What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-03-31 compared with 2020-05-27 · 557 added, 759 removed, 311 unchanged (81% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company is authorized to issue 100,000,000,000

of its $0.00001 par value common stock and 20,000,000 shares of its $0.00001 par value preferred stock Series B and 10,000 shares

of its $0.00001 par value preferred stock Series C, 100,000 shares of its $0.00001 par value preferred Series D shares, 2,000,000

of its $0.00001 par value preferred Series G shares and 40,000 of its $0.00001 par value preferred Series H shares.

As of December

31, 2019, 16,536,351 shares of common stock, as well as 45,000 shares of preferred stock Series B, 700 shares of preferred stock

Series C, zero shares of preferred stock Series D, zero shares of preferred stock Series G and 20,000 shares of preferred stock

Series H were issued and outstanding.

As of May 27_2020, 171,496,091 shares of common stock, as well as 45,000 shares of preferred

stock Series B, 700 shares of preferred stock Series C, zero shares of preferred stock Series D, zero shares of preferred stock

Series G and 20,000 shares of preferred stock Series H are issued and outstanding.

The Board of Directors reserves the right to

issue shares of preferred stock in the future indicating preference or rights as appropriate.

common stock commenced quotation on the OTC PINK under the symbol “GTCH”.

The Company’s subsequent symbol was

“GOPH”.

MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Company is authorized to issue 100,000,000,000 of its $0.00001 par value common stock and 20,000,000 shares of its $0.00001 par

value preferred stock Series B and 10,000 shares of its $0.00001 par value preferred stock Series C, 100,000 shares of its $0.00001

par value preferred Series D shares, 2,000,000 of its $0.00001 par value preferred Series G shares and 40,000 of its $0.00001

par value preferred Series H shares.

As of December 31, 2020, 256,674,458 shares of common stock, as well as 45,000 shares of

preferred stock Series B, 700 shares of preferred stock Series C, zero shares of preferred stock Series D, zero shares of preferred

stock Series G and 20,000 shares of preferred stock Series H were issued and outstanding.

As of March 24, 2021, 493,110,305 shares

of common stock, as well as 45,000 shares of preferred stock Series B, 700 shares of preferred stock Series C, zero shares of

preferred stock Series D, zero shares of preferred stock Series G and 20,000 shares of preferred stock Series H are issued and

The Board of Directors reserves the right to issue shares of preferred stock in the future indicating preference

or rights as appropriate.

common stock commenced quotation on the OTC PINK under the symbol GTCH.

The Companys subsequent symbol was

The following table sets forth the range of high and low prices per share of our common stock for each period

indicated (after given effect to reverse split of1 for 100 split)

Quarters Ended

number of holders of record for our common stock as of April 10, 2020 was 88.

number of holders of record for our common stock as of March 24, 2021 was 89.

Company has not yet adopted any policy regarding payment of dividends.

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19, 2019, the Company changed transfer agents, replacing West Coast Stock Transfer, located in Encinitas, CA with Nevada Agency

and Transfer Company (“NATCO”) with a business address at 50 West Liberty Street, Suite 880, Reno NV 89501;

NATCO’s

and Transfer Company (NATCO) with a business address at 50 West Liberty Street, Suite 880, Reno NV 89501;

website is www.natco.com , and their phone number is (775) 322-0626.

common stock is considered “penny stock”

under the rules the Securities and Exchange Commission (the “SEC”)

common stock is considered penny stock under the rules the Securities and Exchange Commission (the SEC)

under the Securities Exchange Act of 1934.

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a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading;

a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the

customer with respect to a violation to such duties or other requirements of Securities’

a description of the brokers or dealers duties to the customer and of the rights and remedies available to the

customer with respect to a violation to such duties or other requirements of Securities laws;

contains a brief, clear,

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of the marker for such stock;

account statements showing the market value of each penny stock held in the customer’s account.

account statements showing the market value of each penny stock held in the customers account.

addition, the penny stock rules that require that prior to a transaction in a penny stock not otherwise exempt from those rules;

the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and

receive the purchaser’s written acknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions

receive the purchasers written acknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions

involving penny stocks, and a signed and dated copy of a written suitably statement.

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the year ended December 31, 2020, the Company had the following transactions in its common stock:

an aggregate of 9,500 shares to employees and board members as part of their compensation

agreements with the Company.

The value of the common stock of $235,900 was determined

based on the closing stock price of the Company’s common stock on the grant date;

74,762 shares to an investor for the conversion of $1,357,200 in convertible notes and

$62,934 in accrued interest;

an aggregate of 140,138,107 for the conversion of convertible notes of $1,306,489 and accrued interest of $4,590;

100,000,000 shares to GBT Tokenize for a joint venture agreement.

The value of the common stock of $5,500,000 was determined based

on the closing stock price of the Companys common stock on the grant date.

the year ended December 31, 2019, the Company had the following transactions in its common stock:

an aggregate of 9,500 shares to employees and board members as part of their compensation agreements with the Company.

of the common stock of $235,900 was determined based on the closing stock price of the Companys common stock on the grant

74,762 shares to an investor for the conversion of $1,357,200 in convertible notes and $62,934 in accrued interest;

59,820 shares to an investor for disputed penalties on a convertible debenture.

of the common stock of $975,065 was determined based on the closing stock price of the

Company’s common stock on the grant date;

200,267 shares to Latinex in order to provide that Latinex may maintain its required

regulatory capital as required by various regulators.

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.

The value of the common stock

was determined based on the closing stock price of the Company’s common stock on

the grant date;

The value of the common stock of $975,065 was

determined based on the closing stock price of the Companys common stock on the grant date;

200,267 shares to Latinex in order to provide that Latinex may maintain its required regulatory capital as required by various

The Company has recorded the value ($7,610,147) 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.

The value of the common stock was determined

based on the closing stock price of the Companys common stock on the grant date;

10,000,000 shares in connection with a joint venture with BitSpeed.

The value of the

common stock of $17,900,000 was based on the closing price of the Company’s common

stock on the closing date;

The value of the common stock of $17,900,000 was based on

the closing price of the Companys common stock on the closing date;

4,566,214 shares in connection with the cashless exercise of 6,120,000 warrants;

200,000 shares that were returned in connection with the Company’s sale of its

investment with Mobiquity.

(See Note 5).

The shares were valued based on the Company’s

stock price on the date of the agreement.

the year ended December 31, 2018, the Company had the following transactions in its common stock:

660,000 shares in connection with the conversion of 66,000 shares of Series D Preferred

20,000 shares in connection with the conversion of 2,000,000 shares of Series G Preferred

2,500 shares to a consultant for professional services rendered valued at $123,725.

value of the common stock was determined based on the closing stock price of the Company’s

common stock on the dates that the shares earned based on the agreement;

18,000 shares to employees and board members as part of their agreements with the Company.

The value of the common stock of $4,404,500 was determined based on the closing stock

price of the Company’s common stock on the date of the respective agreements;

30,000 to a consultant for services related to assisting the Company with the acquisition

of the RWJ assets.

The 3,000,000 shares were earned when the operations of the RWJ assets

produced revenue in excess of $10,000,000.

The value of the common stock of $4,590,000

was determined based on the closing stock price of the Company’s common stock on

the date of the shares were earned.

aggregate of 1,2,500 shares to a consultant for services rendered valued at $2,715,000.

The services, which include business development, analysis, and interaction with professionals,

were principally related to assisting the Company with the acquisition of the ECS and

Electronic Check assets (see Note 3).

