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Item 9A. Controls and Procedures

2023-04-12 compared with 2022-03-25 · 2516 added, 1952 removed, 751 unchanged (86% of the section changed)

3 unchanged sentences

We maintain a system of disclosure

controls and procedures (as defined in Securities Exchange Act Rule 15d-15(e)) that are designed to ensure that information required to

controls and procedures (as defined in Securities Exchange Act Rule 15d-15I) that are designed to ensure that information required to

be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under

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Exchange Act Rule 15d-14 as of the end of the period covered by this report.

Based on the foregoing evaluation, our management has concluded

Based on the foregoing evaluation, our management concluded

that our disclosure controls and procedures are not effective in timely alerting management to material information required to be included

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includes those policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of our assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of

our financial statements in accordance with generally accepted accounting principles, and

that our receipts and expenditures are being made only in accordance with authorizations

of our management and directors;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use of disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are

subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

Pertain to the maintenance

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

Provide reasonable assurance

that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted

accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management

and directors;

Provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use of disposition of our assets that could have a material

effect on the financial statements.

Because of its inherent limitations, ICFR reporting

may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may

All internal control systems, no matter how well designed, have inherent limitations.

Therefore, even those

systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal

control over financial reporting as of December 31, 2021.

Based on this assessment, management believes that as of December 31, 2021,

our internal control over financial reporting is not effective based on those criteria.

Therefore, even those systems determined

to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our ICFR

reporting as of December 31, 2022.

Based on this assessment, management believes that as of December 31, 2022, our ICFR reporting is not

effective based on those criteria.

This annual report does not include an attestation

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Current Directors/Officers:

Michael Murray

President and Director

Danny Rittman

1 unchanged sentence

Mansour Khatib

Chief Executive Officer, Chief Financial Officer and Director

Michael Murray is

a licensed and UST Certified NMLS Originator, a licensed mortgage banker, a real estate broker and a licensed general contractor.

1998 through August 2012, Mr.

Murray held the position of Broker and DRE Officer with Home Plus Realty, Inc.

From August 2012 through

May 2013, Mr.

Murray held the positions of FHA Production and Save Team with Cash-call Mortgage, Inc.

and since May 2013 to the present,

Murray has been self-employed as a Consultant and Managing Broker.

Murray received an M.A.

in Public Relations from California

Baptist University in May 2014 and a B.A.

in Political Science from California Baptist University in May 2013.

Murray is President

of the Company, and a director.

Chief Executive Officer, Chief Financial Officer and

Danny Rittman

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2014 through the present, Dr.

Rittman has served as the CTO and as a director of the Company, leading the Company’s technological

direction and managing teams of mobile software developers.

Rittman served as the CTO and as a director of the Company, leading the Company’s technological direction

and managing teams of mobile software developers.

From 2012, through 2014, Dr.

Rittman served as a Senior Integrated Circuit

Consultant for Qualcomm / Max Linear, managing teams of integrated circuit designers within the mobile technology arena.

Rittman served as a Senior Integrated Circuit Consultant

for Qualcomm / Max Linear, managing teams of integrated circuit designers within the mobile technology arena.

From 2007 through 2012,

Rittman served as the Founder and CTO of Micrologic Design Automation, leading the company’s technological direction,

including architecture, design and development of EDA software tools.

Rittman served as the Founder and CTO of Micrologic Design Automation, leading the company’s technological direction, including

architecture, design and development of EDA software tools.

From 2002 through 2007, Dr.

Rittman served as an Integrated Circuit

CAD / Software Senior Consultant for IBM, managing IC back-end projects and leading back-end CAD and QA software tool development and

implementation.

Rittman served as an Integrated Circuit CAD /

Software Senior Consultant for IBM, managing IC back-end projects and leading back-end CAD and QA software tool development and implementation.

From 1995 through 2002, Dr.

Rittman served as the Founder and VP of R&D for Bind-key Technologies, leading the company’s

technological direction, research and development of EDA software tools for integrated circuits and back-end design.

Rittman received

a BS in Electrical Engineering - VLSI Design from the University of Bridgeport, graduating Magna Cum Laude in 1992;

a MS in Computer Science

Rittman served as the Founder and VP of R&D for Bind-key Technologies, leading the company’s technological

direction, research and development of EDA software tools for integrated circuits and back-end design.

Rittman received a BS in Electrical

Engineeri–g - VLSI Design from the University of Bridgeport, graduating Magna Cum Laude in 1992;

a MS in Computer Scien–e

- VLSI Design, specializing in Automation Algorithms, from La Salle University, graduating Magna Cum Laude in 1996;

and a PhD in Computer

Science - VLSI Design, specializing in EDA Concepts and Algorithms, from La Salle University, graduating Summa Cum Laude in 1998.

Scien–e - VLSI Design, specializing in EDA Concepts and Algorithms, from La Salle University, graduating Summa Cum Laude in 1998.

Rittman is the Company’s CTO and director.

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appointed as the Company Chief Executive and Financial Officer on April 13, 2020, the Company’s Board of Directors appointed Mansour

Khatib, who has served as the Chief Marketing Officer and a director of the Company as Chief Executive Officer.

Khatib, who served as the Chief Marketing Officer and a director of the Company as Chief Executive Officer.

Khatib has also previously

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executive officers has:

a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at

the time of the bankruptcy or within two years prior to that time.

convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor

subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,

permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities

or banking activities.

found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated

a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization,

any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members

or persons associated with a member.

Had a bankruptcy petition

filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy

or within two years prior to that time.

Been convicted in a criminal

proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses.

Been subject to any order,

judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily

enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.

Been found by a court of

competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or

state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Been the subject to, or

a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered

entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons

associated with a member.

Corporate governance

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Agreements with Officers and Directors

On April 22, 2015, Michael Murray was appointed by

the Company as the Chairman of the Board of Directors, CEO, and President of the Company.

On March 4, 2015, the Company entered into a

Territorial License Agreement with Hermes, which later been revoked and granted again by Tokenize It – it is the basis for the Company’s

current operations.

On June 30, 2015, the Company appointed Dr.

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employment agreement is terminated.

On August 1, 2021, the Company and Danny Rittman, Chief Technology Officer and a Director of the Company,

agreed to amend his employment agreement pursuant to which he will receive salary at the rate of $5,000 per month.

On April 16, 2016 (the “Effective Date”),

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his employment agreement pursuant to which he will receive salary at the rate of $5,000 per month.

On August 1, 2021, the Company and Danny Rittman,

Chief Technology Officer and a Director of the Company, agreed to amend his employment agreement pursuant to which he will receive salary

at the rate of $5,000 per month.

Delinquent Section 16(a) Reports

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Non-Qualified

Name and principal

and principal

Michael Murray

1 unchanged sentence

Danny Rittman

Chief Technology Officer and director

Technology Officer and director

Mansour Khatib

Chief Executive Officer and director

Douglas Davis (1)

former Chief Executive Officer

Executive Officer and director

(1) On June 17, 2022 Michael Murry Michael Murray resigned as the President

and Director of the Company so that he may fully devote all of his efforts to GBT Tokenize Corp.

and Metaverse Kit Corp.

The compensation discussed herein addresses all compensation

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pension, or profit-sharing plans for the benefit of our sole officer and director other than as described herein.

Resigned as the Chief Executive Officer in April 2020.

Director Compensation

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Outstanding Equity Awards at Fiscal Year-End

The following table sets forth all unexercised warrants

and unvested restricted stock that have been awarded to our named executives by the Company and were outstanding as of December 31, 2021.

Name and principal Position

securities underlying unexercised warrants exercisable (#)

securities underlying unexercised warrants unexercisable (#)

Equity incentive

Number of securities underlying unexercised unearned options (#)

Warrant exercise

Warrant expiration date

Number of shares or units of stock that have not vested (#)

of shares or units of stock that have not vested

Equity incentive

Number of unearned shares, units or other rights that have not vested (#)

E quity incentive

Market or payout value of unearned shares, units or other rights that have not vested ($)

Michael Murray

President and director

SECURITY OWNERSHIP

OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets

forth information with respect to the beneficial ownership of the Common Stock as of March 23,

2022 by (i) each person known by the Company to own beneficially more than 5% of the outstanding Common Stock;

(ii) each director of the

(iii) each officer of the Company and (iv) all executive officers and directors as a group.

Except as otherwise indicated below,

each of the entities or persons named in the table has sole voting and investment powers with respect to all shares of Common Stock beneficially

owned by it or him as set forth opposite its or his name.

