United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

(Mark One)
☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023

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

Commissions file number: 000-54530

GBT TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

Nevada	27-0603137
State or other jurisdiction of	I.R.S. Employer Identification Number
incorporation or organization

2450 Colorado Ave., Suite 100E, Santa Monica, CA 90404

(Address of principal executive offices)

Issuer ’s telephone number:

888-685-7336

Securities registered pursuant to Section 12(b) of the Act: Not applicable.

Title of each class	Trading Symbol	Name of each exchange on which registered
Not applicable.

Indicate by check mark whether the registrant (1) has ~~filed~~filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 No

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	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 Exchange Act). Yes ☐No ☒

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

Common Stock, $0.00001 par value	~~1,206,818,392~~4,577,753,886 Common Shares
(Class)	(Outstanding at ~~November 11, 2022)~~May 22, 2023)

GBT TECHNOLOGIES INC.

TABLE OF CONTENTS

PART I.	Financial Information	Page

Item 1.	Condensed Consolidated Financial Statements	2

	Condensed Consolidated Balance Sheets as of ~~September 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021(audited)~~2022	2

	Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	3

	Condensed Consolidated Statements of Stockholder’s Deficit for the ~~three and Nine~~Three months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	6

	Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		4342

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		6158

Item 4.	Controls and Procedures		6158

PART II.	Other Information	6260

Signatures			7475

Item 1: Condensed consolidated financial statements

GBT TECHNOLOGIES INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


ASSETS	March 31,			December 31,
	2023			2022
Current Assets:
Cash	$	59,067		$	106,639
Accounts Receivable		40,651			25,244
Inventory		7,567			11,569
Prepaid		72,222			12,500
Note Receivable		193,788			198,475
Investment		7,652			16,198
Other current asset		556			—
Total current assets		381,503			370,625

Total assets	$	381,503		$	370,625
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	5,376,935		$	6,240,634
Accrued settlement		4,090,057			4,090,057
Unearned revenue		—			48,921
Contract liabilities		38,944			41,444
Convertible notes payable, current		6,114,140			6,397,727
Convertible notes payable, related party		750,000			116,605
Notes payable, current,		—			41,137
Notes payable, current, related party		140,000			140,000
Due to related party		61,809			62,003
Derivative liability		6,524,972			1,714,143
Total current liabilities		23,096,857			18,892,671
Convertible note payable, noncurrent,		516,606			—
Convertible notes payable,noncurrent, related party		75,000			—
Note payable, noncurrent,		353,891			308,863
Total liabilities		24,042,354			19,201,534
Contingencies (Note 18)		—			—
Stockholders’ Deficit:
Series B Preferred stock, $0.00001 par value;
45,000 and 45,000 shares issued respectively		—			—
Series C Preferred stock, $0.00001 par value;
700 and 700 shares issued and outstanding respectively		—			—
Series D Preferred stock, $0.00001 par value;
0 and 0 shares issued and outstanding respectively		—			—
Series G Preferred stock, $0.00001 par value;
0 and 0 shares issued and outstanding respectively		—			—
Series H Preferred stock, $0.00001 par value ($500 stated value); 40,000 shares authorized;
20,000 and 20,000 shares issued and outstanding respectively		—			—

Common stock, $0.00001 par value; 10,000,000,000 shares authorized; 2,930,101,819 and 1,535,593,440 shares issued and outstanding respectively		29,301			15,356
Treasury stock, at cost; 21 shares,		(643,059	)		(643,059	)
Stock loan receivable		(7,610,147	)		(7,610,147	)
Additional paid in capital		289,450,684			288,664,858
Accumulated deficit		(304,887,630	)		(299,257,917	)
Total stockholders’ deficit		(23,660,851	)		(18,830,909	)
Total liabilities and stockholders’ deficit	$	381,503		$	370,625

GBT TECHNOLOGIES INC.

CONSOLIDATED STATEMENT OF OPERATIONS

ASSETS September 30, December 31,
2022 2021
(Unaudited) (Audited)
Current Assets:
Cash $ 130,642 $ 155,106
Funds in escrow 394,694 —
Cash held in trust — 112,942
Accounts Receivable 19,227 —
Inventory 7,158 —
Notes receivable 194,821 —
Other receivable — 3,750,000
Inventory in transit 43,872
Due from related party 30,049 —
Marketable securities 40,942 —
Total current assets 861,405 4,018,048
Total assets $ 861,405 $ 4,018,048

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable and accrued expenses $ 5,901,663 $ 6,896,263
Accrued settlement 4,090,057 4,090,057
Unearned revenue 249,159 249,384
Contract liabilities 43,944 —
Convertible notes payable, current 6,549,832 8,109,436
Convertible notes payable, related party 116,605 116,605
Notes payable, current 38,196 2,612,397
Notes payable, related party 140,000 140,000
Derivative liability 5,787,760 10,192,485
Total current liabilities 22,917,216 32,406,629

Noncurrent Liabilities:
Convertible note payable, noncurrent, net of discount of $0 and $88,403 — 35,797
Note payable, noncurrent 311,804 337,603
Total noncurrent liabilities 311,804 373,400

Total liabilities 23,229,020 32,780,029

Stockholders’ Deficit:
Series B Preferred stock, $0.00001 par value; 20,000,000 shares authorized; — —
Series C Preferred stock, $0.00001 par value; 10,000 shares authorized; — —
Series D Preferred stock, $0.00001 par value; 100,000 shares authorized; — —
Series G Preferred stock, $0.00001 par value; 2,000,000 shares authorized; — —

Series H Preferred stock, $0.00001 par value ($500.00 stated value); 40,000 shares authorized; — —

Common stock, $0.00001 par value; 2,000,000,000 shares authorized; 1,183,741,469 and 5,133,489 shares issued and outstanding at September 30, 2022 and December 31, 2021 11,838 332
Treasury stock, at cost; 21 shares at September 30, 2022 and December 31, 2021 (643,059 ) (643,059 )
Stock loan receivable (7,610,147 ) (7,610,147 )
Additional paid in capital- 288,199,959 284,072,666
Accumulated deficit (302,326,206 ) (304,581,773 )
Total stockholders’ deficit (22,367,615 ) (28,761,981 )
Total liabilities and stockholders’ deficit $ 861,405 $ 4,018,048


	For The Three Months ended March 31,
	2023			2022
Sales	$	217,785		$	224,970
Consulting Income – Related Party		—			45,000
Total sales		217,785			269,970
Cost of Goods Sold		176,091			208,987
Gross Profit		41,694			60,983
Operating expenses:
General and administrative		149,401			129,383
Marketing		54,898			341,132
Professional		293,930			535,887
Total operating expenses		498,229			1,006,402
Loss from operations		(456,535	)		(945,419	)
Other income (expense):
Amortization of debt discount		(147,628	)		(68,485	)
Change in fair value of derivative liability		(3,924,247	)		5,239,579
Interest expense and financing costs		(1,595,650	)		(235,493	)
Other Expense		(6,031	)		—
Gain on debt extinguishment		315,297			—
Change in fair value of marketable securities		(8,547	)		(65,000	)
Other income		193,628			1,057
Total other income (expense)		(5,173,178	)		4,871,658
Profit (Loss) before income taxes		(5,629,713	)		3,926,239
Income tax expense		—			—
Profit (Loss) from continuing operations		(5,629,713	)		3,926,239
Net Income (Loss)	$	(5,629,713	)	$	3,926,239
Weighted average common shares outstanding:
Basic		2,381,753,489			33,387,530
Diluted		25,705,601,964			84,767,611
Net Income (Loss) per share (basic and diluted):
Basic	$	(0.00	)	$	0.12
Diluted		(0.00	)		0.05

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

GBT TECHNOLOGIES INC.

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Sales $ 201,495 $ — $ 771,446 $ —
Sales - related party 45,000 45,000 90,000 135,000
Total sales 246,495 45,000 861,446 135,000
Cost of goods sold 141,545 — 530,003 —
Gross profit 104,950 45,000 331,443 135,000

Operating expenses:
General and administrative 167,411 723,706 538,663 1,931,963
Marketing 87,900 182,692 521,200 514,906
Professional 378,226 — 1,506,418 —
Impairment of assets — — — 15,400,000
Total operating expenses 633,537 906,398 2,566,281 17,846,869

Loss from operations (528,587 ) (861,398 ) (2,234,838 ) (17,711,869 )

Other income (expense):
Amortization of debt discount (54,132 ) (220,095 ) (362,011 ) (686,732 )
Change in fair value of derivative liability (354,869 ) 627,784 2,795,870 (165,402 )
Interest expense and financing costs (261,858 ) (326,222 ) (731,251 ) (1,473,712 )
Realized gain on marketable equity security — — — 11,000
Loss on debt modification — — — (13,777,480 )
Gain on RJW settlement 3,012,633 — 3,012,633 —
Gain on bad debt — — 50,000 —
Change in fair value of marketable securities (50,537 ) — (290,537 ) —
Licensing income – related party 7,814 350,000 15,699 950,000
Total other income (expense) 2,299,051 431,467 4,490,403 (15,142,326 )

Income (loss) before income taxes 1,770,464 (429,931 ) 2,255,565 (32,854,195 )

Income tax expense — — — —

Income (loss) from operations 1,770,464 (429,931 ) 2,255,565 (32,854,195 )

Net income (loss) $ 1,770,464 $ (429,931 ) $ 2,255,565 $ (32,854,195 )

Weighted average common shares outstanding:
Basic 1,108,371,904 26,154,579 1,426,061,998 16,522,673
Diluted 5,198,401,226 26,154,579 5,516,091,320 16,522,673
Net loss per share (basic and diluted):
Basic $ 0.00 $ (0.02 ) $ 0.00 $ (1.99 )
Diluted 0.00 (0.02 ) 0.00 (1.99 )

~~The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.~~

~~GBT TECHNOLOGIES INC.~~

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

(unaudited)

Total
Stock Additional Stockholders’
Common Stock Treasury Stock Loan Paid-in Accumulated Equity/
Shares Amount Shares Amount Receivable Capital Deficit (Deficit)
Balance, December 31, 2021 33,200,198 $ 332 $ 1,040 $ (643,059 ) $ (7,610,147 ) $ 284,072,666 $ (304,581,773 ) $ (28,761,981 )

Common stock issued for conversion of convertible debt and accrued interest 369,198 4 — — — 34,996 — 35,000
Fair value of beneficial conversion feature of converted — — — — — 49,504 — 49,504
Common stock issued for cash 463,303 4 — — — 68,304 — 68,308
Net loss — — — — — — 3,926,239 3,926,239

Balance, March 31, 2022 34,032,699 $ 340 $ 1,040 $ (643,059 ) $ (7,610,147 ) $ 284,225,470 $ (300,655,534 ) $ (24,682,930 )

Common stock issued for conversions 288,672,073 2,887 — — — 1,663,973 — 1,666,861
Fair value of derivative liability due to conversions — — — — — 1,571,238 — 1,571,238
Common stock issued for cash 5,036,697 50 — — — 163,508 — 163,559
Common stock issued for JV - Tokenize 150,000,000 1,500 — — — (1,500 ) — —
Equity Method Investment - Meta 500,000,000 5,000 — — — (5,000 ) — —
Net loss — — — — — — (3,441,137 ) (3,441,137 )

Balance, June 30, 2022 977,741,469 $ 9,777 $ 1,040 $ (643,059 ) $ (7,610,147 ) $ 287,617,690 $ (304,096,671 ) $ (24,722,409 )

Common stock issued for conversions 206,000,000 2,060 — — — 268,240 — 270,300
Fair value of derivative liability due to conversions — — — — — 314,029 — 314,029
Common stock issued for cash — — — — — —
Common stock issued for JV - Tokenize — — — — — —
Equity Method Investment - Meta — — — — —
Net loss — — — — — — 1,770,464 1,770,464

Balance, September 30, 2022 1,183,741,469 $ 11,837 $ 1,040 $ (643,059 ) $ (7,610,147 ) $ 288,199,959 $ (302,326,207 ) $ (22,367,615 )


										Stock			Additional					Stockholders’
	Common Stock				Treasury Stock					Loan			Paid-in		Accumulated			Equity/
	Shares		Amount		Shares		Amount			Receivable			Capital		Deficit			(Deficit)
Balance, December 31, 2022		1,535,593,440	$	15,356	$	1,040	$	(643,059	)	$	(7,610,147	)	$	288,664,858	$	(299,257,917	)	$	(18,830,909	)

Common stock issued for conversion of convertible debt and accrued interest		1,294,808,379		12,945		—		—			—			390,603		—			403,548
Fair value of beneficial conversion feature of converted		—		—		—		—			—			316,223		—			316,223
Common stock issued for Service		100,000,000		1,000		—		—			—			79,000		—			80,000
Net loss		—		—		—		—			—			—		(5,629,713	)		(5,629,713	)

Balance, March 31, 2023		2,930,101,819	$	29,301	$	1,040	$	(643,059	)	$	(7,610,147	)	$	289,450,684	$	(304,887,630	)	$	(23,660,851	)

~~The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.~~

GBT TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

(unaudited)

																		Total
										Stock			Additional					Stockholders’
	Common Stock				Treasury Stock					Loan			Paid-in		Accumulated			Equity/
	Shares		Amount		Shares		Amount			Receivable			Capital		Deficit			(Deficit)
Balance, December 31, 2021		33,200,198	$	332	$	1,040	$	(643,059	)	$	(7,610,147	)	$	284,072,666	$	(304,581,773	)	$	(28,761,981	)

Common stock issued for conversion of convertible debt and accrued interest		369,198		4		—		—			—			34,996		—			35,000
Fair value of beneficial conversion feature of converted		—		—		—		—			—			49,504		—			49,504
Common stock issued for cash		463,303		4		—		—			—			68,304		—			68,308
Net loss		—		—		—		—			—			—		3,926,239			3,926,239

Balance, March 31, 2022		34,032,699	$	340	$	1,040	$	(643,059	)	$	(7,610,147	)	$	284,225,470	$	(300,655,534	)	$	(24,682,930	)

Total
Stock Additional Stockholders’
Common Stock Treasury Stock Loan Paid-in Accumulated Equity/
Shares Amount Shares Amount Receivable Capital Deficit (Deficit)
Balance, December 31, 2020 5,133,489 $ 51 $ 1,040 $ (643,059 ) $ (7,610,147 ) $ 251,046,191 $ (270,651,339 ) $ (27,858,303 )

Common stock issued for conversion of convertible debt and accrued interest 4,483,717 45 — — — 3,122,803 — 3,122,848
Common stock issued for services 245,000 2 — — — 281,748 — 281,750
Fair value of beneficial conversion feature of converted — — — — — 9,207,107 — 9,207,107
Net loss — — — — — — (5,375,609 ) (5,375,609 )

Balance, March 31, 2021 9,862,206 98 1,040 (643,059 ) (7,610,147 ) 263,657,849 (276,026,948 ) (20,622,207 )

Common stock issued for conversion of convertible debt and accrued interest 720,311 7 — — — 592,698 — 592,705
Common stock issued for joint venture 14,000,000 140 — — — 15,399,860 — 15,400,000
Fair value of beneficial conversion feature of converted — — — — — 522,349 — 522,349
Net loss — — — — — — (27,048,655 ) (27,048,655 )

Balance, June 30, 2021 24,582,517 245 1,040 (643,059 ) (7,610,147 ) 280,172,756 (303,075,603 ) (31,155,808 )

Common stock issued for conversion of convertible debt and accrued interest 3,155,026 32 — — — 1,540,425 — 1,540,457
Common stock issued for joint venture — — — — — 1,135,462 — 1,135,462
Fair value of beneficial conversion feature of converted — — — — — 522,349 — 522,349
Net loss — — — — — — (429,931 ) (429,931 )

Balance, September 30, 2021 27,737,543 277 1,040 (643,059 ) (7,610,147 ) 283,370,992 (303,505,534 ) (28,387,471 )

~~The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.~~

GBT TECHNOLOGIES INC.

~~GBT TECHNOLOGIES INC.~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30,
2022 2021
Cash Flows From Operating Activities:
Net income (loss) $ 2,255,565 $ (32,854,195 )
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount 362,011 686,732
Change in fair value of derivative liability (2,795,870 ) 165,402
Excess of debt discount and financing costs 34,175 609,265
Shares issued for services — 281,750
Loss on modification of debt — 13,777,480
Impairment loss — 15,400,000
Realized (gain) on market equity security — (11,000 )
Payment of other income with marketable securities — (800,000 )
Change in fair value of market equity security 290,538 —
Gain on settlement (3,012,633 ) —

Changes in operating assets and liabilities:
Account receivable (19,227 )
Other receivable 3,745,179 —
Inventory in transit (43,872 ) —
Cash held in trust — 224,516
Inventory (7,158 ) —
Unearned revenue (225 ) —
Contract liabilities (6,056 ) —
Accounts payable and accrued expenses (469,014 ) 1,562,039
Net cash provided by (used in) operating activities 333,414 (958,011 )

Cash Flows From Investing Activities:
Investment to GTX (150,000 ) —
Investment to TGHI (125,000 ) —
Net cash used in investing activities (275,000 ) —

Cash Flows From Financing Activities:
Issuance of convertible notes 300,000 1,231,636
Issuance of note receivable (190,000 ) —
Proceeds from sales of common stock 231,864 —
Repayments to related party (664,225 ) —
Proceeds from related party 634,176 —
Net cash provided by financing activities 311,816 1,231,636

Net increase in cash 370,230 273,625

Cash, beginning of period 155,106 113,034

Cash, end of period $ 525,336 $ 386,659

Cash paid for:
Interest $ — $ —
Income taxes $ — $ —

Supplemental non-cash investing and financing activities
Debt discount related to convertible debt $ 325,916 $ 641,100
Reduction in derivative liability due to conversion $ 1,934,771 $ 10,864,918
Shares issued for conversion of convertible debt $ 1,972,164 $ 5,256,010
Equity Method Investment $ — $ 424,731
Share issuance for JV Metaverse $ 5,000 $ —
Share issuance for JV Tokenize $ 1,500 $ —
Transfer of accounts payable to convertible note $ $ 424,731
Transfer of accounts payable to convertible note $ $ 202,899


	For the Three Months Ended March 31,

	2023			2022
Cash Flows From Operating Activities:
Net income (loss)	$	(5,629,713	)	$	3,926,239
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization of debt discount		147,628			68,486
Change in derivative liability		3,924,246			(5,239,579	)
Excess of debt discount and financing costs		1,376,302			—
Shares issued for services		80,000			—
Change in fair value of Marketable securities		8,546			65,000
Gain on debt extinguishment		(315,297	)		—

Changes in operating assets and liabilities:
Accounts receivable		(15,407	)		(82,964	)
Other receivable		4,687			3,750,000
Cash held in trust		—			58,002
Prepaid		(59,722	)		—
Other Asset		(556	)
Inventory		4,002			(29,367
Unearned revenue		(48,921	)		(225	)
Contract liabilities		(2,500	)		(1,056	)
Accounts payable and accrued expenses		414,070			(2,270,304	)
Net cash provided by (used in) operating activities		(112,635	)		244,232

Cash Flows From Investing Activities:
Cash paid for investment to TGHI		—			(125,000	)
Net cash used in investing activities		—			(125,000	)

Cash Flows From Financing Activities:
Proceeds from issuance of convertible notes		104,300			—
Proceeds from sales of common stock		—			68,306
Repayment to related party		(302,700	)		(182,618	)
Repayment of Convertible note		(39,043	)		—
Proceeds from related party		302,506			336,734
Net cash provided by financing activities		65,063			222,422
Net change in cash and restricted cash		(47,572	)		341,654
Cash and restricted cash, beginning of period		106,639			155,106
Cash and restricted cash, end of period	$	59,067		$	496,760
Components of cash and restricted cash:
Cash	$	(59,067	)	$	113,616
Restricted cash		—			383,144
Total cash and restricted cash	$	(59,067	)	$	496,760
Cash paid for:
Interest	$	—		$	—
Income taxes	$	—		$	—
Supplemental non-cash investing and financing activities
Debt discount related to convertible debt	$	104,301		$	—
Reduction in derivative liability due to conversion	$	316,223		$	49,504
Shares issued for conversion of convertible debt	$	403,548		$	35,000

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

GBT Technologies, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30,~~For the Three Months Ended March 31, 2023 and 2022 ~~and 2021~~ (Unaudited)

Note 1 - Organization and Basis of Presentation

Organization and Line of Business

GBT Technologies Inc. (formerly Gopher Protocol Inc.) (the “Company”, “GBT”, or “GTCH”) was incorporated on July 22, 2009 under the laws of the State of Nevada. The Company ~~targets building an intellectual properties portfolio for~~is targeting growing markets such as development of Internet of Things (IoT) and Artificial Intelligence (AI) enabled networking and tracking technologies, including wireless mesh network technology platform and fixed solutions, development of an intelligent human body vitals device, asset-tracking IoT, and wireless mesh networks. Effective August 5, 2019, the Company changed its name from Gopher Protocol Inc. to GBT Technologies Inc. The Company derived revenues from (i) the provision of IT consulting orservices; and (ii) from the licensing ~~services; and~~of its technology. (ii) from selling electronic products through e-commerce platforms.

On February 18, 2022 the Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company shares revenues generated by Mahaser with respect to e-commerce sales through the online retail platform in the United States of America.

The unaudited condensed ~~consolidated~~ financial statements (“CFS”) are prepared by the Company, pursuant to the rules and regulations of the ~~Securities Exchange Commission (“SEC”).~~SEC. The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) were omitted pursuant to such rules and regulations. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022.

Basis of Presentation

The accompanying CFS were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. ~~GAAP.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~GAAP”).

Stock ~~Splits Increase Authorized~~Split

On October 26, 2021, the Company effectuated a 1 for 50 reverse stock split. The share and per share information ~~were~~has been retroactively restated to reflect this reverse stock split.

In July 7,2, 2022 the Company filed a preliminary information statement to the stockholders of record (the “Record Date”) in connection with certain actions to be taken by the written consent by stockholders holding a majority of the voting stock of the Company, dated as of June 28, 2022.

●

To amend the Company’s Articles of Incorporation, (the “Articles of Incorporation”) to increase the number of authorized shares of common stock, par value $0.00001 per share (the “Common Stock”), of the Company from 2,000,000,000 shares to 10,000,000,000 shares. This action concluded on August 11, ~~2022.~~2022:

●

(i) authorize the Company’s Board of Directors to effect, in its sole discretion, a reverse stock split of the Common Stock in a ratio of up to 1-for-500 (the “Reverse Stock Split”), and (ii) authorize the filing of an amendment to the Company’s Articles of Incorporation to implement the Reverse Stock Split and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time prior to December 31, 2023. This action was not commenced by the Company’s board.

Note 2 – Going Concern

The accompanying CFS ~~were~~have been prepared assuming ~~that~~ the Company will continue as a going concern. The Company has an accumulated deficit of $~~302,326,206~~304,887,630 and has a working capital deficit of $~~22,055,811~~22,715,354 as of ~~September 30, 2022,~~March 31, 2023, which raises substantial doubt about its ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through some private placement offerings of debt and equity securities. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. These CFS do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Note 23 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of CFS in conformity with U.S. GAAP requires management 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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes 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 the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying ~~financial statements~~CFS include ~~leases,~~ valuation of derivatives and valuation allowance on deferred tax assets.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Principles of Consolidation

The accompanying CFS include the accounts of the Company and its subsidiaries; the Company’s 50% owned subsidiaries GBT ~~Tokenize Corp;~~BitSpeed Corp. (currently inactive) and GBT ~~BitSpeed (currently inactive) Corp. and~~Tokenize Corp; the Company’s 50% owned subsidiary, Gopher Protocol Costa Rica Sociedad De Responsabilidad Limitada (currently ~~inactive ),~~inactive), a wholly owned subsidiary, AltCorp Trading LLC, a Costa Rica company (“AltCorp” currently inactive), and Greenwich International Holdings, a Costa Rica corporation (“Greenwich” currently inactive) ~~and Mahaser Ltd., a variable interest entity.~~. All significant intercompany transactions and balances were ~~eliminated in consolidation.~~eliminated.

For entities determined to be VIEs, an evaluation is required to determine whether the Company is the primary beneficiary. The Company evaluates its economic interests in the entity specifically determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE (“the benefits”). When making the determination whether the benefits received from an entity are significant, the Company considers the total economics of the entity, and analyzes whether the Company’s share of the economics is significant. The Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis.

In addition, the Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially be significant to Mahaser. As a result of this analysis, the Company concluded it is the primary beneficiary of Mahaser and therefore consolidates the balance sheets, results of operations and cash flows of Mahaser. The Company performs a qualitative assessment of Mahaser on an ongoing basis to determine if it continues to be the primary beneficiary.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Cash Equivalents

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly-liquid debt instruments with original maturities of three months or less. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company did not have any cash equivalents.

~~Funds in Escrow~~

~~Restricted cash is $375,000~~ ~~as part of the SURG settlements proceeds that needs to stay in escrow and $19,694~~ restricted cash that the court on January 28, 2022 awarded the Company with injunction against RWJ defendants, where all funds generating from resale should be deposited into GBT blocked account, and therefore RWJ defendants cannot use these funds without court order, neither the Company. According to below settlement agreement made on September 26, 2022, these funds held in escrow and no longer restricted.

~~Investment~~Marketable Securities

The Company accounts for investment securities in accordance with ASC Topic 321, Investments – equity securities. Marketable equity securities are reported at ~~fair value~~FV based on quotations available on securities exchanges with any unrealized gain or loss being reported as a component of other income (expense) on the statement of operations. The portion of marketable equity security expected to be sold within 12 months of the balance sheet date is reported as a current asset. These publicly traded equity securities are valued using quoted prices and are included in Level 1.

Inventory

Inventory consists of electronic product ready for sale on Amazon.com. It is stated at the lower of cost or net realizable value and all inventories were returned product from online customers. We value our inventory using the weighted average costing method. Our Company’s policy is to include as a part of inventory any freight incurred to ship the product from our contract vendors to our warehouses. Outbound freight costs to our customers are considered period costs and reflected in selling, general and administrative expenses. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence.

~~Note Receivable Paid-Off~~

~~On September 18, 2020, the Company entered into a Purchase and Sale Agreement with Mr. LightHouse LTD~~., an Israeli corporation (“MLH”) pursuant to which the Company agreed to sell and assign to MLH, effective July 1, 2020 all the shares, and certain specified liabilities, of Ugopherservices Corp. (“UGO”), a wholly owned subsidiary of the Company for $~~100,000~~ to be paid through the delivery of a promissory note payable to the Company (the “Note”), upon the terms and subject to the limitations and conditions set forth in the Note. At December 31, 2020, the Company determined this note was not collectible and took an impairment charge of $~~100,000. During July 2021, MLH effected a $50,000~~ ~~payment on the Note. During April 2022, MLH effected a second payment for additional $50,000~~ ~~on the Note exhausting the Note balance.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Derivative Financial Instruments

The Company evaluates all of its agreements to determine if ~~they contain~~such instruments have derivatives or ~~have~~ contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its ~~fair value “FV”~~FV and is then re-valued at each reporting date, with changes in the FV reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of ~~September, 30, 2022~~March 31, 2023 and December 31, ~~2021 (audited),~~2022, the Company’s only derivative financial instrument was an embedded conversion feature associated with convertible notes payable due to certain provisions that allow for a change in the conversion price based on a percentage of the Company’s stock price at the date of conversion.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their ~~FVs~~FV due to their short maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the FV of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines ~~fair value,~~FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	●	Level 3 inputs to the valuation methodology ususe one or more unobservable inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as a financial instrument, and are a reasonable estimate of their ~~FVs~~FV because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their ~~FVs~~FV were determined by using the Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect ~~fair value~~FV at each period end, with any increase or decrease in the ~~fair value~~FV being recorded in results of operations as adjustments to FV of derivatives.

At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company identified the following ~~assets and~~ liabilities that are required to be presented on the balance sheet at FV:

Schedule of fair value, assets and liabilities measured on recurring basis
Description Fair Value
As of
September 30, 2022 Fair Value Measurements at
September 30, 2022
Using Fair Value Hierarchy
Level 1 Level 2 Level 3
Conversion feature on convertible notes $ 5,787,760 $ — $ 5,787,760 $ —
Marketable securities $ 40,942 $ 40,942 $ — $ —

Schedule of fair value, assets and liabilities measured on recurring basis
Description	Fair Value As of March 31, 2023		Fair Value Measurements at March 31, 2023 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	6,524,972	$	—	$	6,524,972	$	—

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Description	Fair Value As of December 31, 2021		Fair Value Measurements at December 31, 2021 Using Fair Value Hierarchy						Fair Value As of December 31, 2022		Fair Value Measurements at December 31, 2022 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Conversion feature on convertible notes	$	10,192,485	$	—	$	10,192,485	$	—	$	1,714,143	$	—	$	1,714,143	$	—

Treasury Stock

Treasury stock is recorded at cost. The re-issuance of treasury shares is accounted for on a first in, first-out basis and any difference between the cost of treasury shares and the re-issuance proceeds are charged or credited to additional paid-in capital.

~~Reclassification~~

~~Certain prior years amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.~~

Revenue Recognition

Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. The Company had no significant post-delivery obligations, this new standard did notresult in a material recognition of revenue on the Company’s accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.

~~Revenues~~Revenue from providing IT consulting services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:

~~IT Consulting services:~~

	●	executed contracts with the Company’s customers that it believes are legally enforceable;

	●	identification of performance obligations in the respective contract;

	●	determination of the transaction price for each performance obligation in the respective contract;

	●	allocation the transaction price to each performance obligation; and

	●	recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each of the Company’s IT revenue category, is summarized below:

●

IT consulting services - revenue is recorded on a monthly basis as services are provided.

These five elements, as applied to each of the Company’s license revenue category, is ~~summarized~~summarize below:

●

License services – the one-time related party licensing income recorded as other income upon agreement is executed and services are provided and recognized over the term of five years.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~e-commerce~~E-Commerce sales–

	●	Identify the contract(s) with a customer. ASC 606 defines a contract as “an agreement between two or more parties that creates enforceable rights and obligations”. Since this is an e-commerce sale on the Amazon orof eBay websites, the Company just followed the general terms on Amazon or eBay websites and the customer entered into a contract with the Company based on the product listed on the Amazon or eBay websites;

	●	Identify the performance obligations in the contract. According to the contract, the Company is responsible for operation exclusively. The Company is entitled to all revenue which is being paid by Amazon or eBay into a designated bank account and the Company is responsible for all product acquisitions as well as shipments. The only performance obligations were the electronic products that were listed on Amazon or eBay websites and the Company determined each order is one single obligation;

	●	~~Determine the transaction price. The transaction price set to be the listed price on the Amazon or eBay websites.;~~

	●	~~Allocate the transaction price to the performance obligations in the contract.; and~~

	●	~~Recognize revenue when the Company satisfies a performance obligation. Sales are being recognize upon shipment.~~

Identify the performance obligations in the contract. According to the contract, the Company is responsible for operation exclusively. The Company is entitled to all revenue which is being paid by Amazon or eBay into a designated bank account and the Company is responsible for all product acquisitions as well as shipments. The only performance obligations were the electronic products that were listed on Amazon or eBay websites and the Company determined each order is one single obligation;

Determine the transaction price. The transaction price set to be the listed price on the Amazon or eBay websites.;

Allocation the transaction price to the performance obligations in the contract.; and

Recognize revenue when the Company satisfies a performance obligation. Sales are being recognized upon shipment.