The value of the common stock was determined based

on the closing stock price of the Company’s common stock on the closing date of

acquisition of ECS and Electronic Check;

5,000 shares for the acquisition of the ECS assets valued at $1,010,000.

the common stock was determined based on the closing stock price of the Company’s

common stock on the acquisition date;

2,500 shares for the acquisition of the Electronic Check valued at $695,000.

of the common stock was determined based on the closing stock price of the Company’s

common stock on the acquisition date;

100,000 shares in connection with its equity interest in Mobiquity valued at $9,980,000

(See Note 6).

The value of the common stock was determined based on the closing stock

price of the Company’s common stock on the closing date of the Mobiquity transaction;

an additional 100,000 shares to Mobiquity valued at $3,90,000 for payment of the exercise

price for 20,000,000 warrants previously granted to the Company.

(See Note 6).

of the common stock was determined based on the closing stock price of the Company’s

common stock on the date of issuance;

10,000 shares to a consultant for services rendered valued at $998,000.

The services,

which include business development, analysis, and interaction with professionals, were

principally related to assisting the Company with the acquisition of its equity interest

in Mobiquity.

The value of the common stock was determined based on the closing stock

price of the Company’s common stock on the closing date of Mobiquity transaction;

125,000 shares to Guardian LLC in connection the termination of its 50% interest in the

profits of certain of the Company’s products (See Note 11).

The shares were valued

at $11,750,000 which was determined based on the closing stock price of the Company’s

common stock at the date of the agreement;

3,245 shares to Bellridge for the conversion of $275,000 in convertible notes and $17,075

in accrued interest;

94,992 shares to an investor for the conversion of $2,000,000 in convertible notes and

$6,521 in accrued interest;

3,186 shares to Bellridge pursuant to the limited price protection.

The shares were valued

at $213,451 which was charged to financing cost was determined based on the closing stock

price of the Company’s common stock on the date of issuance;

20,000 shares to a consultant for services rendered in connection with the issuance of

the Company’s common stock as payment of the exercise price for the Mobiquity warrants

valued at $780,000.

The value of the common stock was determined based on the closing

stock price of the Company’s common stock on the date of issuance;

20,000 shares to a consultant for services rendered in connection with the issuance of

the Company’s common stock as payment of the exercise price for the Mobiquity warrants

valued at $780,000.

20,000 shares to Eagle Equities LLC as a result of the Company issuing shares of common

stock for less than $30.00 pursuant to an agreement with Eagle Equities.

The shares were valued at $670,000 which was charged to financing cost was determined

based on the closing stock price of the Company’s common stock on the date the

Company issued shares for less than $30.00;

937 shares to a consultant for services rendered valued at $30,000.

The value of the

common stock was determined based on the closing stock price of the Company’s common

stock on the date of issuance;

12,727 shares of common stock to an investor for cash proceeds of $1,500,000 (See discussion

500 shares pursuant to the settlement of a legal matter.

Equities, LLC

December 29, 2017, the Company entered into a Securities Purchase Agreement with Eagle Equities, LLC (“Eagle”) pursuant

to which Eagle agreed to purchase up to 20,000 shares of the Company’s common stock for a purchase price of $1,500,000 or

$75.00 per share.

The closing occurred on December 29, 2017 with respect to the funding of $1,000,000 resulting in the issuance

of 13,333 shares of common stock (the “First Closing Shares”).

Eagle agreed to potentially purchase an additional

6,667 shares of common stock (the “Second Closing Shares”) on or before March 31, 2018 for a purchase price of $500,000

subject to various closing conditions.

On March 21, 2018, Eagle purchased an additional 6,667 shares of common stock for a purchase

price of $500,000.

Company placed an aggregate of 20,000 shares of common stock (the “Escrow Shares”) in escrow to be utilized for the

purpose of limited price protection.

If, beginning on the seventh month anniversary of the issuance of the First Closing Shares

and Second Closing Shares, Eagle has sold any of the First Closing Shares or the Second Closing Shares at a sales price of less

than $72.00 per share, then that number of Escrow Shares shall be released from escrow to Eagle as a limited make whole which

shall be determined by using the following formula:

Closing Price) / Closing Price) * number of shares sold at a price less than $72.00.

Price is price on the first day of each monthly anniversary beginning on the first day of the 7th month (and continuing monthly

until the earlier of January 31, 2019 or until all shares are sold).

Company shall deposit an additional 20,000 shares of common stock into escrow which shares shall only be released to Eagle, if,

prior to January 31, 2019 (while Eagle continues to hold shares), the Company issues shares at an issue price of less than $30.00

Company also issued Eagle a Common Stock Purchase Warrant to acquire 6,667 shares of common stock exercisable for three years

at an exercise price of $200.00 per share (the “Eagle Warrant”).

Unless otherwise agreed in writing by both the Company

and Eagle, at no time will Eagle exercise any amount of the Eagle Warrant to purchase common stock that would result in Eagle

owning more than 9.9% of the common stock outstanding of the Company.

The Eagle Warrant contains standard anti-dilution protections.

May 4, 2018, the Company entered into a Securities Purchase Agreement with Eagle pursuant to which Eagle agreed to purchase up

to 12,121 shares of the Company’s common stock for an aggregate purchase price of $2,000,000 or $165.00 per share.

occurred on May 4, 2018 with respect to the funding of $500,000 resulting in the issuance of 3,030 shares of common stock and

on May 25, 2018 with respect to the funding of $500,000 resulting in the issuance of an additional 3,030 shares of common stock.

Additional closings of $500,000 for 303,030 shares are scheduled to close on June 15, 2018 and July 5, 2018 each.

The additional

closings on June 15, 2018 and July 5, 2018 have not occurred.

Company agreed to place 3,030 shares of common stock each tranche (the “Escrow Shares”) in escrow to be utilized for

the purpose of limited price protection.

If, beginning on the seventh month anniversary of the closing of each tranche, Eagle

has sold any of its shares of common stock at a sales price of less than $165.00 per share, then that number of Escrow Shares

shall be released from escrow to Eagle as a limited make whole which shall be determined by using the following formula:

Closing Price) / Closing Price) * number of shares sold at a price less than $165.00.

Price is price on the first day of each monthly anniversary beginning on the first day of the 7th month (and continuing monthly

until the earlier of June 4, 2019 or until all shares are sold.

200,000 shares that were returned in connection with the Companys sale of its investment with Mobiquity.

The shares were

valued based on the Companys stock price on the date of the agreement.

B Preferred Shares

November 1, 2011, the Company and certain creditors entered into a Settlement Agreement (the “Settlement Agreement”)

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

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and obligations between the parties.

Series B Preferred Stock has a stated value of $100 per share and is convertible into the Company’s common stock at a conversion

Series B Preferred Stock has a stated value of $100 per share and is convertible into the Companys common stock at a conversion

price of $30.00 per share representing 30 posts split common shares.

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April 29, 2011, GV Global Communications, Inc.

(“GV”) provided funding to the Company in the aggregate principal amount

of $111,000 (the “Loan”).

(GV) provided funding to the Company in the aggregate principal amount

of $111,000 (the Loan).

On September 25, 2012, the Company and GV entered into a Conversion Agreement

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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

Price for each share is equal to a 50% discount to the average of the lowest three lowest closing bid prices of the Companys

common stock during the 10-day trading period prior to the conversion with a minimum conversion price of $0.02.

stated value is $11.00 per share (the “Stated Value”).

stated value is $11.00 per share (the Stated Value).

