                                                Weighted           Warrants          Weighted
                              Warrants -        Average         exercisable -        Average
                            Common Share        Exercise        Common Share         Exercise
                             Equivalents         price           Equivalents          price
Outstanding December 31,
2020                                     -     $        -                     -     $        -
Additions
Granted                          2,000,000           0.30          2,000,000.00           0.30
Expired                                  -              -                     -
Exercised                                -              -                     -              -
Outstanding December 31,
2021                             2,000,000     $     0.30             2,000,000     $     0.30
Additions
Granted                                  -              -                     -
Expired                         (2,000,000 )            -            (2,000,000 )
Exercised                                -              -                     -              -
Outstanding September
30, 2022                                 -     $        -                     -     $        -



The warrants contained a down round feature that were triggered during 2020, and
the result $12,600 of deemed dividend recognized as a result.



NOTE 7 - INCOME TAXES


We currently have no current tax liability, as we have had limited revenue and
incurred losses since inception.

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the
“Tax Act”) was enacted. Among the significant changes to the U.S. Internal
Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate
(“Federal Tax Rate”) from 35% to 21% effective January 1, 2019. The Company will
compute its income tax expense for the year ended December 31, 2022 using a
Federal Tax Rate of 21%.

Income taxes are provided based upon the liability method of accounting pursuant
to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred
income taxes are recorded to reflect the tax consequences in future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year-end. A valuation allowance is recorded against
deferred tax assets if management does not believe the Company has met the “more
likely than not” standard required by ASC 740-10-25-5.

Deferred income tax amounts reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax reporting purposes.

During the Period January 1, 2020 to December 31, 2020 there
were 1,250,000 shares issued to these individuals to recompense post-split roll
back numbers issued for service compensation to the Company. As a result the
company recognized a share based expense of $1,150,000. This amount was
eliminated from the net operating loss carry forward

During the Period January 1, 2021 to December 31, 2021 there
were 53,238,652 shares issued to these individuals to recompense post-split roll
back numbers issued for service compensation to the Company. As a result the
company recognized a share based expense of $2,683,226. This amount was
eliminated from the net operating loss carry forward

As of September 30, 2022, we had a net operating loss carry-forward of
approximately $(9,379,827 and a deferred tax asset of approximately
$.1969,764 using the statutory rate of 21%. The deferred tax asset may be
recognized in future periods, not to exceed 20 years for 2020 and prior and post
2018 are indefinite.

However, due to the uncertainty of future events, we have booked valuation
allowance of $(1,969,764). FASB ASC 740 prescribes recognition threshold and
measurement attributes for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. FASB ASC 740
also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. At December
31, 2021
, the Company had not taken any tax positions that would require
disclosure under FASB ASC 740.




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                            September 30,      December 31,
                                2022               2021
Deferred Tax Asset         $     1,969,764     $   1,948,124
Valuation Allowance             (1,969,764 )      (1,948,424 )
Deferred Tax Asset (net)   $             -     $           -




The Company is subject to tax in the U.S. federal and Washington jurisdictions.
These filings are subject to a three-year statute of limitations unless the
returns have not been filed at which point the statute of limitations becomes
indefinite. No filings are currently under examination. No adjustments have been
made to reduce the estimated income tax benefit at year end. Any valuations
relating to these income tax provisions will comply with U.S. generally Accepted
Accounting principles.

NOTE 8 – NOTES PAYABLE AND DERIVATIVE LIABILITIES

On June 25, 2020, the company issued a 12-month Convertible Note for the sum of
$30,000 to Shmeul Rotbard at 8%. Convertible at $0.008. No beneficial conversion
was recognized as the conversion price was higher than the stock price.

On November 5, 2021, the company issued a 12-month Convertible Note for the sum
of $55,000 to Sixth Street Lending at 6%. Convertible at 65% of the averaged 3
lowest trading prices during the prior 15 day trading period. We recognized a
derivative liability in the amount of $117,851 as a result.

On December 28, 2021, the company issued a 12-month Convertible Note for the sum
of $38,000 to Sixth Street Lending at 10%. Convertible at 65% of the averaged 3
lowest trading prices during the prior 15 day trading period. We recognized a
derivative liability in the amount of $79,868 as a result.

On July 15, 2022, the company issued a 24-month Convertible Note for the sum of
$1,050,000 to RB Capital at 8%. Convertible at $0.05. This Note is a result of
the consolidation of (21) previous Notes which have a total of 1,050,000,
inclusive of accrued interest. These (21) Notes have various dates ranging from
February 2, 2018, up to and including October 5, 2021.