Unearned revenue

Unearned revenue isrepresents the net amount received for the purchase of products that have not seen shipped to the Company’s customers. On November 12, 2020 the Company filed a complaint in the United States District Court – District of Nevada - Case 2:20-cv-02078 against RWJ Advanced Marketing, LLC, Greg Bauer, and Warren Jackson and against W.L. Petrey Wholesale Company Inc (the “RWJ Defendants”) for fraud, breach of contract, Unjust Enrichment and other claims. On January 28, 2022, the court awarded the Company with an injunction against RWJ Defendants, where all fee funds generating from resale should be deposited into a GBT blocked account and, therefore, RWJ Defendants cannot use these funds without court order. $~~19,694~~ ~~been credited as unearned revenue until the court’s final decision.~~ The Company has $~~249,159~~0 and $~~249,384~~48,921 of unearned revenue at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021 (audited),~~2022, respectively. ~~The Company entered into a Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Defendants and the Company effective September 26, 2022 (see Contingencies)~~

Contract liabilities

On February 22, 2022, the Company entered into an Intellectual Property License and Royalty Agreement with Touchpoint Group Holdings, Inc. (“Touchpoint” or “TGHI”) pursuant to which the Company granted TGHI a worldwide license for its technologies for five years in the domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining to the Company’s digital currency technology (the “Technology”). GBT will charge TGHI royalties based on actual uses by TGHI of the Technology resulting from revenue attributable to the use, performance or other exploitation of the Technology, to the extent applicable, after deducting any taxes that the Company may be required to collect, and deducting any international sales, goods and services, value added taxes or similar taxes which the Company is required to pay, if any, excluding deductions for taxes on the Company net income. TGHI agreed to issue the Company 10,000,000 shares of common stock of TGHI in the FV of $50,000 as a onetime fee ~~in consideration of~~for the Company entering this Intellectual Property License and Royalty Agreement, which was booked contract liabilities and amortized over the 5 five-year term. The Company has yet to earn any royalty income in relation to this agreement as of ~~September 30, 2022.~~March 31, 2023. The contract liabilities as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021 (audited)~~2022 was $~~43,944~~38,944 and $041,444, ~~respectively (See Footnote 4).~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~respectively.

Variable Interest Entity

On February 18, 2022, the Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company shares in revenues generated by Mahaser e-commerce sales through the online retail platform in the United States of America. Mahaser owns an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics. The Company will operate the e-commerce platform and entitled to 95% for all revenue generated by and received by Mahaser from March 1, 2022 through December 31, 2022. The RSA provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $100,000 no later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common stock. The Company shall have no obligations to make any further payments to Mahaser. For any further extensions, the Company will have the option to extend the RSA for annual payment of $200,000, which can be payable with the Company’s shares of common stock payable based on 20 days VWAP prior to issuance. On March 16, 2022 the parties entered into Amendment No. 1 to the to the RSA, where all consideration to be paid or issued to Mahaser will be deferred until such time where the e-commerce platform generated in cumulative revenue of $1,000,000.

On March 31, 2022, the parties entered into Amendment No. 2 to the RSA, where Mahaser agreed to pay the Company 100% per year for all revenue generated by and received by seller from the sales by Amazon within the United States of America as follows from March 1, 2022 through December 31, 2022. The Company will be responsible for 100% of the cost of goods sold as well. In addition, the Company is entitled to earn 100% revenues and cost of goods sold of the period from February 1, 2022 to February 28, 2022. On January 1, 2023 the company extended their partnership to December 31, 2023.

The Company evaluated whether it has a variable interest in Mahaser, whether Mahaser is a VIE and whether the Company has a controlling financial interest in Mahaser. The Company concluded that it has variable interests in Mahaser on the basis of GBT has 100% control over the JV/revenue sharing, and as such should consolidate the JV into its books and records as it assigned 100% financial responsibility. Mahaser’s equity at risk, as defined by GAAP, is considered to be insufficient to finance its activities without additional support, and, therefore, Mahaser is considered a VIE.

The following table summarizes the carrying amount of the assets and liabilities of Mahaser included in the Company’s consolidated balance sheets at ~~September 30, 2021(after~~March 31, 2023 and as December 31, 2022 (after elimination of intercompany transactions and balances):

Condensed financial statements
Assets of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets above (after elimination of intercompany transactions and balances) consist of:
Assets of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets as of March 31, 2023 (after elimination of intercompany transactions and balances) consist of:
Current assets:
Cash and equivalents	$	89,962	$	56,807
Accounts Receivable				40,651
Inventory		7,158		7,567
Due From related party		30,049
Other current asset				556
Total current assets	$	127,169	$	105,581

Liabilities of consolidated VIE included in the consolidated balance sheets above (after elimination of intercompany transactions and balances) consist of:
Current liabilities
Total current liabilities	$	—	$	143,700

Statements of operations of consolidated VIE included in the consolidated statements of operations above (after elimination of intercompany transactions and balances) consist of:
Statements of operations
Sales	$	771,446	$	217,785
Cost of goods sold		530,003		176,091
Gross profit		241,443		41,694
General and administrative expenses		206,743		32,096
Net income	$	34,700
Net Income			$	9,598

~~GBT Technologies, Inc.~~


Assets of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets as of December 31, 2022 (after elimination of intercompany transactions and balances) consist of:
Current assets:
Cash and equivalents	$	93,581
Inventory		11,569
Due From related party		20,270
Total current assets	$	125,420

Liabilities of consolidated VIE included in the consolidated balance sheets above (after elimination of intercompany transactions and balances) consist of:
Current liabilities
Total current liabilities	$	94,496

Statements of operations of consolidated VIE included in the consolidated statements of operations above (after elimination of intercompany transactions and balances) consist of:
Statements of operations
Sales	$	1,107,555
Cost of goods sold		817,754
Gross profit		289,801
General and administrative expenses		330,647
Net Loss	$	40,846

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented and its current on all its tax filings federal and state until 2021 inclusive.

Basic and Diluted Earnings Per Share

Earnings ~~(loss)~~ per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS assumes that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the ~~three and nine months.~~period. Due to the net income incurred potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss for all periods presented. The following potentially-dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

~~Schedule of anti dilutive securities excluded from computation of earnings per share~~
	September 30, 2022		September 30, 2021*
~~Series B preferred stock~~		~~45,000~~		—
~~Series C preferred stock~~		~~700~~		—
~~Series H preferred stock~~		~~20,000~~		—
~~Warrants~~		~~70,770~~		—
~~Convertible notes~~		~~4,088,958,514~~		—
~~Total~~		~~4,089,094,984~~		—

*	~~No dilution for the loss periods ended September 30, 2021.~~

Schedule of anti dilutive securities excluded from computation of earnings per share
	March 31,		December 31,
	2023		2022
Series B preferred stock		45,000		45,000
Series C preferred stock		700		700
Series H preferred stock		20,000		20,000
Warrants		70,770		70,770
Convertible notes		23,322,777,667		3,949,223,831
Total		23,322,914,137		3,949,360,301

Management’s Evaluation of Subsequent Events

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~The Company evaluates events that have occurred after the balance sheet date of March 31, 2023, through the date which the CFS are issued. Based upon the review, other than described in Note 20 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the CFS.

Recent Accounting Pronouncements

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Simplifying the Accounting for Income Taxes~~ ~~which amends ASC 740~~ ~~Income Taxes~~ (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company have adopted this ASU on the CFS in the year ended December 31, 2021. The adoption had no material impact on the CFS for the periods ended September 30, 2022.

In August 2020, the FASB issued ASU 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. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company adopted this ASU on the CFS in the year ended December 31, 2021. The adoption had no material impact on the CFS for the ~~periods~~period ended ~~September 30, 2022.~~March 31, 2023.

On April 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”) to clarify the accounting by issuers for modifications or exchanges of equity-classified warrants. The new ASU is available here and effective for all entities in fiscal years starting after December 15, 2021. Early adoption is permitted. The Company adopted this ASU on the CFS in the year ended December 31, 2021. The adoption had no material impact on the CFS for the ~~periods~~period ended ~~September 30, 2022.~~March 31, 2023.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Note 3 – Cash, Restricted Cash, and Cash held in Trust

Cash consist of amounts held as bank deposits, amounts held in escrow and highly liquid debt instruments purchased with an original maturity of three months or less.

From time to time, we may maintain bank balances in interest bearing accounts in excess of the $250,000 currently insured by the Federal Deposit Insurance Corporation for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). We have not experienced any losses with respect to cash. Management believes our Company is not exposed to any significant credit risk with respect to its cash.

The Company entered into a Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Defendants and the Company effective September 26, 2022. Said RJW Agreement will remove restriction on cash and cash held in escrow (see Footnote 17 Contingencies).

Note 4 – Marketable Securities

TGHI Agreement

On January 28, 2022, the Company entered into a Stock Purchase Agreement with Marko Radisic (the “Seller”) and Touchpoint Group Holdings, Inc. (“TGHI”) pursuant to which the Company acquired 10,000 shares of Series A Convertible Preferred Stock (the “Touchpoint Preferred”) from the Seller for $125,000. The Touchpoint Preferred is convertible into 10,000,000 shares of common stock of Touchpoint. On February 22, 2022, the Company entered into an Intellectual Property License and Royalty Agreement with TGHI pursuant to which the Company granted TGHI a worldwide license for its technologies for five years in the domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining to the Company’s digital currency technology (the “Technology”). GBT will charge TGHI earned royalties based on actual uses by TGHI of the Technology resulting from revenue attributable to the use, performance or other exploitation of the Technology, to the extent applicable, after deducting any taxes that the Company may be required to collect, and deducting any international sales, goods and services, value added taxes or similar taxes which the Company is required to pay, if any, excluding deductions for taxes on the Company net income. TGHI agreed to issue the Company 10,000,000 shares of common stock of TGHI in the FV of $50,000 as a one-time fee ~~in consideration of~~for the Company entering this Intellectual Property License and Royalty Agreement, which was booked contract liabilities and amortized over the five-year term. The Company has yet to earn any royalty income ~~order to~~under this agreement as of ~~September 30, 2022.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~March 31, 2023.

TGHI converted the Touchpoint Preferred into 10,000,000 shares of common stock of Touchpoint on February ~~23,2022~~23, 2022 resulting in the Company owning 20,000,000 shares of common stock of Touchpoint in total FV of $~~6,000~~2,000 as of ~~September 30, 2022~~March 31, 2023 based on level 1 stock price in OTC markets.

MetAlert ~~(prior name)~~-prior name GTX ~~Agreement~~Corp

On April 12, 2022, GBT Tokenize Corp (“GBT Tokenize”), a Nevada corporation which the Company owns 50% of the outstanding shares of common stock, entered into a series of agreements with GTX Corp (“GTX”) and various note holders of GTX pursuant to which Tokenize acquired a convertible promissory note of GTX of $100,000 (the “GTX Notes”). In addition, GBT Tokenize acquired 76,923 (GBT acquired 5,000,000 in the original deal, where GTX to perform a corporate action of 1:65 reverse split on September 20, 2022) shares of common stock of GTX for $150,000 - in total FV of $~~28,462~~3,992 as of ~~September 30, 2022~~March 31, 2023 based on level 1 stock price in OTC markets.

The GTX Notes bear 10% interest and 50% of the principal may be converted into shares of common stock on a one-time basis at a conversion price of $0.01 per share. The remaining 50% of the principal must be paid in cash. The closing occurred on April 12, 2022.

GTX changed its name into Metalert Inc. on or about September 20, 2022.

On September 30, 2022, GBT Tokenize, loaned MetAlert Inc., a Nevada corporation (f/k/a GTX Corp.) (“MetAlert”) $90,000. For such loan, MetAlert provided Tokenize a promissory note of $90,000 which is due and payable together with interest of 5% upon the earlier of September 19, 2023 or when declared by Tokenize.

MetAlert designs, manufactures and sells various interrelated and complementary products and services in the wearable technology and IoMT (Internet of Medical Things) marketplace.

On or about January 31, 2023 GTB Tokenize Corp the Company’s 50% owned subsidiary, assigned $7,500 from the GTX Notes to Stanley Hills, LLC, which in turn converted said $7,500 plus interest into 812,671 GTX shares. Stanley Hills, LLC credit GBT Tokenize for $146,037 for the transaction, reducing its credit outstanding balances with the Company and GBT Tokenize Corp.

As of ~~September, 30,~~March 31, 2023 the notes had an outstanding balance of $ $182,500 and accrued interest of $ $11,288. As of December 31, 2022, the notes had an outstanding balance of $190,000 and accrued interest of $~~4,821~~8,475.

As of ~~September, 30, 2022~~March, 31, 2023 and December 31, ~~2021,~~2022, the marketable security had a FV of $~~28,462~~3,992 and $012,538, respectively.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Note 5 – Investment in Surge Holdings, Inc.

SurgeHoldings, Inc.

On September 30, 2019, GBT Technologies Inc. (the “Company”) entered into an Asset Purchase Agreement (“APA”) with Surge Holdings, Inc., a Nevada corporation (“SURG”) pursuant to which the Company agreed to sell and assign to SURG, all the assets and certain specified liabilities, of its ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses for $5,000,000 to be paid through the issuance of 3,333,333 shares of SURG’s common stock (the “SURG Common Stock”) and a convertible promissory note in favor of the Company in the principmountount of $4,000,000 (the “SURG Note”), convertible into SURG’s shares of common stock. On January 7, 2022, the Company received payments from ~~Surge pays~~Surgepays Inc. (formerly known as Surge Holdings, Inc.) in total of $3,750,000 pursuant to the terms of the Settlement Agreement dated December 22, 2021.

On June 23, 2020, SURG entered into an Exchange Agreement (the “AltCorp Exchange Agreement”) with AltCorp Trading LLC (“AltCorp”) with such AltCorp Exchange Agreement being consented and agreed to by the Company, the parent of AltCorp. At the expiration of the lock-up period, in the event the VWAP for the SURG Common Stock was, during the preceding ~~20-day~~twenty-day trading period, less than $0.50 per share, AltCorp retained the right to reserve additional shares of SURG Common Stock equal to the True-Up Value as defined in the AltCorp Exchange Agreement.

On March 8, 2020, SURG filed a lawsuit against its transfer agent from transferring millions of SURG stock that is currently in possession by the Company and assigned to Stanley Hills, LLC. On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual Release and Settlement Agreement (“Settlement Agreement”). Pursuant to the terms of the Settlement Agreement, SURG agreed to amend the AltCorp Exchange Agreement where SURG acknowledged a debt of $3,300,000 (the “Debt”) to be paid in 33 monthly payments of $100,000 payable in shares of common stock of SURG at a per share price equal the ~~VWAP~~volume weighted average price of Surg’s common stock during the 10 trading days immediately preceding the issuance. SURG paid $400,000 in cash and $800,000 by shares. The SURG common stock issued to Altcorp have been pledged since August 12, 2020 for the benefit of Stanley to secure Stanley’s note payable by the Company. Accordingly, the SURG Common Stock issued to AltCorp as a result of the Settlement Agreement were pledged to Stanley. As of December 31, 2021 there were no surge shares pledges after the final settlement signed on December 22, 2021 and that replaced all prior settlement agreement. The final settlement SURG agreed to make total payments of $4,200,000 to the Company’s trust account on or prior to January 7, 2022. This $4.2 million amount consists of $450,000 paid by SURG in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or prior to January 7, 2022 of which $375,000 will be held in escrow as described before. The $3,750,000 was recorded as other receivable as of December 31, 2021. As of December 31, 2021, the Company recorded an outstanding payable to Stanley ofamounted $1,862,928 recorded under accrued expenses.

Subsequently, SURG was a party to two lawsuits in state District Court, the Eighth Judicial District Court for Clark County, Nevada involving AltCorp, Stanley and Glen Eagles Acquisition LP (the “AltCorp Parties.”). Each of these lawsuits were ultimately disputes relating to the total consideration SURG was to pay the Company under the APA.

On October 18, 2021, the AltCorp Parties, the Company, and SURG entered into a Memorandum of Understanding (the “MOU”) to set up a framework for an attempt to settle the two lawsuits.

On December 22, 2021 (the “Effective Date”), pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG, Kevin Brian Cox (SURG’s Chief Executive ~~Officer)~~Office–) - in his individual capacity, entered into a Resolution of Purchase, Mutual Release, and Settlement Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related to the consideration paid by SURG to the Company in connection with the APA.

The Final Settlement Agreement, among other resolutions, essentially provides the following: i) From the total consideration of the Final Settlement Agreement, the amount of $375,000 (“Escrow Amount”) will be deposited by SURG in escrow. SURG has acquired the Company’s rights to a certain Master Distribution and Service Agreement (“MDA”). Under certain circumstances, if the result of the Company’s lawsuit against a third party (the “GBT Lawsuit”) is a monetary judgment without the assignment or legal decree of ownership of the MDA, the Company shall be entitled to receive the Escrow Amount and shall assign to SURG the first $1,000,000 the Company recovers from the defendants in the GBT Lawsuit. In the event that the Company does not prevail in the GBT Lawsuit then it shall be entitled to release of the Escrow Amount but shall be responsible for any fees and costs obligation sought by the defendants in the GBT Lawsuit.

~~GBT Technologies, Inc.~~

~~Notes~~(ii) SURG agreed to ~~Condensed Consolidated Financial Statements~~

~~September 30,~~make total payments of $4,200,000 to the Company’s trust account on or prior to January 7, 2022. This $4.2 million amount consists of $450,000 paid to the Company in November and December 2021, $100,000 to be paid on or about January 4, 2022, and ~~2021 (Unaudited)~~$3,650,000 to be paid on or prior to January 7, 2022 of which $375,000 will be held in escrow as described before. The final settlement SURG agreed to make total payments of $4,200,000 to the Company’s trust account on or prior to January 7, 2022. The $3,750,000 was recorded as other receivable as of December 31, 2021. The entire balance of $3,750,000 was paid in January 2022.

~~The Final Settlement Agreement, among other resolutions, essentially provides the following:~~

~~(i) From the total consideration of the Final Settlement Agreement, $375,000~~ (“Escrow Amount”) will be deposited by SURG in escrow. SURG has acquired the Company’s rights to a certain Master Distribution and Service Agreement (“MDA”). Under certain circumstances, if the result of the Company’s lawsuit against a third party (the “GBT Lawsuit”) is a monetary judgment without the assignment or legal decree of ownership of the MDA, the Company shall be entitled to receive the Escrow Amount and shall assign to SURG the first $~~1,000,000~~ the Company recovers from the defendants in the GBT Lawsuit. In the event that the Company does not prevail in the GBT Lawsuit then it shall be entitled to release of the Escrow Amount but shall be responsible for any fees and costs obligation sought by the defendants in the GBT Lawsuit.

~~(ii)~~(iii) Potential payments to third parties.

The Final Settlement Agreement replaces all prior agreements between the parties. In addition, within three (3) trading days of the last payment of ~~the~~ $4.2 million payment to Stanley being made, the parties shall make filings with the state District Court in Clark County, Nevada to dismiss both lawsuits, including, regarding the lawsuit filed by AltCorp Trading, LLC, the dismissal of the lawsuit as to VStock Transfer, LLC. The parties agreed to a full mutual release of any disputes or claims between the parties.

The final settlement of $3,750,000 was received by the Company in January 2022 and paid out $3,750,000 to the third parties before ~~September 30,~~December 31, 2022.

As the Company committed to assign certain revenue share agreement to SURG as part of the Company’s settlement with RWJ Agreement, on October 5, 2022 and as cumulation of all settlement agreements the Company issued a request to the SURG regarding release of certain escrow funds and the execution of an assignment of rights as contemplated in the aforereferenced agreement.

As of March 31, 2023 and as of December, 31 2022 there is no balances with regard to this transactions.

Note 6 - Stock Loan Receivable

On January 8, 2019, the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa Rica corporation (“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by various regulators. The Company has pledged 4,006 restricted shares of its common stock valued at $7,610,147 (based on the closing price on the grant date) for a term of three years for an annual payment of $375,000 paid in quarterly installments of $93,750. In lieu of cash payment, Latinex may pay the Company in virtual currency of WISE Network S.A. valued at a 50% discount of its offering price of $10 per token. In the event that Latinex’s required capital has decreased below $5,000,000, Latinex is permitted to sell the pledged shares of common stock only in an amount to ensure that Latinex can satisfy the required capital levels. The Company must consent to such sale of the shares of common stock, which may not be unreasonably withheld. Upon expiration of the agreement, ~~(See Footnote 17 Contingencies).~~the remaining shares of common stock shall be returned to the Company free and clear of all liens. The Company has recorded the value of these shares of common stock as a stock loan receivable which is presented as a contra-equity account in the accompanying consolidated balance sheets. At December 31, 2019, the Company wrote off the accrued interest income as Latinex did not perform any payment and the Company has no mean to enforce this payment. Latinex agreed in principle to return the pledged 4,006 restricted shares to the Company for cancellation. The 4,006 restricted shares have not yet been returned to the Company as of March 31, 2023.

Note 7 – Impaired Investment

~~Note 6 –~~ ~~Impaired Investments~~Investment in GBT Technologies, S.A.

~~Investment in GBT Technologies, S.A.~~

The Gopher Convertible Note bears interest of 6%6% and ~~was~~is payable at maturity on December 31, ~~2021~~.2021. At the election of Gonzalez, the Gopher Convertible Note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($500 per share). The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. Upon conversion of the Gopher Convertible Note and the 20,000 shares of Series H Preferred Stock, Gonzalez would be entitled to less than 50% of the resulting outstanding shares of common stock of the Company following conversion in full and, as a result, such transaction is not considered a change of control.

On May 19, 2021, the Company, entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal and Accrued Interest (the “Gonzalez Agreement”) with third party, GBT-CR, IGOR 1 Corp and Gonzalez. Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties had agreed to (i) extend the GBT ~~Technologies, Inc.~~

~~Notes~~Convertible Note maturity date to ~~Condensed Consolidated Financial Statements~~

~~September 30, 2022~~December 31,2022, (ii) amend the GBT Convertible Note terms to include a beneficial ownership blocker of 4.99% and ~~2021 (Unaudited)~~a modified conversion feature to the GBT Convertible Note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT Convertible Note by Gonzalez to a third party.

GBT-CR is in the business of the strategic management of BPO (Business Process Outsourcing) digital communications processing for enterprises and startups, distributed ledger technology development, AI development and fintech software development and applications.

The Company accounted for its investment in GBT-CR using the equity method of accounting; however, in 2020, the Company owned less than 20% after GBT-CR issued additional shares to other investors therefore exercised no control over GBT-CR; therefore, this investment is currently accounted for under the cost method. Moreover, on March 19, 2020, California Governor Gavin Newsom issued a stay-at-home order to protect the health and well-being of all Californians and to establish consistency across the state in order to slow the spread of COVID-19. California was therefore under strict quarantine control and travel has been severely restricted, resulting in disruptions to work, communications, and access to files (due to limited access to facilities). The stay-at-home order was lifted in California only on January 25, 2021. As such, the Company was unable to access or to contact GBT-CR on an on-going basis, and cannot get information about GBT-CR.

2.Investment in Joint Venture

~~Investment in Joint Venture – GBT Tokenize Corp~~

The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment. The Company shall appoint two directors and Tokenize shall appoint one director of GBT Tokenize.

Tokenize shall contribute the services and resources for the development of the Technology Portfolio to GBT Tokenize. The Company shall contribute 2,000,000 shares of common stock of the Company (“GBT Shares”) to GBT Tokenize. Tokenize and the Company will each own 50% of GBT Tokenize. The shares were valued at ~~FV of~~ $5,500,000.

In addition, GBT Tokenize and Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged to provide services for $33,333 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. Gonzalez will provide services in connection with the development of the business as well as GBT Tokenize’s capital raising efforts. The term of the Consulting Agreement is two years. During year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley Hills in a private transaction that the Company is not part to. The closing of the Tokenize Agreement occurred on March 9, 2020.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Through this Joint Venture the parties commenced development of an intelligent human vital signs’ device, which we currently refer to as the qTerm. The platform is an expansion of the existing license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp. with an exclusive territory of California to develop certain of the Company’s technology. As the nature of the platform cannot be restricted only to California, the Company’s joint venture GBT Tokenize Corp. will be compensated with additional ~~200,000,000~~two hundred million shares of the Company to strengthen its funding, subject to board approval. A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO. The application has been assigned serial number 63001564. The Joint Venture completed successfully the first prototype. There is no guarantee that the Company will be successful in researching, developing or implementing this product into the market. In order to successfully implement this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling and distributing this product. There is no guarantee the Company will be successful in any or all of these critical steps.

At March 31, 2020, the Company evaluated the carrying amount of this joint venture investment and determined itthis investment was fully impaired and as a result an impairment charge of $5,500,000 was taken. At December 31, 2021, the Company evaluated the carrying amount of this joint venture investment and determined that this investment was fully impaired and as a result an impairment charge of $15,400,000 was taken.

Although the investment was impaired, the product development is still ongoing. The carrying amount of this investment at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021 (audited),~~2022, was $0 and $0, respectively.

~~Note 7 –~~ ~~Inventory~~

Inventory consists of electronic product ready for sale on Amazon. It is stated at the lower of cost or net realizable value and all inventories were returned product from online customers. We value our inventory using the weighted average costing method. Our Company’s policy is to include as a part of inventory any freight incurred to ship the product from our contract vendors to our warehouses. Outbound freights costs related to shipping costs to our customers are considered period costs and reflected in selling, general and administrative expenses. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence.

~~If the estimated realizable value of our inventory is less than cost, we make provisions in order to reduce it carrying value to its estimated market value.~~ No ~~write down to net realizable value was necessary for the periods ended September 30, 2022 and December 31, 2021.~~

Note 8 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at ~~September 30, 2022~~March 31, 2023 and at December 31, ~~2021 (audited)~~2022 consist of the following:

Schedule of accounts payable and accrued expenses
2022 2021
Accounts payable $ 1,089,143 $ 670,127
Accounts payable – related party 530,000 440,000
Accrued liabilities 660,665 1,170,088
Accrued liabilities – related party 660,735 1,862,928
Accrued interest 2,914,922 2,746,793
Accrued interest – related party 46,198 6,327
Total accounts payable and accrued expenses $ 5,901,663 $ 6,896,263

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Schedule of accounts payable and accrued expenses
	2023		2022
Accounts payable	$	1,619,318	$	1,530,762
Accrued liabilities		367,687		1,513,261
Accrued interest		3,389,930		3,196,611
Other		—		—
Total	$	5,376,935	$	6,240,634

Note 9 – Unearned Revenue

Unearned revenue isrepresents the net amount received for the purchase of products that have not seen shipped to the Company’s customers. In 2018, the Company ran pre-sales efforts for its pet tracker product and received prepayments for its product. The Company has $0 and $48,921 of unearned revenue at March 31, 2023 and December 31, 2022, respectively.

Note 10 – Convertible Notes Payable, Non-related Partied and Related Party

Convertible notes payable – non related parties at March 31, 2023 and at December 31, 2022 consist of the following:

Schedule of rollfoward of convertible note
	March 31,			December 31,
	2023			2022
Convertible note payable to GBT Technologies S.A	$	6,125,456		$	6,395,531
Convertible notes payable to 1800		100,794			191,275
Convertible notes payable to Glen		512,500			—
Total convertible notes payable, non related parties		6,738,750			6,586,788
Unamortized debt discount		(108,004	)		(189,060	)
Convertible notes payable – non related parties		6,630,746			6,397,727
Less current portion		(6,114,140	)		(6,397,727	)
Convertible notes payable – non related parties, long-term portion	$	516,606		$	—

$10,000,000 for GBT Technologies S. A. acquisition

In accordance with the acquisition of GBT-CR the Company issued a convertible note in the principal amount of $10,000,000. The convertible note bears interest of 6% and is payable at maturity on December 31, 2021. At the election of the holder, the convertible note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($500 per share). This convertible note may convert into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back immediately preceding the date of conversion and therefore recorded as derivative liability (see note 13).

On ~~January 28,~~May 19, 2021, the Company, Gonzalez, GBT-CR and IGOR 1 Corp entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance plus accrued interest (the “Gonzalez Agreement”). Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties had agreed to (i) extend the GBT convertible note maturity date to December 31, 2022, (ii) amend the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT convertible note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third party. As a result of the change in terms of this convertible note, the Company took a charge related to the modification of debt of $13,777,480 during the year ended December 31, 2021. This convertible note is recorded as derivative liability because of the discounted price on conversion (see note 13).

During the period ended March 31, 2023, IGOR 1 converted $232,575 of the convertible note into 733,235,294 shares of the Company’s common stock.

As of March, 31, 2023, the note had an outstanding balance of $ $6,125,456 and accrued interest of $ $2,119,245.

Paid Off Notes/Converted Notes

Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC -

On May 5, 2022, the ~~court awarded~~Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”), pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) of $244,500 for $203,500. The DL Note had a maturity date of August 4, 2023 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at 6.0% from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note at any time from the Issue Date and continuing through 180 days following the Issue Date, provided it makes a payment including a prepayment premium to DL as set forth in the DL Note. The transactions described above funded on May 9, 2022.

Unless the Company shall have first delivered to DL, at least 48 hours prior to the closing of any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future Offering”), written notice describing the proposed Future Offering and providing the Buyer an option during the 48 hour period following delivery of such notice to DL the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering then the Company is restricted from ~~resale should be deposited into a GBT blocked account~~conducting the Future Offering during the period beginning on the Issue Date and ~~therefore, RWJ Defendants cannot use these funds without a court order.~~ending nine months following the Issue Date.

During the period ended March 31, 2023, the entire balance of convertible note of $~~19,694~~114,100 plus accrued interest of $7,335 was ~~credited as unearned revenue until the court’s final decision.~~ converted into 367,004,026 shares of common stock.

Outstanding Notes

Glen Eagle

The Company entered into a ~~Confidential Settlement~~series of loan arrangements with Glen Eagles Acquisition LP pursuant to which it received $512,500 in loans (the “Debt”) from August 2021 up to September 2022. The original funded amount of $457,500 included convertible feature into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion.

In order to include a convertible feature for the $55,000 which was not covered by convertible feature, on January 24, 2023, the Company issued a consolidated convertible promissory note to Glen Eagles Acquisition LP in the principal amount of $512,500, which include all prior convertible notes with addition of the $55,000 straight note. The convertible promissory note bears interest of 10% and is payable at maturity on December 31, 2023. Glen Eagles Acquisition LP may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a loss on debt extinguishment of $92,737 at the issuance date.

As of March 31, 2022, the consolidated convertible note had an outstanding balance of $512,500 and an interest of $9,267.

Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC

Convertible Note - On September 13, 2022, the Company entered into a Securities Purchase Agreement ~~and Mutual Release~~(dated September 9, 2022) with 1800 Diagonal Lending LLC, an accredited investor (“~~RJW Agreement”~~DL”) ~~by and between RWJ Defendants~~pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) of $116,200 with an original issue discount of $12,450 resulting in net proceeds of the Company of $103,750. The DL Note had a maturity date of September 9, 2023 and the Company ~~effective September 26, 2022. Said RJW Agreement entitled~~had agreed to pay interest on the ~~RWJ Defendants to 50%~~unpaid principal balance of the DL Note at the rate of 12.0% from the date on which the DL Note is issued (the “Issue Date”). A one-time interest charge of 12% or $13,944 was applied on the Issue Date to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments of $13,014.40 resulting in a total payback to DL of $130,144. The first payment is due October 30, 2022 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company. The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts ~~deposited into blocked account (see Footnote 17 Contingencies)~~as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

During the period ended March 31, 2023, the company paid back $39,043 to 1800 Diagonal lending.

As of March 31, 2023, the note had an outstanding balance of $ $38,114 and an interest of $13,944.

Straight Note – with Convertible Feature - On March 1, 2023, the Company entered into a Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) of $59,408 with an original issue discount of $6,258 resulting in net proceeds of the Company of $53,150. The DL Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% from the date on which the DL Note is issued. A one-time interest charge of 12% or $7,128 was applied on the issuance date of the DL Note to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments of $6,654 resulting in a total payback to DL of $66,536. The first payment is due April 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price during the 10 day period immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of March 31, 2022, the note had an outstanding balance of $59,408 and an interest of $7,129.

Convertible Note - On March 1, 2023, the Company entered into a Securities Purchase Agreement with DL pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Convertible Note”) of $62,680 for a purchase price of $52,150. The DL Convertible Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Convertible Note at the rate of 6.0% from the date on which the DL Convertible Note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Convertible Note, provided it makes a payment including a prepayment to DL as set forth in the DL Convertible Note.

The outstanding principal amount of the DL Convertible Note may not be converted prior to the period beginning on the date that is 180 days following the date the DL Convertible Note is issued . Following the 180th day, DL may convert the DL Convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20 day period preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Convertible Note), the DL Convertible Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Convertible Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of March 31, 2022, the note had an outstanding balance of $62,680 and an interest of $309.