Name of Beneficial Owner

As of December 31, 2022, no new warrants was awarded

to the executives.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The following table sets forth information with respect to the beneficial

ownership of the Common Stock as of March 31, 2023 by (i) each person known by the Company to own beneficially more than 5% of the outstanding

Common Stock;

(ii) each director of the Company;

(iii) each officer of the Company and (iv) all executive officers and directors as a

Except as otherwise indicated below, each of the entities or persons named in the table has sole voting and investment powers

with respect to all shares of Common Stock beneficially owned by it or him as set forth opposite its or his name.

of Beneficial Owner

Danny Rittman (2)

Mansour Khatib (3)

GBT Tokenize Corp (4)

All Officers and Directors as a Group

Beneficial ownership is determined in accordance with the Rule 13d-3(d)(1) of the Exchange Act, as amended and generally includes voting or investment power with respect to securities.

Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of common stock that an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person shown in the table.

Tokenize Corp (4)

Officers and Directors as a Group

Beneficial ownership is determined in accordance with the Rule 13d-3(d)(1)

of the Exchange Act, as amended and generally includes voting or investment power with respect to securities.

Pursuant to the rules and

regulations of the Securities and Exchange Commission, shares of common stock that an individual or group has a right to acquire within

60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership

of such individual or group, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other

person shown in the table.

The above is based on 2,930,101,819 shares of common stock outstanding as of March 31, 2023

Murray is President of the company, and a director.

He holds a warrant for 4,000,000 shares of the Company’s common stock.

Current Officer and Director of the Company.

GBT Tokenize Corp is a 50/50 Joint venture between the Company and Tokenize-It S.A.

which was assigned on June 30, 2021 to Magic International Argentina F.C, S.L.

Controlled by Sergio Fridman, a third party GBT Tokenize Corp hold 16,000,000 shares of the Company’s common stock.

Current Officer and Director

of the Company.

Metaverse Kit Corp is a 50/50 Joint venture between the Company and ldar

Gainulin and Maria Belova.

which was assigned on June 10, 2022 to ldar Gainulin and Maria Belova.

The company contributed 500,000,000

share of the common stock to Metaverse Kit.

Tokenize Corp is a 50/50 Joint venture between the Company and Tokenize-It S.A.

which was assigned on June 30, 2021 to Magic International Argentina

Controlled by Sergio Fridman, a third party GBT Tokenize Corp hold 16,000,000 shares of the Company’s common

April 11, 2022 the company, through its own subsidiary, Greenwich International Holdings, entered

into a Master Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Magic Internacional Argentina

(“Magic”) and Tokenize which replaced a prior joint venture entered between the parties , Controlled by

Sergio Fridman, a third party GBT Tokenize Corp to hold an additional 150,000,000 shares of the Company’s common stock

No Director, executive officer, affiliate or any owner

1 unchanged sentence

has a material interest adverse to the Company.

On June 10, 2022, (the Company, entered into

a Joint Venture and Territorial License Agreement (the “Metaverse Agreement”) with Ildar Gainulin and Maria Belova

(collectively, the “Licensor”).

Under the Metaverse Agreement, the parties formed Metaverse Kit Corp., a Nevada corporation

(“Metaverse Kit”).

The purpose of Metaverse Kit was to develop, maintain and support source codes for its proprietary

technologies and comprehensive platform that combines a core virtual reality platform and an extended set of real-world functions

to provide a metaverse experience initially within the area of sports and then expanding into virtual worlds of entertainment,

live events, gaming, communications and other cross over product opportunities (the “Meta Portfolio”).

Under the Metaverse

Agreement, Licensor agreed to provide Metaverse Kit with the licensed technology and expertise.

In connection therewith, the parties

entered an Asset Purchase Agreement (the “Metaverse APA”) concurrently with the Metaverse Agreement whereby Licensor

sold Metaverse Kit all source codes pertaining to the Meta Portfolio.

Further, Licensor provided an exclusive license to Metaverse

Kit throughout the world for the invented product/service and the related platforms relating to the Meta Portfolio and to use the

know how to develop, manufacture, sell, market and distribute the Meta Portfolio throughout the world.

The Company was required

to contribute 500,000,000 shares of common stock of the Company (“GBT Shares”) to Metaverse Kit.

Licensor and the Company

were to each own 50% of Metaverse Kit.

The Company issued 500,000,000 shares to Metaverse for certain equity method investment.

The value of the shares of $5,000 was determined based on the FV of the Company’s common stock.

The Company pledged

its 50% ownership in Metaverse Kit to Igor 1 Corp.

to secure a convertible note held by Igor 1 Corp.

The Company was to appoint

two directors and Licensor was allowed to appoint one director of Metaverse Kit.

In addition, Metaverse Kit, Licensor and Elentina

Group, LLC (“Elentina”) entered into a Consulting Agreements in which IGBM and Elentina, each were engaged to provide

services for $25,000 per month payable quarterly which Metaverse Kit has the option to pay in shares of common stock calculated

by the amount owed divided by the Company’s 10-day VWAP.

Licensor and Elentina were to provide services in connection with

the development of the business as well as Metaverse Kit’s capital raising efforts.

The term of the Consulting Agreement

was two years.

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

On March 14, 2023, the Company received a counter

signed Settlement Agreement and Release by Licensor dated March 2, 2023 (“Settlement Agreement”).

Pursuant to the Settlement

Agreement, the parties agreed that Metaverse Agreement, the Metaverse APA and the Consulting Agreement are void and cancelled.

agreed to pay $5,000 to the Company as settlement payment and surrender their shares in Metaverse Kit.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

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Rittman’s employment agreement is terminated.

On September 1, 2017, the Company entered into and

closed an Asset Purchase Agreement with a third party, RWJ Advanced Marketing, LLC (“RWJ”), a Georgia corporation, pursuant

to which the Company purchased certain assets from RWJ, including inventory, terminals, licenses and permits and intangible assets.

closing, the Company and Mr.

On September 1, 2017, the Company entered into

and closed an Asset Purchase Agreement with a third party, RWJ Advanced Marketing, LLC (“RWJ”), a Georgia corporation,

pursuant to which the Company purchased certain assets from RWJ, including inventory, terminals, licenses and permits and intangible

At closing, the Company and Mr.

Greg Bauer entered into an Employment Agreement pursuant to which Mr.

Bauer was retained as Chief Executive

Officer for a term of one year, subject to an automatic extension, unless terminated, in consideration of a base salary of $250,000 and

a bonus of 10% of net profit generated by the assets acquired.

Bauer was also appointed to the Board of Directors of the Company.

Bauer was retained

as Chief Executive Officer for a term of one year, subject to an automatic extension, unless terminated, for a base salary of $250,000

and a bonus of 10% of net profit generated by the assets acquired.

Bauer was also appointed to the Board of Directors of the

As of the closing date, Mr.

Murray resigned as Chief Executive Officer of the Company but will remain as a director of the Company.

Murray resigned as Chief Executive Officer of the Company but will remain as a director of

Bauer, since 2004 through present, has served as executive director with W.L.

Petrey Wholesale, Inc.

where he was in charge of the UGO/Preway

The Company is in litigations in connection with RWJ transaction – See Note 15 - Contingencies.

was in charge of the UGO/Preway operations.

The Company is in litigations in connection with RWJ transaction.

On January 1, 2019, the Company and Douglas Davis

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upon the Company up-listing to a national exchange.

Davis was also entitled to the issuance of Stock Options to acquire an aggregate

of 50,000 shares of common stock of the Company, exercisable for five years, subject to vesting.

The options were to be earned and vested

(i) with respect to 20,000 shares of common stock on the date hereof, (ii) 5,000 shares of common stock upon the successful dual list

of the Company on an international exchange such as SIX Zurich Stock Exchange or Euronext, (iii) 15,000 shares of common stock upon the

successful up listing to a national exchange such as the Nasdaq, NYSE Euronext, TSX, AMEX or other, and (iv) with respect to 5,000 shares

of common stock at each of the six (6) month anniversaries (July 1, 2019 and January 1, 2020).

The exercise price of such options shall

be the closing price of the Company on the date prior to such event.

On October 10, 2019, the Company entered into a Joint

Venture Agreement (the “BitSpeed Agreement”) with BitSpeed LLC, which is owned by Douglas Davis, the Company’s Chief

Executive Officer, to form GBT BitSpeed Corp., a Nevada company (“GBT BitSpeed”).

The purpose of GBT BitSpeed is to develop,

maintain and support its proprietary Extreme Transfer Software Application Concurrency, a software application to transfer secure, accelerated

transmission of large file data over networks, and connection to cloud storage, Network-Attached Storage (NAS) and Storage Area Networks

(SANs) (“Concurrency”).

BitSpeed shall contribute the services and resources for the development of Concurrency to GBT BitSpeed.

The Company shall contribute 10 million shares of common stock (valued at $17,900,000) of the Company to GBT BitSpeed.

BitSpeed and the

Company will each own 50% of GBT BitSpeed.

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

Davis was also entitled to the issuance of Stock Options to acquire 50,000 shares

of common stock of the Company, exercisable for five years, subject to vesting.

The options were to be earned and vested (i) with respect

to 20,000 shares of common stock on the date hereof, (ii) 5,000 shares of common stock upon the successful dual list of the Company on

an international exchange such as SIX Zurich Stock Exchange or Euronext, (iii) 15,000 shares of common stock upon the successful up listing

to a national exchange such as the Nasdaq, NYSE Euronext, TSX, AMEX or other, and (iv) with respect to 5,000 shares of common stock at

each of the 6 month anniversaries (July 1, 2019 and January 1, 2020).