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On July 11, 2022, the company issued a 12-month Convertible Note for the sum of
$50,000 to RB Capital at 10%. Convertible at $0.02. No beneficial conversion was
recognized as the conversion price was higher than the stock price.

On September 27, 2022, the company issued a 12-month Convertible Note for the
sum of $50,000 to RB Capital at 10%. Convertible at $0.02. No beneficial
conversion was recognized as the conversion price was higher than the stock
price.

As a result of the convertible notes we recognized the embedded derivative
liability on the date that the note was convertible. We also revalued the
remaining derivative liability on the outstanding note balance on the date of
the balance sheet. The inputs used were a weighted volatility of 286% and a
risk-free discount rate of 2.44%

The convertible notes have interest rates that range from 8% to 12% per annum
and default rates that range from 12% to 24% per annum. The maturity dates range
from six months to one year. The conversion rates range from 55% discount to the
market to 62% discount to the market. As of September 30, 2022, there were
twenty-three convertible notes outstanding,




The remaining derivative liabilities valued using the level 3 inputs in the fair
value hierarchy were:



                                                September 30,       December 31,
                                                    2022                2021
Derivative Liabilities on Convertible Loans:
Outstanding Balance                                    113,948            295,306




NOTE 9 - COMMITMENTS


The company maintains a month-to-month lease agreement on a 8,000 sq. ft.
facility located in outer Goldendale and monthly lease cost is $2,000. The total
lease payments for the three and nine months ended September 30, 2022 were
$6,000 and 12,000 respectively.

As of September 30, 2022 the company has not remitted all of the backup
withholdings, which could result in material trust-fund penalties from the
internal revenue service.




NOTE 10 - SUBSEQUENT EVENTS



Subsequent to September 30, 2022 end on November 15, 2022 Auscrete obtained a
line of credit from RB Capital of $100,000 at 8% interest.

In accordance with ASC 855, the Company has analyzed its operations subsequent
to September 30, 2022 through the date these financial statements were issued,
and has determined that there were no material subsequent events to disclose in
these financial statements, other than referenced above.






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Item 2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations




Forward Looking Statements



Readers of this discussion are advised that the discussion should be read in
conjunction with the financial statements of Registrant (including related notes
thereto) appearing elsewhere in this Form 10-Q. Certain statements in this
discussion may constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
reflect Registrant’s current expectations regarding future results of
operations, economic performance, financial condition and achievements of
Registrant, and do not relate strictly to historical or current facts.
Registrant has tried, wherever possible, to identify these forward-looking
statements by using words such as “believe,” “expect,” “anticipate,” “intend,”
“plan,” “estimate” or words of similar meaning.

Although Registrant believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions, such statements
are subject to risks and uncertainties, which may cause the actual results to
differ materially from those anticipated in the forward-looking statements. Such
factors include, but are not limited to, the following: general economic and
business conditions, which will, among other things, affect demand for housing,
the availability of prospective buyers; adverse changes in Registrant’s real
estate and construction market; including, among other things, competition with
other manufacturers, risks of real estate development and acquisitions;
governmental actions and initiatives; and environmental/safety requirements.



Results of Operations


There were no material operational changes from the last financials of December
31, 2021
. Revenue for the three and nine months ended September 30, 2022, and
2021 was $0 and $0 respectively.

Net cash used in operating activities was $189,595 for the nine months ended
September 30, 2022 compared to net cash used in operating activity of $250,719
for the same period in 2021.

Net cash used in investing activities was $0 in the nine months ended September
30, 2022
, compared to net cash used in investing activity of $0 for the same
period in 2021.

Net cash provided by financing activities was $207,376 for the nine months ended
September 30, 2022, compared to $237.115 for same period in 2021.

We have had minimal operating activity since inception of the company in 2010.
Our 2022 short-term obligations are being covered by funding received from
convertible notes. with a total value of $100,000 issued in 2022.

As of September 30, 2022, the Company had inadequate cash to operate its
business at the current level for the next three months and to achieve its
business goals. The success of our business plan during and beyond the next
three months will be provided by additional loan financing of a minimum of
$300,000.




Overview



Auscrete Corporation was formed as an enterprise to take advantage of
technologies developed for the construction of affordable, thermally efficient
and structurally superior housing. This “GREEN” product is the culmination of
design and development since the early 1980’s. The current technology is the
amalgamation of various material stages of Company development, taking an idea
to a product and further developing that product to address an ongoing problem
in the world’s largest marketplace, the quest for affordable, efficient and
enduring housing.