Convertible notes payable – related parties at March 31, 2023 and December 31, 2022 consist of the following:

Summary of convertible notes payable
	December 31,			December 31,
	2023			2022
Convertible note payable to Stanley Hills		825,000			116,605
Unamortized debt discount		—			—
Convertible notes payable, net, related party		825,000			116,605
Less current portion		(75,000	)		(116,605	)
Convertible notes payable, net, related party, long-term portion	$	750,000		$	—

Stanley Hills LLC

The Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $1,000,000 in loans (the “Debt”) from May 2019 up to December 2019. On February 26, 2020, in order to induce Stanley to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley of $1,214,900 may be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. Stanley had agreed to restrict its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted $1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an additional $325,000. Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $800,000 of this convertible note (See Note 10) and also converted $126,003 of accrued interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley in a private transaction that the Company is not part to (See Note 10). On January 2, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $750,000. The convertible promissory note bears interest of 10% and is payable at maturity on June 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a gain on debt extinguishment of $408,034 at the issuance date.

As of March 31, 2023 and December 31, 2022 the principal balance of Stanley debt is $825,000 and 116,605 respectively. The unpaid interest of the Stanley debt at March 31, 2023 and 2022 was $14,131 and $11,247, respectively. The Stanley debt is secured via a pledge agreement on the SURG shares.

Discounts on convertible notes

The Company recognized interest expense of $1,595,650 and $235,493 during the three months ended March 31, 2023 and 2022, respectively, related to the amortization of the debt discount on convertible notes. The unamortized debt discount at March 31, 2023 and at December 31, 2022 was $163,520 and $189,060, respectively.

A roll-forward of the convertible notes payable from December 31, 2021 to March 31, 2023 is below:

Schedule of convertible notes payable
Convertible notes payable, December 31, 2021	$	8,261,839
Issued for cash		300,000
Payment with cash		(39,042
Original issue discount		60,700
Conversion to common stock		(2,158,971	)
Debt discount related to new convertible notes		(352,441	)
Amortization of debt discounts		442,247
Convertible notes payable, December 31, 2022	$	6,514,332
Issued for cash		52,150
Convertible note issued for accounts payable		1,262,500
Payment with cash		(39,043	)
Original issue discount	$	10,530
Conversion to common stock		(388,280	)
Debt discount related to new convertible notes		(108,180	)
Amortization of debt discounts		143,737
Convertible notes payable, March 31, 2023	$	7,455,746

Note ~~10 –~~–11 - ~~Accrued Settlement~~Notes Payable, Non-related Parties and Related Party

~~In connection with~~Notes payable, non-related parties at March 31, 2023 and December 31, 2022 consist of the following:

Schedule of notes payable
	March 31,			December 31,
	2023			2022
1800 note	$	59,408		$	—
SBA loan		350,000			350,000
Total notes payable		409,408			350,000
Unamortized debt discount		(55,517	)		—
Notes payable		353,891			350,000
Less current portion		—			(41,137	)
Notes payable, long-term portion	$	353,891		$	308,863

SBA Loan

On June 22, 2020, the Company received a ~~legal matter filed~~loan from the Small Business Administration under the Economic Injury Disaster Loan program related to the COVID-19 relief efforts. The loan bears interest at 3.75%, requires monthly principal and interest payments of $731 after 12 months from funding and is due 30 years from the date of issuance. The monthly payments have been extended by the ~~Investor~~SBA to all EIDL borrowers with additional 12 months. Monthly payments will be commenced on or around June 16, 2022. On October 1, 2021, the Company entered an Amended Loan Authorization and Agreement with the SBA providing for the modification of the Original Note providing for monthly principal and interest payments of $~~8,340,000~~1,771 ~~Senior Secured Redeemable Convertible Debenture,~~after 24 months from the Original Note commencing on ~~December 23, 2019, in~~or around June 22, 2022. On March 17, 2022 the ~~pending arbitration between~~SBA notified it deferred the payments to all COVID-19 EIDL loans will have the first payment due extended from 24-months to 30-months from the date of the note. The Modified Note will continue to bear interest at 3.75% and is due 30 years from the date of issuance of the Original Note. The Modified Note is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT Tokenize Corp. The additional funding of $200,000 was received by the ~~Investor, an Interim Award was entered in favor~~Company on October 5, 2021. The balance of the ~~Investor.~~ note at March 31, 2023 and at December 31, 2022 was $350,000 and $350,000 plus accrued interest of $26,943 and $23,707, respectively.

Notes payable, related party at March 31, 2023 and December 31, 2022 consist of the following:

Schedule of notes payable related parties
	March 31,			December 31,
	2023			2022
Alpha Eda note payable	$	140,000		$	140,000
Total notes payable, related party		140,000			140,000
Unamortized debt discount		—			—
Notes payable, net, related party		140,000			140,000
Less current portion		(140,000	)		(140,000	)
Notes payable, net, related party, long-term portion	$	—		$	—

Alpha Eda

On ~~January 31,~~November 15, 2020, the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and was ~~informed that a final award was entered (the “Final Award”).~~due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023. The ~~Final Award affirms that certain sections~~balance of the ~~Senior Secured Redeemable Convertible Debenture (the “Debenture”) constitute unenforceable liquidated damages penalties~~note at March 31, 2023 and ~~were stricken. Further, it~~at December 31, 2022 was ~~determined that the Investor was entitled to recovery of attorney’s fees. Consequently, the arbitrator awarded Investor~~ $~~4,034,444~~140,000 and $140,000 plus accrued interest of $~~7.25~~36,085~~% accrued from May 15, 2019 (presented separately in accounts payable~~ and ~~accrued expenses) and costs~~ $~~55,613~~32,633~~. In connection with this settlement, the~~, respectively.

Discounts on Promissory Note

The Company recognized ~~a gain on the settlement of debt~~interest expense of $~~1,375,556~~3,891 ~~in 2019 as~~and $0 during the ~~difference between~~period ended March 31, 2023 and December 31, 2022, respectively, related to the ~~carrying amount~~amortization of the debt discount on promissory notes. The unamortized debt discount at March 31, 2023 and ~~the amount awarded by the arbitrator. As of September, 30, 2022, the award had not been paid. The Company recorded accrued settlement of $4,090,057~~at ~~September 30, 2022 and~~ December 31, ~~2021 (audited)~~2022 was $55,516 and $0, ~~respectively, not including accrued interest.~~respectively.

~~Note 11 –~~ ~~Convertible Notes Payable, Non-related Partied and Related Party~~

~~Convertible notes payable – nonrelated parties at September 30, 2022 and December 31, 2021 (audited) consist of the following:~~

Schedule of rollfoward of convertible note
September 30,
2022 December 31,
2021
Convertible note payable to IGOR 1 CORP $ 6,458,431 $ 8,055,400
Convertible notes payable to Sixth Street — 124,200
Convertible notes payable to Redstart Holdings — 244,500
Convertible notes payable to 1800 Diagonal Lending 360,700 —
Total convertible notes payable, non-related parties 6,819,131 8,424,100
Unamortized debt discount (269,297 ) (278,867 )
Convertible notes payable – nonrelated parties 6,574,631 8,145,233
Less current portion (6,574,631 ) (8,109,436 )
Convertible notes payable – nonrelated parties, long-term portion $ — $ 35,797

~~$10,000,000 for Igor 1 Corp (Prior year - GBT Technologies S. A.)~~

~~In accordance with the acquisition of GBT-CR the Company issued a convertible note of $10,000,000. The convertible Note bears interest of 6% was payable at maturity on~~ ~~December 31, 2021. At the election of the holder, the convertible note can be converted into a maximum of~~ ~~20,000~~ shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($~~500~~ ~~per share) by the conversion price ($500.00 share). This convertible note may convert into shares of the Company’s common stock at a conversion price equal to~~ 85~~% of the lowest trading price with a 20-day look back immediately preceding the date of conversion and therefore recorded as derivative liability.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

On May 19, 2021, the Company, Gonzalez, GBT-CR and IGOR 1 Corp entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance plus accrued interest (the “Gonzalez Agreement”). Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties has agreed to (i) extend the GBT convertible note maturity date to December 31, 2022, (ii) amend the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT convertible note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third party. As a result of the change in terms of this convertible note, the Company took a charge related to the modification of debt of $~~13,777,480~~ ~~during the year ended December 31, 2021. This convertible note is recorded as derivative liability because of the discounted price on conversion.~~

~~During the year ended December 31, 2021,~~ IGOR 1 converted $1,284,600 of the convertible note into 4,185,650 shares of the Company’s common stock. Also, on June 24, 2021, the Company transferred 5,500,000 SURG shares received as repayment of $660,000 of this convertible note.

~~As of September, 30, 2022, the note had an outstanding balance of $6,458,431~~ ~~including accrued interest of $1,877,901~~.

~~Redstart Holdings Corp~~

On September 21, 2021, the Company entered into a Securities Purchase Agreement with Redstart pursuant to which the Company issued to Redstart a Convertible Promissory Note (the “Redstart Note No. 7”) of $~~244,500~~ ~~for $203,750. The Redstart Note No. 7 has a maturity date of~~ ~~December 22, 2022~~ and the Company agreed to pay interest on the unpaid principal balance of the Redstart Note No. 7 at 2.5% from the date on which the Redstart Note No. 7 is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the Redstart Note No. 7, provided it makes a payment including a prepayment to Redstart as set forth in the Redstart Note No. 7. The transactions described above closed on September 28, 2021. The outstanding principal amount of the Redstart Note No. 7 may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180^th day, Redstart may convert the Redstart Note No. 7 into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back immediately preceding the date of conversion. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note No. 7), the Redstart Note No. 7 shall become immediately due and payable and the Company shall pay to Redstart, in full satisfaction of its obligations hereunder, additional amounts as set forth in the Redstart Note No. 7. During the nine months ended September 30, 2022, Redstart converted the entire note into ~~7,656,951~~ ~~shares of the Company’s common stock.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC~~

~~First Note~~

On November 8, 2021, the Company entered into a Securities Purchase Agreement with Sixth Street Lending LLC (“Sixth Street”) pursuant to which the Company issued to Sixth Street a Convertible Promissory Note (the “Sixth Street Note”) of $~~124,200~~ ~~for $103,500. The Sixth Street Note has a maturity date of~~ ~~February 8, 2023~~ ~~and the Company agreed to pay interest on the unpaid principal balance of the note at~~ 6% from the date on which the note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment including a prepayment to Sixth Street as set forth in the Sixth Street Note. The outstanding principal amount of the note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180^th day, Sixth Street may convert the note into shares of the Company’s common stock at a conversion price equal to 85% of the average of the two lowest trading prices with a 20-day look back immediately preceding the date of conversion. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Sixth Street Note), the note shall become immediately due and payable and the Company shall pay to Sixth Street, in full satisfaction of its obligations hereunder, additional amounts as set forth in the Sixth Street Note. During the nine months ended September 30, 2022, Sixth Street converted the entire note into ~~26,343,190~~ ~~shares of the Company’s common stock.~~

~~Second Note~~

On May 5, 2022, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”), pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) of $~~244,500~~ ~~for $203,500. The DL Note has a maturity date of~~ ~~August 4, 2023~~ ~~and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at~~ ~~6.0~~% from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note at any time from the Issue Date and continuing through 180 days following the Issue Date, provided it makes a payment including a prepayment premium to DL as set forth in the DL Note. The transactions described above funded on May 9, 2022.

~~The outstanding principal amount of the DL Note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180~~^th ~~day, DL may convert the DL Note into shares of~~ ~~the Company’s~~ ~~common stock~~ ~~at a conversion price~~ equal to 85% of the lowest trading price during the 20-day period immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

Unless the Company shall have first delivered to DL, at least 48 hours prior to the closing of any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future Offering”), written notice describing the proposed Future Offering and providing the Buyer an option during the 48 hour period following delivery of such notice to DL the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering then the Company is restricted from conducting the Future Offering during the period beginning on the Issue Date and ending nine months following the Issue Date.

~~Third Note~~

On September 13, 2022, the Company entered into a Securities Purchase Agreement (dated September 9, 2022) with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) in the aggregate principal amount of $~~116,200~~ ~~with an original issue discount of $12,450~~ ~~resulting in net proceeds of the Company of $103,750. The DL Note has a maturity date of~~ ~~September 9, 2023~~ and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% per annum from the date on which the DL Note is issued (the “Issue Date”). A one-time interest charge of 12~~% or $13,944~~ was applied on the Issue Date to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments each in the amount of $13,014.40 resulting in a total payback to DL of $130,144. The first payment is due October 30, 2022 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company. The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock ~~at a conversion price~~ ~~equal to~~ 75% of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed ~~4.99% of the outstanding shares of the common stock of the Company.~~

~~As of September 30, 2022 and December 31, 2021, the nonrelated party convertible notes had total outstanding balance of $6,574,631~~ ~~and~~ ~~8,145,233, net of debt discount, and accrued interest of $1,897,794~~ ~~and $1,547,924, respectively.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~Convertible notes payable – related parties at September 30, 2022 and December 31, 2021 (audited) consist of the following:~~

Summary of convertible notes payable
September 30,
2022 December 31,
2021
Convertible note payable to Stanley Hills, related party $ 116,605 $ 116,605
Less current portion (116,605 ) (116,605 )
Convertible notes payable, net, related party, long-term portion $ — $ —

~~Stanley Hills LLC~~

~~The Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $1,000,000~~ in loans (the “Debt”) from May 2019 to December 2019. On February 26, 2020, to induce Stanley to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley $~~1,214,900~~ may be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. Stanley has agreed to restrict its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted $~~1,231,466~~ ~~of its convertible note plus interest into~~ ~~4,420,758~~ ~~shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an additional $325,000. Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $800,000~~ ~~of this convertible note and also converted $126,003~~ ~~of accrued interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731~~ ~~to Stanley in a private transaction. The unpaid interest of the Stanley debt at September 30, 2022 and December 31, 2021 was $17,094~~ ~~and $8,372, respectively. The Stanley debt was secured via a pledge agreement on the SURG shares.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Note 12 -– ~~Notes Payable, Non-related Parties and Related Party~~Accrued Settlement

~~Notes payable, non-related parties at September 30, 2022 and December 31, 2021 (audited) consist of the following:~~

Schedule of notes payable
September 30,
2022 December 31,
2021
RWJ acquisition note $ — $ 2,600,000
SBA loan 350,000 350,000
Total notes payable 350,000 2,950,000
Less current portion (38,196 ) (2,612,397 )
Notes payable, long-term portion $ 311,804 $ 337,603

~~RWJ Acquisition Note~~

In connection with a legal matter filed by the ~~acquisition~~Investor of ~~RWJ~~the $8,340,000 Senior Secured Redeemable Convertible Debenture, on December 23, 2019, in ~~September 2017,~~the pending arbitration between the Company ~~issued a note payable. The note accrues interest at~~ ~~3.5~~%, was due on December 31, 2019 and is secured by the assets purchased in the acquisition. The Company entered into a Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Defendants and the ~~Company effective September 26, 2022. Said RJW Agreement will voided~~Investor, an Interim Award was entered in favor of the ~~RWJ acquisition Note in its entirely. (See Footnote 17 Contingencies).~~

~~SBA Loan~~

Investor. On ~~June 22,~~January 31, 2020, the Company ~~received~~was informed that a ~~loan from~~final award was entered (the “Final Award”). The Final Award affirms that certain sections of the ~~Small Business Administration under~~Senior Secured Redeemable Convertible Debenture (the “Debenture”) constitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the ~~Economic Injury Disaster Loan program related~~Investor was entitled to recovery of their attorney’s fees. Consequently, the ~~COVID-19 relief efforts. The loan bears interest at~~ ~~3.75%, requires monthly principal and interest payments~~arbitrator awarded Investor an award of $~~731~~4,034,444 ~~after 12 months~~plus interest of 7.25% accrued from ~~funding~~May 15, 2019 (presented separately in accounts payable and ~~is due~~ accrued expenses) and costs of $3055,613. (See Note 17). In connection with this settlement, the Company recognized a gain on the settlement of debt of $1,375,556 ~~years from~~in 2019 as the ~~date~~difference between the carrying amount of ~~issuance. The monthly payments were extended~~the debt and the amount awarded by the ~~SBA to all EIDL borrowers with additional 12 months. Monthly payments was commenced on or around June 16, 2022. On October 1, 2021, the~~arbitrator (See Note 17). The Company ~~entered an Amended Loan Authorization and Agreement with the SBA providing for the modification of the Original Note providing for monthly principal and interest payments~~recorded accrued settlement of $~~1,771~~ after 24 months from the Original Note commencing on or around June 22, 2022. On March 17, 2022 the SBA notified it deferred the payments to all COVID-19 EIDL loans will have the first payment due extended from 24-months to 30-months from the date of the note. The Modified Note will continue to bear interest at ~~3.75~~% and is due 30 years from the date of issuance of the Original Note. The Modified Note is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT Tokenize Corp. The additional funding of $~~200,000~~ ~~was received by the Company on October 5, 2021. The balance of the note at September 30, 2022 and December 31, 2021 was $350,000~~4,090,057 and $~~350,000~~4,090,057 ~~plus accrued interest of $20,399~~at March 31, 2023 and $~~10,581, respectively.~~

~~Notes payable, related party~~ at ~~September 30, 2022 and~~ December 31, ~~2021 (audited) consist of the following:~~

Schedule of notes payable related parties
September 31,
2022 December 31,
2021
Alpha Eda note payable $ 140,000 $ 140,000
Less current portion (140,000 ) (140,000 )
Notes payable, net, related party, long-term portion $ — $ —

2022, respectively.

~~GBT Technologies, Inc~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~Alpha Eda~~

On November 15, 2020, the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and was due on September 30, 2021. On June 20, 2021 Alpha and the Company extended the note maturity to December 31, 2022. The balance of the note at September 30, 2022 and December 31, 2021 (audited) was $~~140,000~~ ~~and $140,000~~ ~~plus accrued interest of $29,104~~ ~~and $16,633, respectively.~~

Note ~~13-~~13 - Derivative Liability

Certain of the convertible notes payable discussed in Note 10 have a conversion price that can be adjusted based on the Company’s stock price which results in the conversion feature being recorded as a derivative liability.

The FV of the derivative liability is recorded and shown separately under current liabilities. Changes in the FV of the derivative liability is recorded in the statement of operations under other income (expense).

The Company uses a weighted average Black-Scholes option pricing model with the following assumptions to measure the FV of derivative liability at ~~September 30, 2022~~March 31, 2023 and at December 31, ~~2021 (audited):~~2022:

~~Schedule of assumptions to measure fair value~~

Schedule of assumptions to measure fair value
September 30, December 31,
2022 2021
Stock price $ 0.0012-0.2 $ 0.17-0.19
Risk free rate 1.06-4.05 % 0.07-0.39 %
Volatility 278-361 % 167-217 %
Conversion/ Exercise price $ 0.001-0.095 $ 0.102-0.103
Dividend rate 0 % 0 %

Schedule of assumptions to measure fair value
	March 31,			December 31,
	2023			2022
Stock price	$	0.0004		$	0.001

Risk free rate		4.64-4.94	%		4.42-4.76	%
Volatility		259-288	%		213-277	%
		0.00030-			0.0015-
Conversion/ Exercise price	$	0.00034		$	0.0017
Dividend rate		0	%		0	%

The following table represents the Company’s derivative liability activity for the ~~three and nine months~~period ended ~~September 30, 2022:~~March 31, 2023:

Derivative instruments and hedging activities disclosure
Derivative liability balance, December 31, 2021 $ 10,192,485
Issuance of derivative liability during the period 191,741
Fair value of beneficial conversion feature of debt converted (1,620,742 )
Change in derivative liability during the period (3,150,739 )
Derivative liability balance, June 30, 2022 $ 5,612,745

~~Issuance of derivative liability during the period~~		~~134,174~~
~~Fair value of beneficial conversion feature of debt converted~~		~~(314,029~~	)
~~Change in derivative liability during the period~~		~~354,869~~
~~Derivative liability balance, September 30, 2022~~	$	~~5,787,759~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Derivative instruments and hedging activities
Derivative liability balance, December 31, 2021	$	10,192,485
Issuance of derivative liability during the period		325,915
Fair value of beneficial conversion feature of debt converted		(2,209,887	)
Change in derivative liability during the period		(6,594,370	)
Derivative liability balance, December 31, 2022	$	1,714,143
Issuance of derivative liability during the period		1,202,806
Fair value of beneficial conversion feature of debt converted		(316,223	)
Change in derivative liability during the period		3,924,247
Derivative liability balance, March 31, 2023	$	6,524,972

Note 14 –- Stockholders’ Equity

Common Stock

The Board of Directors of the Company approved, on April 13, 2020, a reverse stock split of all of the Company’s Common Stock, pursuant to which every 50 shares of Common Stock of the Company ~~was~~shall be reverse split, reconstituted and converted into one (1) share of Common Stock of the Company (the “Reverse Stock Split”). The Company submitted an Issuer Company Related Action Notification regarding the Reverse Stock Split to FINRA on April 14, 2020. To effectuate the Reverse Stock Split, the Company filed on April 21, 2020 a Certificate of Change Pursuant to Nevada Revised Statutes (“NRS”) Section 78.209 (the “Certificate of Change”) with the Secretary of State of the State of Nevada subject to FINRA approval. On June 8, 2020 FINRA advised the Company that such request is deficient due to the fact that a holder of an outstanding convertible note of the Company had entered into two settlements with the ~~SEC~~Securities and Exchange Commission that related to securities laws violations but were in no way related to the Company. As a result, FINRA advised that it is necessary for the protection of investors, the public interest, and to maintain fair and orderly markets that documentation related to the Reverse Stock Split not be processed. The Company appealed the decision made by FINRA on June 15, 2020. On August 4, 2020, FINRA notified the Company that its appeal had been denied. On October 25, 2021 FINRA approved the Reverse Stock Split and on October 26, 2021, the Company effectuated a 1 for 50 reverse stock split.

In July 7, 2022 the Company filed a preliminary information statement to the stockholders of record (the “Record Date”) in connection with certain actions to be taken by the written consent by stockholders holding a majority of the voting stock of the Company, dated as of June 28, 2022.

●

During the ~~three months~~period ended March 31, 2023, the Company had the following transactions in its common stock:

	●	Of 1,294,508,379 Shares issued for the conversion of convertible notes of $390,603 and accrued interest of $ $15,268; and

	●	Of 100,000,000 Shares issued to Pacific Captital Markets LLC for certain for service agreement between Pacific Captital Markets LLC. and the Company. The value of the shares of $80,000 was determined based on the FV of the Company’s common stock;

During the period ended March 31, 2022, the Company had the following transactions in its common stock:

	●	issued an aggregate of 369,198 ~~shares~~ for the conversion of convertible ~~notes~~note of $35,000; and

	●	issued 463,303 shares to GHS from Equity Financing Agreement for ~~gross consideration of~~ $~~68,308~~68,309, The value of the shares of was determined based on the Equity Financing.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~During the three months ended June 30, 2022, the Company had the following transactions in its common stock:~~

��	●	~~issued~~ ~~288,672,073~~ ~~shares for the conversion of convertible notes of $1,660,370~~ ~~and accrued interest of $6,491; and~~

	●	~~issued~~ ~~150,000,000~~ ~~shares to GBT Tokenize for certain joint venture agreement between Magic International Argentina FC, S.L. and the Company. The value of the shares of $1,500~~ ~~was determined based on the FV of the Company’s common stock; and~~

	●	~~issued~~ ~~500,000,000~~ ~~shares to Metaverse for certain equity method investment. The value of the shares of $5,000~~ ~~was determined based on the FV of the Company’s common stock; and~~

	●	~~issued~~ ~~5,036,697~~ ~~shares to GHS from Equity Financing Agreement for gross consideration of $163,559, The value of the shares of was determined based on the Equity Financing.~~

~~During the three months ended September 30, 2022, the Company had the following transactions in its common stock:~~

●

~~issued~~ ~~206,000,000~~ ~~shares for the conversion of convertible notes of $270,300~~.

Series B Preferred Shares

On November 1, 2011, the Company and certain creditors entered into a Settlement Agreement (the “Settlement Agreement”) whereby without admitting any wrongdoing on either part, the parties settled all previous agreements and resolved any existing disputes. Under the terms of the Settlement Agreement, the Company agreed to issue the creditors 45,000 shares of Series B Preferred Stock of the Company on a pro-rata basis. Following the issuance and delivery of the shares of Series B Preferred Stock to said creditors, as well as surrendering the undelivered shares, the Settlement Agreement resulted in the settlement of all debts, liabilities and obligations between the parties.

The Series B Preferred Stock has a stated value of $100 per share and is convertible into the Company’s common stock at a conversion price of $30 per share representing 30 ~~post-split~~posts split common shares. Furthermore, the Series B Preferred Stock votes on an as converted basis and carries standard anti-dilution rights. These rights were subsequently removed, except in cases of stock dividends or splits.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30,~~As of March 31, 2023 and as of December 31, 2022, ~~and 2021 (Unaudited)~~there were 45,000 Series B Preferred Shares outstanding.

Series C Preferred Shares

On April 29, 2011, GV Global Communications, Inc. (“GV”) provided funding to the Company of $111,000 (the “Loan”). On September 25, 2012, the Company and GV entered into a Conversion Agreement pursuant to which the Company agreed to convert the Loan into 10,000 shares of Series C Preferred Stock of the Company, which was approved by the Board of Directors.

Each share of Series C Preferred Stock is convertible, at the option of GV, into such number of shares of common stock of the Company as determined by dividing the Stated Value (as defined below) by the Conversion Price (as defined below). The Conversion Price for each share is equal to a 50% discount to the average of the lowest three lowest closing bid prices of the Company’s common stock during the 10-day trading period prior to the conversion with a minimum conversion price of $0.02. The stated value is ~~$11.00~~$11 per share (the “Stated Value”). The Series C Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series C Preferred Stock shall be entitled to one vote for each share of common stock that the Series C Preferred Stock shall be convertible into. GV has contractually agreed to restrict its ability to convert the Series C Preferred Stock and receive shares of the Company’s common stock such that the number of shares of the Company’s common stock held by it and its affiliates after such conversion does not exceed 4.9% of the then issued and outstanding shares of the Company’s common stock.

The issuance of the Series C Preferred Stock was made in reliance upon exemptions from registration pursuant to Section 4(a)(2) under the Securities Act of 1933 and Rule 506 promulgated under Regulation D thereunder. GV is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933.

At March 31, 2023 and at December 31, 2022, GV owns 700 Series C Preferred Shares.

Series D Preferred Shares

As of March 31, 2023 and as of December 31, 2022, there are 0 and 0 shares of Series D Preferred Shares outstanding, respectively.

Series G Preferred Shares

As of March 31, 2023 and as of December 31, 2022, there are 0 and 0 shares of Series G Preferred Shares outstanding, respectively.

Series H Preferred Shares

On June 17, 2019, the Company, AltCorp Trading LLC, a Costa Rica company and a wholly-owned subsidiary of the Company (“AltCorp”), GBT Technologies, S.A., a Costa Rica company (“GBT-CR”) and Pablo Gonzalez, a shareholder’s representative of GBT-CR (“Gonzalez”), entered into and closed an Exchange Agreement (the “GBT Exchange Agreement”) pursuant to which the parties exchanged certain securities. In accordance with the Exchange Agreement, AltCorp acquired 625,000 shares of GBT-CR representing 25% of its issued and outstanding shares of common stock from Gonzalez for the issuance of 20,000 shares of Series H Convertible Preferred Stock of the Company and a Convertible Note of $10,000,000 issued by the Company (the “Gopher Convertible Note”) as well as additional consideration. The Gopher Convertible Note bears interest of 6% and ~~was paid~~is payable at maturity on December 31, 2021. At the election of Gonzalez, the Gopher Convertible Note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($10 per share). The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. On July 8, 2019, the Company entered a Consulting Agreement with Glen Eagles Glen Eagles Acquisition LP (“Glen”) as consultant to provide services in connection with the Company’s acquisition of 25% of GBT-CR. Consultant will provide analysis, interaction with related professional and other services as requested by the Company to integrate and expand capabilities between GBT-CR and the Company. (See Note 14 for further details.)

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30,~~As of March 31, 2023 and as of December 31, 2022, ~~and 2021 (Unaudited)~~there are 20,000 shares of Series H Preferred Shares outstanding.

Warrants

The following is a summary of ~~warrants activity:~~warrant activity.

Summary of warrant activity
					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Warrants		Exercise		Contractual		Intrinsic
	Outstanding		Price		Life		Value
Outstanding, December 31, 2022		70,770	$	205.07		0.30	$	—
Granted		—
Forfeited		60,100
Exercised		—
Outstanding, March 31, 2023		10,670	$	729.90		0.02	$	—
Exercisable, March 31, 2023		10,670	$	729.90		0.02	$	—

~~Summary of~~

The exercise price for warrant ~~activity~~outstanding and exercisable at March 31, 2023:

Summary of warrant activity

Warrants
Outstanding
Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Life

Aggregate
Intrinsic
Value
Outstanding, December 31, 2021 392,870 $ 74.97 1.76 $ —
Granted — —
Forfeited — —
Exercised (322,100 ) —
Outstanding, September 30, 2022 70,770 $ 205.07 0.56 $ —
Exercisable, September 30, 2022 70,770 $ 205.07 0.56 $ —

Summary of exercise price for warrant outstanding
Outstanding		Exercisable
Number of		Exercise		Number of		Exercise
Warrants		Price		Warrants		Price
	10,000		135.00		10,000		135.00
	400		1,595.00		400		1,595.00
	100		11,750.00		100		11,750.00
	150		12,500.00		150		12,500.00
	20		14,000.00		20		14,000.00
	10,670				10,670

Equity Purchase Agreement and Registration Rights Agreement

On December 17, 2021 (the “Effective Date”), ~~the Company~~GBT Technologies Inc. (the “Company”) entered into an equity financing agreement (the “Equity Financing Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with GHS Investments LLC (“GHS”), pursuant to which GHS shall purchase from the Company, up to that number of shares of common stock of the Company (the “Shares”) ~~having an aggregate Purchase Price of $10,000,000~~,for $10,000,000, subject to certain limitations and conditions set forth in the Equity Financing Agreement from time to time over 24 months after an effective registration of the Shares with the ~~SEC~~Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC (the “Contract Period”).

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

The Equity Financing Agreement grants the Company the right, from time to time at its sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase shares of Common Stock on any business day (a “Put”), provided that at least 10ten trading days has passed since the most recent Put. The purchase price of the shares of Common Stock contained in a Put will be 90% of the lowest daily ~~VWAP~~volume weighted average price (VWAP) of the Company’s Common Stock during the 10ten consecutive trading days preceding the receipt by GHS of the applicable Put notice. Such sales of Common Stock by the Company, if any, may occur from time to time, at the Company’s option, during the Contract Period. Subject to the satisfaction of certain conditions set forth in the Equity Financing Agreement, on each Put the Company will deliver an number of Shares equaling 110% of the dollar amount of each Put. The maximum dollar amount of each Put will not exceed 200% of the average daily trading dollar volume for the Company’s Common Stock during the ten trading days preceding the Trading Day that GHS receives a Put. No Put will be made in an amount equaling less than $10,000 or greater than $500,000. Puts are further limited to GHS owning no more than 4.99% of the outstanding stock of the Company at any given time. The Equity Financing Agreement and the Registration Rights Agreement contain customary representations, obligations, rights, warranties, agreements and conditions of the parties. The Equity Financing Agreement terminates upon any of the following events: when GHS has purchased ~~an aggregate of~~ $10,000,000 in the Common Stock of the Company pursuant to the Equity Financing Agreement; on the date that is 24 calendar months from the date the Equity Financing Agreement was executed.

For the ~~nine months~~period ended ~~September 30, 2022,~~March 31, 2023, the Company ~~received $231,866~~ asdid not receive any proceeds from the equity purchase ~~agreement for issuance of~~ ~~5,500,000~~ ~~registered common shares. Post this issuance The Equity Financing Agreement is exhausted and not valid anymore.~~agreement.

Note 15 –- ~~Other~~ Related ~~Party Transactions~~Parties

Related parties are natural persons or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.