The exercise price of such options shall be the closing price of

the Company on the date prior to such event.

On October 10, 2019, the Company entered into

a Joint Venture Agreement (the “BitSpeed Agreement”) with BitSpeed LLC, which is owned by Douglas Davis, the Company’s

Chief Executive Officer, to form GBT BitSpeed Corp., a Nevada company (“GBT BitSpeed”).

The purpose of GBT BitSpeed

is to develop, maintain and support its proprietary Extreme Transfer Software Application Concurrency, a software application to

transfer secure, accelerated transmission of large file data over networks, and connection to cloud storage, Network-Attached Storage

(NAS) and Storage Area Networks (SANs) (“Concurrency”).

BitSpeed shall contribute the services and resources for the

development of Concurrency to GBT BitSpeed.

The Company shall contribute 10 million shares of common stock (valued at $17,900,000)

of the Company to GBT BitSpeed.

BitSpeed and the Company will each own 50% of GBT BitSpeed.

The Company shall appoint two directors

and BitSpeed shall appoint one director of GBT BitSpeed.

In addition, GBT BitSpeed and Mr.

Davis entered into a Consulting Agreement in which Mr.

Davis is engaged to provide services 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.

Davis entered into a Consulting Agreement

Davis is engaged to provide services for $10,000 per month payable quarterly which may be paid in shares of common

stock calculated by the amount owed divided by the Company’s 20-day VWAP.

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

The closing of the BitSpeed Agreement occurred on October 14, 2019.

On April 11, 2020, Douglas Davis resigned as Chief Executive Officer of the Company so that he may fully devote all of his efforts to

GBT Tokenize Corp., the Company’s joint venture, which intends to develop a new product.

Davis’ resignation was not the

result of any disagreements with management or board of directors of the Company.

On March 6, 2020, the Company through Greenwich, entered

into the Tokenize Agreement with Tokenize, which is owned by a Costa Rica Trust represented by Gonzalez.

Gonzalez also represents Gonzalez

Costa Rica Trust, which holds a note in the principal amount of $10,000,000 and is also a shareholder of the Company.

On April 11, 2020, Douglas Davis resigned as Chief

Executive Officer of the Company so that he may fully devote all of his efforts to GBT Tokenize Corp., the Company’s joint

venture, which intends to develop a new product.

Davis’ resignation was not the result of any disagreements with management

or board of directors of the Company.

On March 6, 2020, the Company through Greenwich,

entered into the Tokenize Agreement with Tokenize, which is owned by a Costa Rica Trust represented by Gonzalez.

Gonzalez also

represents Gonzalez Costa Rica Trust, which holds a note of $10,000,000 and is also a shareholder of the Company.

Under the Tokenize

Agreement, the parties formed GBT Tokenize.

The purpose of GBT Tokenize is to develop Technology Portfolio, throughout the State of California.

Upon generating any revenue from the Technology Portfolio, the Joint Venture will earn the first right of refusal for other territories.

Tokenize shall contribute the services and resources for the development of the Technology Portfolio to GBT Tokenize.

The Company contributed

100,000,000 GBT Shares to GBT Tokenize.

Tokenize and the Company will each own 50% of GBT Tokenize.

The Company pledged its 50% ownership

in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment.

The Company shall appoint

two directors and Tokenize shall appoint one director of GBT Tokenize.

In addition, GBT Tokenize and Gonzalez entered into a Consulting

Agreement in which Gonzalez is engaged to provide services in consideration of $33,333.33 per month payable quarterly which may be paid

in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP.

Gonzalez will provide services in

connection with the development of the business as well as GBT Tokenize’s capital raising efforts.

The term of the Consulting Agreement

is two years.

The purpose of GBT Tokenize is to develop Technology Portfolio, throughout the State

of California.

Upon generating any revenue from the Technology Portfolio, the Joint Venture will earn the first right of refusal

for other territories.

Tokenize shall contribute the services and resources for the development of the Technology Portfolio to

GBT Tokenize.

The Company contributed 100,000,000 GBT Shares to GBT Tokenize.

Tokenize and the Company will each own 50% of GBT

The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology

Portfolio investment.

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

GBT Tokenize and Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged to provide services for $33,333 per

month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s

Gonzalez will provide services in connection with the development of the business as well as GBT Tokenize’s

capital raising efforts.

The term of the Consulting Agreement is two years.

The closing of the Tokenize Agreement occurred on March

Via this Joint Venture the parties commenced development

of a development of an intelligent human vital signs’ device, suggested named qTerm.

The platform is an expansion of the existing

license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp.

with an exclusive territory of California to develop certain

of the Company’s technology.

As the nature of the platform cannot be restricted only to California, the Company’s joint venture

GBT Tokenize Corp.

will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to

board approval.

A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO.

The application

has been assigned serial number 63001564.

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

suggested named qTerm.

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

Tokenize Corp.

with an exclusive territory of California to develop certain of the Company’s technology.

As the nature of

the platform cannot be restricted only to California, the Company’s joint venture GBT Tokenize Corp.

will be compensated

with additional two hundred million shares of the Company to strengthen its funding, subject to board approval.

A provisional patent

application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO.

The application has been assigned serial

number 63001564.

The Joint Venture completed successfully the first prototype.

There is no guarantee that the

Company will be successful in researching, developing or implementing this product into the market.

In order to successfully implement

this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted

regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing,

selling and distributing this product.

There is no guarantee that the Company will be successful

in researching, developing or implementing this product into the market.

In order to successfully implement this concept, the Company

will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval,

the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling

and distributing this product.

There is no guarantee that the Company will be successful in any or all of these critical steps.

On May 19, 2021, the Company

entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance plus accrued interest (the “Gonzalez

As explained above, on April 11, 2022 the Company,

through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into

a Master Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Magic International Argentina FC,

(“Magic”) and Tokenize which replaced a prior joint venture entered between the parties.

The purpose of Tokenize is to develop, maintain and

support source codes for its proprietary technologies including advanced mobile chip technologies, tracking, radio technologies, AI core

engine, electronic design automation, mesh, games, data storage, networking, IT services, business process outsourcing development services,

customer service, technical support and quality assurance for business, customizable and dedicated inbound and outbound calls solutions,

as well as digital communications processing for enterprises and startups (“Technology Portfolio”), throughout the world,

which Technology Portfolio was previously licensed to the Company for the State of California.

The Tokenize Agreement provides that the Company shall

contribute 150,000,000 shares of common stock of the Company (“GBT Shares”) to Tokenize.

Sergio Fridman is the manager of

Magic and the beneficial owner of all outstanding securities of Magic.

Magic will contribute cash of $250,000 into Tokenize for promissory

note and agreed to further fund Tokenize with all funds reasonably needed for implementation of the business purposes as described in

the Tokenize Agreement.

The GBT Shares will not be transferable for five years.

As of June 30, 2022, the Company received the $250,000

fund from Magic but the promissory note agreement has not been finalized yet.

Therefore, the Company recorded the $250,000 funds as an

account payable.

Magic and the Company each own 50% of the outstanding

shares of common stock of Tokenize.

The Company pledged its 50% ownership in Tokenize and its 100% ownership of Greenwich (the “Pledged

Securities”) to Magic for providing that Magic may take possession of such Pledged Securities in the event the Company executes,

delivers and performs any future agreement or document or judgement resulting in the creation of any lien, pledge, mortgage, claim, charge

or encumbrance upon any assets of the Company.

The Company shall appoint two directors and Magic shall appoint one director of Tokenize.

On June 16, 2022 the parties amended the Tokenize

Agreement to further define the constitution of the Board of Directors.

As such, Section 4.2 of the Tokenize Agreement was amended and

restated to provide that the Board of GBT Tokenize Corp.

shall consist of two Directors, one of whom shall be appointed by GBT Tokenize

and the other shall be appointed by the Company.

As of December, 31, 2022 and December 31, 2021, the

Company owed $505,000 and $475,000 to Yello Partners, Inc., a Company owned by the Mansour Khatib, the Company’s CEO.

Stanley Hills LLC Accounts

Payable – Related Party

On March 8, 2020, SURG filed a lawsuit against its

transfer agent, Vstock from transferring millions of SURG stock is currently in possession by the Company and assigned to Stanley Hills,

On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual Release and Settlement Agreement

(“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement, SURG agreed to amend the AltCorp Exchange Agreement

where SURG acknowledged a debt of $3,300,000 (the “Debt”) to be paid in 33 monthly payments of $100,000 payable in shares

of common stock of SURG at a per share price equal the volume weighted average price of Surg’s common stock during the ten trading

days immediately preceding the issuance.

SURG paid $400,000 in cash and $800,000 by shares.