The Series C Preferred Stock has no liquidation

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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.

to convert the Series C Preferred Stock and receive shares of the Companys common stock such that the number of shares

of the Companys 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 Companys common stock.

the year ended December 31, 2014, GV Global Communications, Inc.

converted 7,770 of its Series C Preferred Stock into 120 post-split.

converted 7,770 of its Series C Preferred Stock into 120 post-splits.

During the third quarter of 2014, the Company received 42 post-split common shares to adjust the shares issued to reflect the

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D Preferred Shares

the terms of the Exclusive License Agreement and in consideration of the licensing agreement signed between the Company and Hermes

Roll LLC, the Company issued 100,000 shares of Series D Preferred Stock of the Company (the “Preferred Shares”).

preferred stock has a value of $ 1,000 based upon the cost of the license;

due to the holder of license is the related party of

The Preferred Shares have no liquidation rights.

The Holder of the Preferred Shares will be entitled to vote on all

matters submitted to shareholders of the Company on an as-converted basis.

The Preferred Shares have a conversion price of $0.01

(the “Conversion Price”) and a stated value of $10.00 per share (the “Stated Value”).

Each Preferred Share

is convertible, at the option of the Holder, into such number of shares of common stock of the Company as determined by dividing

the Stated Value by the Conversion Price.

January 23, 2018, Reko Holdings, LLC converted 66,000 shares of its Series D Preferred Stock into 660,000 restricted common shares.

of December 31, 2020, and 2019, there are 0 and 0 shares of Series D Preferred Shares outstanding, respectively.

G Preferred Shares

December 29, 2017, Guardian LLC converted all of the principal and interest of the Note, into 2,000,000 shares of Series G Preferred

The Series G Preferred Stock is entitled to vote on an as-converted basis, automatically converts to common stock upon

any liquidation, dissolution or winding up and the Company may not declare a dividend until the Series G Preferred Stock has received

Each share of Series G Preferred Stock is convertible into one shares of common stock of the Company and contain standard

anti-dilution rights.

August 30, 2018, Guardian LLC converted the 2,000,000 shares of Series G Preferred Stock into 20,000 shares of common stock.

of December 31, 2020, and 2019, there are 0 and 0 shares of Series G Preferred Shares outstanding, respectively.

H Preferred Shares

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

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 shareholders representative of

GBT-CR (Gonzalez), entered into and closed an Exchange Agreement (the GBT Exchange Agreement) pursuant

to which the parties exchanged certain securities.

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20,000 shares of Series H Convertible Preferred Stock of the Company and a Convertible Note in the principal amount of $10,000,000

issued by the Company (the “Gopher Convertible Note”) as well as additional consideration.

issued by the Company (the Gopher Convertible Note) as well as additional consideration.

The Gopher Convertible

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H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible

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.

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 Companys acquisition of 25% of GBT-CR.

Consultant will provide

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(See Note 14 for further details.)

of December 31, 2019, there are 20,000 shares of Series H Preferred Shares outstanding.

of December 31, 2020, and 2019, there are 20,000 shares of Series H Preferred Shares outstanding.

following is a summary of warrant activity.

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dividend yield

a result of the above mentioned reverse stock split, the Company issued 25,245,000 warrants to purchase shares of the Company’s

a result of the above-mentioned reverse stock split, the Company issued 25,245,000 warrants to purchase shares of the Companys

common stock with exercise prices ranging from $0.50 to $2.70 per share as a result of an anti-dilutive clause in certain of the

Company’s outstanding warrants.

Companys outstanding warrants.

The fair value of these warrants was $120,476,603 which is shown as a charge to earnings

on the accompanying financial statements.

the years ended December 31, 2018, the Company issued:

warrants in connection with two convertible notes payable;

warrants as consideration for the acquisition of the ECS assets (see Note 3) valued at

warrants as consideration for the acquisition of the Electronic Check assets (see Note

3) valued at $682,919;

warrants to shares to employees and board members as part of their agreements with the

Company valued at $5,443,039;

warrants to a consultant for services rendered.

The services, which include business

development, analysis, and interaction with professionals, were principally related to

assisting the Company with the acquisition of the ECS and Electronic Check assets (see

Note 3) valued at $3,661,791;

warrants in connection with a convertible note issued to investor;

938 warrants pursuant to the settlement of a legal matter.

shares of common stock described above have not been registered under the Securities Act of 1933, as amended (the “Securities

Act”) and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities

Act and Rule 506 of Regulation D promulgated thereunder.

Each of the parties is an accredited investor as defined by Rule 501

under the Securities Act.

on the accompanying financial statements for the year ended December 31, 2019.

SELECTED FINANCIAL DATA

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Selected Financial Data.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

following discussion should be read in conjunction with our financial statements and related notes included elsewhere in this

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”

which could cause actual results to differ materially from managements expectations.

See Forward-Looking Statements

included in this report.

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with the Securities and Exchange Commission.

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

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.

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for the years ended December 31, 2020 and 2019 are compared in the sections below.

Technologies Inc (f/k/a Gopher Protocol Inc., the “Company”, “we”, “us”, “our”,

“Gopher”, “Gopher Protocol”

, “GOPH”, “GTCH”, or “GBT”) was incorporated

on July 22, 2009 under the laws of the State of Nevada and is headquartered in Santa Monica, California.

The Company is creating

and patenting innovative mobile microchip (ICs) and software technologies based on the GopherInsight ™

Technologies Inc.

(f/k/a Gopher Protocol Inc., the Company, we, us, our,

GBT, Gopher, Gopher Protocol, GOPH, GTCH, or GBT)

was incorporated on July 22, 2009 under the laws of the State of Nevada and is headquartered in Santa Monica, California.

Company is creating and patenting innovative mobile microchip (ICs) and software technologies based on the GopherInsight ™

technology platform.

Effective August 5, 2019, the Company changed its name from Gopher Protocol Inc.

to GBT Technologies Inc.

also offers prepaid cellular phone minutes for both domestic and international carriers.

In addition, the Company offers cellular

activation (activating SIM cards with wireless carriers) to create additional users (consumers) on those networks and provides

check processing, verification and recovery solutions for small to medium sized businesses.

The Company has historically derived

revenues from (i) the provision of IT services;

(ii) from the operations of the assets that include the sale of phones, phone

card products, prepaid cellular phone minutes and cellular activation and (iii) from the licensing of its technology.

March 16, 2018 ( “Closing Date”), the Company entered into and closed an Asset Purchase Agreement dated March 1, 2018

(the “ECS Purchase Agreement”) with ECS Prepaid LLC (“ECS”), a Missouri limited liability company, pursuant

to which the Company purchased certain assets from ECS, including, but not limited to, the processing prepaid platform, servers,

POS terminals, customer list, a processing software program and goodwill, in consideration of $1,100,000 of which $100,000 was

paid on the Closing Date and the balance is to be paid pursuant to a secured promissory note in the amount of $1,000,000 (the

“ECS Note”).

In addition, the Company issued 500,000 shares of common stock of the Company (the “ECS Shares”)

and warrants to purchase 500,000 shares of common stock (the “ECS Warrants”).

The ECS Warrants were assigned by ECS

to Dennis Winfrey.

The ECS Warrants are exercisable for a period of five years at a fixed exercise price of $1.85 per share and

contain standard anti-dilution protection.

Under the ESC Note, which is secured by the assets acquired by the Company from ECS,

the Company is required to make ten equal payments of $100,000 commencing on April 15, 2018.

The Company may prepay the ECS Note

at any time without penalty.

The ECS Note is a short-term debt obligation that is material to the Company.

April 2, 2018 (“Closing Date”), the Company entered into and closed an Asset Purchase Agreement (the “Electronic

Purchase Agreement”) with Electronic Check Services Inc.