On August 1, 2021, the Company and Danny Rittman, Chief Technology Officer and a Director of the Company, agreed to amend his employment agreement pursuant to which he will receive salary atof $5,000 per ~~month .~~

month.

~~GBT Technologies, Inc.~~

~~Notes~~On January 1, 2019, the Company and Douglas Davis entered into an Amended and Restated Employment Agreement pursuant to ~~Condensed Consolidated Financial Statements~~

~~September 30, 2022~~which Mr. Davis was retained as Chief Executive Officer. Mr. Davis served as Interim Chief Executive Officer since July 2018 until his resignation on April 11, 2020. The term of Mr. Davis’ employment was for two years through January 1, 2021. Mr. Davis was entitled to an annual base salary of $250,000, which was to be increased to $400,000 upon the Company up-listing to a national exchange. Mr. Davis was also entitled to the issuance of Stock Options to acquire of 50,000 shares of common stock of the Company, exercisable for five years, subject to vesting. The options were to be earned and ~~2021 (Unaudited)~~vested (i) with respect to 20,000 shares of common stock on the date hereof, (ii) 5,000 shares of common stock upon the successful dual list of the Company on an international exchange such as SIX Zurich Stock Exchange or Euronext, (iii) 15,000 shares of common stock upon the successful up listing to a national exchange such as the Nasdaq, NYSE Euronext, TSX, AMEX or other, and (iv) with respect to 5,000 shares of common stock at each of the six (6) month anniversaries (July 1, 2019 and January 1, 2020). The exercise price of such options shall be the closing price of the Company on the date prior to such event.

On October 10, 2019, the Company entered into a Joint Venture Agreement (the “BitSpeed Agreement”) with BitSpeed LLC, which is owned by Douglas Davis, the Company’s Chief Executive Officer, to form GBT BitSpeed Corp., a Nevada company (“GBT BitSpeed”). The purpose of GBT BitSpeed is to develop, maintain and support its proprietary Extreme Transfer Software Application Concurrency, a software application to transfer secure, accelerated transmission of large file data over networks, and connection to cloud storage, Network-Attached Storage (NAS) and Storage Area Networks (SANs) (“Concurrency”). BitSpeed shall contribute the services and resources for the development of Concurrency to GBT BitSpeed. The Company shall contribute ~~10,000,000~~10 million shares of common stock (valued at $17,900,000) of the Company to GBT BitSpeed. BitSpeed and the Company will each own 50% of GBT BitSpeed. The Company shall appoint two directors and BitSpeed shall appoint one director of GBT BitSpeed. In addition, GBT BitSpeed and Mr. Davis entered into a Consulting Agreement in which Mr. Davis is engaged to provide services for $10,000 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 20-day VWAP. Mr. Davis will provide services in connection with the development of the business as well as GBT BitSpeed’s capital raising efforts. The term of the Consulting Agreement was two years. The closing of the BitSpeed Agreement occurred on October 14, 2019. On April 11, 2020, Douglas Davis resigned as Chief Executive Officer of the Company so that he may fully devote all of his efforts to GBT Tokenize Corp., the Company’s joint venture, which intends to develop a new product. Mr. Davis’ resignation was not the result of any disagreements with management or board of directors of the Company.

On ~~June 16, 2022~~March 31, 2023 Doug Davis gave notice to the ~~parties amended the Bitspeed Agreement to further define the constitution~~Company of termination of the Board of Directors. As such, Section 4.2 of the Bitspeed Agreement was amended and restated to provide that the Board of GBT Bitspeed Corp. shall consist of two Directors, one of whom shall be appointed by Bitspeed LLC and the other shall be appointed by the Company.consulting agreement dated October 10, 2019.

On March 6, 2020, the Company through Greenwich, entered into the Tokenize Agreement with Tokenize, which is owned by a Costa Rica Trust represented by Gonzalez. Gonzalez also represents Gonzalez Costa Rica Trust, which holds a note of $10,000,000 and is also a shareholder of the Company. Under the Tokenize Agreement, the parties formed GBT Tokenize. The purpose of GBT Tokenize is to develop Technology Portfolio, throughout the State of California. Upon generating any revenue from the Technology Portfolio, the Joint Venture will earn the first right of refusal for other territories. Tokenize shall contribute the services and resources for the development of the Technology Portfolio to GBT Tokenize. The Company contributed 100,000,000 GBT Shares to GBT Tokenize. Tokenize and the Company will each own 50% of GBT Tokenize. The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment. The Company shall appoint two directors and Tokenize shall appoint one director of GBT Tokenize. In addition, GBT Tokenize and Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged to provide services ~~in consideration of~~for $33,333.33 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. Gonzalez will provide services in connection with the development of the business as well as GBT Tokenize’s capital raising efforts. The term of the Consulting Agreement was two years. The closing of the Tokenize Agreement occurred on March 9, 2020. Via this Joint Venture the parties commenced development of a development of an intelligent human vital signs’ device, suggested named qTerm.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

The platform is an expansion of the existing license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp. with an exclusive territory of California to develop certain of the Company’s technology. As the nature of the platform cannot be restricted only to California, the Company’s joint venture GBT Tokenize Corp. will be compensated with additional 200,000,000 shares of the Company to strengthen its funding, subject to board approval. A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO. The application has been assigned serial number 63001564. The Joint Venture completed successfully the first prototype. There is no guarantee that the Company will be successful in researching, developing or implementing this product into the market. In order to successfully implement this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling and distributing this product. There is no guarantee that the Company will be successful in any or all of these critical steps.

~~Magic Agreement~~

As explained above, on April 11, 2022 the Company, through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into a Master Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Magic International Argentina FC, S.L. (“Magic”) and Tokenize which replaced a prior joint venture entered between the parties.

The purpose of Tokenize is to develop, maintain and support source codes for its proprietary technologies including advanced mobile chip technologies, tracking, radio technologies, AI core engine, electronic design automation, mesh, games, data storage, networking, IT services, business process outsourcing development services, customer service, technical support and quality assurance for business, customizable and dedicated inbound and outbound calls solutions, as well as digital communications processing for enterprises and startups (“Technology Portfolio”), throughout the world, which Technology Portfolio was previously licensed to the Company for the State of California.

The Tokenize Agreement provides that the Company shall contribute 150,000,000 shares of common stock of the Company (“GBT Shares”) to Tokenize. Sergio Fridman is the manager of Magic and the beneficial owner of all outstanding securities of Magic. Magic will contribute cash of $250,000 into Tokenize for promissory note and agreed to further fund Tokenize with all funds reasonably needed for implementation of the business purposes as described in the Tokenize Agreement. The GBT Shares will not be transferable for five years. ~~As of June 30, 2022, the Company received the $250,000~~ ~~fund from Magic but the promissory note agreement has not been finalized yet. Therefore, the Company recorded the $250,000~~ ~~funds as an account payable.~~

Magic and the Company each own 50% of the outstanding shares of common stock of Tokenize. The Company pledged its 50% ownership in Tokenize and its 100% ownership of Greenwich (the “Pledged Securities”) to Magic for providing that Magic may take possession of such Pledged Securities in the event the Company executes, delivers and performs any future agreement or document or judgement resulting in the creation of any lien, pledge, mortgage, claim, charge or encumbrance upon any assets of the Company. The Company shall appoint two directors and Magic shall appoint one director of Tokenize.

On June 16, 2022 the parties amended the Tokenize Agreement to further define the constitution of the Board of Directors. As such, Section 4.2 of the Tokenize Agreement was amended and restated to provide that the Board of GBT Tokenize Corp. shall consist of two Directors, one of whom shall be appointed by GBT Tokenize Corp. and the other shall be appointed by the Company.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

Yello Partners Inc.

As of ~~September, 30, 2022~~March 31, 2023 and as of December 31, ~~2021 (audited),~~2022, the Company ~~owed~~has $~~475,000~~535,000 and $~~385,000~~505,000 owed to Yello Partners, Inc., a Company owned by the ~~Mansour Khatib,~~CEO.

Alpha Eda Note Payable – Related Party

On November 15, 2020, the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party, for $140,000. The note accrues interest at 10%, is unsecured and was due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023. The balance of the note at March 31, 2023 and at December 31, 2022 was $140,000 and $140,000 plus accrued interest of $36,085 and $32,633, respectively.

Stanley Hills LLC Convertible Note Payable – Related Party

The Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $1,000,000 in loans (the “Debt”) from May 2019 up to December 2019. On February 26, 2020, in order to induce Stanley to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley of $1,214,900 may be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the conversion price will vary based on the Company’s ~~CEO.~~stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. Stanley had agreed to restrict its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted $1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an additional $325,000. Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $800,000 of this convertible note (See Note 10) and also converted $126,003 of accrued interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley in a private transaction that the Company is not part to (See Note 10). On January 1, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $750,000. The convertible promissory note bears interest of 10% and is payable at maturity on June 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a gain on debt extinguishment of $408,034 at the issuance date.

As of March, 31, 2023 and 2022 the principal balance of Stanley debt is $825,000 and 116,605 respectively. The unpaid interest of the Stanley debt at March 31, 2023 and December 31, 2022 was $32,418 and $20,033, respectively. The Stanley debt is secured via a pledge agreement on the SURG shares.

Stanley Hills LLC Accounts Payable – Related Party

On March 8, 2020, SURG filed a lawsuit against its transfer agent, Vstock from transferring millions of SURG stock that is currently in possession by the Company and assigned to Stanley Hills, LLC. On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual Release and Settlement Agreement (“Settlement Agreement”). Pursuant to the terms of the Settlement Agreement, SURG agreed to amend the AltCorp Exchange Agreement where SURG acknowledged a debt of $3,300,000 (the “Debt”) to be paid in 33 monthly payments of $100,000 payable in shares of common stock of SURG at a per share price equal the volume weighted average price of Surg’s common stock during the ~~ten~~10 trading days immediately preceding the issuance. SURG paid $400,000 in cash and $800,000 by shares. The SURG common stock issued to Altcorp ~~have~~has been pledged since August 12, 2020 for the benefit of Stanley to secure Stanley’s note payable by the Company. Accordingly, the SURG Common Stock issued to AltCorp as a result of the Settlement Agreement were pledged to Stanley. As of December 31, 2021 there were no surge shares pledges after the final settlement signed on December 22, 2021 and that replaced all prior settlement agreement. The final settlement SURG agreed to make total payments of $4,200,000 to the Company on or prior to January 7, 2022. This $4.2 million amount consists of $450,000 paid by SURG in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or prior to January 7, 2022 of which $375,000 will be held in escrow as described before. The ~~$3,750,000~~$3,750,000 was recorded as other receivable as of ~~December~~ 31, 2021. On January 1, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $750,000. As of ~~September, 30, 2022 and December~~March 31, ~~2021,~~2023, the Company has recorded an outstanding payable balance to Stanley ~~of $660,735 and $1,862,928, respectively,~~amounted $18,288 recorded under accrued expenses.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~Sales to related party~~Consulting income for the ~~three months~~period ended ~~September 30,~~March 31, 2023 and for the year ended on December 31, 2022 ~~and 2021~~ were $~~45,000~~0 and $45,000 ~~respectively. Sales~~. Consulting income are derived from providing IT consulting services to Stanley Hills, a related party.

~~Sales to related party for the nine months ended September 30, 2022 and 2021 were $90,000~~ ~~and $90,000~~ ~~respectively. Sales are derived from providing IT consulting services to Stanley Hills, a related party.~~

~~The Company did not provide IT services to Stanley during the second quarter ended June 30, 2022.~~

~~Advanced from Related Party~~

~~During the nine months ended September 30, 2022, Mansour Khatib, the Company’s CEO advanced $634,176~~ ~~cash to the Company for business purposes to fund the e-commerce operations.~~

~~During the nine months ended September 30, 2022, the Company repaid $664,225~~ ~~cash to Mansour Khatib.~~

~~As of September, 30, 2022 and December 31, 2021 (audited), the Company has recorded a due from related party of $30,049~~ ~~and $~~0~~, respectively.~~

~~Metaverse Agreement~~

On June 10, 2022, the Company, entered into a Joint Venture and Territorial License Agreement (the “Metaverse Agreement”) with Ildar Gainulin and Maria Belova (“IGMB”). Under the Metaverse Agreement, the parties formed Metaverse Kit Corp., a Nevada corporation (“Metaverse Kit”). The purpose of Metaverse Kit is to develop, maintain and support source codes for its proprietary technologies and comprehensive platform that combines a core virtual reality platform and an extended set of real-world functions to provide a metaverse experience initially within the area of sports and then expanding into virtual worlds of entertainment, live events, gaming, communications and other cross over product opportunities (the “Meta Portfolio”). Under the Metaverse Agreement, IGMB agreed to provide Metaverse Kit with the licensed technology and expertise, as requested and mutually agreed to by Company and IGMB. In connection therewith, the parties entered an Asset Purchase Agreement concurrently with the Metaverse Agreement whereby IGMB sold Metaverse Kit all source codes pertaining to the Meta Portfolio. Further, IGMB provided an exclusive license to Metaverse Kit throughout the world for the invented product/service and the related platforms relating to the Meta Portfolio and to use the know how to develop, manufacture, sell, market and distribute the Meta Portfolio throughout the world The Company shall contribute ~~500,000,000~~ shares of common stock of the Company (“GBT Shares”) to Metaverse Kit. IGBM and the Company will each own 50% of Metaverse Kit. The Company pledged its 50% ownership in Metaverse Kit to Igor 1 Corp. to secure a convertible note held by Igor 1 Corp. The Company shall appoint two directors and IGBM shall appoint one director of Metaverse Kit.

~~In addition, Metaverse Kit, IGMB and Elentina Group, LLC (“Elentina”) entered into a Consulting Agreements in which IGBM and Elentina, each were engaged to provide services for $25,000~~ per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. IGBM and Elentina will provide services in connection with the development of the business as well as Metaverse Kit’s capital raising efforts. The term of the Consulting Agreement is two years.

~~The closing of the Metaverse Agreement occurred on June 13, 2022 and the Company recorded the share issuance at FV of $5,000~~ ~~on the agreement date.~~

~~On June~~Note 16 ~~2022~~ the parties amended the Meta Agreement to further define the constitution of Meta Board of Directors. As such, Section 4.2 of the Meta Agreement was amended and restated to provide that the Board of Metaverse Kit Corp. shall consist of two Directors, one of whom shall be appointed by Ildar Gainulin and Maria Belova and the other shall be appointed by the Company.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~Note 17 –~~- ~~Contingencies~~

Legal Proceedings

From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business. There is currently no litigation that management believes will have a material impact on the financial position of the Company.

On or around January 30, 2019, RWJ Advanced Marketing, LLC, Greg Bauer, and Warren Jackson sued the Company and multiple third and related parties in Superior Court of the State of California –- County of Los Angeles, General District in connection with the acquisition of UGO in September 2017. The case number is 19STCV03320 (the “Original Lawsuit”). The complaint in the Original Lawsuit alleges breach of contract, among other causes of action. The Company answered the complaint and filed a cross-complaint against the plaintiffs in the case and third parties on or around February 15, 2019. On or about September 10, 2020, the Company through its agent of service was “served” with a complaint (the Company contested service) that was recently filed against the Company and third parties by Robert Warren Jackson and Gregory Bauer in Los Angeles Superior Court Case No.: 20STCV32709 (“Second Lawsuit”). In the Original Lawsuit filed, the court rejected the plaintiff’s claims that they were filing a purported quasi-derivative lawsuit. As such, in this current litigation, the plaintiff is now again claiming the action is a derivative lawsuit. On October 13, 2020, the Second Lawsuit was removed by other defendants into Central District of California (CASE NO. 2:20−cv−09399−RGK−AGR). On February 2, 2021 the Central District of California dismissed the entire Second Lawsuit based on “demand futility”. In the Original lawsuit, the Company filed a cross complaint against the plaintiff and other third parties. ~~The~~Recently, the court has scheduled various hearings and a trial date set for December 27, 2021 which was later continued by the Court to September 28, 2022. It was the Company’s intention to dividend its holdings of its wholly owned subsidiary ~~Ugopherservices~~Ugopher services Corp. (“UGO”). As UGO is the main dispute in the litigations described above, the Company has elected to sell UGO to a third-party effective July 1, ~~2020 (See Note 3).~~2020. On September 17, 2020, the Company terminated Greg Bauer as consultant (resulting from the sale of UGO), which he confirmed in writing. On or about June 14, 2021 the Company stipulated with plaintiff that all third parties will be released and plaintiff may file a new first amendment complaint that will name only the Company. As such, all third parties other than prior transfer agent of the Company have been dismissed from this litigation. ~~The Company is in default on this note.~~

Following the sale of UGO, the Company noticed third parties (including SURG, via its asset manager) to wire the UGO funds to its new bank account. SURG never answered the notice. SURG is the clearing house for ~~UGO. The~~UGO.The Company noticed certain third parties that it intends to take legal actions to resolve this issue. On November 12, 2020 the Company filed a complaint in the United States District Court – District of Nevada –- Case 2:20-cv-02078 against RWJ, Mr. Bauer, Mr. Jackson and against W.L. Petrey Wholesale Company Inc for fraud, breach of contract, Unjust Enrichment and other claims. On January 28, 2022 the court awarded the Company anwith injunction against RWJ defendants, where all fee funds generating from resale should be deposited into GBT blocked account, and therefore RWJ ~~Defendants~~defendants cannot use these funds without court order.

The Company entered into the Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Advanced Marketing, LLC, Robert Warren Jackson, Gregory Bauer (collectively the “RJW Parties”) and W.L. Petrey Wholesale Company, Inc., (“Petrey”) on one hand; and GBT Technologies Inc., on behalf of itself and its agents (collectively the GBT Parties”), on the other hand. The Company the RJW Agreement effective September 26, 2022 with final signatures delivered to the Company on or about October 5, 2022. Pursuant to the RJW Agreement, the parties have agreed to settle, release, and otherwise resolve all known or unknown claims between them and agreed to jointly stipulate, move, or otherwise dismiss the lawsuits filed in the United States District Court of Nevada (Case No. 2:20-cv- 02078), in the Superior Court of the State of California, County of Los Angeles, Central District (Case Nos. 19STCV03320 and 20STCV32709), and in the United States District Court of the Central District of California (Case No. 2:20-cv-09399-RGK-AGR) with prejudice. The parties agreed and stipulated to release all funds currently being held in a blocked account of $19,809 with 50% distributed to the RWJ Parties and 50% distributed the Company or its assignee. The Parties also entered into the InComm Assignment Agreement (“IAA”) which assigned, transferred and conveyed all proceeds derived from the RWJ Parties’ agreements with Interactive Communications International, Inc., and its affiliate Hi Technology Corp., including but not limited to that Master Distribution and Service Agreement between Interactive Communications International, Inc. and Petrey d/b/a UGO-HUB dated August 29, 2016, as amended (collectively referred to as the “InComm Proceeds”), and which shall divide the InComm Proceeds 90% to the Company or its assignee and 10% to the RWJ Parties or their assignee. Finally, the Company agreed to pay $40,000 to the RWJ Parties or their assignee. The Company accrued $49,847 expenses represent the final amounts due to the RJW Parties.

The Company under a different settlement agreement with SURG, committed to assign the IAA. As such, on October 5, 2022 and as cumulation of all settlement agreements the Company issued a request to SURG regarding release of certain escrow funds and the execution of an assignment of rights as contemplated in the aforereferenced agreement.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

an Interim Award was entered in favor of the Investor. On January 31, 2020, the Company was informed that a final award was entered (the “Final Award”). The Final Award affirms that certain sections of the Debenture constitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the Investor was entitled to recovery of their attorney’s fees. Consequently, the arbitrator awarded Investor an award of $4,034,444 plus interest of 7.25% accrued from May 15, 2019 and costs of $55,613. On February 18, 2020, the Company filed a motion with the United States District Court District of Nevada (the “Nevada Court”) to confirm the Final Award and a motion to consolidate Investor’s application to confirm the Final Award filed in the U.S. District Court of the Virgin Islands (Case No: 3 :20-cv-00012-CVG-RM) (the “Virgin Island Court”). On February 27, 2020, the Nevada Court denied the Company’s motion to confirm the Final Award and motion to consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court. As such, on February 27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration Award, address the outstanding issues regarding whether Investor’s rights are subordinated to other creditors and, thereafter, oversee a commercially reasonable foreclosure sale (Case No: 3 :20-cv-00012-CVG-RM). It was the Company’s position that the ~~final~~Final Award must first be confirmed and all questions regarding the rights of Investor relative to those of other creditors must be determined before any foreclosure sale can proceed. It is further the position of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk. Nevertheless, on February 28, 2020, Investor advised that it conducted a sale of the Company’s assets. As the date of this report Investor failed to present a deed of sale for the alleged sale that allegedly took place as noticed. The Company filed with Virgin Island Court the motions disputing the validity of the alleged sale. On July 28, 2020, Investor filed in the State of Nevada a motion for ~~attorney’s fees~~attorneys $48,844 and ~~cost of~~costs $716. The Company filed an answer on August 11, 2020. On October 16, 2020, Investor motion for ~~attorney’s fees~~attorneys $48,844 and ~~cost of~~costs $716 was denied. ~~The balance was included in accounts payable for the unearned settlement. As of September, 30, 2022, this~~This case is still pending with the Federal court and the Court has not taken any substantive action in the matter as of the date of this report.

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

~~GBT Technologies, S.A.~~

On September 14, 2018, the Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the “GBT License Agreement”) with GBT-CR, a fully compliance and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized crypto currency platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right and license relating intellectual property relating to systems and methods of converting electronic transmissions into digital currency as reflected in that certain patent filed with the United Stated Patent and Trademark Office on or about June 14, 2018 (EFS ID: 32893586; Application Number: 16008069; Type: Utility under 35 USC 111(a); Confirmation Number: 6787)(collectively, the “Digital Currently Technology”). Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide license to use the Digital Currency Technology to make, use, sell, lease or otherwise commercialize and dispose of products and devices utilizing the Digital Currently Technology. Under the terms of the GBT License Agreement, the Company is entitled to receive a royalty of 2% of gross revenue of each licensed product sold by GBT-CR during the period starting in which revenue is first generated using the licensed products and continuing for five years thereafter. Upon signing the GBT-CR License Agreement, GBT-CR paid the Company $~~300,000~~ which is nonrefundable. The Company has recognized the $300,000 as revenue during the year ended December 31, 2018. Upon GBT-CR making available for sale (the “Commercial Event”) an ICO (Initial Coin Offering) (the “Coin”), GBT-CR will make a payment to the Company of $~~5,000,000~~. Further, upon the Commercial Event, GBT-CR will grant the Company the ability to acquire 30% of the Coin at a 30% discount of such offering price of the Coin. The GBT License Agreement commenced as of the signing date and, unless terminated in accordance with the termination provisions of the GBT License Agreement, shall remain in force until the expiration of the patent pertaining to the Digital Currency Technology; provided that the right to use trade, secrets shall survive the expiration of the GBT License Agreement provided the Company has not terminated. Prior to the signing of the GBT License Agreement, GBT-CR advanced $~~200,000~~ to the Company, which the parties agreed will be applied toward the $5,000,000 fee when it becomes due. On February 27, 2020 GBT Technologies, S.A., as successor in interest to Hermes Roll, LLC had notified the Company that it was in default on its Amended and Restated Territorial License Agreement (“ARTLA”) dated June 15, 2015 and that the ARTLA had been cancelled and rescinded.

~~On October 18, 2021, the AltCorp Parties, the Company, and SURG entered into a Memorandum of Understanding (the “MOU”) to set up a framework for an attempt to settle the two lawsuits.~~

~~GBT Technologies, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~September 30, 2022 and 2021 (Unaudited)~~

On December 22, 2021 (the “Effective Date”), pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG, Kevin Brian Cox (SURG’s Chief Executive Officer) – in his individual capacity, entered into a Resolution of Purchase, Mutual Release, and Settlement Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related to the consideration paid by SURG to the Company in connection with the APA.

On or about July 9, 2021 the Company filed a lawsuit in District Court in Clack County Nevada – Department 19 (Case number A-21-837631-C) against Terry Taylor and TTSG Holdings, Inc for breach of contract, breach of covenant of Good Faith and Fair Dealing, Unjust Enrichment and declaratory relief for failure of providing consulting services per contract they entered. The Company is demanding the return of 240,000 shares issued, return of the $5,000 payments, recission of the consulting agreement, and attorney’s fees and costs. ~~The lawsuit is still pending as of the date of this report.~~ As Terry Taylor and TTSG Holdings failed to appear to a notice of deposition, the Company filed for a summary judgment. On January 20, 2023 the court issued a $708,821 writ of execution against Terry Taylor and TTSG

Gregory Mancuso and Rainer AG

On or about February 2, 2022, GBT was served with a First Amended Complaint (the “Complaint”) initiated by Gregory Mancuso and Rainer AG, a Swiss corporation, Case No. 21SMCV01430, filed in the Superior Court of the State of California for the County of Los Angeles. The Complaint names a number of different parties, including GBT, and asserts, among other things, claims for conversion, unjust enrichment, breach of contract, and breach of implied covenant of fair dealing, which Plaintiffs allege arise out of a brokerage agreement entered into between Plaintiff Rainer AG and co-defendant Consul Group re Dos Mil Veintiuno S.R.L (“Consul”). GBT was sued under an alter ego theory of liability, and its only involvement in the above-referenced chain of events seems to be that its shares were deposited with Rainer by Consul upon the opening of the brokerage account. GBT will be filling a demurrer to the First Amended Complaint based on a variety of deficiencies with the First Amended Complaint, and will ask the Court to dismiss the claims against GBT.

Note 17 - Contingencies

GBT Technologies, S.A.

On September 14, 2018, the Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the “GBT License Agreement”) with GBT-CR, a fully compliant and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized crypto currency platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right and license relating intellectual property relating to systems and methods of converting electronic transmissions into digital currency as reflected in that certain patent filed with the United Stated Patent and Trademark Office on or about June 14, 2018 (EFS ID: 32893586; Application Number: 16008069; Type: Utility under 35 USC 111(a); Confirmation Number: 6787)(collectively, the “Digital Currently Technology”). Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide license to use the Digital Currency Technology to make, use, sell, lease or otherwise commercialize and dispose of products and devices utilizing the Digital Currently Technology. Under the terms of the GBT License Agreement, the Company is entitled to receive a royalty payment of 2% of gross revenue of each licensed product sold by GBT-CR during the period starting in which revenue is first generated using the licensed products and continuing for five years thereafter. Upon signing the GBT-CR License Agreement, GBT-CR paid the Company $300,000 which is nonrefundable. The Company recognized the $300,000 as revenue during the years ended December 31, 2018. Upon GBT-CR making available for sale (the “Commercial Event”) an ICO (Initial Coin Offering) (the “Coin”), GBT-CR will make a payment to the Company of $5,000,000. Further, upon the Commercial Event, GBT-CR will grant the Company the ability to acquire 30% of the Coin at a 30% discount of such offering price of the Coin. The GBT License Agreement commenced as of the signing date and, unless terminated in accordance with the termination provisions of the GBT License Agreement,

shall remain in force until the expiration of the patent pertaining to the Digital Currency Technology; provided that the right to use trade secrets shall survive the expiration of the GBT License Agreement provided the Company has not terminated. Prior to the signing of the GBT License Agreement, GBT-CR advanced $200,000 to the Company, which the parties have agreed will be applied toward the $5,000,000 fee when it becomes due. On February 27, 2020 GBT Technologies, S.A., as successor in interest to Hermes Roll, LLC had notified the Company that it was in default on its Amended and Restated Territorial License Agreement (“ARTLA”) dated June 15, 2015 and that the ARTLA had been cancelled and rescinded.

Stock Loan Receivable

On January 8, 2019, the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa Rica corporation (“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by various regulators. The Company pledged ~~4,005~~4,006 restricted shares of its common stock valued at $7,610,147 (based on the closing price on the grant date) for three years ~~in consideration of~~for an annual payment of $375,000 paid in quarterly installments of $93,750. In lieu of cash payment, Latinex may pay the Company in virtual currency of WISE Network S.A. valued at a 50% discount of its offering price of $10 per token. In the event that Latinex’s required capital has decreased below $5,000,000, Latinex is permitted to sell the pledged shares of common stock only in an amount to ensure that Latinex can satisfy the required capital levels. The Company must consent to such sale of the shares of common stock, which may not be unreasonably withheld. Upon expiration of the agreement, the remaining shares of common stock shall be returned to the Company free and clear of all liens. The Company recorded the value of these shares of common stock as a stock loan receivable which is presented as a contra-equity account in the accompanying consolidated balance sheets. At December 31, 2019, the Company wrote off the accrued interest income as Latinex did not perform any payment and the Company has no mean to enforce this payment. Latinex agreed in principle to return the pledged ~~4,005~~4,006 restricted shares to the Company for cancellation. The ~~4,005~~4,006 restricted shares have not yet been returned to the Company as of ~~September 30, 2022.~~March 31, 2023.

Assignment of lease agreement

On May 17, 2022, Mahaser LLC (“Assignee”) entered into an assignment and assumption of lease agreement by and between 2819 Coldwater LLC (“Assignor”), Sunset Place Holdings LLC (“Lessor”) and Yossi Attia (“Guarantor”). Pursuant to the agreement, Lessor agreed to lease to Assignor certain Standard Industrial/Commercial Multi-Tenant Lease – Gross agreement dated February 7, 2022 (the “Lease”) and expiring on January 31, 2024, which premises commonly known as 8265 Sunset Boulevard, Suite #107, West Hollywood, CA 90046. The base rent payment shall equal $4,100 per month and share of common area operating expense shall equal $200 per month. Guarantor has guaranteed payment of Assignor’s obligations under the Lease and Assignor assigned all of its right, title and interest in the Lease to Assignee and Assignee assumed Assignor’s obligations under the Lease.

On June 10, 2022, GBT Technologies, Inc. (the “Company”), entered into a Joint Venture and Territorial License Agreement (the “Metaverse Agreement”) with Ildar Gainulin and Maria Belova (collectively, the “Licensor”).

~~Notes~~

Under the Metaverse Agreement, the parties formed Metaverse Kit Corp., a Nevada corporation (“Metaverse Kit”). The purpose of Metaverse Kit was to ~~Condensed Consolidated Financial Statements~~develop, maintain and support source codes for its proprietary technologies and comprehensive platform that combines a core virtual reality platform and an extended set of real-world functions to provide a metaverse experience initially within the area of sports and then expanding into virtual worlds of entertainment, live events, gaming, communications and other cross over product opportunities (the “Meta Portfolio”). Under the Metaverse Agreement, Licensor agreed to provide Metaverse Kit with the licensed technology and expertise. In connection therewith, the parties entered an Asset Purchase Agreement (the “Metaverse APA”) concurrently with the Metaverse Agreement whereby Licensor sold Metaverse Kit all source codes pertaining to the Meta Portfolio. Further, Licensor provided an exclusive license to Metaverse Kit throughout the world for the invented product/service and the related platforms relating to the Meta Portfolio and to use the know how to develop, manufacture, sell, market and distribute the Meta Portfolio throughout the world. The Company was required to contribute 500,000,000 shares of common stock of the Company (“GBT Shares”) to Metaverse Kit. Licensor and the Company were to each own 50% of Metaverse Kit. The Company pledged its 50% ownership in Metaverse Kit to Igor 1 Corp. to secure a convertible note held by Igor 1 Corp. The Company was to appoint two directors and Licensor was allowed to appoint one director of Metaverse Kit.

~~September 30, 2022~~

In addition, Metaverse Kit, Licensor and ~~2021 (Unaudited)~~Elentina Group, LLC (“Elentina”) entered into a Consulting Agreements in which IGBM and Elentina, each were engaged to provide services for $25,000 per month payable quarterly which Metaverse Kit has the option to pay in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. Licensor and Elentina were to provide services in connection with the development of the business as well as Metaverse Kit’s capital raising efforts. The term of the Consulting Agreement was two years.

The closing of the Metaverse Agreement occurred on June 13, 2022.