The SURG common stock issued to Altcorp have

been pledged since August 12, 2020 for the benefit of Stanley to secure Stanley’s note payable by the Company.

Accordingly, the

SURG Common Stock issued to AltCorp as a result of the Settlement Agreement were pledged to Stanley.

As of December 31, 2021 there were

no surge shares pledges after the final settlement signed on December 22, 2021 and that replaced all prior settlement agreement.

settlement SURG agreed to make total payments of $4,200,000 to the Company on or prior to January 7, 2022.

This $4.2 million amount consists

of $450,000 paid by SURG in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on

or prior to January 7, 2022 of which $375,000 will be held in escrow as described before.

The $3,750,000 was recorded as other receivable

as of December 31, 2021.

As of December, 31, 2022 and December 31, 2021, the Company recorded an outstanding payable to Stanley of $927,136

and $660,735, respectively, recorded under accrued expenses.

Sales to related party for the year ended December

31, 2022 and 2021 were $45,000 and $180,000.

Sales are derived from providing IT consulting services to Stanley Hills, a related

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

Advanced from Related Party

During the year ended December 31, 2022, Mansour Khatib,

the Company’s CEO advanced $22,658 cash to the Company for business purposes to fund the e-commerce operations.

During the year ended December 31, 2022, the Company

repaid $18,384 cash to Mansour Khatib.

As of December, 31, 2022 and December 31, 2021, the

Company has recorded a due from related party of $0 and $30,049, respectively.

As of December, 31, 2022 and December 31, 2021, the

Company has recorded a due to related party of $62,003 and $0, respectively.

Metaverse Agreement

On June 10, 2022, the Company, entered into

a Joint Venture and Territorial License Agreement (the “Metaverse Agreement”) with Ildar Gainulin and Maria Belova

(collectively, the “Licensor”).

Under the Metaverse Agreement, the parties formed Metaverse Kit Corp., a Nevada corporation

(“Metaverse Kit”).

The purpose of Metaverse Kit was to develop, maintain and support source codes for its proprietary

technologies and comprehensive platform that combines a core virtual reality platform and an extended set of real-world functions

to provide a metaverse experience initially within the area of sports and then expanding into virtual worlds of entertainment,

live events, gaming, communications and other cross over product opportunities (the “Meta Portfolio”).

Under the Metaverse

Agreement, Licensor agreed to provide Metaverse Kit with the licensed technology and expertise.

In connection therewith, the parties

entered an Asset Purchase Agreement (the “Metaverse APA”) concurrently with the Metaverse Agreement whereby Licensor

sold Metaverse Kit all source codes pertaining to the Meta Portfolio.

Further, Licensor provided an exclusive license to Metaverse

Kit throughout the world for the invented product/service and the related platforms relating to the Meta Portfolio and to use the

know how to develop, manufacture, sell, market and distribute the Meta Portfolio throughout the world.

The Company was required

to contribute 500,000,000 shares of common stock of the Company (“GBT Shares”) to Metaverse Kit.

Licensor and the Company

were to each own 50% of Metaverse Kit.

The Company pledged its 50% ownership in Metaverse Kit to Igor 1 Corp.

to secure a convertible

note held by Igor 1 Corp.

The Company was to appoint two directors and Licensor was allowed to appoint one director of Metaverse

In addition, Metaverse Kit, Licensor and Elentina Group, LLC (“Elentina”) entered into a Consulting Agreements

in which IGBM and Elentina, each were engaged to provide services for $25,000 per month payable quarterly which Metaverse Kit has

the option to pay in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP.

and Elentina were to provide services in connection with the development of the business as well as Metaverse Kit’s capital

raising efforts.

The term of the Consulting Agreement was two years.

The closing of the Metaverse Agreement occurred on June 13,

On March 14, 2023, the Company received a counter

signed Settlement Agreement and Release by Licensor dated March 2, 2023 (“Settlement Agreement”).

Pursuant to the Settlement

Agreement, the parties agreed that Metaverse Agreement, the Metaverse APA and the Consulting Agreement are void and cancelled.

agreed to pay $5,000 to the Company as settlement payment and surrender their shares in Metaverse Kit.

On May 19, 2021, the Company entered into a

Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance plus accrued interest (the “Gonzalez

Agreement”) with third party, GBT-CR, IGOR 1 Corp and Gonzalez.

Pursuant to the Gonzalez Agreement, without any party admission

of liability and to avoid litigation, the parties has agreed to (i) extend the GBT convertible note maturity date to December 31, 2022,

(ii) amend the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the

GBT convertible note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day

prior to the conversion date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third party.

of the change in terms of this convertible note, the Company took a charge related to the modification of debt of $13,777,480 during

the year ended December 31, 2021.

of liability and to avoid litigation, the parties had agreed to (i) extend the GBT convertible note maturity date to December 31,

2022, (ii) amend the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature

to the GBT convertible note with 15% discount to the market price during the 20 trading day period ending on the latest complete

trading day prior to the conversion date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third

As a result of the change in terms of this convertible note, the Company took a charge related to the modification of debt

of $13,777,480 during the year ended December 31, 2021.

During the year ended

December 31, 2021, IGOR 1 converted $1,284,600 of the convertible note into 4,185,650 shares of the Company’s common

On June 24, 2021, the Company transferred 5,500,000 SURG shares received as repayment of $660,000 of this convertible note

(See Note 10).

During the year ended December

31, 2022, IGOR 1 converted $1,659,869 of the convertible note into 590,117,647 shares of the Company’s common stock.

June 24, 2021, the Company transferred 5,500,000 SURG shares received as repayment of $660,000 of this convertible note.

On November 15, 2020, the Company issued a promissory

note to Alpha Eda, LLC (“Alpha”), a related party, for $140,000.

The note accrues interest at 10% per annum, is unsecured

and is due on September 30, 2021.

On November 15, 2020, the Company issued a

promissory note to Alpha Eda, LLC (“Alpha”), a related party, for $140,000.

The note accrues interest at 10%,

is unsecured and was due on September 30, 2021.

On June 20, 2021 Alpha and the Company extended the note maturity to December

balance of the note at December 31, 2021 and 2020 was $140,000 and $140,000 plus accrued interest of $16,633 and $1,803, respectively.

On March 30, 2022 Alpha and the Company extended the note maturity to December 31, 2022.

The balance of the note

at December 31, 2022 and 2021 was $140,000 and $140,000 plus accrued interest of $32,633 and $16,633, respectively.

On February 9, 2022 the Board approved the employment

12 unchanged sentences

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table shows the fees that were billed

for the audit and other services provided by BF Borgers CPA PC for the years ended December 31, 2021 and 2020.

Years Ended December 31,

Audit-Related Fees

All Other Fees

The following table shows the fees that were

billed for the audit and other services provided by Madhava Rao and BF Borgers CPA PC for the years ended December 31, 2022 and

Ended December 31,

Audit-Related

Audit Fees - This category

11 unchanged sentences

services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees - This

category consists of fees for other miscellaneous items.

All Other Fees - This category

consists of fees for other miscellaneous items.

Board of Directors Pre-Approval Process, Policies

134 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on September 9, 2009.

Incorporated by reference to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 6, 2011

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on May 14, 2012

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 27, 2012.

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 20, 2012.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 18, 2015

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 12, 2015

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 1, 2015

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2015

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 21, 2015

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 30, 2017

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 7, 2017

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 3, 2018

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 21, 2018

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 18, 2018

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 26, 2018.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 9, 2018.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 18, 2018.

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on June 19, 2019.

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 12, 2019.

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 15, 2019.

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 5, 2019.

Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 7, 2019.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 16, 2019.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 25, 2019.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 2, 2020.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 11, 2020.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 24, 2020.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 10, 2020.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 21, 2021.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 1, 2021.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 23, 2021.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 29, 2021.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on October 6, 2021.

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 11, 2021

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 20, 2021

Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 28, 2021

Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on January 12, 2022

by reference to the Form S-1 Registration Statement filed with the SEC on September 9, 2009.

Incorporated by reference

to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 6, 2011

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on May 14, 2012

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 27, 2012.

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 20, 2012.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 18, 2015

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 12, 2015

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 1, 2015

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2015

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 21, 2015

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 30, 2017

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 7, 2017

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 3, 2018

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 21, 2018

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 18, 2018

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 26, 2018.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 9, 2018.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 18, 2018.

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on June 19, 2019.

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 12, 2019.

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 15, 2019.

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 5, 2019.

Incorporated by reference

to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 7, 2019.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 16, 2019.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 25, 2019.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 2, 2020.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 11, 2020.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 24, 2020.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 10, 2020.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 21, 2021.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 1, 2021.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 23, 2021.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 29, 2021.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on October 6, 2021.

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 11, 2021

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 20, 2021

Incorporated by reference

to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 28, 2021

Incorporated by reference

to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on January 12, 2022

Form 10-K Summary.

3 unchanged sentences

GBT TECHNOLOGIES INC.