(“Electronic Check”), a Missouri corporation, pursuant

to which the Company purchased certain assets from Electronic Check, including, but not limited to, assets associated with software

that validates written check authenticity, in consideration of $75,000 paid on the Closing Date.

In addition, the Company issued

250,000 shares of common stock of the Company (the “Electronic Shares”) and warrants to purchase 250,000 shares of

common stock (the “Electronic Warrants”).

The Electronic Warrants were assigned by Electronic Check to Dennis Winfrey,

the shareholder of Electronic Check.

The Electronic Warrants are exercisable for a period of five years at a fixed exercise price

of $2.70 per share and contain standard anti-dilution protection.

April 2, 2018, the Company entered into and closed an Asset Purchase Agreement (the “Central Purchase Agreement”)

with Central State Legal Services Inc.

(“Central”), a Missouri corporation, pursuant to which the Company purchased

certain assets from Central, including, but not limited to, assets associated with the a system to recover funds from returned

checks, in consideration of $25,000 paid on the Closing Date.

Derron Winfrey, the COO of the Company, is a director and President

of Electronic Check and Central.

Derron Winfrey’s parents are the shareholders of Check and Central.

or around November 10, 2017, UGopherServices experienced a suspension of operations on the terminals that the Company acquired

in its acquisition on September 1, 2017 from RWJ Advanced Marketing LLC.

Management of the Company believes that this shutdown

came as a result of the decision of Paypal Holdings Inc.

(“Paypal”) decision to suspend operations of TIO Networks

(“TIO”), and appears to have affected all of TIO’s customers.

TIO was acquired by Paypal in or around July 2017.

Prior to the suspension, the Company received no notice from TIO, or from RWJ Advanced Marketing LLC, which sold the assets to

UGopherServices, that the suspension would be taking place.

Although the Company worked diligently to contain the fallout from

the suspension of operations by TIO, the vast majority of the customers that were acquired as part of the transaction defected

The subsequent acquisition of ECS was done partly to stem the customer defections, as many of the customers of UgopherServices

sought the services of ECS.

In doing so, the Company got many, though not all, of the customers back.

On a combined basis, there

were approximately 9,400 points of sale as a result of acquiring certain assets from both RWJ Advanced Marketing LLC and ECS.

Company is currently in litigation with RWJ Advanced Marketing, LLC, its executives and other third parties, and wrote off a substantial

portion of its investment in UgopherServices from September 1, 2017.

The Company’s position is that it was defrauded by

the Seller and certain third parties due to the lack of disclosure of TIO’s decision to suspend operations.

September 30, 2019, the Company entered into an Asset Purchase Agreement 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 in consideration of $5,000,000 to be paid through the

issuance of 3,333,333 shares of SURG’s common stock and a convertible promissory note in favor of the Company in the principal

amount of $4,000,000.

The 3,333,333 shares of SURG’s common stock have been pledged to a third party for providing working

capital needs of the Company.

The ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses have

been presented as discontinued operations on the accompanying financial statements.

September 4, 2018, the Company and Mobiquity Technologies, Inc., a New York corporation (“Mobiquity”) entered an agreement

pursuant to which the parties exchanged equity interest in each of the companies.

In accordance with the agreement, the Company

received 1,000 shares of Mobiquity’s restricted Series AAAA Preferred Stock (the “Mobiquity Preferred Stock”)

in consideration of Company’s concurrent sale and issuance to Mobiquity of 10,000,000 shares of Company’s common stock.

The shares of Mobiquity Preferred Stock are convertible into an aggregate of up to 100,000,000 shares of Mobiquity common stock

(the “Mobiquity Common Stock”) and 150,000,000 common stock purchase warrants (the “Mobiquity Warrants”).

The Mobiquity Warrants shall have a term of 5-years from the date of grant and shall be exercisable at a price of $0.12 per share

and the shares of Mobiquity Preferred Stock shall not be convertible into shares of Mobiquity Common Stock and the Mobiquity Warrants

shall not be contemporaneously granted until after Mobiquity’s Board of Directors and stockholders shall have increased

the authorized number of shares of Mobiquity’s common stock to a number sufficient to accommodate a reserve in the Company’s

favor of 250,000,000 shares of Mobiquity’s common stock.

The Mobiquity Preferred Stock shall have immediate voting rights

equal to the number of shares of Mobiquity Common Stock into which they may be converted, not including the shares of Mobiquity’s

common stock underlying the Mobiquity Warrants.

November 19, 2018, the Company and Mobiquity entered into an Amendment and Exercise Letter waiving the requirement that Mobiquity’s

Board of Directors and stockholders increase the authorized number of shares of Mobiquity’s common stock to a number sufficient

to accommodate a reserve in the Company’s favor of 250,000,000 shares of Mobiquity’s common stock prior to the conversion

of the Mobiquity Preferred Stock or exercise of the Mobiquity Warrants.

In addition, the Company converted 200 shares of Mobiquity

Preferred Stock resulting in the issuance to the Company by Mobiquity of 20,000,000 shares of Mobiquity Common Stock and 30,000,000

Mobiquity Warrants.

The Company exercised the 30,000,000 Mobiquity Warrants at an exercise price of $0.12 per share of common

stock, payable through of the issuance to Mobiquity of 10,000,000 shares of common stock of the Company.

addition, the Company issued 20,000 shares of common stock to Glen Eagles Acquisition LP (“GEAL”) in consideration

of its consulting services associated with the negotiation of the number of shares of common stock to be delivered to Mobiquity

upon exercise of the Mobiquity Warrants.

a result of the transaction on September 4, 2018, the Company had an approximate 21% interest in Mobiquity and began to account

for its investment in Mobiquity using the equity method of accounting.

During the fourth quarter of 2018, Mobiquity issued additional

shares of common stock resulting in the Company’s ownership in Mobiquity dropping to approximately 18% at December 31, 2018.

The Company determined that during the fourth quarter of 2018 that it did not exercise significant influence over Mobiquity due

to its decreased ownership percentage and the Company’s intent to begin selling shares of Mobiquity common stock that will

further decrease its ownership percentage.

As a result, during the fourth quarter of 2018 the Company began accounting for its

investment in Mobiquity as a marketable equity security.

February 6, 2019, the Company entered into a letter agreement with Gopher Protocol Costa Rica Sociedad De Responsabilidad Limitada,

a Costa Rican company (“Gopher CR”) and a 50% owned subsidiary of the Company, pursuant to which the Company sold

30,000,000 shares of Mobiquity Technologies, Inc., a New York corporation (“Mobiquity”) to Gopher CR in the principal

amount of $5,000,000 secured by all of the assets of Gopher CR payable with 10% interest on the two-year anniversary.

May 10, 2019, the Company entered into a Membership Interest Purchase Agreement with GEAL pursuant to which the Company acquired

49% of the membership interest in Advangelists, LLC (the “AVNG Interest”) in consideration of the assumption of a

Promissory Note payable by GEAL to the former owners of the AVGN Interest with an outstanding balance of $7,475,000 (the “AVNG

Note”) and cancellation of an outstanding Promissory Note payable by GEAL to the Company in the amount of $1,200,000 originally

issued on March 1, 2019.

Concurrently, the Company entered into a Membership Interest Purchase Agreement with Mobiquity pursuant

to which the Company sold the AVNG Interest to Mobiquity in consideration of Mobiquity assuming the AVNG Note and Mobiquity amending

the terms of the Remaining Mobiquity Warrant providing for cashless exercise.