Auscrete’s structures are monetarily very competitive. A turnkey house, ready to
move in sells for around $105 per square foot. That is very competitive in
today’s market but is brought about by Auscrete’s ability to manufacture

large panels in mass production format. The house is very quickly constructed on
site to produce an attractive and functional site-built home, a home that will
stay where it is put through all kinds of adverse weather and age conditions. It
will not burn, is not affected by insect infestation or rot, it saves
extensively on energy costs and has very low maintenance needs.



Financing


Auscrete Corporation, a Wyoming public company was incorporated on December 31,
2009
and initially became effective with the SEC for an IPO on August 16, 2012.
The IPO was never exercised and expired.

Subsequently the company had an S-1 become Effective on December 30, 2014. This
was not an Offering and not used for fundraising.




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The company has been quoted on the OTCQB Bulletin Board under the symbol “ASCK”
since February 2019 and is DWAC registered.

Financial Statements in this document represent the full results of the company
during the nine month period to September 30, 2022. There are no “off balance
sheet” arrangements.



Marketing


Principal marketing efforts will be initially aimed at leveraging specific
contacts and relationships that have developed over the last 12 years since the
inception of the founders’ pilot plant. The company has interviewed and chosen
an experienced sales person who will have the luxury of dealing with existing
contacts as well as the multitude of inquiries received every week.

Auscrete’s product is also extremely suitable for the construction of commercial
and industrial structures. Company marketing will also explore the commercial
world for applications and it is believed that such construction will become a
large part of the company’s future direction.



Operations Management


The Auscrete Team will comprise of a minimal tiered management structure that
enables control and knowledge to be firmly at the hands of senior management
ensuring rapid and simplified direct reporting to action.

Under control of the CEO will be marketing, manufacturing operations, design
architecture and engineering, administration and safety compliance.
Additionally, the Construction Manager will oversee Auscrete’s own construction
activities as well as liaise with contractors and developers.



Operations


Design and Engineering will prepare new design concepts and adapt customer’s
designs, either residential or commercial, to the Auscrete style of construction
as well as preparing all drawings for manufacturing on the production floor.

The construction manager will be responsible for liaising with contractors,
developers and other customers to ensure the satisfactory completion of their
contract. As well, the company will have its own construction division that will
not conflict with other contractors but will enable the company the ability to
carry out construction operations where no alternative exists. The construction
manager will also oversee these operations.



Future Strategy


Auscrete Corporation intends to position itself as a major supplier in the
affordable housing market. Housing is generally considered “affordable” when its
cost does not exceed 30 percent of the median family income in a given area. In
many parts of the country, housing costs have shown signs of adversely affecting
corporations, workers and local economies. Yet, still the availability of
affordable housing is becoming increasingly scarce.

The company is promoting a product that will not only make housing affordable
but also offers some luxuries as well, such as incorporated heat pump/air
conditioning units that would not be available in other houses at such
comparable pricing. By constructing with the Auscrete Building System, those
luxuries will result in lower cost utilities and a comfortable ‘feel’ to the
living environment, as can be achieved with a product offering excellent thermal
and soundproofing qualities as well as superb fire resistance.

Developers and contractors will offer the homes as complete ready constructed
site-built units on suitable land. They are NOT and will not be offered under
the banner of such categories as ‘pre-fabricated’, ‘modular” or ‘factory built’
homes. They are just plain good value masonry homes built of a time proven
product, concrete.

Although Auscrete can economically deliver whole house panel sets as far away as
New Mexico or Alberta, Canada, the Company will concentrate mostly on its home
markets here in the Northwest where future growth will be achieved by servicing
this fast-emerging market in this above average (for affordable housing)
evolving area.

The company plans on selling most of its output to developers, contractors and
builders who will purchase the complete set of wall, roof and interior panels
from Auscrete and use their own construction crews to construct the houses.

The Plant’s specialized line equipment installation has been completed with end
line product fabrication meeting the Company’s expectations in high construction
standards. The Company has made further equipment purchases to support its
machine shop which will allow it to build additional much needed casting tables
amongst other production plant assets.




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Housing construction planning is currently in a number of project stages. The
Company’s Marketing efforts have recently diversified to also include designs of
small dwellings sometimes referred to as “Tiny Homes.” These structures are 80 –
500 square feet housing units built to fill the gap in urban multi-unit homeless
transitional housing. This additional new venture in fabrication fits well with
Auscrete’s overall model in concrete panel construction for housing and
commercial structures.

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