On March 14, 2023, the Company received a counter signed Settlement Agreement and Release by Licensor dated March 2, 2023 (“Settlement Agreement”). Pursuant to the Settlement Agreement, the parties agreed that Metaverse Agreement, the Metaverse APA and the Consulting Agreement are void and cancelled. Licensor agreed to pay $5,000 to the Company as settlement payment and surrender their shares in Metaverse Kit.

On February 1, 2023, the Company engaged AlKhatib Consulting Group to provide exclusive representation services in connect with managing market partners, effective on February 1, 2012 for 24 consecutive months.

Note 18 – Concentrations

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to a concentration of credit risk for the years, consist principally of temporary cash investments. There have been no losses in these accounts through ~~September 30,~~March 31, 2023 and the year ended on December 31, 2022.

Liquidity risk

The Company has an accumulated deficit of $304,887,630 and has a working capital deficit of $22,715,354 as of March 31, 2023, which raises substantial doubt about its ability to continue as a going concern as the Company does not have sufficient funds to discharge its current liabilities.

Customers

~~For~~Sales for both the ~~three months~~period ended ~~September 30,~~March 31, 2023 and 2022 were $204,833 and $224,970. The Consulting income from related party for the period ended March 31, 2023 and 2022 was $0 and $45,000 ~~of sales were~~. Sales are derived from providing IT consulting services to a related party and $~~201,495~~sales ~~were derived~~ from ~~e-commerce sales .~~

~~For the nine months ended September 30, 2022, $90,000~~ ~~of sales were derived from providing IT consulting services~~amazon and $~~771,446~~ ~~sales were derived from e-commerce sales.~~Ebay.

Note 19 – ~~Income Taxes~~

~~No income tax expense reflected in the consolidated statements of operations for the nine months ended September 30, 2022 and 2021. The Company has $2,255,565~~ ~~net income during the nine months ended September 30, 2022 but it was mainly from the gain on the Surge settlement of $3,012,633~~ ~~and the gain of change in FV in derivatives of $2,795,870~~ ~~and it is a non-taxable event so would have a taxable loss, and continue to record a valuation allowance.~~

~~Note 20 –~~- Subsequent Events

~~Management has evaluated events~~On April 3, 2023, GBT Tokenize Corp. (“Seller”), a subsidiary that ~~occurred subsequent to the end of the reporting period shown herein:~~

is owned 50% by GBT Technologies, ~~Inc. (the “Company”~~Inc (“GBT”) entered into ~~the Confidential Settlement~~an Asset Purchase Agreement ~~and Mutual Release~~ (“~~RJW Agreement”~~APA”) ~~by and between RWJ Advanced Marketing, LLC, Robert Warren Jackson, Gregory Bauer (collectively the “RJW Parties”) and W.L. Petrey Wholesale Company,~~with Trend Innovation Holdings, Inc., (“~~Petrey”) on one hand; and GBT Technologies Inc., on behalf of itself and its agents (collectively the GBT Parties”~~TREN”), ~~on the other hand. The Company the RJW Agreement effective September 26, 2022 with final signatures delivered~~in which GBT consented, pursuant to ~~the Company on or about October 5, 2022.~~which Seller sold certain assets relating to proprietary system and method named Avant-Ai, which is a text-generation, deep learning self-training model (the “System”).

~~Pursuant~~In consideration of acquiring the System, TREN is required to issue to the ~~RJW Agreement,~~Seller 26,000,000 common shares of TREN (the “Shares”). The Shares will be restricted per Rule 144 as promulgated under the ~~parties~~Securities Act of 1933, as amended (the “1933 Act”) and Seller agreed to ~~settle, release,~~a lock-up period of nine (9) months following closing (the “Lock Up Term”). In the event that TREN is unable to up-list to Nasdaq either through a business combination or otherwise prior to the expiration of the Lock Up Term, the Seller may request within three (3) business days of the expiration of the Lock-Up Term, that all transactions contemplated by the APA be unwound.

In addition, TREN, Seller and ~~otherwise resolve all known~~ GBT entered into a license agreement regarding the System, granting the Seller and/or ~~unknown claims between them~~GBT a perpetual, irrevocable, non-exclusive, non-transferable license for using the System to be used in its own development, as in-house tool, where Seller or GBT may not sublicense its rights hereunder to any customer or client.

On April 17, 2023, the Company, Bannix Acquisition Corp. (“Bannix”) and EVIE Autonomous Ltd. (“EVIE”) pursuant to which Bannix agreed to ~~jointly stipulate, move,~~acquire EVIE. In addition, Bannix agreed to acquire from the Company the Apollo System which is intellectual property covered by patent application (publication number 2022/0405966) filed with the US Patent and Trademark Office. This patent application describes a machine learning driven technology that controls radio wave transmissions, analyzes their reflections data, and constructs 2D/3D images of stationary and moving objects. The Apollo system is based on radio waves and can detect an entity’s moving and stationary positions, enabling imaging technology to show these movements and positions on a screen in real time. This includes an AI technology that controls the radio waves transmission and analyzes the reflections. The goal is to integrate the Apollo System as an efficient driver monitoring system, detecting impaired or ~~otherwise dismiss the lawsuits filed in the United States District Court of Nevada (Case No. 2:20-cv- 02078), in the Superior Court~~distracted drivers, providing audible and visual alerts. Consummation of the State of California, County of Los Angeles, Central District (Case Nos. 19STCV03320 and 20STCV32709), and in the United States District Court of the Central District of California (Case No. 2:20-cv-09399-RGK-AGR) with prejudice.

~~The parties agreed and stipulated to release all funds currently being held in a blocked account of $19,809 with 50% distributed~~above transactions are subject to the ~~RWJ Parties and 50% distributed~~execution of a mutually satisfactory definitive agreement by the Company, ~~or its assignee. The Parties also entered into the InComm Assignment Agreement (“IAA”) which assigned, transferred~~Bannix and conveyed all proceeds derived from the RWJ Parties’ agreements with Interactive Communications International, Inc., and its affiliate Hi Technology Corp., including but not limited to that Master Distribution and Service Agreement between Interactive Communications International, Inc. and Petrey d/b/a UGO-HUB dated August 29, 2016, as amended (collectively referred to as the “InComm Proceeds”EVIE (the “Definitive Agreement”)~~, and which shall divide the InComm Proceeds 90% to the Company or its assignee and 10% to the RWJ Parties or their assignee. Finally, the Company agreed to pay $40,000~~ ~~to the RWJ Parties or their assignee.~~.

Straight Note $47,208- On ~~November 10,~~April 24, 2023, the Company ~~received~~entered into a ~~notice of conversion from~~Securities Purchase Agreement, with 1800 Diagonal Lending LLC, ~~(for their second note~~an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) in the aggregate principal amount of $47,208 with an original issue discount of $5,058 resulting in net proceeds of the Company of $42,150. The DL Note has a maturity date of April 24, 2024 and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% per annum from the date on which the DL Note is issued (the “Issue Date”). A one-time interest charge of 12% or $5,664 was applied on the Issue Date to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments each in the amount of $5,287.20 resulting in a total payback to DL of $52,872. The first payment is due June 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

The transaction closed on April 26, 2023.

Convertible Note $50,580 - ~~see note 11)~~On April 24, 2023, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) in the aggregate principal amount of $50,580 for a purchase price of $~~30,000~~42,150. The DL Note has a maturity date of July 24, 2024 ~~converting~~and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of six percent (6.0%) per annum from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note, provided it makes a payment including a prepayment to DL as set forth in the DL Note.

The transaction closed on April 26, 2023.

Exhibit 4.18 Description of Securities

DESCRIPTION OF SECURITIES

General

Our authorized capital stock consists of 10,000,000,000 shares of common stock, par value $0.0001 per share, and 20,000,000 shares of preferred stock, par value $0.0001 per share.

The following description of our capital stock and provisions of our Articles of Incorporation and Bylaws. You should also refer to our Articles of Incorporation, a copy of which is filed as an exhibit to the registration statement of which this prospectus is a part, and our Bylaws, a copy of which is filed as an exhibit to the registration statement of which this prospectus is a part.

Common Stock

We are authorized to issue up to a total of 10,000,000,000 shares of common stock, par value $0.0001 per share. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of our stockholders. Holders of our common stock have no cumulative voting rights.

Further, holders of our common stock have no preemptive or conversion rights or other subscription rights. Upon our liquidation, dissolution or winding-up, holders of our common stock are entitled to share in all assets remaining after payment of all liabilities and the liquidation preferences of any of our outstanding shares of preferred stock. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of our assets which are legally available.

The holders of a majority of the shares of our capital stock, represented in person or by proxy, are necessary to constitute a quorum for the transaction of business at any meeting. If a quorum is present, an action by stockholders entitled to vote on a matter is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, with the exception of the election of directors, which requires a plurality of the votes cast.

Preferred Stock

Our board of directors will have the authority, without further action by the stockholders, to issue up to 20,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges, and relative participating, optional, or special rights as well as the qualifications, limitations, or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences, any or all of which may be greater than the rights of the common stock. Our board of directors, without stockholder approval, will be able to issue convertible preferred stock with voting, conversion, or other rights that could adversely affect the voting power and other rights of the holders of common stock. Preferred stock could be issued quickly with terms calculated to delay or prevent a change of control or make removal of management more difficult. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of our common stock, and may adversely affect the voting and other rights of the holders of common stock.

Series B Convertible Preferred Stock

We are authorized to issue up to a total of 45,000 shares of a series of preferred stock designated as Series B preferred stock, par value $0.0001 per share. Holders of our Series B preferred stock are entitled to vote the number of votes equal to the number of whole shares of common stock into which the shares of Series B preferred stock, held by such holder are convertible as of the record date on all matters submitted to a vote of our stockholders. Holders of our Series B preferred stock are entitled, exclusively and as a separate class, to elect two directors of the Corporation,

Further, holders of our Series B preferred stock shall have conversion rights. The holders of our Series B preferred stock have the right to convert each share of Series B preferred stock, at any time, without payment of additional consideration by the holder into 30 shares of our common stock.

Series C Convertible Preferred Stock

We are authorized to issue up to a total of 10,000 shares of a series of preferred stock designated as Series C preferred stock, par value $0.0001 per share. Holders of our Series C preferred stock are entitled to vote the number of votes equal to the number of whole shares of common stock into which the shares of Series C preferred stock, held by such holder are convertible as of the record date on all matters submitted to a vote of our stockholders. Holders of our Series C preferred stock are entitled, exclusively and as a separate class, to elect two directors of the Corporation,

Further, holders of our Series C preferred stock shall have conversion rights. The holders of our Series C preferred stock have the right to convert each share of Series C preferred stock, at any time, without payment of additional consideration by the holder into 8 shares of our common stock.

Series H Convertible Preferred Stock

We are authorized to issue up to a total of 40,000 shares of a series of preferred stock designated as Series H preferred stock, par value $0.0001 per share. Holders of our Series H preferred stock are entitled to vote the number of votes equal to the number of whole shares of common stock into which the shares of Series H preferred stock, held by such holder are convertible as of the record date on all matters submitted to a vote of our stockholders. Holders of our Series F preferred stock are entitled, exclusively and as a separate class, to elect two directors of the Corporation,

Further, holders of our Series H preferred stock shall have conversion rights. The holders of our Series H preferred stock have the right to convert each share of Series H preferred stock, at any time, without payment of additional consideration by the holder into such number of fully paid and non-assessable shares of our common stock as determined by dividing $500 by $10 in effect at the time of such conversion. In lieu of any fractional shares to which the Series H holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the fair market value of a share of common stock as determined in good faith by our board of directors.]

Anti-Takeover Provisions Under Nevada Law.

Combinations with Interested Stockholder. Sections 78.411-78.444, inclusive, of the Nevada Revised Statutes (“NRS”) contain provisions governing combinations with an interested stockholder. For purposes of the NRS, “combinations” include: (i) any merger or consolidation with any interested stockholder, (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition to any interested stockholder of corporate assets with an aggregate market value equal to 5% or more of the aggregate market value of the corporation’s consolidated assets, 5% or more of the outstanding shares of the corporation or 10% or more of the earning power or net income of the corporation, (iii) the issuance to any interested stockholder of voting shares (except pursuant to a share dividend or similar proportionate distribution) with an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding shares of the corporation, (iv) the dissolution of the corporation if proposed by or on behalf of any interested stockholder, (v) any reclassification of securities, recapitalization or corporate reorganization that will have the effect of increasing the proportionate share of the corporation’s outstanding voting shares held by any interested stockholder and (vi) any receipt by the interested stockholder of the benefit (except proportionately as a stockholder) of any loan, advance, guarantee, pledge or other financial assistance. For purposes of the NRS, an “interested stockholder” is defined to include any beneficial owner of more than 10% of any class of the voting securities of a Nevada corporation and any person who is an affiliate or associate of the corporation and was at any time during the preceding three years the beneficial owner or more than 10% of any class of the voting securities of the Nevada corporation.

Subject to certain exceptions, the provisions of the NRS governing combinations with interested stockholders provide that a Nevada corporation may not engage in a combination with an interested stockholder for two years after the date that the person first became an interested stockholder unless the combination or the transaction by which the person first became an interested stockholder is approved by the board of directors before the person first became an interested stockholder.

Control Share Acquisitions. The NRS also contains a “control share acquisitions statute.” If applicable to a Nevada corporation this statute restricts the voting rights of certain stockholders referred to as “acquiring persons,” that acquire or offer to acquire ownership of a “controlling interest” in the outstanding voting stock of an “issuing corporation.” For purposes of these provisions a “controlling interest” means with certain exceptions the ownership of outstanding voting stock sufficient to enable the acquiring person to exercise one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more of all voting power in the election of directors and “issuing corporation” means a Nevada corporation that has 200 or more stockholders of record, at least 100 of whom have addresses in Nevada appearing on the stock ledger of the corporation, and which does business in Nevada directly or through an affiliated corporation. The voting rights of an acquiring person in the affected shares will be restored only if such restoration is approved by the holders of a majority of the voting power of the corporation. The NRS allows a corporation to “opt-out” of the control share acquisitions statute by providing in such corporation’s articles of incorporation or bylaws that the control share acquisitions statute does not apply to the corporation or to an acquisition of a controlling interest specifically by types of existing or future stockholders, whether or not identified.

Articles of Incorporation and Bylaws

No Cumulative Voting. Where cumulative voting is permitted in the election of directors, each share is entitled to as many votes as there are directors to be elected and each shareholder may cast all of its votes for a single director nominee or distribute them among two or more director nominees. Thus, cumulative voting makes it easier for a minority shareholder to elect a director. Our articles of incorporation deny shareholders the right to vote cumulatively.

Authorized But Unissued Shares. Our articles of incorporation permit the board to authorize the issuance of preferred stock, and to designate the rights and preferences of our preferred stock, without obtaining shareholder approval. One of the effects of undesignated preferred stock may be to enable the board to render more difficult or to discourage a third party’s attempt to obtain control of Gopher Protocol by means of a tender offer, proxy contest, merger, or otherwise. The issuance of shares of preferred stock also may discourage a party from making a bid for the common stock because the issuance may adversely affect the rights of the holders of common stock. For example, preferred stock that we issue may rank prior to the common stock as to dividend rights, liquidation preference, or both, may have special voting rights and may be convertible into shares of common stock. Accordingly, the issuance of shares of preferred stock may discourage bids for our common stock or may otherwise adversely affect the market price of our common stock.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Nevada Agency and Transfer Company (“NATCO”) with a business address at 50 West Liberty Street, Suite 880, Reno NV 89501; NATCO’s website is www.natco.com, and their phone number is (775) 322-0626.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our consolidated financial ~~statements~~statements(“CFS”) and related notes included elsewhere in this report. In addition to historical information, this discussion includes forward-looking information that involves risks and assumptions, which could cause actual results to differ materially from management’s expectations. See “Forward-Looking Statements” included in this report.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward looking statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report.

This section of the report should be read together with Footnotes of the Company audited financials for the year ended December 31, ~~2021,~~2022, the unaudited statements of operations for the three ended March 31, 2023 and ~~nine months ended September 30,~~ 2022 ~~and 2021~~ are compared in the sections below.

General Overview

GBT Technologies Inc. ~~(the~~(formally known as Gopher Protocol Inc., the “Company”, “GBT”, “Gopher”, “Gopher Protocol” “GOPH” or “GTCH”) was incorporated on July 22, 2009 under the laws of the State of Nevada. ~~The Company target building an intellectual properties portfolio for~~GBT is targeting growing markets such as development of Internet of Things (IoT) and Artificial Intelligence (AI) enabled networking and tracking technologies, including wireless mesh network technology platform and fixed solutions, development of an intelligent human body vitals device, asset-tracking IoT, and wireless mesh networks. Effective August 5, 2019, the Company changed its name from Gopher Protocol Inc. to GBT Technologies Inc. The Company derived revenues from the provision of IT consulting services. The Company derived revenues from (i) the provision of IT consulting or licensing services; and (ii) from selling electronic products through e-commerce platforms like Amazon and eBay.

~~GBT Tokenize Joint Venture (totally Impaired in 2021)~~

On March 6, 2020, the Company through Greenwich, entered into a Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Tokenize-It, S.A. (“Tokenize”), which is owned by a Costa Rica Trust represented by Pablo Gonzalez (“Gonzalez”). Gonzalez also represents Gonzalez Costa Rica Trust, which holds a note in the principal amount of $10,000,000 and is also a shareholder of the Company. Under the Tokenize Agreement, the parties formed GBT Tokenize Corp., a Nevada corporation (“GBT Tokenize”). The purpose of GBT Tokenize is to develop, maintain and support source codes for its proprietary technologies including advanced mobile chip technologies, tracking, radio technologies, AI core engine, electronic design automation, mesh, games, data storage, networking, IT services, business process outsourcing development services, customer service, technical support and quality assurance for business, customizable and dedicated inbound and outbound calls solutions, as well as digital communications processing for enterprises and startups (“Technology Portfolio”), throughout the State of California. Upon generating any revenue from the Technology Portfolio, the Joint Venture will earn the first right of refusal for other territories. The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment. The Company shall appoint two directors and Tokenize shall appoint one director of GBT Tokenize. Tokenize shall contribute the services and resources for the development of the Technology Portfolio to GBT Tokenize. The Company shall contribute 2,000,000 shares of common stock of the Company (“GBT Shares”) to GBT Tokenize. Tokenize and the Company will each own 50% of GBT Tokenize. The shares were valued at $5,500,000.

In addition, GBT Tokenize and Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged to provide services for $33,333 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. Gonzalez will provide services in connection with the development of the business as well as GBT Tokenize’s capital raising efforts. The term of the Consulting Agreement was two years. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley Hills in a private transaction that the Company is not part to. The closing of the Tokenize Agreement occurred on March 9, 2020.

Through this Joint Venture the parties commenced development of an intelligent human vital signs’ device, which we currently refer to as the qTerm. The platform is an expansion of the existing license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp. with an exclusive territory of California to develop certain of the Company’s technology. As the nature of the platform cannot be restricted only to California, the Company’s joint venture GBT Tokenize Corp. will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to board approval. A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO. The application has been assigned serial number 63001564. The Joint Venture completed successfully the first prototype. There is no guarantee that the Company will be successful in researching, developing or implementing this product into the market. In order to successfully implement this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling and distributing this product. There is no guarantee that the Company will be successful in any or all of these critical steps.

On May 28, 2021, the parties agreed to amend the Tokenize Agreement to expand territory granted for the Technology Portfolio under the license to GBT Tokenize to include the entire continental United States. The Company has further agreed to issue GBT Tokenize an additional 14,000,000 shares of common stock of the Company. The shares were valued at $15,400,000. At March 31, 2020, the Company evaluated the carrying amount of this joint venture investment and determined it was fully impaired and recorded an impairment charge of $5,500,000 was taken. At December 31, 2021, the Company evaluated the carrying amount of this joint venture investment and determined that this investment was fully impaired and as a result an impairment charge of $15,400,000. Although the investment was impaired, the product development is still ongoing. The carrying amount of this investment at September 30, 2022 and December 2021(audited), was $0 and $0, respectively.

Magic Agreement

The Tokenize Agreement provides that the Company shall contribute 150,000,000 shares of common stock of the Company (“GBT Shares”) to Tokenize. Sergio Fridman is the manager of Magic and the beneficial owner of all outstanding securities of Magic. Magic will contribute cash of $250,000 into Tokenize ~~in consideration of~~for a promissory note and agreed to further fund Tokenize with all funds reasonably needed for implementation of the business purposes as described in the Tokenize Agreement. The GBT Shares will not be transferable for a period of five years.

MetAlert (prior ~~name)~~name – GTX ~~Agreement~~Corp)

On April 12, 2022, GBT Tokenize Corp (“GBT Tokenize”), a Nevada corporation which the Company owns 50% of the outstanding shares of common stock, entered into a series of agreements with GTX Corp (“GTX”) and various note holders of GTX pursuant to which Tokenize acquire convertible promissory notes of GTX of $100,000 (the “GTX Notes”). In addition, GBT Tokenize acquired 76,923 (GBT acquired 5,000,000 in the original deal, where GTX to perform a corporate action of 1:65 reverse split on September 20, 2022) shares of common stock of GTX for $150,000 - in total FV of ~~$28,462~~$3,992 as of ~~September 30, 2022~~March 31, 2023 based on level 1 stock price in OTC markets.

GTX changed its name into MetAlert Inc. on or about September 20, 2022.

On September 30, 2022, GBT Tokenize, loaned MetAlert Inc., a Nevada corporation (f/k/a GTX Corp.) (“MetAlert”) $90,000. ~~In consideration of~~For such loan, MetAlert provided Tokenize with a promissory note of $90,000 which is due and payable together with interest of 5% upon the earlier of September 19, 2023 or when declared by Tokenize.

MetAlert designs, manufactures and sells various interrelated and complementary products and services in the wearable technology and IoMT (Internet of Medical Things) marketplace.

As of ~~September, 30,~~March 31, 2023 the notes had an outstanding balance of $182,500 and accrued interest of $ $11,288. As of

December 31, 2022, the notes had an outstanding balance of $190,000 and accrued interest of ~~$4,821.~~$8,475.

As of ~~September, 30, 2022~~March, 31, 2023 and December 31, ~~2021,~~2022, the marketable security had a FV of ~~$28,462~~$3,992 and ~~$0,~~$12,538, respectively.

Revenue Sharing Agreement – Variable Interest Entity (VIE)

Wireless mesh networking

Wireless mesh networks consist of LAN/MAN/WAN solutions that are infrastructural-intensive, may rely on regulated frequencies and bandwidth, often have so-called “last mile” problems areas where either economics or population density make it too expensive for current solutions to cover, and difficult to manage centrally. The Company’s GopherInsight platform makes it easy to add and manage last mile capacity. The solution is easily integrated into existing networks. The Company’s AI platform is designed for easy integration with, and management of, additional coverage for customer networks.

Wireless mesh networking markets

The Company potentially will target telecommunications providers, corporate entities that run LAN or wide-area networks, universities, and government entities.

Wireless mesh networking markets competition

The competitors for wireless mesh networking solutions, and AI solutions, are the entities themselves that have their own capability. The Company’s strategy is to integrate and “wrap around” those solutions to make them more efficient, less costly, and less infrastructural-intensive, while at the same time solving last mile problems to the end user.

COVID-19 Pandemic

The Company operates in a high-tech marketplace and relies on professionals and partnerships all over the world, which is impacted by the global pandemic, causing the Company’s resources to be affected. Our business operations have been and may continue to be materially and adversely affected by the coronavirus disease COVID-19.

An outbreak of respiratory illness caused by COVID-19 emerged in Wuhan city, Hubei province, PRC, in late 2019 and expanded globally. COVID-19 is considered to be highly contagious and poses a serious public health threat.

On March 19, 2020, California Governor Gavin Newsom issued a stay-at-home order to protect the health and well-being of all Californians and to establish consistency across the state in order to slow the spread of COVID-19. California was therefore under strict quarantine control and travel has been severely restricted, resulting in disruptions to work, communications, and access to files (due to limited access to facilities). Since then, other measures have been imposed in other countries and major cities in the USA, including Los Angeles, and throughout the world in an effort to contain the COVID-19 outbreak. The World Health Organization (the “WHO”) is closely monitoring and evaluating the situation. On March 11, 2020, the WHO declared the outbreak of COVID-19 a pandemic, expanding its assessment of the threat beyond the global health emergency it had announced in January. Any outbreak of such epidemic illness or other adverse public health developments in the USA or elsewhere in the world may materially and adversely affect the global economy, our markets and our business. The stay-at-home order was lifted in California only on January 25, 2021.

In the first quarter of 2020, the COVID-19 outbreak caused disruptions in our development operations, which resulted in delays on exiting projects. The State of California and the economy in general has begun to slowly re-open following the introduction of the COVID-19 vaccine. However, in the event COVID-19 or other variant is to again surface any further unforeseen delay in our operations of the development, delivery and assembly process within any of our activities could continue to result in, increased costs and reduced revenue.

We cannot foresee whether the outbreak of COVID-19 and its variants will continue to be effectively contained. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook for sales, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers and vendors or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations.

~~Risks and Uncertainties~~

Management is currently evaluating the impact of the COVID-19 pandemic on the Company and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

~~Consideration of Inflation Reduction Act Excise Tax~~

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Results of Operations:

Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

A comparison of the statements of operations for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ is as follows:

Change
2022 2021 %
Sales $ 201,495 $ — $ 201,495 100 %
Consulting income – related party 45,000 45,000 — 0 %
Total sales 246,495 45,000 201,495 448 %
Cost of goods sold 141,545 — 141,545 100 %
Gross profit 104,950 45,000 59,950 133 %

Operating expenses 633,537 906,398 (272,861 ) -30 %
Loss from operations (528,587 ) (861,398 ) 332,811 -39 %
Other income 2,299,051 431,467 1,867,584 433 %
Income (loss) before provision for income taxes 1,770,464 (429,931 ) 2,200,395 -512 %
Provision for income taxes — — — 0 %
Net Income (Loss) $ 1,770,464 $ (429,931 ) $ 2,200,395 -512 %

	Three Months Ended March 31						Change
	2023			2022			$			%
Sales	$	217,785		$	224,970		$	(7,185	)		-3	%
Consulting income – related party		—			45,000			(45,000	)		-100	%
Total sales		217,785			269,970			(52,185	)		-24	%
Cost of goods sold		176,091			208,987			(32,185	)		-19	%
Gross profit		41,694			60,983			(19,289	)		-46	%

Operating expenses		498,229			1,006,402			(508,173	)		-102	%
Loss from operations		(456,535	)		(945,419	)		488,884			-107	%
Other income		(5,173,178	)		4,871,658			(10,044,836	)		194	%
Income (Loss) before provision for income taxes		(5,629,713	)		3,926,239			(9,555,952	)		170	%
Provision for income taxes		—			—			—
Net Income (Loss)	$	(5,629,713	)	$	3,926,239		$	(9,555,952	)		170	%

For the ~~three months~~period ended ~~September 30, 2021,~~March 31, 2023, our Company earned net revenues of ~~$45,000. All~~$217,785. $217,785 sales were derived from ~~providing IT consulting services to a related party.~~E-commerce sales.

For the ~~three months~~period ended ~~September 30,~~March 31, 2022, our Company earned net revenues of ~~$246,495. $201,495 of the sales were derived from e-commerce that commenced in the first quarter of 2022 and~~$269,970. $45,000 ~~were derived from providing IT consulting service to a related party.~~

Operating expenses for the three months ended September 30, 2022 were $633,537, compared to $906,398 for the 2021 period. The decrease of $272,861, or 30% was principally due to decrease in professional and marketing fees.

Other income for the three months ended September 30, 2022 was $2,299,051, compared to $431,467 for the 2021 period. The increase of $1,867,584, or 433% was principally due to an $3,012,633 gain from Surge Settlement.

~~Net income for the three months ended September 30, 2022 was $1,770,464 compared to a net loss of $429,931 for the period in 2021 due to the factors described above.~~

~~Nine months ended September 30, 2022 and 2021~~

~~A comparison of the statements of operations for the nine months ended September 30, 2022 and 2021 is as follows:~~

Change
2022 2021 %
Sales $ 771,446 $ — $ 771,446 100 %
Consulting income – related party 90,000 135,000 (45,000 ) -33 %
Total sales 861,446 135,000 726,446 538 %
Cost of goods sold 530,003 — 530,003 100 %
Gross profit 331,443 135,000 196,443 146 %

Operating expenses 2,566,281 17,846,869 (15,280,588 ) -86 %
Loss from operations (2,234,838 ) (17,711,869 ) 15,477,031 -87 %
Other income (expense) 4,490,403 (15,142,326 ) 19,632,729 -130 %
Loss before provision for income taxes 2,255,565 (32,854,195 ) 35,109,760 -107 %
Provision for income taxes — — — 0 %
Net Income (Loss) $ 2,255,565 $ (32,854,195 ) $ 35,109,760 -107 %

~~For the nine months ended September 30, 2021, our Company earned net revenues of $135,000. All sales were derived from providing IT consulting services to a related party.~~

~~For the nine months ended September 30, 2022, our Company earned net revenues of $861,446. $90,000~~ sales were derived from providing IT consulting services to a related party, and ~~$771,446~~$224,970 sales were derived from ~~e-commerce.~~Amazon sales that commenced in the quarter ended March 31, 2022.

Operating expenses for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were ~~$2,566,281,~~$498,229, compared to ~~$17,846,869~~$1,006,402 for the ~~2021 period.~~same period in 2022. The decrease of ~~$15,280,588,~~$508,173 or ~~86%~~102% was principally due to a decrease in ~~one time impairment of assets of $15,400,000 which incurred in the 2021 period.~~marketing and Professional expense.

Other income (expense) for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$4,490,403 compared to $(15,142,326)~~$(5,173,178), an increase of $10,044,836 or 194% from $4,871,658 for the ~~2021 period.~~same period in 2022. The ~~increase of $19,632,729, or 130% was~~change is principally due to an increase in the change in ~~fair value~~FV of derivative ~~liability of $2,795,870, gain on Surge Settlement of $3,012,633 and decrease in one time loss on debt modification of $13,777,480 which incurred in the 2021 period.~~liability.

Net income (loss) for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$2,255,565~~$(5,629,713) compared to ~~a net loss of $32,854,195~~$3,926,239 for ~~2021~~the same period in 2022 due to the factors described above.

Liquidity and Capital Resources

Going Concern

The accompanying condensed ~~CFS were~~consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has an accumulated deficit of ~~$302,326,206~~$304,887,630 and has a working capital deficit of ~~$22,055,811~~$22,715,354 as of ~~September 30, 2022,~~March 31, 2023, which raises substantial doubt about its ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through some private placement offerings of debt and equity securities. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. These ~~CFS~~consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Our cash and ~~restricted~~ cash ~~were $525,336~~equivalent was $59,067 and $0$106,639 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Cash provided by (used in) operating activities during the ~~nine months~~period ended ~~September 30, 2022~~March 31, 2023 was ~~$333,414,~~$(112,635), compared to ~~$(958,011)~~$244,232 during the ~~2021 period.~~same period in 2022. The amount provided by operating activities for the ~~nine months~~period ended ~~September 30 2022~~March 31 2023 was primarily related to a net ~~income~~loss of ~~$2,255,565~~$5,629,713 and offset by amortization of debt discount of ~~$362,011, gain~~$147,628, change in ~~fair value~~FV of derivative liability of ~~$2,795,870,~~$3,924,246 and ~~gain on Surge settlement~~excess of ~~$3,012,663.~~debt discount and financing cost. Our working capital position changed by going from a working capital deficit of ~~$28,388,581~~$18,522,046 at December 31, ~~2021~~2022 to a working capital deficit of ~~$22,055,811~~$22,715,354 at ~~September 30, 2022.~~March 31, 2023.