March 25, 2022

/s/ Mansour Khatib

April 12, 2023

Mansour Khatib

2 unchanged sentences

In accordance with the Exchange Act, this report has

been signed below by the following persons on May 28, 2020, on behalf of the registrant and in the capacities indicated.

/s/ Mansour Khatib

Chief Executive & financial Officer & Director

been signed below by the following persons on behalf of the registrant and in the capacities indicated.

Mansour Khatib

(Principal Executive, Financial and Accounting Officer)

Executive & financial Officer & Director

April 12, 2023

Executive, Financial and Accounting Officer)

Danny Rittman

Chief Technology Officer and Director

Technology Officer and Director

April 12, 2023

Danny Rittman

/s/ Michael Murray

President and Director

Michael Murray

GBT TECHNOLOGIES INC.

1 unchanged sentence

Financial Statements:

Report of Independent Registered Public Accounting Firm (PCAOB

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2022 and 2021

3 unchanged sentences

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

the shareholders and the board of directors of GBT Technologies, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of GBT Technologies, Inc.

the "Company") as of December 31, 2021

and 2020, the related statement of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related

notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and

its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Doubt about the Company’s Ability to Continue as a Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue

as a going concern.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

of litigation and claims accruals

disclosed in Note 16 to the consolidated financial statements, the Company is involved in various legal proceedings.

The Company assesses

the need to make a provision or to disclose a contingent liability on a case-by-case basis considering the underlying facts of each litigation.

The eventual outcome of the litigations is uncertain and estimation at the balance sheet date involves extensive judgement of management

including input from legal counsel due to the complexity of each litigation.

outcomes could significantly impact the Company’s reported operations and balance sheet position.

Considering the judgement involved

in determining the need to make a provision or disclose litigation, the matter is considered a Critical Audit Matter.

audit procedures included, among others, obtaining a list of litigation Company’s management and legal counsel, identifying material

litigations from the aforementioned list and performing inquiries with the said counsel, obtaining and reading the underlying documents

to assess the assumptions used by management in arriving at the conclusions;

circulating, obtaining, and reading legal confirmations

from the Company’s external legal counsels in respect of material litigations and considered that in our assessment;

and verifying

the disclosures related to provisions and contingent liabilities in the financial statements to assess consistency with underlying documents.

recognition in relation to fraud

described in Note 2 to the consolidated financial statements, management applies FASB Topic 606, Revenue from Contacts with Customers

(“ASC 606”) to recognize revenue.

Management recognizes revenue in a manner that reasonably reflects the delivery of its

services to customers in return for expected consideration.

The Company’s revenue, inclusive of related party revenue, is IT services

revenue recorded on a monthly basis as services are provided.

principal considerations for our determination that performing procedures over the full completion of revenue contracts and subsequent

payment collections is a critical audit matter.

This in turn led to significant effort in performing our audit procedures which were

designed to evaluate whether the contractual terms, the timing of revenue recognition and the subsequent collections were appropriately

identified and accounted for by management under ASC 606.

audit procedures included, among others, understanding of controls relating to management’s revenue recognition process, examining

transaction related documents, confirming revenues and outstanding receivables at the balance sheet date with a sample of the customers,

and testing collections subsequent to the balance sheet date.

BF Borgers CPA PC

Borgers CPA PC

as Auditor since 2017

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the shareholders and the board of directors of

GBT Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheet of GBT Technologies, Inc.

the "Company") as of December 31, 2022, the related statement of operations, stockholders' equity

(deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally

accepted in the United States.

Substantial Doubt about the Company’s Ability

to Continue as a Going Concern

The accompanying financial statements have been prepared

assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has accumulated

deficit of $ 299,257,917 as of December 31, 2022 and has incurred recurring operating losses.

These conditions raise substantial doubt

about its ability to continue as a going concern.

Management’s plans in regard to these matters are described in Note 2.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter

communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to

be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,

providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Completeness of litigation and claims accruals

As disclosed in Note 17 to the consolidated financial

statements, the Company is involved in various legal proceedings.

The Company assesses the need to make a provision or to disclose a contingent

liability on a case-by-case basis considering the underlying facts of each litigation.

The eventual outcome of the litigations is uncertain

and estimation at the balance sheet date involves extensive judgement of management including input from legal counsel due to the complexity

of each litigation.

Adverse outcomes could significantly impact the Company’s

reported operations and balance sheet position.

Considering the judgement involved in determining the need to make a provision or disclose

litigation, the matter is considered a Critical Audit Matter.

Our audit procedures included, among others, obtaining

a list of litigation Company’s management and legal counsel, identifying material litigations from the aforementioned list and performing

inquiries with the said counsel, obtaining and reading the underlying documents to assess the assumptions used by management in arriving

at the conclusions;

circulating, obtaining, and reading legal confirmations from the Company’s external legal counsels in respect

of material litigations and considered that in our assessment;

and verifying the disclosures related to provisions and contingent liabilities

in the financial statements to assess consistency with underlying documents.

Revenue recognition

As described in Note 3 to the consolidated financial

statements, management applies FASB Topic 606, Revenue from Contacts with Customers (“ASC 606”) to recognize revenue.

recognizes revenue in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration.

The Company’s revenue includes resale of purchased products through Amazon and also through IT services.

The principal considerations for our determination

that performing procedures over the full completion of revenue contracts and subsequent payment collections is a critical audit matter.

This in turn led to significant effort in performing our audit procedures which were designed to evaluate whether the contractual terms,

the timing of revenue recognition and the subsequent collections were appropriately identified and accounted for by management under ASC

Our audit procedures included, among others, understanding

of controls relating to management’s revenue recognition process, examining transaction related documents, confirming revenues and

outstanding receivables at the balance sheet date with a sample of the customers.

April 12, 2023

Served as Auditor since 2022

GBT TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS

3 unchanged sentences

AND STOCKHOLDERS’ DEFICIT

payable and accrued expenses (including related parties of $ 2,302,928 and $ 410,833 )

notes payable, current, net of discount of $ 190,464 and $ 362,004

notes payable, related party, net of discount of $ 0 and $ 0

payable, current, net of discount of $ 0 and $ 47,671

payable and accrued expenses (including related parties of $ 1,539,802

and $ 2,302,928 )

notes payable, current, net of discount of $ 190,464

and $ 362,004

notes payable, related party, net of discount of $ 0

payable, current, net of discount of $ 0

payable, current, related party

to related party

current liabilities

note payable, noncurrent, net of discount of $ 88,403 and $ 0

note payable, noncurrent, net of discount of $ 88,403

payable, noncurrent

1 unchanged sentence

Stockholders’

B Preferred stock, $ 0.00001 par value;

B Preferred stock, $ 0.00001

shares authorized;

and 45,000 shares issued and outstanding at December 31, 2021 and December 31, 2020

C Preferred stock, $ 0.00001 par value;

shares issued respectively

C Preferred stock, $ 0.00001

shares authorized;

and 700 shares issued and outstanding at December 31, 2021 and December 31, 2020

D Preferred stock, $ 0.00001 par value;

shares issued and outstanding respectively

D Preferred stock, $ 0.00001

shares authorized;

and 0 shares issued and outstanding at December 31, 2021 and December 31, 2020

G Preferred stock, $ 0.00001 par value;

shares issued and outstanding respectively

G Preferred stock, $ 0.00001

shares authorized;

and 0 shares issued and outstanding at December 31, 2021 and December 31, 2020

H Preferred stock, $ 0.00001 par value ($500.00 stated value);

shares issued and outstanding respectively

H Preferred stock, $ 0.00001

par value ($500 stated value);

shares authorized;

and 20,000 shares issued and outstanding at December 31, 2021 and December 31, 2020

stock, $ 0.00001 par value;

shares issued and outstanding respectively

stock, $ 0.00001

10,000,000,000

shares authorized;

and 5,133,489 shares issued and outstanding at December 31, 2021 and December 31, 2020

1,535,593,440

and 33,200,198

shares issued and outstanding respectively

stock, at cost;

21 shares at December 31, 2021 and December 31, 2020

shares respectively

loan receivable

( 7,610,147 )

paid in capital

2 unchanged sentences

stockholders’ deficit

( 28,761,981 )

( 27,858,303 )

liabilities and stockholders’ deficit

The accompanying footnotes are an integral

part of these consolidated financial statements.

The accompanying footnotes are an integral part of

these consolidated financial statements.

GBT TECHNOLOGIES INC.