Company paid 60,000,000 of its Mobiquity shares as partial consideration for the purchase of GBT Technologies, S.

August 6, 2019, Mobiquity delivered a counter signed letter agreement dated August 2, 2019 pursuant to which the Company exchanged

120,000,000 Mobiquity Warrants into 20,000,000 shares of Mobiquity common stock, which resulted in the Company holding 60,000,000

shares of Mobiquity common stock.

September 10, 2019, the Company entered into (i) a Stock Purchase Agreement with Mobiquity pursuant to which the Company agreed

to return 15,000,000 shares of Mobiquity common stock to Mobiquity in exchange for 110,000 shares of common stock of the Company,

(ii) a Stock Purchase Agreement with Marital Trust GST Subject U/W/O Leopold Salkind (“Salkind Trust”) pursuant to

which the Company agreed to sell 7,000,000 shares of Mobiquity common stock to Salkind Trust in consideration of $67,200, (iii)

Stock Purchase Agreement with Dr.

Gene Salkind (“Salkind”) pursuant to which the Company agreed to sell 28,000,000

shares of Mobiquity common stock to Salkind in consideration of $268,000 and (iv) a Stock Purchase Agreement with Deepanker Katyal

(“Katyal”) pursuant to which the Company agreed to sell 10,000,000 shares of Mobiquity common stock to Katyal in consideration

of 90,000 shares of common stock of the Company.

The closing of the agreements occurred on September 13, 2019.

As a result of

these transactions, the Company realized a loss on the sale of Mobiquity common stock of $3,673,595.

At December 31, 2019, the

Company owned no shares of Mobiquity common stock.

Technologies, S.A.

(“GBT”)

September 14, 2018, the Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the “GBT

License Agreement”) with GBT, a fully compliant and regulated cryptocurrency exchange platform that currently operates in

Costa Rica as a decentralized cryptocurrency platform, pursuant to which, among other things, the Company granted to GBT 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:

Application Number:

collectively, the “Digital Currently Technology”).

Pursuant to the GBT License Agreement, the Company granted GBT 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 during the period starting in which revenue is first generated using the licensed products and continuing

for five years thereafter.

Upon signing the GBT License Agreement, GBT paid the Company $300,000, which is nonrefundable.

Company has recognized the $300,000 as revenue during the year ended December 31, 2018.

Upon GBT making available for sale (the

“Commercial Event”) an ICO (Initial Coin Offering) (the “Coin”), GBT will make a payment to the Company

in the amount of $5,000,000.

Further, upon the Commercial Event, GBT 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 advanced

$200,000 to the Company, which the parties have agreed will be applied toward the $5,000,000 fee when it becomes due.

is recorded as unearned revenue at December 31, 2019 in the accompanying consolidated balance sheet.

As of the date of this filing,

the Commercial Event has not yet occurred.

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 in exchange for the issuance of

20,000 shares of Series H Convertible Preferred Stock of the Company and a Convertible Note in the principal amount of $10,000,000

issued by the Company (the “Gopher Convertible Note”) as well as the transfer and assignment of a Promissory Note

payable by Gopher Protocol Costa Rica Sociedad De Responsabilidad Limitada to the Company in the principal amount of $5,000,000

dated February 6, 2019 (of which the underlying security for this Promissory Note is 30,000,000 restricted shares of common stock

of Mobiquity) and 60,000,000 restricted shares of common stock of Mobiquity.

Gopher Convertible Note bears interest of 6% per annum and 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 ($10.00 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.

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.

Company accounts for its investment in GBT-CR using the equity method of accounting.

December 31, 2019, the Company evaluated the carrying amount of this equity investment and determined that an impairment charge

of $31,239,517 was necessary.

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 200,267 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.

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

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.

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 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

The Company shall appoint two directors and BitSpeed shall appoint one director of GBT BitSpeed.

In addition, GBT BitSpeed

Davis entered into a Consulting Agreement in which Mr.

Davis is engaged to provide services in consideration of $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

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 is two years.

The closing of the BitSpeed Agreement occurred on

October 14, 2019.

December 31, 2019, the Company evaluated the carrying amount of this joint venture investment and determined that an impairment

charge of $17,900,000 was necessary.

to GBT Technologies

The Company has historically derived revenues from (i) the provision of IT services;

and (ii) from the licensing of its technology.

Company is targeting additional growing markets:

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.

Tokenize Joint Venture

March 6, 2020, the Company through its newly acquired wholly owned subsidiary, Greenwich International Holdings, a Costa Rica

corporation (“Greenwich”), entered into a Joint Venture and Territorial License Agreement (the “Tokenize Agreement”)

corporation (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”).

(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”).

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

2 unchanged sentences

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.

enterprises and startups (Technology Portfolio), throughout the State of California.

Upon generating any revenue

2 unchanged sentences

The Company shall

contribute 100,000,000 shares of common stock of the Company (“GBT Shares”) to GBT Tokenize.

contribute 100,000,000 shares of common stock of the Company (GBT Shares) to GBT Tokenize.

Tokenize and the Company

6 unchanged sentences

of $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.

the Companys 10-day VWAP.

Gonzalez will provide services in connection with the development of the business as well as

GBT Tokenize’s capital raising efforts.

GBT Tokenizes capital raising efforts.

The term of the Consulting Agreement is two years.

1 unchanged sentence

occurred on March 9, 2020.

This investment was fully impaired as of March 31, 2020.

this Joint Venture, the parties commenced development of a development of an intelligent human vital signs device, suggested

The platform is an expansion of the existing license agreement with GBT Tokenize Corp., which provided GBT Tokenize

with an exclusive territory of California to develop certain of the Companys technology.

As the nature of the platform

cannot be restricted only to California, the Companys 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

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

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.

by the global pandemic, causing the Companys resources to be affected.

Our business operations have been and may continue

2 unchanged sentences

COVID-19 is considered to be highly contagious and poses a serious public health threat.

March 19, 2020, the California Governor announced the lockdown of California in an attempt to slow the spread of the virus.

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.

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.

the first quarter of 2020, the COVID-19 outbreak has caused disruptions in our development operations, which have resulted in

10 unchanged sentences

of Operations:

Ended December 31, 2019 and December 31, 2018

ended December 31, 2020 and 2019

comparison of the statements of operations for the year ended December 31, 2020 and 2019 is as follows:

Year Ended December 31,

Cost of goods sold

Years Ended December 31,

Sales - related party

Operating expenses

Loss from operations

(177,050,691 )

(45,408,929 )

(131,641,762 )

Other expense

(10,354,953 )

Loss before provision for income taxes

(187,405,644 )

(51,378,269 )

(136,027,375 )

Provision for income taxes

Loss from continued operations

(187,405,644 )

(51,378,269 )

(136,027,375 )

Discontinued operations

$ (186,505,119 )

$ (51,769,670 )

Sales for both the years ended December 31, 2020 and

2019 were $180,000.

Sales are derived from providing IT consulting services to a related party.

Operating expenses for the year ended December 31,

2020 were $7,952,836, compared to $176,637,100 for the same period in 2019.

The decrease of $168,684,264 or 95.5% was principally due

to the fair value of warrants issued of $120,476,603 as a result of anti-dilution provisions in certain warrants previously issued and

a charge took for the impairment of assets of $48,631,534 during the year ended December 31, 2019.

There were no such expenses in 2020.

Other expense for the year ended December 31, 2020

was $11,206,839, an increase of $851,886 or 8.2% from $10,354,953 for the same period in 2019.