Cash flows used in investing activities were ~~$275,000~~nil during the ~~nine months~~period ended ~~September 30, 2022,~~March 31, 2023, compared to $0$125,000 for the ~~2021 period.~~same period in 2022. The increase is due to the Stock Purchase Agreement with Marko Radisic and Touchpoint Group Holdings, Inc., and the Intellectual Property License and Royalty Agreement withTouchpoint Group Holdings, Inc. ~~and the series agreements with MetAlert Inc (formally GTX Corp.).~~

Cash from financing activities for the ~~nine months~~period ended ~~September 30, 2022~~March 31, 2023 was ~~$311,816,~~$65,063, compared to ~~$1,231,636~~$222,422 for the ~~2021 period.~~same period in 2022. The change was primarily due to ~~a decrease~~an increase in proceeds from convertible notes of ~~$300,000, and an increase in proceed from sales of common stock of $231,864~~$104,300, and an increase in proceeds from related party of ~~$664,225~~$302,506 and repayments to related party of ~~$634,176.~~$302,700 and a repayment of convertible note payable $39,043. Cash from financing activities for the ~~nine months~~period ended ~~September 30, 2021~~March 31, 2022, was due to ~~the issuance~~an increase in proceeds from related party of ~~convertible notes in 2021~~$336,734 and repayments to related party of ~~$1,231,636.~~$182,618 and proceeds from sales of common stock.

We sustained net ~~income~~loss of ~~$2,255,565~~$5,629,713 for the ~~nine months~~period ended ~~September 30, 2022.~~March 31, 2023. In addition, we had a working capital deficit of ~~$21,970,878~~$22,715,354 and accumulated deficit of ~~$302,326,206~~$304,887,630 at ~~September 30, 2022.~~March 31, 2023.

Equity Purchase Agreement and Registration Rights Agreement

On December 17, 2021 (the “Effective Date”), the Company entered into an equity financing agreement (the “Equity Financing Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with GHS Investments LLC (“GHS”), pursuant to which GHS shall purchase from the Company, up to that number of shares of common stock of the Company (the “Shares”) ~~having an aggregate Purchase Price of~~for $10,000,000, subject to certain limitations and conditions set forth in the Equity Financing Agreement from time to time over ~~the course~~ of 24 months after an effective registration of the Shares with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC (the “Contract Period”).

The Equity Financing Agreement grants the Company the right, from time to time at its sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase shares of Common Stock on any business day (a “Put”), provided that at least 10ten trading days has passed since the most recent Put. The purchase price of the shares of Common Stock contained in a Put will be 90% of the lowest daily volume weighted average price (VWAP) of the Company’s Common Stock during the ten consecutive trading days preceding the receipt by GHS of the applicable Put notice. Such sales of Common Stock by the Company, if any, may occur from time to time, at the Company’s option, during the Contract Period. Subject to the satisfaction of certain conditions set forth in the Equity Financing Agreement, on each Put the Company will deliver a number of Shares equaling 110% of the dollar amount of each Put. The maximum dollar amount of each Put will not exceed 200% of the average daily trading dollar volume for the Company’s Common Stock during the ten trading days preceding the Trading Day that GHS receives a Put. No Put will be made in an amount equaling less than $10,000 or greater than $500,000. Puts are further limited to GHS owning no more than 4.99% of the outstanding stock of the Company at any given time. The Equity Financing Agreement and the Registration Rights Agreement contain customary representations, obligations, rights, warranties, agreements and conditions of the parties. The Equity Financing Agreement terminates upon any of the following events: when GHS has purchased ~~an aggregate of~~ $10,000,000 in the Common Stock of the Company pursuant to the Equity Financing Agreement; on the date that is 24 calendar months from the date the Equity Financing Agreement was executed.

Actual sales of shares of Common Stock to GHS under the Equity Financing Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. ~~For the nine months ended September 30, 2022, the~~The Company ~~received $231,866 as~~issued 463,303 shares with net proceeds of $66,942 from the ~~equity purchase agreement for issuance of 5,500,000 registered common shares. Post this issuance The~~ Equity Financing Agreement ~~is exhausted and not valid anymore.~~in February 2022.

~~$10,000,000 for GBT Technologies S. A. acquisition (assigned~~We intend to ~~a third-party Igor 1 Corp)~~

continue to make investments to support our business growth and we will require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing products, improve our operating infrastructure or acquire complementary businesses and technologies. Further, we need additional capital to continue operations. We expect that we have sufficient capital to maintain operations through the end of 2023. In ~~accordance with~~order to fully implement our business plan, we will need to raise $10,000,000. The Company will need to raise additional capital in the ~~acquisition~~future of ~~GBT Technologies, S.A., a Costa Rican corporation (“GBT-CR”)~~which there is no guarantee that the Company ~~issued a convertible note of $10,000,000. The convertible note bears interest of 6%~~will be able to successfully raise such capital on acceptable terms. With the current cash on hand, and ~~was payable at maturity on December 31, 2021. At~~additional cash anticipated to be raised in the ~~election of~~future, we believe we will have sufficient cash to meet our obligations for the holder, the convertible note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($10 per share). On May 19, 2021, the Company, IGOR 1 Corp, and Gonzalez GBTCR (none related parties) entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal and Accrued Interest (the “Gonzalez Agreement”). Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties has agreed to (i) extend the GBT Convertible Note maturity date to December 31, 2022, (ii) amend the GBT Convertible Note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT Convertible Note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT Convertible Note by Gonzalez to a third party. As a result of the change in terms of this convertible note, the Company took a charge for modification of debt of $13,777,480 during the year ended December 31, 2021.next 12 months.

During the year ended December 31, 2021, IGOR 1 converted $1,284,600 of the convertible note into 4,185,650 shares of the Company’s common stock. Also, on June 24, 2021, the Company transferred 5,500,000 SURG shares received as repayment of $660,000 of this convertible note.

~~As of September, 30, 2022, the note had an outstanding balance of $8,336,332 including accrued interest of $1,877,901.~~

~~Glen Eagles Acquisition LP~~Discover Growth Fund

On July 8, 2019, the Company entered a Consulting Agreement with Glen Eagles Acquisition LP (“Glen”) as consultant to provide services in connection with the Company’s acquisition of 25% of GBT-CR. Consultant will provide analysis, interaction with related professional and other services as requested by the Company to integrate and expand capabilities between GBT-CR and the Company. The Company shall pay Glen $1,000,000 through the issuance of a 6% Convertible Note. At the election of Glen, the Convertible Note can be converted into a maximum of 2,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($10 share). The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. In addition, the Company entered into an Amendment of a Common Stock Purchase Warrant held by Glen to acquire 9,000,000 shares of common stock that had been assigned to Glen by Guardian Patch LLC. Pursuant to the amendment, the Company agreed to provide that the Common Stock Purchase Warrant may be exercised on a cashless basis and provided a beneficial ownership limitation of 4.99%. On or about June 23, 2020, the Company and AltCorp entered into agreements with SURG and Glen Eagles Acquisition LP (“Glen”) into series of agreements regarding the $4,000,000 SURG Note. Glen converted in full its $1,000,000 convertible note that was issued by the Company on July 8, 2019 plus $50,000 of accrued interest, into $1,050,000 of a SURG Note via an assignment of a portion ($1,050,000 of a $4,000,000 face value) of the $4,000,000 SURG Note. In addition, the Company entered into a consulting agreement with Glen for which the Company shall pay to Glen $200,000 via an assignment of a portion ($200,000 of a $4,000,000 face value) of the $4,000,000 SURG Note. Glen in turn converted all its $1,250,000 considerations received into 2,500,000 SURG shares. Per the final settlement agreement with Surge and per allocation of settlement funds agreement, Glen credit balance for the end of 2021 was $662,500 which included $425,000 credit derived from said settlement (which was paid January 2022), where the open aged credit balance derived from the above, along with cash infusion with Glen as off the date of this report is $412,500.

~~RWJ Acquisition Note~~

~~In connection with the acquisition of RWJ in September 2017, the Company issued a note. The note accrues interest at 3.5%, was due on~~ December 31, 2019 and was secured by the assets purchased in the acquisition. The Company contests the validity of the note, as such the note has not been repaid. The Company entered into a Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Defendants and the Company effective September 26, 2022. Said RJW Agreement voided the RWJ acquisition Note in its entirely. (See ~~PART II - OTHER INFORMATION~~ - ~~ITEM 1. LEGAL PROCEEDINGS)~~

~~Redstart Holdings Corp.~~

~~On September 21, 2021,~~3, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with ~~Redstart~~Discover Growth Fund, LLC (the “Investor”) pursuant to which the Company issued a Senior Secured Redeemable Convertible Debenture (the “Debenture”) in the aggregate face value of $8,340,000. In connection with the issuance of the Debenture and pursuant to ~~Redstart a Convertible Promissory Note (the “Redstart Note No. 7”)~~the terms of ~~$244,500 for $203,750. The Redstart Note No. 7 has a maturity date of December 22, 2022 and~~the SPA, the Company ~~agreed~~issued a Common Stock Purchase Warrant to ~~pay interest~~acquire up to 225,000 shares of common stock for a term of three years (the “Warrant”) on ~~the unpaid principal balance~~a cash-only basis at an exercise price of $100.00 per share with respect to 50,000 Warrant Shares, $75.00 with respect to 75,000 Warrant Shares and $50.00 with respect to 100,000 Warrant Shares. The holder may not exercise any portion of the ~~Redstart Note No. 7 at 2.5% from~~Warrants to the ~~date on which~~extent that the ~~Redstart Note No. 7 is issued (the “Issue Date”) until~~holder would own more than 4.99% of the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the Redstart Note No. 7, provided it makes a payment including a prepayment to Redstart as set forth in the Redstart Note No. 7. The transactions described above closed on September 28, 2021.Company’s outstanding common stock immediately after exercise. The outstanding principal amount ~~of the Redstart Note No. 7~~ may ~~not~~ be converted ~~prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180~~^th ~~day, Redstart may convert the Redstart Note No. 7~~at any time into shares of the Company’s common stock at a conversion price equal to ~~85%~~95% of the Market Price less $5.00 (the conversion price is lowered by 10% upon the occurrence of each Triggering Event – the current conversion price is 75% of the Market Price less $5.00). The Market Price is the average of the 5 lowest ~~trading price~~individual daily volume weighted average prices during the period the Debenture is outstanding. On May 28, 2019, the Investor delivered to the Company a “Notice of Default and Notice of Sale of Collateral” (the “Notice”). On December 23, 2019, in arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor. On January 31, 2020, the Company was informed that a final award was entered (the “Final Award”). The Final Award affirms that certain sections of the Debenture constitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the Investor was entitled to recovery of their attorney’s fees. Consequently, the arbitrator awarded Investor an award of $4,034,444 plus interest of 7.25% accrued from May 15, 2019 and costs in the amount of $55,613. On February 18, 2020, the Company filed a motion with the United States District Court District of Nevada (the “Nevada Court”) to confirm the Final Award and a ~~20-day look back immediately preceding~~motion to consolidate Investor’s application to confirm the Final Award filed in the U.S. District Court of the Virgin Islands (Case No: 3 :20-cv-00012-CVG-RM) (the “Virgin Island Court”). On February 27, 2020, the Nevada Court denied the Company’s motion to confirm the Final Award and motion to consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court. As such, on February 27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration Award, address the outstanding issues regarding whether Investor’s rights are subordinated to other creditors and, thereafter, oversee a commercially reasonable foreclosure sale (Case No: 3 :20-cv-00012-CVG-RM). It was the Company’s position that the Final Award must first be confirmed and all questions regarding the rights of Investor relative to those of other creditors must be determined before any foreclosure sale can proceed. It is further the position of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk. Nevertheless, on February 28, 2020, Investor advised that it conducted a sale of the Company’s assets. As the date of ~~conversion. Since~~this report Investor failed to present a deed of sale for the ~~conversion price will vary based on~~alleged sale that allegedly took place as noticed. The Company filed with Virgin Island Court the ~~Company’s stock price,~~motions disputing the ~~beneficial conversion feature associated with this note is accounted for as a derivative liability. In addition, upon~~validity of the ~~occurrence and during the continuation of an Event of Default (as defined~~alleged sale. On July 28, 2020, Investor filed in the ~~Redstart Note No. 7),~~State of Nevada a motion for attorneys $48,844 and costs $716. The Company filed an answer on August 11, 2020. On October 16, 2020, Investor motion was denied. This case is still pending with the ~~Redstart Note No. 7 shall become immediately due and payable~~Federal court and the ~~Company shall pay to Redstart, in full satisfaction of its obligations hereunder, additional amounts as set forth~~Court has not taken any substantive action in the ~~Redstart Note No. 7. On or about March 28, 2022 Redstart converted $35,000~~matter as of the date of this note into 369,198 common shares of the Company. During the nine months ended September 30, 2022, Redstart converted the entire note into 7,656,951 shares of the Company’s common stock. As of September, 30, 2022, the note had an outstanding balance of $0 and accrued interest of $0.report.

Paid Off Notes/Converted Notes

Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC

~~First Note~~

On November 8, 2021, the Company entered into a Securities Purchase Agreement with Sixth Street Lending LLC (“Sixth Street”) pursuant to which the Company issued to Sixth Street a Convertible Promissory Note (the “Sixth Street Note”) of $124,200 for $103,500. The Sixth Street Note has a maturity date of February 8, 2023 and the Company agreed to pay interest on the unpaid principal balance of the note at 6% from the date on which the note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the note, provided it makes a payment including a prepayment to Sixth Street as set forth in the Sixth Street Note. The outstanding principal amount of the note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180^th day, Sixth Street may convert the note into shares of the Company’s common stock at a conversion price equal to 85% of the average of the two lowest trading prices with a 20-day look back immediately preceding the date of conversion. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Sixth Street Note), the note shall become immediately due and payable and the Company shall pay to Sixth Street, in full satisfaction of its obligations hereunder, additional amounts as set forth in the Sixth Street Note. During the three months ended September 30, 2022, Sixth Street converted the entire note into 26,343,190 shares of the Company’s common stock. As of September,, 30, 2022, the note had an outstanding balance of $0 and accrued interest of $0.

~~Second Note~~ -

On May 5, 2022, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”), pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) of $244,500 for $203,500. The DL Note ~~has~~had a maturity date of August 4, 2023 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at 6.0% from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note at any time from the Issue Date and continuing through 180 days following the Issue Date, provided it makes a payment including a prepayment premium to DL as set forth in the DL Note. The transactions described above funded on May 9, 2022.

Unless the Company shall have first delivered to DL, at least 48 hours prior to the closing of any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future Offering”), written notice describing the proposed Future Offering and providing the Buyer an option during the 48 hour period following delivery of such notice to DL the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering then the Company is restricted from conducting the Future Offering during the period beginning on the Issue Date and ending nine months following the Issue Date.

~~Third Note~~During the period ended March 31, 2023, the entire balance of convertible note of $114,100 plus accrued interest was converted into 367,004,026 shares of common stock.

Outstanding Notes

$10,000,000 for GBT Technologies S. A. acquisition (assigned to a third-party Igor 1 Corp)

In accordance with the acquisition of GBT-CR the Company issued a convertible note in the principal amount of $10,000,000. The convertible note bears interest of 6% per annum and is payable at maturity on December 31, 2021. At the election of the holder, the convertible note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($10.00 per share). On May 19, 2021, the Company, IGOR 1 Corp, , and Gonzalez GBTCR (none related parties)entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal and Accrued Interest (the “Gonzalez Agreement”). Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties has agreed to (i) extend the GBT Convertible Note maturity date to December 31,2022, (ii) amend the GBT Convertible Note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT Convertible Note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT Convertible Note by Gonzalez to a third party. As a result of the change in terms of this convertible note, the Company took a charge for modification of debt of $13,777,480 during the year ended December 31, 2021.

During the period ended March 31, 2023, IGOR 1 converted $ $232,575 of the convertible note into 733,235,294 shares of the Company’s common stock.

As of March, 31, 2023, the note had an outstanding balance of $6,125,456 and accrued interest of $2,119,245.

Glen Eagles Acquisition LP

On July 8, 2019, the Company entered a Consulting Agreement with Glen Eagles Acquisition LP (“Glen”) as consultant to provide services in connection with the Company’s acquisition of 25% of GBT Technologies, S.A., a Costa Rican corporation (“GBT-CR”). Consultant will provide analysis, interaction with related professional and other services as requested by the Company to integrate and expand capabilities between GBT-CR and the Company. The Company shall pay Glen $1,000,000 through the issuance of a 6% Convertible Note. At the election of Glen, the Convertible Note can be converted into a maximum of 2,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($10 per share). The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. In addition, the Company entered into an Amendment of a Common Stock Purchase Warrant held by Glen to acquire nine million shares of common stock that had been assigned to Glen by Guardian Patch LLC. Pursuant to the amendment, the Company agreed to provide that the Common Stock Purchase Warrant may be exercised on a cashless basis and provided a beneficial ownership limitation of 4.99%.

On or about June 23, 2020, the Company and AltCorp entered into agreements with SURG and Glen Eagles Acquisition LP (“Glen”) into series of agreements regarding the $4,000,000 SURG Note. Glen converted in full its $1,000,000 convertible note was issued by the Company on July 8, 2019 plus $50,000 of accrued interest, into $1,050,000 of a SURG Note via an assignment of a portion ($1,050,000 of a $4,000,000 face value) of the $4,000,000 SURG Note. In addition, the Company entered into a consulting agreement with Glen for which the Company shall pay to Glen $200,000 via an assignment of a portion ($200,000 of a $4,000,000 face value) of the $4,000,000 SURG Note. Glen in turn converted all its $1,250,000 considerations received into 2,500,000 SURG shares. Per the final settlement agreement with Surge and per allocation of settlement funds agreement, Glen credit balance for the end of 2021 was $662,500 which included $425,000 credit derived from said settlement (which was paid on January 2022), where the open aged credit balance derived from the above, along with cash infusion with Glen as off the date of this report is $512,500 in loans (the “Debt”) derived from August 2021 up to September 2022. The original funded amount of $457,500 included convertible feature into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. In order to include a convertible feature for the $55,000 which was not covered by convertible feature, on January 24, 2023, the Company issued a consolidated convertible promissory note to Glen Eagles Acquisition LP in the principal amount of $512,500, which include all prior convertible notes with addition of the $55,000 straight note. The convertible promissory note bears interest of 10% and is payable at maturity on December 31, 2023. Glen Eagles Acquisition LP may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a loss on debt extinguishment of $92,737 at issuance date.

As of March 31, 2022, the consolidated convertible note had an outstanding balance of $512,500 and an interest of $9,267.

Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC

Convertible Note - On September 13, 2022, the Company entered into a Securities Purchase Agreement (dated September 9, 2022) with ~~DL,~~1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) of $116,200 with an original issue discount of $12,450 ~~resulting in net proceeds to the Company of~~for $103,750. The DL Note ~~has~~had a maturity date of September 9, 2023 and the Company agreed to pay interest on the unpaid principal balance of the DL Note at 12.0% from the date on which the DL Note is issued (the “Issue Date”). A one-time interest charge of 12% or $13,944 was applied on the Issue Date to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in 10ten payments ~~each~~ of ~~$13,014~~$13,014.40 resulting in a total payback to DL of $130,144. The first payment is due October 30, 2022 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company. The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note,

DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

~~SBA Loan~~During the period ended March 31, 2023, the company paid back $39,043 to 1800 Diagonal lending.

As of March 31, 2023, the note had an outstanding balance of $38,114 and an interest of $13,944.

Straight Note – with Convertible Feature - On ~~June 22, 2020,~~March 1, 2023, the Company ~~received~~entered into a ~~loan from~~Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the ~~Small Business Administration under~~Company issued to DL a Promissory Note (the “DL Note”) of $59,408 with an original issue discount of $7,258 resulting in net proceeds of the ~~Economic Injury Disaster Loan program related~~Company of $52,150. The DL Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the ~~COVID-19 relief efforts. The loan bears interest~~unpaid principal balance of the DL Note at ~~3.75%, requires monthly principal and interest payments~~the rate of ~~$731 after 12 months from funding and is due 30 years~~12.0% from the date on which the DL Note is issued. A one-time interest charge of ~~issuance.~~12% or $7,128 was applied on the issuance date of the DL Note to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments of $6,653.60 resulting in a total payback to DL of $66,536. The ~~monthly~~first payment is due April 15, 2023 with nine subsequent payments ~~were extended~~each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the ~~SBA~~Company.

The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price during the 10 day period immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all ~~EIDL borrowers with additional 12 months. Monthly payments will be commenced on or around June 16, 2022.~~other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of March 31, 2023, the note had an outstanding balance of $59,408 and an interest of $7,129.

Convertible Note - On ~~October~~March 1, ~~2021,~~2023, the Company entered ~~an Amended Loan Authorization and~~into a Securities Purchase Agreement with DL pursuant to which the ~~SBA providing~~Company issued to DL a Convertible Promissory Note (the “DL Convertible Note”) of $62,680 for a purchase price of $52,150. The DL Convertible Note had a maturity date of June 1, 2024 and the ~~modification~~Company had agreed to pay interest on the unpaid principal balance of the ~~Original~~DL Convertible Note ~~providing for monthly principal and interest payments~~at the rate of $1,771 after 24 months from the Original Note commencing on or around June 22, 2022. On March 17, 2022 the SBA notified it deferred the payments to all COVID-19 EIDL loans will have the first payment due extended from 24-months to 30-months6.0% from the date on which the DL Convertible Note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Convertible Note, provided it makes a payment including a prepayment to DL as set forth in the DL Convertible Note.

The outstanding principal amount of the ~~note. The Modified~~DL Convertible Note ~~will continue~~may not be converted prior to ~~bear interest~~the period beginning on the date that is 180 days following the date the DL Convertible Note is issued . Following the 180th day, DL may convert the DL Convertible Note into shares of the Company’s common stock at ~~3.75% and is due 30 years from~~a conversion price equal to 85% of the lowest trading price during the 20 day period preceding the date of ~~issuance~~conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the ~~Original Note. The Modified~~DL Convertible Note), the DL Convertible Note ~~is guaranteed by Douglas Davis, the former CEO of the Company~~shall become immediately due and current consultant, as well as by GBT Tokenize Corp. The additional funding of $200,000 was received by the Company on October 5, 2021. The balance of the note at September 30, 2022 and December 31, 2021 was $350,000 and $350,000 plus accrued interest of $20,399 and $10,581, respectively.

~~Alpha Eda Note~~

On November 15, 2020, the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and was due on September 30, 2021. On June 20, 2021 Alphapayable and the Company ~~extended~~shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Convertible Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

As of March 31, 2023, the note ~~maturity to December 31, 2022. The~~had an outstanding balance of ~~the note at September 30, 2022~~$62,680 and ~~December 31, 2021 (audited) was $140,000 and $140,000 plus accrued~~an interest of ~~$29,104 and $16,633, respectively.~~$309.

Stanley Hills LLC ~~Convertible Note Payable~~

The Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $1,000,000 in loans (the “Debt”) from May 2019 up to December 2019. On February 26, 2020, to induce Stanley to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley of $1,214,900 may be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. Stanley agreed to restrict its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted $1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an additional $325,000. Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $800,000 of this convertible note (See Note 4)10) and also converted $126,003 of accrued interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley in a private transaction that the Company is not part ~~to.~~to (See Note 10). On January 1, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $750,000. The convertible promissory note bears interest of 10% and is payable at maturity on June 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a gain on debt extinguishment of $408,033 at issuance date.

As of March 31, 2023 and 2022 the principal balance of ~~the~~ Stanley ~~convertible note payable at September 30, 2022~~debt is $825,000 and ~~December 31, 2020 was $116,605 and $116,605,~~116,605 respectively. The unpaid interest of the Stanley ~~convertible note payable at September 30, 2022~~debt on March 31, 2023 and December 31, ~~2020~~2022 was ~~$17,094~~$32,418 and ~~$8,372,~~$20,033, respectively. The Stanley debt ~~was~~is secured via a pledge agreement on the SURG shares.

~~Stanley Hills LLC Accounts Payable~~Alpha Eda

On ~~March 8,~~November 15, 2020, ~~SURG filed a lawsuit against its transfer agent, Vstock from transferring millions of SURG stock is currently in possession by~~ the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and ~~assigned~~was due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to ~~Stanley Hills, LLC.~~December 31, 2023. The balance of the note at March 31, 2023 and at December 31, 2022 was $140,000 and $140,000 plus accrued interest of $36,085 and $32,633, respectively.

1800 Diagonal Lending LLC

Straight Note $47,208 - On ~~January 1, 2021, SURG, AltCorp and Stanley~~April 24, 2023, the Company entered into a ~~Mutual Release~~Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) in the aggregate principal amount of $47,208 with an original issue discount of $5,058 resulting in net proceeds of the Company of $42,150. The DL Note has a maturity date of April 24, 2024 and ~~Settlement Agreement (“Settlement Agreement”~~the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% per annum from the date on which the DL Note is issued (the “Issue Date”). ~~Pursuant~~A one-time interest charge of 12% or $5,664 was applied on the Issue Date to the ~~terms of~~principal amount owed under the ~~Settlement Agreement, SURG agreed~~DL Note. Accrued, unpaid interest and outstanding principal, subject to ~~amend the AltCorp Exchange Agreement where SURG acknowledged a debt of $3,300,000 (the “Debt”) to~~adjustment, shall be paid in ~~33 monthly~~ten payments each in the amount of ~~$100,000 payable~~$5,287.20 resulting in a total payback to DL of $52,872. The first payment is due June 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares ofthe Company’s common stock at a conversion price equal to 75% of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of ~~SURG~~ the Company.

The transaction closed on April 26, 2023.

Convertible Note $50,580 - On April 24, 2023, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) in the aggregate principal amount of $50,580 for a purchase price of $42,150. The DL Note has a maturity date of July 24, 2024 and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of six percent (6.0%) per annum from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note, provided it makes a payment including a prepayment to DL as set forth in the DL Note.

The outstanding principal amount of the DL Note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180^th day, DL may convert the DL Note into shares of the Company’s common stock at a ~~per share~~conversion price equal to 85% of the ~~volume weighted average~~lowest trading price ~~of Surg’s common stock during the 10 trading days~~with a 20-day look back immediately preceding the ~~issuance. SURG paid $400,000~~date of conversion. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in ~~cash~~the DL Note), the DL Note shall become immediately due and ~~$800,000 by shares. The SURG~~payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock ~~issued to Altcorp have been pledged since August 12, 2020 for the benefit of Stanley to secure Stanley’s note payable~~beneficially owned by ~~the Company. Accordingly, the SURG Common Stock issued to AltCorp as a result~~DL and its affiliates would exceed 4.99% of the ~~Settlement Agreement were pledged to Stanley. As~~outstanding shares of ~~December 31, 2021 there were no surge shares pledges after~~ the ~~final settlement signed~~common stock of the Company.

The transaction closed on December 22, 2021 and that replaced all prior settlement agreement. The final settlement SURG agreed to make total payments of $4,200,000 to the Company on or prior to January 7, 2022. This $4.2 million amount consists of $450,000 paid by SURG in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or prior to January 7, 2022 of which $375,000 will be held in escrow as described before. The $3,750,000 was recorded as other receivable as of December 31, 2021. As of September, 30, 2022 and December 31, 2021, the Company recorded an outstanding payable to Stanley of $660,735 and $1,862,928, respectively, recorded under accrued expenses.April 26, 2023.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Policies and Use of Estimates

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our CFS, which were been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of our CFS in accordance with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements, the reported amounts and classification of revenues and expenses during the periods presented, and the disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on an ongoing basis and material changes in these estimates or assumptions could occur in the future. Changes in estimates are recorded on the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances and at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily-apparent from other sources. Actual results may differ materially from these estimates if past experience or other assumptions do not turn out to be substantially accurate.

We believe that the accounting policies described below are critical to understanding our business, results of operations, and financial condition because they involve significant judgments and estimates used in the preparation of our CFS. An accounting policy is deemed to be critical if it requires a judgment or an accounting estimate to be made based on assumptions about matters that are highly uncertain, and if different estimates that could have been used, or if changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our CFS. Other significant accounting policies, primarily those with lower levels of uncertainty than those discussed below, are also critical to understanding our CFS. The notes to our CFS contain additional information related to our accounting policies and should be read in conjunction with this discussion.

Presentation of Financial Statements

The accompanying CFS were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. ~~GAAP.~~GAAP”).

Marketable Securities

The Company accounts for marketable securities in accordance with ASC Topic 321, Investments – equity securities. Marketable equity securities are reported at ~~fair value~~FV based on quotations available on securities exchanges with any unrealized gain or loss being reported as a component of other income (expense) on the statement of operations. The portion of marketable equity security expected to be sold within 12 months of the balance sheet date is reported as a current asset. These publicly traded equity securities are valued using quoted prices and are included in Level 1.

Inventory

Inventory consists of electronic product ready for sale on Amazon.com. It is stated at the lower of cost or net realizable value and all inventories were returned product from online customers. We value our inventory using the weighted average costing method. Our Company’s policy is to include as a part of inventory any freight incurred to ship the product from our contract vendors to our warehouses. Outbound freights costs related to shipping costs to our customers are considered period costs and reflected in selling, general and administrative expenses. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence.

~~Note Receivable~~

~~On September 18, 2020, the Company entered into a Purchase and Sale Agreement with Mr. LightHouse LTD~~., an Israeli corporation (“MLH”) pursuant to which the Company agreed to sell and assign to MLH, effective July 1, 2020 all the shares, and certain specified liabilities, of Ugopherservices Corp. (“UGO”), a wholly owned subsidiary of the Company, in consideration of $100,000 to be paid through the delivery of a promissory note payable to the Company (the “Note”), upon the terms and subject to the limitations and conditions set forth in the Note. There is no material relationship between the Company, and MLH. At December 31, 2020, the Company determined that this note receivable was not collectible and took an impairment charge of $100,000. During July 2021, MLH effected a $50,000 payment on the Note. During April 2022, MLH effected a second payment for additional $50,000 on the Note exhausting the Note balance.

Stock Loan Receivable

On January 8, 2019, the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa Rica corporation (“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by various regulators. The Company has pledged 4,005 restricted shares of its common stock valued at $7,610,147 (based on the closing price on the grant date) for a term of three years in consideration of an annual payment of $375,000 paid in quarterly installments of $93,750. In lieu of cash payment, Latinex may pay the Company in virtual currency of WISE Network S.A. valued at a 50% discount of its offering price of $10 per token. In the event that Latinex’s required capital has decreased below $5,000,000, Latinex is permitted to sell the pledged shares of common stock only in an amount to ensure that Latinex can satisfy the required capital levels. The Company must consent to such sale of the shares of common stock, which may not be unreasonably withheld. Upon expiration of the agreement, the remaining shares of common stock shall be returned to the Company free and clear of all liens. The Company has recorded the value of these shares of common stock as a stock loan receivable which is presented as a contra-equity account in the accompanying consolidated balance sheets. At December 31, 2019, the Company wrote off the accrued interest income as Latinex did not perform any payment and the Company has no mean to enforce this payment. Latinex agreed in principle to return the pledged 4,005 restricted shares to the Company for cancellation. The 4,005 restricted shares have not yet been returned to the Company as of ~~September 30, 2022.~~March 31, 2023.

Derivative Financial Instruments

The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its FV and is then re-valued at each reporting date, with changes in the ~~fair value~~FV reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of ~~September, 30, 2022 and December~~March 31, ~~2021,~~2023, the Company’s only derivative financial instrument was an embedded conversion feature associated with convertible notes payable due to certain provisions that allow for a change in the conversion price based on a percentage of the Company’s stock price at the date of conversion.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their FVfair values(“FV”) due to their short maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the FV of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for ~~fair value~~FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	●	Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the FV measurement.

For certain financial instruments, the carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as a financial instrument, and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their FV were determined by using the Black-Scholes-Merton option pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect FV at each period end, with any increase or decrease in the FV being recorded in results of operations as adjustments to FV of derivatives.

Treasury Stock

~~Reclassification~~

~~Certain prior years amounts were reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.~~

Revenue Recognition

~~Revenues are~~Revenue is recognized under Topic 606 ~~in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements:~~

~~IT Consulting services:~~as follows:

●

executed contracts with the Company’s customers that it believes are legally enforceable;


	●	identification of performance obligations in the respective contract;


	●	determination of the transaction price for each performance obligation in the respective contract;


	●	allocation the transaction price to each performance obligation; and


	●	recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each of the Company’s IT revenue category, is summarized below:

●

IT consulting services -– revenue is recorded on a monthly basis as services are ~~provided~~provided; and

~~These five elements, as applied to each of the Company’s license revenue category, is summarized below:~~

●

License ~~services~~fees and Royalties – ~~the one-time~~ revenue is ~~recorded as other income upon~~recognized based on the terms of the agreement ~~is executed and services are provided.~~with its customer.