CONSOLIDATED STATEMENT OF OPERATIONS

For the Years Ended December 31,

Consulting Income - related party

Ended December 31,

Income – Related Party

of Goods Sold

and administrative

operating expenses

General and administrative expenses

Marketing expenses

Professional expenses

Impairment of assets

Total operating expenses

Loss from operations

( 18,475,514 )

( 7,772,836 )

from operations

income (expense):

of debt discount

in fair value of derivative liability

expense and financing costs

gain (loss) on disposal of marketable equity security

on RJW settlement

on debt modification

in fair value of marketable securities

other income (expense)

Amortization of debt discount

( 4,197,550 )

Change in fair value of derivative liability

( 1,339,117 )

( 1,533,610 )

Interest expense and financing costs

( 2,022,584 )

( 2,949,849 )

Unrealized gain (loss) on marketable equity security

Realized gain (loss) on disposal of marketable equity security

Loss on exchange of assets

( 1,430,000 )

Loss on debt modification

( 13,777,480 )

Total other income (expense)

( 15,454,919 )

( 11,206,839 )

(Loss) before income taxes

( 33,930,433 )

( 18,979,675 )

Income tax expense

(Loss) from continuing operations

( 33,930,433 )

( 18,979,675 )

Discontinued operations:

Loss from operations of discontinued operations

Gain on disposition of discontinued operations

Loss from discontinued operations, net

$ ( 33,930,433 )

Income (Loss)

average common shares outstanding:

4,646,981,551

Weighted average common shares outstanding:

Basic and diluted

Net loss per share (basic and diluted):

Continuing operations

Discontinued operations

Net loss per share

The accompanying footnotes are an integral part of the consolidated financial statements.

Income (Loss) per share (basic and diluted):

The accompanying footnotes are an integral part

of the consolidated financial statements.

GBT TECHNOLOGIES INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

Stockholders’

5 unchanged sentences

Common stock issued for conversion of convertible debt

and accrued interest

Common stock issued for services

Common stock issued for joint venture

Fair value of beneficial conversion feature of converted

( 17,994,888 )

Fair value of beneficial conversion feature

Net income (loss)

( 33,930,433 )

5 unchanged sentences

$ ( 28,761,981 )

Common stock issued for conversion of convertible debt and accrued interest

Common stock issued for services

Common stock issued for joint venture

Fair value of beneficial conversion feature of converted

( 33,930,433 )

Common stock issued amount for conversion of debt and

accrue interest

Fair value of derivative liability due to conversions

Common stock issued for cash

Common stock issued for- Tokenize

Equity Method Investment - Meta

Cancelation of shares

Net income (loss)

Balance, December 31, 2022

4 unchanged sentences

$ ( 299,257,917 )

The accompanying footnotes are an integral

part of these consolidated financial statements.

$ ( 18,830,909 )

The accompanying footnotes are an integral part of

these consolidated financial statements.

GBT TECHNOLOGIES INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Years Ended December 31,

Years Ended December 31,

Cash Flows From Operating Activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation of property and equipment

Net income (loss)

$ ( 33,930,433 )

Adjustments to reconcile net income to net cash used in operating activities:

Amortization of debt discount

Change in fair value of derivative liability

( 6,594,370 )

Excess of debt discount and financing costs

2 unchanged sentences

Impairment of assets

Unrealized (gain) loss on market equity security

gain on disposal of market equity security

Realized gain on disposal of market equity security

Loss on exchange of assets

Gain on disposition of discontinued operations

Convertible note receivable exchanged for services

Change in fair value of market equity security

Change on Settlement

( 3,012,633 )

Payment of other income with marketable securities

2 unchanged sentences

Other receivable

( 3,750,000 )

Cash held in trust

Contract liabilities

Unearned revenue

1 unchanged sentence

Net cash used in operating activities

( 1,369,114 )

Cash Flows From Investing Activities:

Purchase of property and equipment

Cash of discontinued operations

Investment to GTX

Investment to TGHI

Net cash used in investing activities

1 unchanged sentence

Issuance of convertible notes

Repayment of convertible notes

Issuance of note receivable

Proceeds from sales of common stock

Repayment of related party

Repayment of convertible note

Proceeds from related party

Issuance of notes payable

1 unchanged sentence

Net increase in cash

Cash, beginning of period

Cash, end of period

Cash, beginning of Year

Cash, end of Year

Cash paid for:

4 unchanged sentences

Transfer of marketable equity security to repay convertible note

Share issuance for JV Metaverse

Share issuance for JV Tokenize

Transfer of accounts payable to convertible note

Transfer of accrued interest to convertible note

The accompanying footnotes are an integral part of the consolidated financial statements.

Cancellation of TTSG Shares

The accompanying footnotes are an integral part of

these consolidated financial statements.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Note 1 - Organization and Basis of Presentation

December 31, 2022 and 2021

1 - Organization and Basis of Presentation

Organization and Line of Business

GBT Technologies Inc.

(formerly Gopher

Protocol Inc.) (the “Company”, “GBT”, or “GTCH”) was incorporated on July 22, 2009 under the laws

of the State of Nevada.

The Company is targeting growing markets such as development of Internet of Things (IoT) and Artificial

Intelligence (AI) enabled networking and tracking technologies, including wireless mesh network technology platform and fixed solutions,

development of an intelligent human body vitals device, asset-tracking IoT, and wireless mesh networks.

Effective August 5, 2019,

the Company changed its name from Gopher Protocol Inc.

(formerly Gopher Protocol Inc.)

(the “Company”, “GBT”, or “GTCH”) was incorporated on July 22, 2009 under the laws of the State of

The Company is targeting growing markets such as development of Internet of Things (IoT) and Artificial Intelligence (AI) enabled

networking and tracking technologies, including wireless mesh network technology platform and fixed solutions, development of an intelligent

human body vitals device, asset-tracking IoT, and wireless mesh networks.

Effective August 5, 2019, the Company changed its name from

Gopher Protocol Inc.

to GBT Technologies Inc.

The Company derived revenues from (i) the provision

of IT consulting services;

and (ii) from the licensing of its technology.

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

(ii) from the licensing of its technology.

(ii) from selling electronic products through e-commerce platforms.

On February 18, 2022 the Company, effective March

1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD.

(“Mahaser”) pursuant to which the Company

shares revenues generated by Mahaser with respect to e-commerce sales through the online retail platform in the United States of America.

The audited condensed CFS are prepared by the

Company, pursuant to the rules and regulations of the SEC.

The information furnished herein reflects all adjustments, consisting

only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial

position, the results of its operations, and cash flows for the periods presented.

Basis of Presentation

The accompanying consolidated financial

statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

On October 26, 2021,

the Company effectuated a 1 for 50 reverse stock split.

The share and per share information has been retroactively

restated to reflect this reverse stock split.

Going Concern

The accompanying consolidated financial

statements have been prepared assuming that the Company will continue as a going concern.

The Company has an

accumulated deficit of $ 304,581,773 and has a working capital deficit of $ 28,388,580 as of December 31, 2021, which raises substantial

doubt about its ability to continue as a going concern.

The Company’s ability to continue as

a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing

to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Management has plans

to seek additional capital through some private placement offerings of debt and equity securities.

These plans, if successful,

will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern.

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded

asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

The accompanying CFS were prepared in conformity with

accounting principles generally accepted in the United States of America (“U.S.

On October 26, 2021, the Company effectuated a 1

for 50 reverse stock split.

The share and per share information has been retroactively restated to reflect this reverse stock

In July 2, 2022 the Company filed a preliminary information

statement to the stockholders of record (the “Record Date”) in connection with certain actions to be taken by the written

consent by stockholders holding a majority of the voting stock of the Company, dated as of June 28, 2022.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

amend the Company’s Articles of Incorporation, (the “Articles of Incorporation”)

to increase the number of authorized shares of common stock, par value $ 0.00001 per share

(the “Common Stock”), of the Company from 2,000,000,000 shares to 10,000,000,000

This action concluded on August 11, 2022:

(i) authorize the Company’s

Board of Directors to effect, in its sole discretion, a reverse stock split of the Common Stock in a ratio of up to 1-for-500 (the

“Reverse Stock Split”), and (ii) authorize the filing of an amendment to the Company’s Articles of Incorporation

to implement the Reverse Stock Split and any other action deemed necessary to effectuate the Reverse Stock Split, without further

approval or authorization of stockholders, at any time prior to December 31, 2023.

This action was not commenced by the Company’s

Note 2 – Going Concern

The accompanying CFS have been prepared assuming the

Company will continue as a going concern.

The Company has an accumulated deficit of $ 299,257,917 and has a working capital

deficit of $ 18,552,046 as of December 31, 2022, which raises substantial doubt about its ability to continue as a going concern.

The Company’s ability to continue as a going

concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its

obligations and repay its liabilities arising from normal business operations when they come due.

Management has plans to seek additional

capital through some private placement offerings of debt and equity securities.

These plans, if successful, will mitigate the factors

which raise substantial doubt about the Company’s ability to continue as a going concern.

These CFS do not include any adjustments

relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result

from this uncertainty.

Note 3 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported

amounts of revenues and expenses during the reporting period.

The Company regularly evaluates estimates and assumptions.

bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable

under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities

and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by the Company

may differ materially and adversely from the Company’s estimates.

To the extent there are material differences between the estimates

and the actual results, future results of operations will be affected.

Significant estimates in the accompanying financial statements

include valuation of derivatives and valuation allowance on deferred tax assets.

The preparation of CFS in conformity with U.S.