The decrease is principally due to i) a

change in the fair value of the derivative liability, ii) a decrease in amortization of discount and interest and financing costs;

iii) a decrease in realized and unrealized loss on a marketable equity security.

The operating results of our discontinued operations

for Ugopherservices, ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses for the year ended December

31, 2020 and 2019 is summarized below:

Years Ended December 31,

Cost of revenue

Operating expenses

Loss from operations

Other income (expenses)

$ (1,074,869 )

for the year ended December 31, 2019 were $19,277,058, compared to $14,507,869 for the year ended December 31, 2018.

of $4,769,189 or 32.9% was a result of increased sales generated from a new contract from our Ugo subsidiary.

gross margins for the year ended December 31, 2019 were 5.3%, compared to 7.8% for the same period in 2018.

The change in the

gross margin was due to licensing revenue generated during the year ended December 31, 2018 that had a very high gross margin.

expenses for the year ended December 31, 2019 were $177,067,794, compared to $46,539,037 for the same period in 2019.

of $131,528,757 or 282.6% was due to the fair value of warrants issued of $120,476,603 as a result of anti-dilution provisions

in certain warrants previously issued and a charge $48,631,534 related to the impairment of assets during the year ended December

31, 2019 compared to a charge of $7,132,286 during 2018;

offset by i) a decrease in common stock issued for services that went

from $13,641,225 for the year ended December 31, 2018 to $235,900 for the same period in 2019;

ii) a decrease in warrants issued

for services that went from $7,881,028 for the year ended December 31, 2018 to $766,804 for the same period in 2019;

a decrease in a charge of $11,750,000 during 2018 related to the buyout of a profit participation agreement with Guardian LLC.

expense for the year ended December 31, 2019 was $10,354,953, an increase of $4,385,613 from $5,969,340 for the same period in

The increase is principally due to an increase in unrealized loss on marketable equity security, as well as an increase

in the change in fair value of the derivative liability, offset by realized gains on settlement of debt.

loss for the year ended December 31, 2019 was $186,505,119 compared to $51,769,670 for the same period in 2018 due to the factors

described above.

and Capital Resources

cash was $59,634 and $1,863,510 at December 31, 2019 and 2018, respectively.

Cash used in operating activities during the year

ended December 31, 2019 was $6,623,463, compared to cash provided by operating activities of $4,651,829 during the same period

Significant differences exist between the periods, including common stock and warrants issued for services, amortization

of intangible assets, amortization of debt discount, financing costs, impairment of assets and unrealized gain on marketable equity

Our working capital position worsened going from a working capital deficit of $3,797,666 at December 31, 2018 to a

working capital deficit of $11,830,572 at December 31, 2019, principally as a result of the decrease in marketable equity securities;

an increase in accounts payable and accrued expenses;

an increase in accrued settlement and an increase in note payable.

flows used in investing activities were $1,152,418 during the year ended December 31, 2019, compared to $479,979 for the same

period in 2018.

The increase is due to the amount paid for an investment during the year ended December 31, 2019.

Cash from financing

activities for the year ended December 31, 2019 was $5,972,005, compared to $5,690,256 for the same period in 2018.

is due to the issuance of a convertible notes and the sale of common stock in 2019.

sustained net losses of $186,505,119 for the year ended December 31, 2019.

In addition, we had a working capital deficit of $11,830,572

and accumulated deficit of $252,656,451 at December 31, 2019.

In September of 2017 we purchased the assets of RWJ Advanced Marketing,

LLC , and then after ECS Prepaid LLC, Electronic Check Services, Inc.

As a result of the disposition of Ugopherservices,

ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses, the Company recognized a gain on the disposition

of discontinued operations of $1,001,711 and $1,381,803 for the year ended December 31, 2020 and 2019, respectively.

Net loss for the year ended December 31, 2020 was

$17,994,888 compared to $186,505,119 for the same period in 2019 due to the factors described above.

Liquidity and Capital Resources

Our cash was $113,034 and $59,634 at December 31,

2020 and 2019, respectively.

Cash used in operating activities during the year ended December 31, 2020 was $994,426, compared to $6,623,463

during the same period in 2019.

Significant differences exist between the periods, including warrants issued for services, change in fair

value of derivative liability, financing costs, impairment of assets and unrealized gain (loss) on marketable equity securities.

capital position worsened going from a working capital deficit of $11,712,886 at December 31, 2019 to a working capital deficit of $27,710,040

at December 31, 2020, principally as a result of an increase in accounts payable and accrued expenses;

an increase in derivative liability;

an increase in convertible notes payable;

offset by a decrease in note payable.

Cash flows used in investing activities were $231,771

during the year ended December 31, 2020, compared to $1,152,418 for the same period in 2019.

The decrease is due to the amount paid for

an investment during the year ended December 31, 2020.

Cash from financing activities for the year ended December 31, 2020 was $1,279,597,

compared to $5,972,005 for the same period in 2019.

The decrease is due to the issuance of convertible notes and notes payable in 2019.

We sustained net losses of $17,994,888 for the year

ended December 31, 2020.

In addition, we had a working capital deficit of $27,710,040 and accumulated deficit of $270,651,339 at December

September of 2017 we purchased the assets of RWJ Advanced Marketing, LLC, and then after ECS Prepaid LLC, Electronic Check Services,

and Central States Legal Services, Inc.

ECS have historically generated significant revenues which we do not expect to continue in the future, as the Company divested

its investment in ECS Prepaid LLC, Electronic Check Services, Inc.

RWJ and ECS have historically generated significant revenues which we do

not expect to continue in the future, as the Company divested its investment in ECS Prepaid LLC, Electronic Check Services, Inc.

and Central States Legal Services, Inc.

on or around September

2019, left only with the acquired assets from RWJ Advanced Marketing, LLC which in litigation, as disclosed in this report.

addition, during the last half of 2018 and the first few months of 2019, the Company has raised approximately $9,500,000 of net

proceeds through the issuance of convertible debt and notes payable (see discussion below).

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 third quarter

on or around September 2019, left only with the acquired assets from RWJ Advanced Marketing,

LLC which in litigation, as disclosed in this report.

In addition, during the last half of 2018 and the first few months of 2019,

the Company has raised approximately $9,500,000 of net proceeds through the issuance of convertible debt and notes payable (see

discussion below).

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

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 end of 2020.

In 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 future of which there is no guarantee that the Company will be able to successfully raise such capital on acceptable

With the cash flow received from recent convertible debt and notes payable, the future sale of our marketable equity securities,

the conversion of the convertible notes receivable into marketable equity securities and ultimately into cash, and additional

cash anticipated to be raised in the near future, we believe we will have sufficient cash to meet our obligations for the next

The Company will need to raise additional capital in the future of which there is no guarantee that the Company will be able to

successfully raise such capital on acceptable terms.

With the current cash on hand, cash in our attorneys trust account

and additional cash anticipated to be raised in the future, we believe we will have sufficient cash to meet our obligations for

the next 12 months.

for GBT Technologies S.

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% per annum and is payable at maturity on December

At the election of the holder, the convertible note can be converted into a maximum of 20,000 shares of Series H Preferred

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).

The convertible note is convertible into common

stock at a fixed price that was higher than the Company’s common stock on the date of grant, therefore, this convertible

note does not contain a beneficial conversion feature.

The holders of the note notify the Company about legal procedure they commenced

against the company in Costa Rica with regard this note.

The company was not served with any lawsuit.

Eagles Glen Eagles Acquisition LP - 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 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

The Company shall pay Glen $1,000,000 through the issuance of a 6% Convertible Note.

At the election of Glen, the Convertible

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.