E-Commerce sales–

●

Identify the contract(s) with a customer. ASC 606 defines a contract as “an agreement between two or more parties that creates enforceable rights and obligations”. Since this is an e-commerce sale on the Amazon ~~website,~~of eBay websites, the Company just followed the general terms on Amazon ~~and/~~or eBay websites and the customer entered into a contract with the Company based on the product listed on the Amazon or eBay websites;


	●	Identify the performance obligations in the contract. According to the contract, the Company is responsible for operation exclusively. The Company is entitled to all revenue which is being paid by Amazon or eBay into a designated bank account and the Company is responsible for all product acquisitions as well as shipments. The only performance obligations were the electronic products that were listed on Amazon or eBay websites and the Company determined each order is one single obligation;


	●	Determine the transaction price. The transaction price set to be the listed price on the Amazon or eBay websites.;


	●	~~Allocate~~Allocation the transaction price to the performance obligations in the contract.; and


	●	Recognize revenue when the Company satisfies a performance obligation. Sales are being ~~recognize~~recognized upon shipment.

Unearned revenue

Unearned revenue isrepresents the net amount received for the purchase of products that have not seen shipped to the Company’s customers. In 2018, the Company ran pre-sales efforts for its pet tracker product and received prepayments for its product. In addition, during 2018, the Company received $200,000 in connection with an intellectual property license and royalty agreement. On January 28, 2022 awarded the Company with injunction against RWJ Defendants, where all fee funds generating from resale should be deposited into GBT blocked account, and therefore RWJ Defendants cannot use these funds without court order - $19,810 been credited as unearned revenue until court final decision. The Company has ~~$249,159~~$0 and ~~$249,384~~$48,921 of unearned revenue at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. ~~The Company entered into a Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Defendants and the Company effective September 26, 2022 (See~~ ~~PART II - OTHER INFORMATION~~ - ~~ITEM 1. LEGAL PROCEEDINGS)~~

Contract liabilities

On February 22, 2022, the Company entered into an Intellectual Property License and Royalty Agreement with Touchpoint Group Holdings, Inc. (“Touchpoint” or “TGHI”) pursuant to which the Company granted TGHI a worldwide license for its technologies for a term of five years in the domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining to the Company’s digital currency technology (the “Technology”). GBT will charge TGHI earned royalties based on actual uses by TGHI of the Technology resulting from revenue attributable to the use, performance or other exploitation of the Technology, to the extent applicable, after deducting any taxes that the Company may be required to collect, and deducting any international sales, goods and services, value added taxes or similar taxes which the Company is required to pay, if any, excluding deductions for taxes on the Company net income. TGHI agreed to issue the Company 10,000,000 shares of common stock of TGHI in the FV of $50,000 as a one-time fee in consideration of the Company entering this Intellectual Property License and Royalty Agreement, which was booked contract liabilities and amortized over the five-year term. The Company have yet to earn any royalty income in relation to this agreement as of ~~September 30, 2022.~~March 31, 2023. The contract liabilities as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was ~~$43,944~~$38,944 and ~~$0,~~$41,444, respectively.

Assets of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets as of March 31, 2023 (after elimination of intercompany transactions and balances) consist of:
Current assets:
Cash and equivalents	$	56,807
Account Receivable		40,651
Inventory		7,567
Other current asset		556
Total current assets	$	105,581

Liabilities of consolidated VIE included in the consolidated balance sheets above (after elimination of intercompany transactions and balances) consist of:
Current liabilities
Total current liabilities	$	143,700

Statements of operations of consolidated VIE included in the consolidated statements of operations above (after elimination of intercompany transactions and balances) consist of:
Statements of operations
Sales	$	217,833
Cost of goods sold		176,091
Gross profit		41,694
General and administrative expenses		32,096
Net Operating Loss	$	9,598

~~Variable Interest Entity~~

On February 18, 2022, the Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company acquired the opportunity to share in revenues generated by Mahaser with respect to e-commerce sales through the online retail platform in the United States of America. Mahaser owns an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics. The Company will operate the e-commerce platform and will be entitled to 95% for all revenue generated by and received by Mahaser for the period from March 1, 2022 through December 31, 2022. The RSA provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $100,000 no later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common stock. The Company shall have no obligations to make any further payments to Mahaser. For any further extensions, the Company will have the option to extend the RSA for annual payment of $200,000, which can be payable with the Company’s shares of common stock payable based on 20 days VWAP prior to issuance. On March 16, 2022 the parties entered into Amendment No. 1 to the to the RSA, where all consideration to be paid or issued to Mahaser will be deferred until such time where the e-commerce platform generated in cumulative revenue of $1,000,000. On March 31, 2022, the parties entered into Amendment No. 2 to the RSA, where Mahaser agreed to pay the Company 100% per year for all revenue generated by and received by seller from the sales by Amazon within the United States of America as follows from March 1, 2022 through December 31, 2022. The Company will be responsible for 100% of the cost of goods sold as well. In addition, the Company is entitled to earn 100% revenues and cost of goods sold of the test run period from February 1, 2022 to February 28, 2022. The Company evaluated whether it has a variable interest in Mahaser, whether Mahaser is a VIE and whether the Company has a controlling financial interest in Mahaser. The Company concluded that it has variable interests in Mahaser on the basis of GBT has 100% control over the JV/revenue sharing, and as such should consolidate the JV into its books and records as it assigned 100% financial responsibility. Mahaser’s equity at risk, as defined by GAAP, is considered to be insufficient to finance its activities without additional support, and, therefore, Mahaser is considered a VIE. In order to determine whether the Company has a controlling financial interest in Mahaser and, thus, is Mahaser’s primary beneficiary, the Company considered whether it has i) the power to direct the activities of Mahaser that most significantly impact its economic performance and ii) the obligation to absorb losses of Mahaser that could potentially be significant to it or the right to receive benefits from Mahaser that could potentially be significant to it. The Company concluded that GBT has the sole power to direct the activities of a VIE via the appointment of Manager to the VIE as sole manager and as it controls the bank account, as it representative is signatory on the account, as well as sole control over the e-commerce platform and its operations that most significantly impact the VIE’s economic performance. In addition, the Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially be significant to Mahaser. As a result of this analysis, the Company concluded that it is the primary beneficiary of Mahaser and therefore consolidates the balance sheets, results of operations and cash flows of Mahaser. The Company performs a qualitative assessment of Mahaser on an ongoing basis to determine if it continues to be the primary beneficiary.

The following table summarizes the carrying amount of the assets and liabilities of Mahaser included in the Company’s consolidated balance sheets (after elimination of intercompany transactions and balances) as of September 30, 2022:

Assets of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets above (after elimination of intercompany transactions and balances) consist of:
Assets of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets as of December 31, 2022 (after elimination of intercompany transactions and balances) consist of:
Current assets:
Cash and equivalents	$	89,962	$	93,581
Inventory		7,158		11,569
Due from related party		30,049
Due From related party				20,270
Total current assets	$	127,169	$	125,420

Liabilities of consolidated VIE included in the consolidated balance sheets above (after elimination of intercompany transactions and balances) consist of:
Current liabilities
Total current liabilities	$	—	$	94,496

Statements of operations of consolidated VIE included in the consolidated statements of operations above (after elimination of intercompany transactions and balances) consist of:
Statements of operations
Sales	$	771,446	$	1,107,555
Cost of goods sold		530,003		817,754
Gross profit		241,443		289,801
General and administrative expenses		206,743		330,647
Net Gain	$	34,700
Net Loss			$	40,846

Income Taxes

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. ~~The Company is current on all its federal and state tax filings until 2021 inclusive.~~

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No cash dividends have been paid or declared since the Date of Inception.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a Smaller Reporting Company, the Company is not required to include the disclosure under this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including Mansour Khatib, who serves as our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer has concluded that our disclosure controls and procedures were not effective as of the end of the applicable period to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in ~~SEC~~Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosures.

As a smaller reporting company, with revenues stemming from recent acquisitions and a lack of profitability, the Company does not have the resources to install dedicated staff with deep expertise in all facets of SEC disclosure and GAAP compliance, and does not employ enough accounting staff to have proper separation of duties. As is the case with many smaller reporting companies, the Company will continue to consult with its external auditors and attorneys as it relates to new accounting principles and changes to SEC disclosure requirements. In order to correct this material weakness, the Company engaged a consultant with expertise in SEC disclosure and GAAP compliance. The Company found that this approach worked well in the past and believes it to be the most cost-effective solution available for the foreseeable future. The Company will conduct a review of existing sign-off and review procedures as well as document control protocols for critical accounting spreadsheets. The Company will also increase management’s review of key financial documents and records.

As a smaller reporting company, the Company does not have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function. However, Company management does review, and will increase the review of, financial statements on a monthly basis, and the Company’s external auditor conducts reviews on a quarterly basis. These actions, in addition to the improvements identified above, will minimize any risk of a potential material misstatement occurring.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the quarter ended March 31, 2023, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

MANAGEMENT’S INTERIM REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management, consisting of our Chief Executive Officer (Principal Executive and Financial Officer), is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f), is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and includes those policies and procedures that:

●

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

●

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

●

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of our assets that could have a material effect on the financial statements.

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

Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2023. Based on this assessment, management believes that as of March 31, 2023, our internal control over financial reporting is not effective based on those criteria.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes during our last fiscal year that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Legal Proceedings

On or around January 30, 2019, RWJ Advanced Marketing, LLC, Greg Bauer, and Warren Jackson sued the Company and multiple third and related parties in Superior Court of the State of California - County of Los Angeles, General District in connection with the acquisition of UGO in September 2017. The case number is 19STCV03320 (the “Original Lawsuit”). The complaint in the Original Lawsuit alleges breach of contract, among other causes of action. The Company answered the complaint and filed a cross-complaint against the plaintiffs in the case and third parties on or around February 15, 2019. On or about September 10, 2020, the Company through its agent of service was “served” with a complaint (the Company contested service) that was recently filed against the Company and third parties by Robert Warren Jackson and Gregory Bauer in Los Angeles Superior Court Case No.: 20STCV32709 (“Second Lawsuit”). In the Original Lawsuit filed, the court rejected the plaintiff’s claims that they were filing a purported quasi-derivative lawsuit. As such, in this current litigation, the plaintiff is now again claiming the action is a derivative lawsuit. On October 13, 2020, the Second Lawsuit was removed by other defendants into Central District of California (CASE NO. 2:20−cv−09399−RGK−AGR). On February 2, 2021 the Central District of California dismissed the entire Second Lawsuit based on “demand futility”. In the Original lawsuit, the Company filed a cross complaint against the plaintiff and other third parties. Recently, the court has scheduled various hearings and a trial date set for December 27, 2021 which was later continued by the Court to September 28, 2022. It was the Company’s intention to dividend its holdings of its wholly owned subsidiary ~~Ugopherservices~~Ugopher services Corp. (“UGO”). As UGO is the main dispute in the litigations described above, the Company has elected to sell UGO to a third-party effective July 1, ~~2020 (See Note 3).~~2020. On September 17, 2020, the Company terminated Greg Bauer as consultant (resulting from the sale of UGO), which he confirmed in writing. On or about June 14, 2021 the Company stipulated with plaintiff that all third parties will be released and plaintiff may file a new first amendment complaint that will name only the Company. As such, all third parties other than prior transfer agent of the Company have been dismissed from this ~~litigation.Following~~litigation.

Following the sale of UGO, the Company noticed third parties (including SURG, via its asset manager) to wire the UGO funds to its new bank account. SURG never answered the notice. SURG is the clearing house for ~~UGO. The~~UGO.The Company noticed certain third parties that it intends to take legal actions to resolve this issue. On November 12, 2020 the Company filed a complaint in the United States District Court – District of Nevada - Case 2:20-cv-02078 against RWJ, Mr. Bauer, Mr. Jackson and against W.L. Petrey Wholesale Company Inc for fraud, breach of contract, Unjust Enrichment and other claims. On January 28, 2022 the court awarded the Company with injunction against RWJ defendants, where all fee funds generating from resale should be deposited into GBT blocked account, and therefore RWJ ~~Defendants~~defendants cannot use these funds without court order.

and in the United States District Court of the Central District of California (Case No. 2:20-cv-09399-RGK-AGR) with prejudice. The parties agreed and stipulated to release all funds currently being held in a blocked account ~~in the amount~~ of $19,809 with 50% distributed to the RWJ Parties and 50% distributed the Company or its assignee. The Parties also entered into the InComm Assignment Agreement (“IAA”) which assigned, transferred and conveyed all proceeds derived from the RWJ Parties’ agreements with Interactive Communications International, Inc., and its affiliate Hi Technology Corp., including but not limited to that Master Distribution and Service Agreement between Interactive Communications International, Inc. and Petrey d/b/a UGO-HUB dated August 29, 2016, as amended (collectively referred to as the “InComm Proceeds”), and which shall divide the InComm Proceeds 90% to the Company or its assignee and 10% to the RWJ Parties or their assignee. Finally, the Company agreed to pay $40,000 to the RWJ Parties or their assignee. The Company accrued $49,847 expenses represent the final amounts due to the RJW Parties.

On December 3, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with Discover Growth Fund, LLC (the “Investor”) pursuant to which the Company issued a Senior Secured Redeemable Convertible Debenture (the “Debenture”) of $8,340,000. In connection with the issuance of the Debenture and pursuant to the terms of the SPA, the Company issued a Common Stock Purchase Warrant to acquire up to 225,000 shares of common stock for a term of three years (the “Warrant”) on a cash-only basis at an exercise price of $100 per share with respect to 50,000 Warrant Shares, $75 with respect to 75,000 Warrant Shares and $50 with respect to 100,000 Warrant Shares. The holder may not exercise any portion of the Warrants to the extent that the holder would own more than 4.99% of the Company’s outstanding common stock immediately after exercise. The outstanding principal amount may be converted at any time into shares of the Company’s common stock at a conversion price equal to 95% of the Market Price less $5 (the conversion price is lowered by 10% upon the occurrence of each Triggering Event – the current conversion price is 75% of the Market Price less ~~$5)~~$5.00). The Market Price is the average of the 5 lowest individual daily volume weighted average prices during the period the Debenture is outstanding. On May 28, 2019, the Investor delivered to the Company a “Notice of Default and Notice of Sale of Collateral” (the “Notice”). On December 23, 2019, in arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor. On January 31, 2020, the Company was informed that a final award was entered (the “Final Award”). The Final Award affirms that certain sections of the Debenture constitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the Investor was entitled to recovery of their attorney’s fees. Consequently, the arbitrator awarded Investor an award of $4,034,444 plus interest of 7.25% accrued from May 15, 2019 and costs of $55,613. On February 18, 2020, the Company filed a motion with the United States District Court District of Nevada (the “Nevada Court”) to confirm the Final Award and a motion to consolidate Investor’s application to confirm the Final Award filed in the U.S. District Court of the Virgin Islands (Case No: 3 :20-cv-00012-CVG-RM) (the “Virgin Island Court”). On February 27, 2020, the Nevada Court denied the Company’s motion to confirm the Final Award and motion to consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court. As such, on February 27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration Award, address the outstanding issues regarding whether Investor’s rights are subordinated to other creditors and, thereafter, oversee a commercially reasonable foreclosure sale (Case No: 3 :20-cv-00012-CVG-RM). It was the Company’s position that the Final Award must first be confirmed and all questions regarding the rights of Investor relative to those of other creditors must be determined before any foreclosure sale can proceed. It is further the position of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk. Nevertheless, on February 28, 2020, Investor advised that it conducted a sale of the Company’s assets. As the date of this report Investor failed to present a deed of sale for the alleged sale that allegedly took place as noticed. The Company filed with Virgin Island Court the motions disputing the validity of the alleged sale. On July 28, 2020, Investor filed in the State of Nevada a motion for ~~attorney’s fees of~~attorneys $48,844 and ~~cost of~~costs $716. The Company filed an answer on August 11, 2020. On October 16, 2020, Investor motion for ~~attorney’s fees of~~attorneys $48,844 and ~~cost of~~costs $716 was denied. ~~The balance was included in accounts payable for the unearned settlement. As of September, 30, 2022, this~~This case is still pending with the Federal court and the Court has not taken any substantive action in the matter as of the date of this report.

~~GBT Technologies, S.A.~~

On September 14, 2018, the Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the “GBT License Agreement”) with GBT-CR, a fully compliant and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized crypto currency platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right and license relating intellectual property relating to systems and methods of converting electronic transmissions into digital currency as reflected in that certain patent filed with the United Stated Patent and Trademark Office on or about June 14, 2018 (EFS ID: 32893586; Application Number: 16008069; Type: Utility under 35 USC 111(a); Confirmation Number: 6787)(collectively, the “Digital Currently Technology”). Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide license to use the Digital Currency Technology to make, use, sell, lease or otherwise commercialize and dispose of products and devices utilizing the Digital Currently Technology. Under the terms of the GBT License Agreement, the Company is entitled to receive a royalty of 2% of gross revenue of each licensed product sold by GBT-CR during the period starting in which revenue is first generated using the licensed products and continuing for five years thereafter. Upon signing the GBT-CR License Agreement, GBT-CR paid the Company $300,000 which is nonrefundable. The Company has recognized the $300,000 as revenue during the years ended December 31, 2018. Upon GBT-CR making available for sale (the “Commercial Event”) an ICO (Initial Coin Offering) (the “Coin”), GBT-CR will make a payment to the Company of $5,000,000. Further, upon the Commercial Event, GBT-CR will grant the Company the ability to acquire 30% of the Coin at a 30% discount of such offering price of the Coin. The GBT License Agreement commenced as of the signing date and, unless terminated in accordance with the termination provisions of the GBT License Agreement, shall remain in force until the expiration of the patent pertaining to the Digital Currency Technology; provided that the right to use trade, secrets shall survive the expiration of the GBT License Agreement provided the Company has not terminated. Prior to the signing of the GBT License Agreement, GBT-CR advanced $200,000 to the Company, which the parties agreed will be applied toward the $5,000,000 fee when it becomes due. The $200,000 is recorded as unearned revenue at December 31, 2018 and reclassified to accrued expense as of September 30, 2022 and December 31, 2021. On February 27, 2020 GBT Technologies, S.A., as successor in interest to Hermes Roll, LLC had notified the Company that it was in default on its Amended and Restated Territorial License Agreement (“ARTLA”) dated June 15, 2015 and that the ARTLA had been cancelled and rescinded.

On December 22, 2021 (the “Effective Date”), pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG, Kevin Brian Cox (SURG’s Chief Executive Officer) - in his individual capacity, entered into a Resolution of Purchase, Mutual Release, and Settlement Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related to the consideration paid by SURG to the Company in connection with the APA.

On or about July 9, 2021 the Company filed a lawsuit in District Court in Clack County Nevada – Department 19 (Case number A-21-837631-C) against Terry Taylor and TTSG Holdings, Inc for breach of contract, breach of covenant of Good Faith and Fair Dealing, Unjust Enrichment and declaratory relief for failure of providing consulting services per contract they entered. The Company is demanding the return of 240,000 shares issued, return of the $5,000 payments, recission of the consulting agreement, and attorney’s fees and costs. ~~The lawsuit is still pending as of the date of this report.~~ As Terry Taylor and TTSG Holdings ~~Inc~~ failed to appear to a ~~Notice~~notice of ~~Deposition,~~deposition, the Company filed for a summary judgment. On January 20, 2023 the court issued a $708,821 writ of execution against Terry Taylor and TTSG

Gregory Mancuso and Rainer AG

~~ITEM~~Item 1A. ~~RISK FACTORS.~~Risk Factors.

As a ~~smaller reporting company,~~Smaller Reporting Company, the Company is not required to include the disclosure under this Item 1A. Risk Factors. Despite the fact that we are not required to provide risk factors, we consider the ~~information~~following factors to be risks to our continued growth and development:

WE HAVE A LIMITED OPERATING HISTORY IN AN EVOLVING INDUSTRY, WHICH MAKES IT DIFFICULT TO EVALUATE OUR FUTURE PROSPECTS AND MAY INCREASE THE RISK THAT WE WILL NOT BE SUCCESSFUL.

We have a limited operating history in an evolving industry that may not develop as expected. Assessing our business and future prospects is challenging in light of the risks and difficulties we may encounter. These risks and difficulties include our ability to:

●

accurately forecast our revenues and plan our operating expenses;

●

successfully expand our business;

●

assimilate our acquisitions;

●

adapt to rapidly evolving trends in the ways consumers and businesses interact with technology;

●

avoid interruptions or disruptions in the offering of our products and our services;

●

develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment of new features and products;

●

hire, integrate and retain talented sales, customer service, technology and other personnel; and

●

effectively manage rapid growth in personnel and operations; and

●

global COVID-19 pandemic

If the demand for our services and/or platforms/products offered or our products under development are not finalized, our business will be harmed. We may not be able to successfully address these risks and difficulties, which could harm our business and results of operations.

OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT FOR US TO EVALUATE OUR FUTURE BUSINESS PROSPECTS AND MAKE DECISIONS BASED ON THOSE ESTIMATES OF OUR FUTURE PERFORMANCE.

We have a limited operating history and, as a consequence, it is difficult, if not impossible, to forecast our future results based upon our historical data. Reliance on the historical results may not be representative of the results we will achieve. Because of the uncertainties related to our limited historical operations, we may be hindered in our ability to anticipate and timely adapt to increases or decreases in revenues or expenses. If we make poor budgetary decisions as a result of unreliable historical data, we could be less profitable or continue to incur losses.

THE COVID-19 OUTBREAK HAS CAUSED DISRUPTIONS IN OUR DEVELOPMENT OPERATIONS, WHICH HAVE RESULTED IN DELAYS ON EXISTING PROJECTS AND MAY HAVE ADDITIONAL NEGATIVE IMPACTS ON OUR OPERATIONS

In the first quarter of 2020, the COVID-19 outbreak caused disruptions in our development operations, which resulted in delays on exiting projects. The State of California and the economy in general has begun to slowly re-open following the introduction of the COVID-19 vaccine. During the fourth quarter of 2021, the omicron variants surfaced and has significantly impacted the United States and globally. However, in the event COVID-19, the omicron variant or other variant is to worsen or again surface any further unforeseen delay in our operations of the development, delivery and assembly process within any of our activities could continue to result in, increased costs and reduced revenue.

OUR RESULTS OF OPERATIONS HAVE NOT RESULTED IN PROFITABILITY AND WE MAY NOT BE ABLE TO ACHIEVE PROFITABILITY GOING FORWARD

The Company does not accrue or capitalize development costs (or any costs to this effect) and expense it to its profit and loss statements as required by US GAAP. As such, the Company incurred a net loss of $5,703,217 for the three months ended March 31, 2023 and net income of $3,926,239 for the three months ended March 31, 2022. If we incur additional significant operating losses, our stock price, may decline, perhaps significantly. Our management is developing plans to alleviate the negative trends and conditions described above. Our business plan is speculative and unproven. There is no assurance that we will be successful in executing our business plan or that even if we successfully implement our business plan, that we will be able to curtail our losses now or in the future. Further, as we are an emerging enterprise, we expect that net losses will continue, and our working capital deficiency will increase.

WE HAVE NOT GENERATED POSITIVE CASH FLOW FROM OPERATIONS, AND OUR ABILITY TO GENERATE POSITIVE CASH FLOW IS UNCERTAIN. IF WE ARE UNABLE TO GENERATE POSITIVE CASH FLOW OR OBTAIN SUFFICIENT CAPITAL WHEN NEEDED, OUR BUSINESS AND FUTURE PROSPECTS WILL BE ADVERSELY AFFECTED AND WE COULD BE FORCED TO SUSPEND OR DISCONTINUE OPERATIONS.

Our operations have not generated positive cash flow for any period since our inception, and we have funded our operations primarily through the issuance of common stock and short-term and long-term debt and convertible debt. Our limited operating history makes an evaluation of our future prospects difficult. The actual amount of funds that we will need to meet our operating needs will be determined by a number of factors, many of which are beyond our control. These factors include the timing and volume of sales transactions, the success of our marketing strategy, market acceptance of our products, the success of our manufacturing and research and development efforts (including any unanticipated delays), our manufacturing and labor costs, the costs associated with obtaining and enforcing our intellectual property rights, regulatory changes, competition, technological developments in the market, evolving industry standards and the amount of working capital investments we are required to make.

Our ability to continue to operate until we are able to generate sufficient our cash flow from operations will depend on our ability to generate sufficient positive cash flow from our operations. If we are unable to generate sufficient cash flow from our operations, our business and future prospects will be adversely affected and we could be forced to suspend or discontinue operations.

The Company sustained net loss of $5,629,713 and our operating activities used in cash flows of $112,635 for the three-month ended March 31, 2023. The Company had a working capital deficit of $22,715,354, stockholders’ deficit of $23,660,851 and an accumulated deficit of $304,887,630 at March 31, 2023.

WE WILL REQUIRE ADDITIONAL CAPITAL TO SUPPORT BUSINESS GROWTH, AND THIS CAPITAL MIGHT NOT BE AVAILABLE ON ACCEPTABLE TERMS, IF AT ALL.

We intend to continue to make investments to support our business growth and we will require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing products, improve our operating infrastructure or acquire complementary businesses and technologies. Further, we need additional capital to continue operations. Accordingly, we need to engage in equity or debt financings to secure additional funds. We expect that we have sufficient capital to maintain operations through the year of 2023. In order to fully implement our business plan, we will need to raise about $10,000,000 If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business may be harmed.

On December 17, 2021 (the “Effective Date”), the “Company entered into an equity financing agreement (the “Equity Financing Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with GHS Investments LLC (“GHS”), pursuant to which GHS may purchase from the Company, up to that number of shares of common stock of the Company (the “Shares”) for $10,000,000, subject to certain limitations and conditions set forth in the Equity Financing Agreement from time to time over the course of 24 months after an effective registration of the Shares with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC (the “Contract Period”). The Equity Financing Agreement grants the Company the right, from time to time at its sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase shares of Common Stock on any business day (a “Put”), provided that at least ten trading days has passed since the most recent Put. The purchase price of the shares of Common Stock contained in a Put will be 90% of the lowest daily volume weighted average price (VWAP) of the Company’s Common Stock during the ten consecutive trading days preceding the receipt by GHS of the applicable Put notice. Such sales of Common Stock by the Company, if any, may occur from time to time, at the Company’s option, during the Contract Period. Subject to the satisfaction of certain conditions set forth in the Equity Financing Agreement, on each Put the Company will deliver a number of Shares equaling 110% of the dollar amount of each Put. The maximum dollar amount of each Put will not exceed 200% of the average daily trading dollar volume for the Company’s Common Stock during the 10 trading days preceding the Trading Day that GHS receives a Put. No Put will be made in an amount equaling less than $10,000 or greater than $500,000. Puts are further limited to GHS owning no more than 4.99% of the outstanding stock of the Company at any given time. The Equity Financing Agreement and the Registration Rights Agreement contain customary representations, obligations, rights, warranties, agreements and conditions of the parties. The Equity Financing Agreement terminates upon any of the following events: when GHS has purchased $10,000,000 in the Common Stock of the Company pursuant to the Equity Financing Agreement; on the date that is 24 calendar months from the date the Equity Financing Agreement was executed. Actual sales of shares of Common Stock to GHS under the Equity Financing Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. On January 12, 2022, the Company filed registration statement for the sale of 5,500,000 shares of common stock pursuant to the Equity Financing Agreement, which was declared effective on February 11, 2022. The Company issued 463,303 shares with net proceeds of $66,942 from the Equity Financing Agreement in February 2022.

For the three months ended March 31, 2023 and year ended December 31, 2022 respectively, the Company received $0 and $231,867 as proceeds from the equity purchase agreement for issuance of 5,500,000 registered common shares. Post this ~~item.~~issuance The Equity Financing Agreement is exhausted and not valid anymore.

WE DEPEND UPON KEY PERSONNEL AND NEED ADDITIONAL PERSONNEL

Our success depends on our inability to attract and retain key personnel including Michael Murray, our President, Mansour Khatib, our CEO, and Dr. Danny Rittman, our CTO, and our inability to do so may materially and adversely affect our business operations. The loss of qualified personnel could have a material and adverse effect on our business operations. Additionally, the success of the Company’s operations will largely depend upon its ability to successfully attract and maintain competent and qualified key management personnel. As with any company with limited resources, there can be no guaranty that the Company will be able to attract such individuals or that the presence of such individuals will necessarily translate into profitability for the Company.

OUR BUSINESS REQUIRES SUBSTANTIAL CAPITAL, AND IF WE ARE UNABLE TO MAINTAIN ADEQUATE CASH FLOWS FROM OPERATIONS OUR PROFITABILITY AND FINANCIAL CONDITION WILL SUFFER AND JEOPARDIZE OUR ABILITY TO CONTINUE OPERATIONS

We require substantial capital to support our operations. If we are unable to generate adequate cash flows from our operations, maintain adequate financing or other sources of capital are not available, we could be forced to suspend, curtail or reduce our operations, which could harm our revenues, profitability, financial condition and business prospects.

THERE IS CURRENTLY A LIMITED PUBLIC MARKET FOR OUR COMMON STOCK. FAILURE TO FURTHER DEVELOP OR MAINTAIN A TRADING MARKET COULD NEGATIVELY AFFECT THE VALUE OF OUR COMMON STOCK AND MAKE IT DIFFICULT OR IMPOSSIBLE FOR YOU TO SELL YOUR STOCK.

There is a limited public market for our Common Stock, which is traded on the OTC PINK under the symbol GTCH. We cannot give any assurances that there will ever be a mature, developed market for our common stock. Failure to further develop or maintain an active trading market could negatively affect the value of our shares and make it difficult for you to sell your shares or recover any part of your investment in us. Even if a market for our common stock does develop in a material way, the market price of our common stock may be highly volatile. In addition to the uncertainties relating to our future operating performance and the profitability of our operations, factors such as variations in our interim financial results, or various, as yet unpredictable factors, many of which are beyond our control, may have a negative effect on the market price of our common stock.

IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD. AS A RESULT, CURRENT AND POTENTIAL STOCKHOLDERS COULD LOSE CONFIDENCE IN OUR FINANCIAL REPORTING, WHICH WOULD HARM OUR BUSINESS AND THE TRADING PRICE OF OUR STOCK.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our brand and operating results could be harmed. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement. For example, for the years ended December 31, 2022 and 2021, we reported that our disclosure controls and procedures were not effective due to the lack of resources and the reliance on outside consultants. We intend to increase management’s review of our financials. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

Additional Risks Related to Our Common Stock

Because we are quoted on the OTC PINK marketplace instead of a national securities exchange, our investors may experience significant volatility in the market price of our stock and have difficulty selling their shares.

Our Common Stock is currently quoted on the OTC Market Group’s OTC PINK marketplace under the ticker symbol “GTCH”. The OTC is a regulated quotation service that displays real-time quotes and last sale prices in over-the-counter securities. Trading in shares quoted on the OTC PINK is often thin and characterized by volatility. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume and market conditions. As a result, there may be wide fluctuations in the market price of the shares of our Common Stock for reasons unrelated to operating performance, and this volatility, when it occurs, may have a negative effect on the market price for our securities. Moreover, the OTC PINK is not a stock exchange, and trading of securities on this platform is more sporadic than the trading of securities listed on a national quotation system or stock exchange. Accordingly, our stockholders may not be able to realize a fair price from their shares when they determine to sell them or may have to hold them for a substantial period of time until the market for our Common Stock improves.

Our stock price and trading volume may be volatile, which could result in substantial losses for our stockholders.

The equity trading markets may experience periods of volatility, which could result in highly variable and unpredictable pricing of equity securities. The market price of our Common Stock could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. In addition, the trading volume in our Common Stock has been low and may fluctuate and cause significant price variations to occur. We have experienced significant volatility in the price of our stock. In addition, the stock markets in general can experience considerable price and volume fluctuations.

We have not paid dividends in the past and have no immediate plans to pay cash dividends.