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the CFS and the reported amounts of revenues and expenses during the reporting period.

regularly evaluates estimates and assumptions.

The Company bases its estimates and assumptions on current facts, historical experience

and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.

To the extent there

are material differences between the estimates and the actual results, future results of operations will be affected.

Significant estimates

in the accompanying CFS include valuation of derivatives and valuation allowance on deferred tax assets.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

Principles of Consolidation

The accompanying consolidated financial

statements include the accounts of the Company and its subsidiaries;

The accompanying CFS include the accounts of the Company

and its subsidiaries;

the Company’s 50% owned subsidiaries GBT BitSpeed Corp.

GBT Tokenize Corp;

the Company’s 50% owned subsidiary, Gopher Protocol Costa Rica Sociedad De Responsabilidad Limitada (currently

inactive), a wholly owned subsidiary, AltCorp Trading LLC, a Costa Rica company (“AltCorp”) and Greenwich International

Holdings, a Costa Rica corporation (“Greenwich”).

All significant intercompany transactions and balances have been eliminated.

(currently inactive) and GBT Tokenize Corp;

the Company’s

50% owned subsidiary, Gopher Protocol Costa Rica Sociedad De Responsabilidad Limitada (currently inactive), a wholly owned subsidiary,

AltCorp Trading LLC, a Costa Rica company (“AltCorp” currently inactive) and Greenwich International Holdings, a Costa Rica

corporation (“Greenwich” currently inactive).

All significant intercompany transactions and balances were eliminated.

For entities determined to be VIEs, an evaluation

is required to determine whether the Company is the primary beneficiary.

The Company evaluates its economic interests in the entity specifically

determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic

performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant

to the VIE (“the benefits”).

When making the determination whether the benefits received from an entity are significant, the

Company considers the total economics of the entity, and analyzes whether the Company’s share of the economics is significant.

Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis.

In addition, the Company’s variable interests

in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially be significant

As a result of this analysis, the Company concluded it is the primary beneficiary of Mahaser and therefore consolidates the

balance sheets, results of operations and cash flows of Mahaser.

The Company performs a qualitative assessment of Mahaser on an ongoing

basis to determine if it continues to be the primary beneficiary.

Cash Equivalents

For the purpose of the statement of

cash flows, cash equivalents include time deposits, certificate of deposits, and all highly-liquid debt instruments with original

maturities of three months or less.

For the purpose of the statement of cash flows, cash

equivalents include time deposits, certificate of deposits, and all highly-liquid debt instruments with original maturities of three months

As of December 31, 2022 and 2021, the Company did no t have any cash equivalents.

Cash Held in Trust

Cash held in trust consists of proceeds

from the sale of investments.

The proceeds less the payment of certain expenses are being held in AltCorp’s (the Company’s wholly

owned subsidiary) attorney trust account.

Marketable Equity Securities

The Company accounts for marketable

equity securities in accordance with ASC Topic 321, Investments – equity securities.

Marketable equity securities

are reported at fair value based on quotations available on securities exchanges with any unrealized gain or loss being reported

as a component of other income (expense) on the statement of operations.

The portion of marketable equity security expected to

be sold within twelve months of the balance sheet date is reported as a current asset.

Note Receivable

Note receivable consists of a promissory

note received in connection with the sale of Ugopherservices (see Note 3).

The note is due on December 31, 2021 and accrues

interest at 6 % per annum.

At December 31, 2020, the Company determined that this note receivable was not collectible and took

an impairment charge of $ 100,000 .

During July 2021, the note holder made a $ 50,000 payment on the note, which is recorded

as other income in the accompanying consolidated statements of operations.

Funds in Escrow

Restricted cash is $ 375,000 as part of the SURG settlements

proceeds that needs to stay in escrow and $ 19,694 restricted cash that the court on January 28, 2022 awarded the Company with injunction

against RWJ defendants, where all funds generating from resale should be deposited into GBT blocked account, and therefore RWJ defendants

cannot use these funds without court order, neither the Company.

According to settlement agreement made on September 26, 2022, these funds

held in escrow and no longer restricted.

The Company entered into the Confidential Settlement Agreement and Mutual Release (“RJW

Agreement”) by and between RWJ Advanced Marketing, LLC, Robert Warren Jackson, Gregory Bauer (collectively the “RJW Parties”)

Petrey Wholesale Company, Inc., (“Petrey”) on one hand;

and GBT Technologies Inc., on behalf of itself and its agents

(collectively the GBT Parties”), on the other hand.

The Company the RJW Agreement effective September 26, 2022 with final signatures

delivered to the Company on or about October 5, 2022.

Among other agreements the parties agreed and stipulated to release all funds currently

being held in a blocked account of $ 19,694 with 50% distributed to the RWJ Parties and 50% to the Company or its assignee.

Marketable Securities

The Company accounts for investment securities

in accordance with ASC Topic 321, Investments – equity securities.

Marketable equity securities are reported at FV

based on quotations available on securities exchanges with any unrealized gain or loss being reported as a component of other income

(expense) on the statement of operations.

The portion of marketable equity security expected to be sold within 12 months of the

balance sheet date is reported as a current asset.

These publicly traded equity securities are valued using quoted prices and are

included in Level 1.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Inventory consists of electronic product ready for

sale on Amazon.com.

It is stated at the lower of cost or net realizable value and all inventories were returned product from online customers.

We value our inventory using the weighted average costing method.

Our Company’s policy is to include as a part of inventory any

freight incurred to ship the product from our contract vendors to our warehouses.

Outbound freight costs to our customers are considered

period costs and reflected in selling, general and administrative expenses.

We regularly review inventory and consider forecasts of future

demand, market conditions and product obsolescence.

Note Receivable Paid-Off

On September 18, 2020, the Company entered into a

Purchase and Sale Agreement with Mr.

LightHouse LTD .

, an Israeli corporation (“MLH”) pursuant to which the Company

agreed to sell and assign to MLH, effective July 1, 2020 all the shares, and certain specified liabilities, of Ugopherservices Corp.

a wholly owned subsidiary of the Company for $ 100,000 to be paid through the delivery of a promissory note payable to the Company

(the “Note”), upon the terms and subject to the limitations and conditions set forth in the Note.

At December 31, 2020, the

Company determined this note was not collectible and took an impairment charge of $ 100,000 .

During July 2021, MLH effected a $ 50,000 payment

During April 2022, MLH effected a second payment for additional $ 50,000 on the Note exhausting the Note balance.

Derivative Financial Instruments

2 unchanged sentences

For derivative financial

instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then

re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative

financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments

at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments

should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative instrument liabilities

are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument

could be required within 12 months of the balance sheet date.

instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its FV and is then re-valued

at each reporting date, with changes in the FV reported in the statements of operations.

For stock-based derivative financial instruments,

the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception

and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded

as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative instrument liabilities are classified

in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be

required within 12 months of the balance sheet date.

As of December 31, 2022 and 2021, the Company’s only derivative financial

3 unchanged sentences

For certain of the Company’s financial instruments,

including cash, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due

to their short maturities.

FASB ASC Topic 820, Fair Value Measurements

and Disclosures , requires disclosure of the fair value of financial instruments held by the Company.

FASB ASC Topic 825, Financial

Instruments , defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement

that enhances disclosure requirements for fair value measures.

The carrying amounts reported in the consolidated balance sheets

for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values

because of the short period of time between the origination of such instruments and their expected realization and their current

market rate of interest.

The three levels of valuation hierarchy are defined as follows:

including cash, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their FV due to their short

FASB ASC Topic 820, Fair Value Measurements and

Disclosures , requires disclosure of the FV of financial instruments held by the Company.

FASB ASC Topic 825, Financial Instruments ,

defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements

for FV measures.

The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify

as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such

instruments and their expected realization and their current market rate of interest.

The three levels of valuation hierarchy are defined

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

1 inputs to the valuation

methodology are quoted

prices for identical assets

or liabilities in active

2 inputs to the valuation

methodology include quoted

prices for similar assets

and liabilities in active

markets, quoted prices

for identical or similar

assets in inactive markets,

and inputs that are observable

for the asset or liability,

either directly or indirectly,

for substantially the

full term of the financial

3 inputs to the valuation

methodology us one or

more unobservable inputs

which are significant

to the fair value measurement.

The Company analyzes all financial instruments

with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity , and FASB

ASC Topic 815, Derivatives and Hedging .

For certain financial instruments, the

carrying amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify

as a financial instrument, and are a reasonable estimate of their fair values because of the short period of time between the origination

December 31, 2022 and 2021

Level 1 inputs to the valuation

methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 inputs to the valuation

methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets

in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially

the full term of the financial instrument.

Level 3 inputs to the valuation

methodology use one or more unobservable inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with

features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity , and FASB ASC Topic 815,

Derivatives and Hedging .

For certain financial instruments, the carrying

amounts reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as

a financial instrument, and are a reasonable estimate of their FV because of the short period of time between the origination

of such instruments and their expected realization and their current market rate of interest.