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of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($10.00 per

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

In addition, the Company enter 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

Acquisition Note -In connection with the acquisition of RWJ in September 2017, the Company issued a $2,600,000 note payable.

The note accrues interest at 3.5% per annum, is due on December 31, 2019 and is secured by the assets purchased in the acquisition.

This note has not been repaid and in litigation bbetweenn the Company, RWJ and third parties (see Item 3 –

The convertible note is convertible into common stock at a fixed price that was higher than the Companys

common stock on the date of grant, therefore, this convertible note does not contain a beneficial conversion feature.

split (See Note 1) the conversion feature is substantially not in the money.

The parties along with Stanley Hills, LLV as potential

funder are in negotiations to address the issue per the Note holder demands to mitigate its damages.

There is no guarantee that

the Company will be successful in resolving this issue.

Eagles Acquisition LP

July 8, 2019, the Company entered a Consulting Agreement with Glen Eagles Acquisition LP (Glen) as consultant to

provide services in connection with the Companys acquisition of 25% of GBT Technologies, S.A., a Costa Rican corporation

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 ($10.00 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 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

Glen in turn converted all its $1,250,000 considerations received into 2,500,000 SURG shares.

The open aged credit balance

derived from the above with Glen as off the date of this report is $45,000.

Acquisition Note

connection with the acquisition of RWJ in September 2017, the Company issued a note payable.

The note accrues interest at 3.5%

per annum, was due on December 31, 2019 and is secured by the assets purchased in the acquisition.

The Company contests the validity

of the note, as such the note has not been repaid as of December 31, 2020.

(see Item 3 –

Legal Proceedings).

Acquisition Note - In connection with the acquisition of ECS, the Company issued a note payable.

The note is to be repaid

in monthly installment payments of $100,000 with the final payment due on January 15, 2019.

The Company imputed interest of 9%

on this note payable.

The balance of this note payable was paid in full in January 2019.

December 3, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with an otherwise unaffiliated

third-party institutional investor (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.

On January 31, 2020, in the arbitration

titled GBT Technologies Inc.

(k/n/a Gopher Protocol, Inc.

Discover Growth Fund, LLC (“Discover”) (JAMS Ref.

1260005395), the Company was informed that a final award was entered (the “Final Award”).

The Final Award affirms

that certain sections of the Senior Secured Redeemable Convertible Debenture (the “Debenture”) constitute unenforceable

liquidated damages penalties and were stricken.

Further, it was determined that neither Discover nor John Kirkland, President

and General Partner of Discover, were entitled to recovery of their attorneys fees.

Consequently, and consistent with the expectations

of the Company, the arbitrator awarded Discover an award of $4,034,444.46 plus interest of 7.25% accrued from May 15, 2019 and

costs in the amount of $55,613.00.

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 Discover’s application

to confirm the Final Award filed in the U.S.

of the note at December 31, 2020 is $2,600,000 plus accrued interest of $307,631.

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 Companys outstanding common stock immediately

after exercise.

The outstanding principal amount may be converted at any time into shares of the Companys 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

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 attorneys 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

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 Investors application to confirm the Final Award filed

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 issue regarding whether Discover’s rights are subordinated to other creditors and, thereafter, oversee

a commercially reasonable foreclosure sale (Case No:

3 :20-cv-00012-CVG-RM) (the Virgin Island Court).

February 27, 2020, the Nevada Court denied the Companys 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 Investors 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 Discover relative to those of other creditors must be

determined before any foreclosure sale can proceed.

It was further the position of the Company that the previously disclosed foreclosure

sale scheduled by Discover 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, Discover advised that it conducted a sale of the Company’s assets.

It was the Companys 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 Companys 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.

October 16, 2020, Investor motion was denied.

Up Lending Group

February 18, 2020, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd., an accredited investor

(“Power Up”) pursuant to which the Company issued to Power Up a Convertible Promissory Note (the “Power Note”)

(Power Up) pursuant to which the Company issued to Power Up a Convertible Promissory Note (the Power Note)

in the aggregate principal amount of $183,600 for a purchase price of $153,000.

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2021 and the Company has agreed to pay interest on the unpaid principal balance of the Power Note at the rate of six percent (6%)

per annum from the date on which the Power Note is issued (the “Issue Date”) until the same becomes due and payable,

per annum from the date on which the Power Note is issued (the Issue Date) until the same becomes due and payable,

whether at maturity or upon acceleration or by prepayment or otherwise.

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on the date that is 180 days following the Issue Date.

Following the 180 th day, Power Up may convert the Power Note

into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price

with a 15-day look back immediately preceding the date of conversion.

Following the 180th day, Power Up may convert the Power Note into shares

of the Companys common stock at a conversion price equal to 85% of the lowest trading price with a 15-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 Power Note), the Power Note shall become immediately due and payable and the Company shall pay to

Power Up, in full satisfaction of its obligations hereunder, additional amounts as set forth in the Power Note.

During 2020, the

full amount of the Power Note ($183,600) plus $4,590 of accrued interest was converted into shares of the Companys common

Holdings Corp.

August 4, 2020, the Company entered into a Securities Purchase Agreement with Redstart Holdings Corp., an accredited investor

(Redstart) pursuant to which the Company issued to Redstart a Convertible Promissory Note (the Redstart Note

1) in the aggregate principal amount of $153,600 for a purchase price of $128,000.

The Redstart Note No.

1 has a maturity

date of November 3, 2021 and the Company has agreed to pay interest on the unpaid principal balance of the Redstart Note No.

at the rate of six percent (6%) per annum from the date on which the Redstart Note No.

1 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.

1, provided it makes a payment including a prepayment to Redstart as set forth

in the Redstart Note No.

The transactions described above closed on August 5, 2020.

outstanding principal amount of the Redstart Note No.

1 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.

1 into shares

of the Companys 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.

In addition, upon the occurrence and during the continuation of an Event

of Default (as defined in the Redstart Note No.

1), the Redstart Note No.

1 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

In February 2021 Note No.

1 was converted into shares in full.

September 15, 2020, 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.

2) in the aggregate principal amount of $93,600

for a purchase price of $78,000.

The Redstart Note No.

2 has a maturity date of September 15, 2021 and the Company has agreed

to pay interest on the unpaid principal balance of the Redstart Note No.

2 at the rate of six percent (6%) per annum from the

date on which the Redstart Note No.

2 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.

2, provided it makes a payment including a prepayment to Redstart as set forth in the Redstart Note No.

The transactions described

above closed on September 16, 2020.

The outstanding principal amount of the Redstart Note No.

2 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.

2 into shares of the Companys 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.

In addition, upon the occurrence and

during the continuation of an Event of Default (as defined in the Redstart Note No.

2), the Redstart Note No.

2 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.

(In March 2021 Note No.

2 was converted into shares in full.

December 9, 2020, 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.

3) in the aggregate principal amount of $100,200

for a purchase price of $83,500.

The Redstart Note No.

3 has a maturity date of December 9, 2021 and the Company has agreed to

pay interest on the unpaid principal balance of the Redstart Note No.

3 at the rate of six percent (6%) per annum from the date

on which the Redstart Note No.

3 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.

it makes a payment including a prepayment to Redstart as set forth in the Redstart Note No.

The transactions described above

closed on December 11, 2020.

The outstanding principal amount of the Redstart Note No.

3 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.

3 into shares of the Companys 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.

In addition, upon the occurrence and during

the continuation of an Event of Default (as defined in the Redstart Note No.

3), the Redstart Note No.

3 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.

February 10, 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.

4) in the aggregate principal amount of $184,200

for a purchase price of $153,500.