We plan to reinvest all of our earnings, to the extent we have earnings, to develop and deliver our products and cover operating costs and to otherwise become and remain competitive. We do not plan to pay any cash dividends with respect to our securities in the foreseeable future. We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our Common Stock as a dividend. Therefore, you should not expect to receive cash dividends on our Common Stock.

Shares eligible for future sale may adversely affect the market for our Common Stock.

Of the 2,930,101,819 shares of our Common Stock outstanding as of the date of this Annual Report, approximately 766,217,939 are restricted and 2,163,883,880 shares are freely tradable without restriction pursuant to Rule 144. Any substantial sale of our Common Stock pursuant to Rule 144 or pursuant to any resale prospectus may have a material adverse effect on the market price of our Common Stock.

You may experience future dilution as a result of future equity offerings.

To raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any future offering at a price per share that is lower than the price per share paid by investors in this offering, which would result in those newly issued shares being dilutive. In addition, investors purchasing shares or other securities in the future could have rights superior to existing stockholders, which could impair the value of your shares. The price per share at which we sell additional shares of our Common Stock, or securities convertible or exchangeable into shares of our Common Stock, in future transactions may be higher or lower than the price per share paid by investors in this offering.

Our charter documents and Nevada law may inhibit a takeover that stockholders consider favorable.

Provisions of our certificate of incorporation and bylaws and applicable provisions of Nevada law may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. The provisions in our certificate of incorporation and bylaws:

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limit who may call stockholder meetings;

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do not provide for cumulative voting rights; and

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provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.

There are limitations on director/officer liability.

As permitted by Nevada law, our certificate of incorporation limits the liability of our directors for monetary damages for breach of a director’s fiduciary duty except for liability in certain instances. As a result of our charter provision and Nevada law, shareholders may have limited rights to recover against directors for breach of fiduciary duty. In addition, our certificate of incorporation provides that we shall indemnify our directors and officers to the fullest extent permitted by law.

Penny stock regulations may impose certain restrictions on marketability of our securities.

The SEC adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5 per share or an exercise price of less than $5 per share, subject to certain exceptions. A security listed on a national securities exchange is exempt from the definition of a penny stock. Our Common Stock is not currently listed on a national security exchange. Our Common Stock is therefore subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by such rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s written consent to the transaction prior to the purchase.

Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market maker, the broker dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Broker-dealers must wait two business days after providing buyers with disclosure materials regarding a security before effecting a transaction in such security. Consequently, the “penny stock” rules restrict the ability of broker-dealers to sell our securities and affect the ability of investors to sell our securities in the secondary market and the price at which such purchasers can sell any such securities, thereby affecting the liquidity of the market for our Common Stock.

Stockholders should also be aware that, according to the SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:

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control of the market for the security by one or more broker-dealers that are often related to the promoter or issuer;

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manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

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“boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

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excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

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the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

The Financial Industry Regulatory Authority (referred to as FINRA) has rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our Common Stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.

~~ITEM~~Item 2. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~Unregistered Sales of Equity Securities and Use of Proceeds.

During the ~~three months~~period ended March 31, 2023, the Company had the following transactions in its common stock:

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Of 1,294,508,379 Shares issued for the conversion of convertible notes of $390,603 and accrued interest of $ $15,268; and

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Of 100,000,000 Shares issued to Pacific Captital Markets LLC for certain for service agreement between Pacific Captital Markets LLC. and the Company. The value of the shares of $80,000 was determined based on the FV of the Company’s common stock;

During the period ended March 31, 2022, the Company had the following transactions in its common stock:

	●	issued an aggregate of 369,198 ~~shares~~ for the conversion of convertible ~~notes~~note of $35,000; and

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issued 463,303 shares to GHS from Equity Financing Agreement for ~~$68,308,~~$68,309, The value of the shares of was determined based on the Equity Financing.

~~During the three months ended June 30, 2022 the Company had the following transactions in its common stock:~~

	●	~~issued 288,672,073 shares for the conversion of convertible notes of $1,660,370 and accrued interest of $6,491; and~~

	●	issued 150,000,000 shares to GBT Tokenize for certain joint venture agreement between Magic International Argentina FC, S.L. and the Company (See note 16). The value of the shares of $1,500 was determined based on the FV of the Company.; and

	●	~~issued 500,000,000 shares to Metaverse for certain equity method investment (see note 16). The value of the shares of $5,000 was determined by management; and~~

	●	~~issued 5,036,697 shares to GHS from Equity Financing Agreement for gross consideration of $163,559, The value of the shares of was determined based on the Equity Financing.~~

~~During the three months ended September 30, 2022, the Company had the following transactions in its common stock:~~

~~Subsequent to September 30, 2022, multiple note holders elected to convert $270,300 principal amount into 206,000,000 shares of the Company’s common stock.~~

The offer, sale and issuance of the above securities was made to accredited investors and the Company relied upon the exemptions contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder with regard to the sale. No advertising or general solicitation was employed in offering the securities. The offer and sales were made to accredited investors and transfer of the common stock will be restricted by the Company in accordance with the requirements of the Securities Act of 1933, as amended.

~~ITEM~~

Item 3. ~~DEFAULTS UPON SENIOR SECURITIES~~Defaults Upon Senior Securities

~~Not Applicable~~On December 3, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with Discover Growth Fund, LLC (the “Investor”) pursuant to which the Company issued a Senior Secured Redeemable Convertible Debenture (the “Debenture”) in the aggregate face value of $8,340,000. In connection with the issuance of the Debenture and pursuant to the terms of the SPA, the Company issued a Common Stock Purchase Warrant to acquire up to 225,000 shares of common stock for a term of three years (the “Warrant”) on a cash-only basis at an exercise price of $100.00 per share with respect to 50,000 Warrant Shares, $75.00 with respect to 75,000 Warrant Shares and $50.00 with respect to 100,000 Warrant Shares. The holder may not exercise any portion of the Warrants to the extent that the holder would own more than 4.99% of the Company’s outstanding common stock immediately after exercise. The outstanding principal amount may be converted at any time into shares of the Company’s common stock at a conversion price equal to 95% of the Market Price less $5.00 (the conversion price is lowered by 10% upon the occurrence of each Triggering Event – the current conversion price is 75% of the Market Price less $5.00). The Market Price is the average of the 5 lowest individual daily volume weighted average prices during the period the Debenture is outstanding. On May 28, 2019, the Investor delivered to the Company a “Notice of Default and Notice of Sale of Collateral” (the “Notice”). On December 23, 2019, in arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor. On January 31, 2020, the Company was informed that a final award was entered (the “Final Award”). The Final Award affirms that certain sections of the Debenture constitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the Investor was entitled to recovery of their attorney’s fees. Consequently, the arbitrator awarded Investor an award of $4,034,444 plus interest of 7.25% accrued from May 15, 2019 and costs in the amount of $55,613. On February 18, 2020, the Company filed a motion with the United States District Court District of Nevada (the “Nevada Court”) to confirm the Final Award and a motion to consolidate Investor’s application to confirm the Final Award filed in the U.S. District Court of the Virgin Islands (Case No: 3 :20-cv-00012-CVG-RM) (the “Virgin Island Court”). On February 27, 2020, the Nevada Court denied the Company’s motion to confirm the Final Award and motion to consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court. As such, on February 27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration Award, address the outstanding issues regarding whether Investor’s rights are subordinated to other creditors and, thereafter, oversee a commercially reasonable foreclosure sale (Case No: 3 :20-cv-00012-CVG-RM). It was the Company’s position that the Final Award must first be confirmed and all questions regarding the rights of Investor relative to those of other creditors must be determined before any foreclosure sale can proceed. It is further the position of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk. Nevertheless, on February 28, 2020, Investor advised that it conducted a sale of the Company’s assets. As the date of this report Investor failed to present a deed of sale for the alleged sale that allegedly took place as noticed. The Company filed with Virgin Island Court the motions disputing the validity of the alleged sale. On July 28, 2020, Investor filed in the State of Nevada a motion for attorneys $48,844 and costs $716. The Company filed an answer on August 11, 2020. On October 16, 2020, Investor motion for attorneys $48,844 and costs $716 was denied. This case is still pending with the Federal court and the Court has not taken any substantive action in the matter as of the date of this report.

~~ITEM~~

Item 4. ~~MINE SAFETY DISCLOSURES~~Mine Safety Disclosures

Not Applicable.

~~ITEM~~Item 5. ~~OTHER INFORMATION~~Other Information

On January 28, 2022, the Company entered into a Stock Purchase Agreement with Marko Radisic (the “Seller”) and Touchpoint Group Holdings, Inc. (“TGHI”) pursuant to which the Company acquired 10,000 shares of Series A Convertible Preferred Stock (the “Touchpoint Preferred”) from the Seller in consideration of $125,000. The Touchpoint Preferred is convertible into 10,000,000 shares of common stock of Touchpoint. On February 22, 2022, the Company entered into an Intellectual Property License and Royalty Agreement with Touchpoint Group Holdings, Inc. (“Touchpoint” or “TGHI”) pursuant to which the Company granted TGHI a worldwide license for its technologies for a term of five years in the domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining to the Company’s digital currency technology (the “Technology”). GBT will charge TGHI earned royalties based on actual uses by TGHI of the Technology resulting from revenue attributable to the use, performance or other exploitation of the Technology, to the extent applicable, after deducting any taxes that the Company may be required to collect, and deducting any international sales, goods and services, value added taxes or similar taxes which the Company is required to pay, if any, excluding deductions for taxes on the Company net income. TGHI agreed to issue the Company 10,000,000 shares of common stock of TGHI in the FV of $50,000 as aan one-time fee in consideration of the Company entering this Intellectual Property License and Royalty Agreement, which was booked as other related party income. The Company have yet to earn any royalty income in relation to this agreement as of ~~September 30,~~March 31, 2022.

~~Magic Agreement~~

The Company, through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into a Master Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Magic Internacional Argentina FC, S.L. (“Magic”) and Tokenize which replaced a prior joint venture entered between the parties.

The Tokenize Agreement provides that the Company shall contribute 150,000,000 shares of common stock of the Company (“GBT Shares”) to Tokenize. Sergio Fridman is the manager of Magic and the beneficial owner of all outstanding securities of Magic. Magic will contribute cash of $250,000 into Tokenize for a promissory note and agreed to further fund Tokenize with all funds reasonably needed for implementation of the business purposes as described in the Tokenize Agreement. The GBT Shares will not be transferable for a period of five years.

~~Metaverse Agreement~~

On ~~June 10, 2022, the Company,~~April 3, 2023, GBT Tokenize Corp. (“Seller”), a subsidiary that is owned 50% by GBT Technologies, Inc (“GBT”) entered into a Joint Venture and Territorial License Agreement (the “Metaverse Agreement”) with Ildar Gainulin and Maria Belova (“IGMB”). Under the Metaverse Agreement, the parties formed Metaverse Kit Corp., a Nevada corporation (“Metaverse Kit”). The purpose of Metaverse Kit is to develop, maintain and support source codes for its proprietary technologies and comprehensive platform that combines a core virtual reality platform and an extended set of real-world functions to provide a metaverse experience initially within the area of sports and then expanding into virtual worlds of entertainment, live events, gaming, communications and other cross over product opportunities (the “Meta Portfolio”). Under the Metaverse Agreement, IGMB agreed to provide Metaverse Kit with the licensed technology and expertise, as requested and mutually agreed to by Company and IGMB. In connection therewith, the parties entered an Asset Purchase Agreement ~~concurrently~~(“APA”) with Trend Innovation Holdings, Inc. (“TREN”), in which GBT consented, pursuant to which Seller sold certain assets relating to proprietary system and method named Avant-Ai, which is a text-generation, deep learning self-training model (the “System”).

In consideration of acquiring the ~~Metaverse Agreement whereby IGMB sold Metaverse Kit all source codes pertaining~~System, TREN is required to issue to the ~~Meta Portfolio. Further, IGMB provided an exclusive license~~Seller 26,000,000 common shares of TREN (the “Shares”). The Shares will be restricted per Rule 144 as promulgated under the Securities Act of 1933, as amended (the “1933 Act”) and Seller agreed to ~~Metaverse Kit throughout~~a lock-up period of nine (9) months following closing (the “Lock Up Term”). In the ~~world for the invented product/service and the related platforms relating~~event that TREN is unable to up-list to Nasdaq either through a business combination or otherwise prior to the ~~Meta Portfolio and to use the know how to develop, manufacture, sell, market and distribute the Meta Portfolio throughout the world The Company shall contribute 500,000,000 shares of common stock~~expiration of the ~~Company (“GBT Shares”) to Metaverse Kit. IGBM and~~Lock Up Term, the ~~Company will each own 50%~~Seller may request within three (3) business days of ~~Metaverse Kit. The Company pledged its 50% ownership in Metaverse Kit to Igor 1 Corp. to secure a convertible note held~~the expiration of the Lock-Up Term, that all transactions contemplated by ~~Igor 1 Corp. The Company shall appoint two directors and IGBM shall appoint one director of Metaverse Kit.~~the APA be unwound.

In addition, ~~Metaverse Kit, IGMB~~TREN, Seller and ~~Elentina Group, LLC (“Elentina”)~~GBT entered into a ~~Consulting Agreements~~license agreement regarding the System, granting the Seller and/or GBT a perpetual, irrevocable, non-exclusive, non-transferable license for using the System to be used in ~~which IGBM and Elentina, each were engaged~~its own development, as in-house tool, where Seller or GBT may not sublicense its rights hereunder to provide services for $25,000 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. IGBM and Elentina will provide services in connection with the development of the business as well as Metaverse Kit’s capital raising efforts. The term of the Consulting Agreement is two years.

~~The closing of the Metaverse Agreement occurred on June 13, 2022 and the Company recorded par value of $5,000 as on the closing date.~~any customer or client.

On ~~June 16, 2022~~ the parties amended the Meta Agreement to further define the constitution of the Board of Directors. As such, Section 4.2 of the Meta Agreement was amended and restated to provide that the Board of Metaverse Kit Corp. shall consist of two Directors, one of whom shall be appointed by Ildar Gainulin and Maria Belova and the other shall be appointed by the Company.

~~Revenue Sharing Agreement~~

~~On February 18, 2022,~~April 17, 2023, the Company, ~~effective March 1, 2022 entered into a Revenue Sharing Agreement~~Bannix Acquisition Corp. (“~~RSA”~~Bannix”) ~~with Mahaser LTD.~~and EVIE Autonomous Ltd. (“~~Mahaser”~~EVIE”) pursuant to which Bannix agreed to acquire EVIE. In addition, Bannix agreed to acquire from the Company ~~acquired~~ the opportunity to share in revenues generated by Mahaser with respect to e-commerce sales through the online retail platform in the United States of America. Mahaser owns an e-commerce platform as a storeApollo System which is intellectual property covered by patent application (publication number 2022/0405966) filed with the ~~legal, exclusive owner~~US Patent and Trademark Office. This patent application describes a machine learning driven technology that controls radio wave transmissions, analyzes their reflections data, and constructs 2D/3D images of ~~Ravenholm Electronics.~~stationary and moving objects. The ~~Company will operate~~Apollo system is based on radio waves and can detect an entity’s moving and stationary positions, enabling imaging technology to show these movements and positions on a screen in real time. This includes an AI technology that controls the ~~e-commerce platform~~radio waves transmission and ~~will be entitled~~analyzes the reflections. The goal is to ~~95% for all revenue generated by~~integrate the Apollo System as an efficient driver monitoring system, detecting impaired or distracted drivers, providing audible and received by Mahaser from March 1, 2022 through December 31, 2022. The RSA provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $100,000 no later than March 1, 2022 and issue Mahaser 1,000,000 sharesvisual alerts. Consummation of the Company’s restricted common stock. The Company shall have no obligations to make any further payments to Mahaser. For any further extensions, the Company will have the option to extend the RSA for annual payment of $200,000, which can be payable with the Company’s shares of common stock payable based on 20 days VWAP prior to issuance. On March 16, 2022 the parties entered into Amendment No. 1above transactions are subject to the ~~to the RSA, where all consideration to be paid or issued to Mahaser will be deferred until such time where the e-commerce platform generated in cumulative revenue~~execution of $1,000,000. On March 31, 2022, the parties entered into Amendment No. 2 to the RSA, where Mahaser agreed to pay the Company 100% per year for all revenue generated by and received by seller from the sales by Amazon within the United States of America as follows from March 1, 2022 through December 31, 2022. The Company will be responsible for 100% of the cost of goods sold as well. In addition, the Company is entitled to earn 100% revenues and cost of goods sold of the test run period from February 1, 2022 to February 28, 2022.

~~Assignment of lease~~a mutually satisfactory definitive agreement

~~ITEM 6. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.~~

~~Previous independent registered public accounting firm~~

On May 27, 2022 (the “Termination Date”), the Company terminated BF Rogers CPA PC (the “Former Auditor”) as the independent registered public accounting firm of the Company. Other than an explanatory paragraph included in the Former Auditor’s audit report for the Registrant’s fiscal years ended December 31, 2021 and 2020 relating to the uncertainty of the Company’s ability to continue as a going concern, the audit reports of the Former Auditor on the Company’s financial statements for the fiscal years ended December 31, 2021 and 2020 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle. During the years ended December 31, 2021 and 2020 and through the date of this Current Report on Form 8-K, the Company has not had any disagreements with the Former Auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the Former Auditor’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s financial statements for such years.

~~During the years ended December 31, 2021 and 2020 and through the date of the Termination Date, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.~~

~~The Company requested our Former Auditor furnish us with a letter addressed to the SEC stating whether it agrees with the above statements, which they did.~~

~~New independent registered public accounting firm~~

On May 27, 2022 (the “Engagement Date”), the Company engaged M.S. Madhava Rao (“New Auditor”) as its independent registered public accounting firm for the Company’s fiscal year ended December 31, 2022. The decision to engage the New Auditor as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors. During the two most recent fiscal years and through the Engagement Date, the Company has not consulted with the New Auditor regarding either:

1. application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was provided that the New Auditor concluded was an important factor considered by the Company, ~~in reaching a decision as to the accounting, auditing or financial reporting issue; or~~

~~2. any matter that was either the subject of a disagreement (as defined in Regulation S-K, Item 304(a)(1) (iv)~~Bannix and ~~the related instructions) or reportable event (as defined in Regulation S-K, Item 304(a)(1)(v)~~EVIE (the “Definitive Agreement”).

ITEM7. 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit
No.

Description

No.		Description
3.1		Certificate of Incorporation of Forex International Trading Corp. (1)
3.2		Bylaws of Forex International Trading Corp. (1)
3.3		Certificate of Designation for Series A Preferred Stock (2)
3.4		Certificate of Designation for Series B Preferred Stock (3)
3.5		Certificate of Designation – Series C Preferred Stock (4)
3.6		Amendment to the Certificate of Designation for the Series B Preferred Stock (5)
3.7		Amendment to the Certificate of Designation for the Series C Preferred Stock(5)
3.8		Certificate of Change filed pursuant to NRS 78.209 (6)
3.9		Articles of Merger filed pursuant to NRS 92.A.200 (6)
3.10		Certificate of Amendment to the Articles of Incorporation of Gopher Protocol Inc. (8)
3.11		Certificate of Change dated July 10, 2019 (23)
3.12		Articles of Merger by and between Gopher Protocol Inc. and GBT Technologies Inc. dated July 10, 2019(23)
3.13		Certificate of Correction to the Certificate of Change (24)
3.14		Certificate of Correction to the Articles of Merger by and between Gopher Protocol Inc. and GBT Technologies Inc. dated July 10, 2019 (24)
3.15		Certificate of Amendment to the Articles of Incorporation of GBT Technologies Inc. dated September 23, 2019(26)
3.16		Certificate of Designation for Series B Preferred Stock (7)
3.17		Certificate of Designation of the Preferences, Rights and Limitations of the Series G Convertible Preferred Stock (15)
3.18		Series H Convertible Preferred Stock Certificate of Designation (21)
4.1		Form of Warrant issued to Robert Warren Jackson, Gregory Bauer, Michael Murray and Guardian Patch, LLC dated September 1, 2017 (14)
4.2		Balloon Note payable by Gopher Protocol Inc. to RWJ Advanced Marketing, LLC dated September 1, 2017 (14)
4.3		Form of Warrant issued to Derron Winfrey, Dennis Winfrey, Mark Garner and JIL Venture dated March 1, 2018 (16)
4.4		Note payable by Gopher Protocol Inc. to ECS, LLC dated March 1, 2018 (16)
4.5		Stock Option issued to Kevin Pickard dated April 16, 2018 (17)
4.6		Stock Option issued to Muhammad Khilji dated April 25, 2018 (18)
4.7		6% Convertible Note payable to Pablo Gonzalez dated June 17, 2019 (21)
4.8		Convertible Note payable to Glen Eagles Acquisition LP (22)
4.9		Amendment to Common Stock Purchase Warrant between Gopher Protocol Inc. and Glen Eagles Acquisition LP (22)
4.10		Second Amendment to Promissory Note between GBT Technologies Inc. and Ilaid Research and Trading LP dated July 20, 2020 (29)
4.11		Convertible Promissory Note August 4, 2020 issued to Redstart Holdings Corp. (30)
4.12		Fourth Amendment to Promissory Note between GBT Technologies Inc. and Iliad Research and Trading, L.P. dated May 14, 2020 – Executed May 19, 2021(31)
4.13		Convertible Promissory Note May 26, 2021 issued to Redstart Holdings Corp. – Executed on May 27, 2021 (32)

4.14		Fifth Amendment to Promissory Note between GBT Technologies Inc. and Iliad Research and Trading LP dated August 19, 2021 executed August 20, 2021 (33)
4.15		Convertible Promissory Note September 21, 2021 issued to Redstart Holdings Corp. – Executed on September 24, 2021, and Funded on September 28, 2021 (34)
4.16		Amended Loan Authorization and Agreement between GBT Technologies Inc. and U.S. Small Business Administration dated October 1, 2021 (35)
4.17		Convertible Promissory Note dated November 8, 2021 issued to Sixth Street Lending LLC (36)
4.18		Description of Securities (40)
4.19		Convertible Promissory Note dated May 4, 2022 issued to 1800 Diagonal Lending LLC (42)
10.1		Territorial License Agreement dated March 4, 2015, by and between Gopher Protocol Inc. and Hermes Roll LLC (7)
10.2		Amended and Restated Territorial License Agreement dated June 16, 2015 by and between Gopher Protocol Inc. and Hermes Roll LLC (9)
10.3		Letter Agreement dated August 20, 2015 by and between Gopher Protocol Inc. and Dr. Danny Rittman (10)
10.4		Letter Agreement dated March 14, 2016 by and between Gopher Protocol Inc. and Dr. Danny Rittman. (11)
10.5		Amended and Restated Employment Agreement by and between Gopher Protocol Inc. and Dr. Danny Rittman dated April 19, 2016 (12)
10.6		Letter Agreement between the Company and Danny Rittman dated June 29, 2017 (13)
10.7		Asset Purchase Agreement between Gopher Protocol Inc. and RWJ Advanced Marketing, LLC dated September 1, 2017 (14)
10.8		Addendum to Asset Purchase Agreement between Gopher Protocol Inc. and RWJ Advanced Marketing, LLC dated September 1, 2017 (14)
10.9		Employment Agreement between Gopher Protocol Inc. and Gregory Bauer dated September 1, 2017 (14)
10.10		Asset Purchase Agreement between Gopher Protocol Inc. and ECS Prepaid LLC dated March 1, 2018 (16)
10.11		Employment Agreement between Gopher Protocol Inc. and Derron Winfrey dated March 1, 2018(16)
10.12		Employment Agreement between Gopher Protocol Inc. and Mark Garner dated March 1, 2018(16)
10.13		Agreement between Gopher Protocol Inc. and Mobiquity Technologies, Inc. dated September 4, 2018 (19)
10.14		Exclusive Intellectual Property License and Royalty Agreement between Gopher Protocol Inc. and GBT Technologies, S.A. dated September 14, 2018 (20)
10.15		Letter Agreement between Gopher Protocol Inc. and Dr. Danny Rittman dated September 14, 2018 (20)
10.16		Exchange Agreement entered into between Gopher Protocol Inc., Altcorp Trading LLC, GBT Technologies, S.A., a Costa Rica company and Pablo Gonzalez dated June 17, 2019 (21)
10.17		Consulting Agreement entered into between Gopher Protocol Inc. and Glen Eagles Acquisition LP (22)
10.18		Letter Agreement between Mobiquity Technologies, Inc. and GBT Technologies Inc. executed August 2, 2019 Delivered August 6, 2019 (39)
10.19		Stock Purchase Agreement between Mobiquity Technologies, Inc. and GBT Technologies Inc. Dated September 10, 2019 (25)
10.20		Stock Purchase Agreement between Marital Trust GST Subject U/W/O Leopold Salkind and GBT Technologies Inc. dated September 10, 2019 (25)
10.21		Letter Agreement between GBT Technologies Inc. and Stanley Hills LLC dated February 26, 2020 (27)
10.22		Amendment to Promissory Note between GBT Technologies Inc. and Iliad Research and Trading, L.P. dated February 27, 2020 (27)
10.23		Order dated February 27, 2020 issued by the United States District Court District of Nevada (27)
10.24		Joint Venture and Territorial License Agreement by and between GBT Technologies Inc. and Tokenize-It S.A. dated March 6, 2020 (28)
10.25		Consulting Agreement by and between Pablo Gonzalez and GBT Tokenize Corp. dated March 6, 2020 (28)
10.26		Pledge Agreement by and between GBT Tokenize Corp. and Tokenize-It S.A., dated March 6, 2020 (28)
10.27		Securities Purchase Agreement dated August 4, 2020 between GBT Technologies Inc. and Redstart Holdings Corp. (30)
10.28		Securities Purchase Agreement dated November 8, 2021 between GBT Technologies Inc. and Sixth Street Lending LLC (36)

10.29		Equity Financing Agreement between GBT Technologies Inc. and GHS Investments LLC dated December 17, 2021 (37)
10.30		Registration Rights Agreement between GBT Technologies Inc. and GHS Investments LLC dated December 17, 2021 (37)
10.31		Resolution of Purchase, Mutual Release and Settlement Agreement by and among GBT Technologies Inc. and Parties Listed Therein December 22, 2021(38)
10.33		Form of Claim Purchase Agreement dated April 12, 2022 (41)
10.34		Finders Fee Agreement between JH Darbie & Co. and GBT Technologies Inc. dated October 14, 2021 (39)
10.35		Master Joint Venture and Territorial License Agreement by and between GBT Technologies Inc. and Magic International Argentina FC SL (41)
10.36		Pledge Agreement by and between GBT Tokenize Corp and Magic International Argentina FC SL (41)
10.37		Securities Purchase Agreement dated May 4, 2022 between GBT Technologies Inc. and 1800 Diagnol Lending LLC (42)
~~10.38~~		~~Joint Venture and Territorial License Agreement by and between GBT Technologies Inc. and Ildar Gainulin and Maria Belova. (43)~~
~~10.39~~		~~Asset Purchase Agreement by and between Metaverse Kit Corp and Ildar Gainulin and Maria Belova (43)~~
~~10.40~~		~~Consulting Agreement by and between Metaverse Kit Corp and Ildar Gainulin and Maria Belova (43)~~
~~10.41~~		~~Consulting Agreement between Metaverse Kit Corp and Elentina Group, LLC(43)~~
~~10.42~~		~~Pledge Agreement by and between GBT Technologies Inc. and Igor 1 Corp. (43)~~
~~10.43~~		~~Amendment No. 1 to the Joint Venture and Territorial License Agreement by and between Ildar Gainulin and Maria Belova and GBT Technologies Inc. (44)~~
~~10.44~~		~~Amendment No. 1 to the Joint Venture and Territorial License Agreement by and between Magic Internacional Argentina FC, SL and GBT Technologies Inc. (44)~~
~~10.45~~		~~Amendment No. 1 to the Joint Venture Agreement by and between Bitspeed LLC and GBT Technologies Inc. (44)~~
31.1		Certification of Chief Executive Officer (Principal Executive and Financial Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer (Principal Executive and Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on September 9, 2009.
(2)	Incorporated by reference to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 6, 2011
(3)	Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on May 14, 2012
(4)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 27, 2012.
(5)	Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 20, 2012.
(6)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 18, 2015
(7)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 12, 2015
(8)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 1, 2015
(9)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2015
(10)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 21, 2015
(11)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016
(12)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016
(13)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 30, 2017
(14)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 7, 2017
(15)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 3, 2018

(16)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 21, 2018
(17)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 18, 2018
(18)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 26, 2018.
(19)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 9, 2018.
(20)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 18, 2018.
(21)	Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on June 19, 2019.
(22)	Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 12, 2019.
(23)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 15, 2019.
(24)	Incorporated by reference to the Form -8-K Current Report filed with the Securities and Exchange Commission on August 5, 2019.
(39)	Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 7, 2019.
(25)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 16, 2019.
(26)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 25, 2019.
(27)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 2, 2020.
(28)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 11, 2020.
(29)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 24, 2020.
(30)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 10, 2020.
(31)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 21, 2021.
(32)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 1, 2021.
(33)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 23, 2021.
(34)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 29, 2021.
(35)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on October 6, 2021.
(36)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 11, 2021
(37)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 20, 2021
(38)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 28, 2021
(39)	Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on January 12, 2022
(40)	Incorporated by reference to the Form 10-K Annual Report filed with the Securities and Exchange Commission on March 25, 2022
(41)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 18, 2022
(42)	Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 10, 2022
~~(43)~~	~~Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 15, 2022.~~
~~(44)~~	~~Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 21, 2022.~~

SIGNATURES

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

	GBT TECHNOLOGIES INC.
	(Registrant)

Date: ~~November 14, 2022~~May 22, 2023	By:	/s/ Mansour Khatib
		Mansour Khatib
			Chief Executive Officer
		(Principal Executive, Financial and Accounting Officer)

7475


ASSETS	September 30,			December 31,
	2022			2021
	(Unaudited)			(Audited)
Current Assets:
Cash	$	130,642		$	155,106
Funds in escrow		394,694			—
Cash held in trust		—			112,942
Accounts Receivable		19,227			—
Inventory		7,158			—
Notes receivable		194,821			—
Other receivable		—			3,750,000
Inventory in transit		43,872
Due from related party		30,049			—
Marketable securities		40,942			—
Total current assets		861,405			4,018,048
Total assets	$	861,405		$	4,018,048

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	5,901,663		$	6,896,263
Accrued settlement		4,090,057			4,090,057
Unearned revenue		249,159			249,384
Contract liabilities		43,944			—
Convertible notes payable, current		6,549,832			8,109,436
Convertible notes payable, related party		116,605			116,605
Notes payable, current		38,196			2,612,397
Notes payable, related party		140,000			140,000
Derivative liability		5,787,760			10,192,485
Total current liabilities		22,917,216			32,406,629

Noncurrent Liabilities:
Convertible note payable, noncurrent, net of discount of $0 and $88,403		—			35,797
Note payable, noncurrent		311,804			337,603
Total noncurrent liabilities		311,804			373,400

Total liabilities		23,229,020			32,780,029

Stockholders’ Deficit:
Series B Preferred stock, $0.00001 par value; 20,000,000 shares authorized;		—			—
Series C Preferred stock, $0.00001 par value; 10,000 shares authorized;		—			—
Series D Preferred stock, $0.00001 par value; 100,000 shares authorized;		—			—
Series G Preferred stock, $0.00001 par value; 2,000,000 shares authorized;		—			—

Series H Preferred stock, $0.00001 par value ($500.00 stated value); 40,000 shares authorized;		—			—

Common stock, $0.00001 par value; 2,000,000,000 shares authorized; 1,183,741,469 and 5,133,489 shares issued and outstanding at September 30, 2022 and December 31, 2021		11,838			332
Treasury stock, at cost; 21 shares at September 30, 2022 and December 31, 2021		(643,059	)		(643,059	)
Stock loan receivable		(7,610,147	)		(7,610,147	)
Additional paid in capital-		288,199,959			284,072,666
Accumulated deficit		(302,326,206	)		(304,581,773	)
Total stockholders’ deficit		(22,367,615	)		(28,761,981	)
Total liabilities and stockholders’ deficit	$	861,405		$	4,018,048