The Redstart Note No.

4 has a maturity date of February 5, 2022 and the Company has agreed to

pay interest on the unpaid principal balance of the Redstart Note No.

4 at the rate of six percent (6%) per annum from the date

on which the Redstart Note No.

4 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.

it makes a payment including a prepayment to Redstart as set forth in the Redstart Note No.

The transactions described above

closed on February 10, 2021.

The outstanding principal amount of the Redstart Note No.

4 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.

4 into shares of the Companys 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.

In addition, upon the occurrence and during

the continuation of an Event of Default (as defined in the Redstart Note No.

4), the Redstart Note No.

4 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.

March 15, 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.

5) in the aggregate principal amount of $106,200 for

a purchase price of $88,500.

The Redstart Note No.

5 has a maturity date of June 15, 2022 and the Company has agreed to pay interest

on the unpaid principal balance of the Redstart Note No.

5 at the rate of six percent (6%) per annum from the date on which the

Redstart Note No.

5 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.

5, provided it makes

a payment including a prepayment to Redstart as set forth in the Redstart Note No.

The transactions described above closed

on March 17, 2021.

The outstanding principal amount of the Redstart Note No.

5 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

5 into shares of the Companys 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.

In addition, upon the occurrence and during the continuation

of an Event of Default (as defined in the Power Note), the Power Note shall become immediately due and payable and the Company

shall pay to Power Up, in full satisfaction of its obligations hereunder, additional amounts as set forth in the Power Note.

February 27, 2019, the Company entered into a note purchase agreement with a third party investor, pursuant to which the Company

issued a promissory note for the original principal amount of $2,325,000.

The promissory note had an original issue discount of

$300,000 and the inventor paid consideration of $2,025,000 to the Company.

The outstanding balance of the promissory note is to

be paid on the one-year anniversary of the issuance of the note.

Interest on the note accrues at the rate of 10% per annum compounding

Subject to the terms and conditions set forth in the note, the Company may prepay all or any portion of the outstanding

balance of the note at any time in an amount in cash equal to 120% of the amount repaid.

In connection with transactions that

generate less than $1,000,000 in proceeds, the Company has agreed to not issue any debt instrument or incurrence of any debt other

than trade payables in the ordinary course of business, any securities or agreements to sell common stock with anti-dilution or

price reset/reduction features or any securities that are or may be become convertible or exercisable into common stock with a

price that varies with the market price of the common stock (collectively, “Restricted Issuance Transaction”).

outstanding balance of the Note will be increased by 5% in the event the Company enters into a Restricted Issuance Transaction

that is approved by Iliad.

The original issue discount in being amortized to interest expense over the term of the promissory

February 27, 2020, the Company and Iliad entered to an Amendment to the Iliad Note pursuant to which the maturity date of the

Iliad Note was extended to August 27, 2020, provided that the Debt may be converted into shares of common stock of the Company

at a conversion price equal to 80% multiplied by the lowest trading daily VWAP for the common stock during the 20 trading day

period ending on the latest complete trading day prior to the conversion date, provided for the payment by the Company to Iliad

of an extension fee equal to 7.5% of the outstanding balance of the Iliad Note resulting in a new balance of the Iliad Note of

$2,765,983 and provided that the Company’s failure to deliver shares of common stock within three trading days of a conversion

would result in an event of default.

Iliad has agreed to restrict its ability to convert the Iliad Note 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 9.99% of the then issued and outstanding shares of common stock.

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”) since May 2019 up to December 2019.

of an Event of Default (as defined in the Redstart Note No.

5), the Redstart Note No.

5 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.

Research and Trading

February 27, 2019, the Company entered into a note purchase agreement with a third-party investor - Iliad Research and Trading,

L.P.(Iliad), pursuant to which the Company issued a promissory note for the original principal amount of $2,325,000.

The promissory note had an original issue discount of $300,000 and the inventor paid consideration of $2,025,000 to the Company,

of which $25,000 was paid for legal expenses.

The outstanding balance of the promissory note is to be paid on the one-year anniversary

of the issuance of the note.

Interest on the note accrues at the rate of 10% per annum compounding daily.

Subject to the terms

and conditions set forth in the note, the Company may prepay all or any portion of the outstanding balance of the note at any

time in an amount in cash equal to 120% of the amount repaid.

In connection with transactions that generate less than $1,000,000

in proceeds, the Company has agreed to not issue any debt instrument or incurrence of any debt other than trade payables in the

ordinary course of business, any securities or agreements to sell common stock with anti-dilution or price reset/reduction features

or any securities that are or may be become convertible or exercisable into common stock with a price that varies with the market

price of the common stock (collectively, Restricted Issuance Transaction).

The outstanding balance of the Note will

be increased by 5% in the event the Company enters into a Restricted Issuance Transaction that is approved by Iliad.

issue discount is being amortized to interest expense over the term of the promissory note.

On February 27, 2020, the Company

and Iliad entered into an Amendment to the Iliad Note pursuant to which the maturity date of the Iliad Note was extended to August

27, 2020, provided that the Debt may be converted into shares of common stock of the Company at a conversion price equal to 80%

multiplied by the lowest trading daily VWAP for the common stock during the 20 trading day period ending on the latest complete

trading day prior to the conversion date, provided for the payment by the Company to Iliad of an extension fee equal to 7.5% of

the outstanding balance of the Iliad Note resulting in a new balance of the Iliad Note of $2,765,983 and provided that the Companys

failure to deliver shares of common stock within three trading days of a conversion would result in an event of default.

agreed to restrict its ability to convert the Iliad Note 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 9.99% of

the then issued and outstanding shares of common stock.

On July 20, 2020 the Company and Iliad entered into agreement to extend

the maturity of the Iliad Note until February 27, 2021 in consideration of an extension fee of $1,000.

During 2020, Iliad converted

$539,000 of its convertible note to 53,175,795 shares of the Companys common stock.

The balance of the Iliad debt at December

31, 2020 was $2,446,746, including accrued interest of $14,905.

On February 28, 2021 the Company and Iliad entered into agreement

to further extend the maturity of the Iliad Note until May 31, 2021 in consideration of an extension fee of $1,000 representing

the third extension of the original note.

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) since May 2019 up to December 2019.

On February 26, 2020, in order to induce

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The Stanley Debt is secured via a pledge agreement on the SURG

The Company agreed that Stanley will hold title to the SURG shares which was completed on or about April 16, 2020 where

the 3,333,333 SURG shares been vested under Stanley name.

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

On or about January 27, 2020 the Company agreed that Stanley will hold title to the SURG shares which was completed on

or about April 16, 2020 where the 3,333,333 SURG shares been vested under Stanley name.

On or about June 23, 2020, Stanley Hills

LLC (Stanley) which holds a pledge of 3,333,333 shares of SURG common stock via its manager/member (Stanleys

Member), acting as an agent for the Company, entered into an agreement with SURG, its transfer agent and an escrow officer

for which it was agreed that 3,333,333 SURG shares will be cancelled for consideration of up to $700,000.

The amount of $575,170

was received into a lawyers trust account, and 3,333,333 of SURG shares have been sent for cancelation.

On August 12, 2020,

the Company and its subsidiary, AltCorp Trading LLC, entered into a new pledge agreement with Stanley, where 5,500,000 SURG shares

been pledged to Stanley to secure the debt payable by the Company to Stanley as well as mitigate the damages allegedly created

Technologies, S.A.

June 17, 2019, the Company, Altcorp Trading LLC, a Costa Rica company and a wholly-owned subsidiary of the Company (Altcorp),