The Company uses Level 2 inputs for

its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing

model based on various assumptions.

The Company’s derivative liabilities are adjusted to reflect fair value at each period end,

with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

At December 31, 2021 and 2020, the Company

identified the following liabilities that are required to be presented on the balance sheet at fair value:

Schedule of Fair Value Measurements

Fair Value Measurements at

The Company uses Level 2 inputs for its valuation

methodology for derivative liabilities as their FV were determined by using the Black-Scholes-Merton pricing model based on various assumptions.

The Company’s derivative liabilities are adjusted to reflect FV at each period end, with any increase or decrease in the FV being

recorded in results of operations as adjustments to FV of derivatives.

At December 31, 2022 and 2021, the Company identified

the following liabilities that are required to be presented on the balance sheet at FV:

Schedule of fair value, assets and liabilities measured on recurring basis

Fair Value Measurements

December 31, 2022

1 unchanged sentence

Using Fair Value Hierarchy

Conversion feature on convertible notes

Fair Value Measurements at

December 31, 2020

Conversion feature on convertible

Fair Value Measurements

December 31, 2022

Using Fair Value Hierarchy

Marketable equity security - Surge Holdings, Inc.

Conversion feature on convertible notes

Using Fair Value

feature on convertible

Treasury Stock

Treasury stock is recorded at cost.

The re-issuance of treasury shares is accounted for on a first in, first-out basis and any difference between the cost of treasury

shares and the re-issuance proceeds are charged or credited to additional paid-in capital.

The re-issuance

of treasury shares is accounted for on a first in, first-out basis and any difference between the cost of treasury shares and the re-issuance

proceeds are charged or credited to additional paid-in capital.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

Reclassification

Certain prior year amounts have been

reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results

of operations.

Certain prior year amounts have been reclassified

for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

Revenue Recognition

Accounting Standards Update (“ASU”)

2014-09, Revenue from Contracts with Customers (“ Topic 606 ”), became effective for the Company

on January 1, 2018.

The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by

this new standard.

The Company applied the “modified retrospective” transition method for open contracts for the implementation

of Topic 606.

The Company had no significant post-delivery obligations, this new standard did not result

in a material recognition of revenue on the Company’s accompanying consolidated financial statements for the cumulative impact

of applying this new standard.

2014-09, Revenue from Contracts with Customers (“ Topic 606 ”), became effective for the

Company on January 1, 2018.

The Company’s revenue recognition disclosure reflects its updated accounting policies that are

affected by this new standard.

The Company applied the “modified retrospective” transition method for open contracts

for the implementation of Topic 606.

The Company had no significant post-delivery obligations, this new standard did

not result in a material recognition of revenue on the Company’s accompanying CFS for the cumulative impact of

applying this new standard.

The Company made no adjustments to its previously-reported total revenues, as those periods continue

to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition .

Revenue from providing IT consulting services are

recognized under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return

Revenue from providing IT consulting services

are recognized under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return

for expected consideration and includes the following elements:

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

● identification

of performance obligations in the respective contract;

● determination

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

the transaction price to each performance obligation;

● recognition

of revenue only when the Company satisfies each performance obligation.

executed contracts with

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

identification of performance

obligations in the respective contract;

determination of the transaction price for each performance

obligation in the respective contract;

allocation the transaction price to each performance

recognition of revenue only when the Company satisfies

each performance obligation.

These five elements, as applied to each of the Company’s IT revenue

category, is summarized below:

IT consulting services

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

These five elements, as applied to each of the Company’s

revenue category, is summarized below:

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

license revenue category, is summarize below:

services – the one-time related party licensing income recorded as other income upon

agreement is executed and services are provided and recognized over the term of five years.

the contract(s) with a customer.

ASC 606 defines a contract as “an agreement between

two or more parties that creates enforceable rights and obligations”.

Since this is

an e-commerce sale on the Amazon of eBay websites, the Company just followed the general

terms on Amazon or eBay websites and the customer entered into a contract with the Company

based on the product listed on the Amazon or eBay websites;

the performance obligations in the contract.

According to the contract, the Company is responsible for operation exclusively.

is entitled to all revenue which is being paid by Amazon or eBay into a designated bank account and the Company is responsible fo r

all product acquisitions as well as shipments.

The only performance obligations were the electronic products that were listed on Amazon

or eBay websites and the Company determined each order is one single obligation;

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Determine the transaction price.

The transaction price set to

be the listed price on the Amazon or eBay websites.;

Allocation the transaction price to the performance obligations

in the contract.;

Recognize revenue when the Company satisfies a performance obligation.

Sales are being recognized upon shipment.

Unearned revenue

Unearned revenue represents the net

amount received for the purchase of products that have not seen shipped to the Company’s customers.

In 2018, the Company ran pre-sales

efforts for its pet tracker product and received prepayments for its product.

In addition, during 2018, the Company received $ 200,000

in connection with an intellectual property license and royalty agreement.

The Company has $ 249,384 and $ 249,675 of unearned revenue

at December 31, 2021 and 2020, respectively.

The Company accounts for income taxes

in accordance with ASC Topic 740, Income Taxes .

ASC 740 requires a company to use the asset and liability method of accounting

for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities

are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets

and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,

it is more likely than not that some portion, or all of, the deferred tax assets will not be realized.

Deferred tax assets

and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized

as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with

a tax examination being presumed to occur.

The amount recognized is the largest amount of tax benefit that is greater than 50%

likely of being realized on examination.

For tax positions not meeting the “more likely than not” test, no tax benefit

The Company has no material uncertain tax positions for any of the reporting periods presented.

Unearned revenue represents the net amount received

for the purchase of products that have not seen shipped to the Company’s customers.

The Company has $ 48,921 and $ 249,384 of unearned

revenue at December 31, 2022 and 2021, respectively.

Contract liabilities

On February 22, 2022, the Company entered into

an Intellectual Property License and Royalty Agreement with Touchpoint Group Holdings, Inc.

(“Touchpoint” or

“TGHI”) pursuant to which the Company granted TGHI a worldwide license for its technologies for five years in the

domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining to the Company’s

digital currency technology (the “Technology”).

GBT will charge TGHI royalties based on actual uses by TGHI of the

Technology resulting from revenue attributable to the use, performance or other exploitation of the Technology, to the extent

applicable, after deducting any taxes that the Company may be required to collect, and deducting any international sales, goods and

services, value added taxes or similar taxes which the Company is required to pay, if any, excluding deductions for taxes on the

Company net income.

TGHI agreed to issue the Company 10,000,000 shares

of common stock of TGHI in the FV of $ 50,000 as

a onetime fee for the Company entering this Intellectual Property License and Royalty Agreement, which was booked

contract liabilities and amortized over the 5 five-year term.

The Company has yet to earn any royalty income in relation to

this agreement as of December 31, 2022.

The contract liabilities as of December 31, 2022 and December 31, 2021 was $ 41,444 and

$ 0 , respectively.

Variable Interest Entity

On February 18, 2022, the

Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD.

pursuant to which the Company shares in revenues generated by Mahaser e-commerce sales through the online retail platform in the United

States of America.

Mahaser owns an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics.

will operate the e-commerce platform and entitled to 95% for all revenue generated by and received by Mahaser from March 1, 2022 through

December 31, 2022.

The RSA provides that the Company will be entitled to appoint a manager to Mahaser.

As consideration, the Company will

pay Mahaser $ 100,000 no later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common

The Company shall have no obligations to make any further payments to Mahaser.

For any further extensions, the Company will have

the option to extend the RSA for annual payment of $ 200,000 , which can be payable with the Company’s shares of common stock payable

based on 20 days VWAP prior to issuance.

On March 16, 2022 the parties entered into Amendment No.

1 to the to the RSA, where all

consideration to be paid or issued to Mahaser will be deferred until such time where the e-commerce platform generated in cumulative revenue

of $1,000,000.

On March 31, 2022, the parties entered into Amendment No.

2 to the RSA, where Mahaser agreed to pay the Company 100% per

year for all revenue generated by and received by seller from the sales by Amazon within the United States of America as follows from

March 1, 2022 through December 31, 2022.

The Company will be responsible for 100% of the cost of goods sold as well.

In addition, the

Company is entitled to earn 100% revenues and cost of goods sold of the period from February 1, 2022 to February 28, 2022.

The Company evaluated whether

it has a variable interest in Mahaser, whether Mahaser is a VIE and whether the Company has a controlling financial interest in Mahaser.

The Company concluded that it has variable interests in Mahaser on the basis of GBT has 100% control over the JV/revenue sharing, and

as such should consolidate the JV into its books and records as it assigned 100% financial responsibility.

Mahaser’s equity at risk,

as defined by GAAP, is considered to be insufficient to finance its activities without additional support, and, therefore, Mahaser is

considered a VIE.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

The following table summarizes

the carrying amount of the assets and liabilities of Mahaser included in the Company’s consolidated balance sheets at December 31,

2022 (after elimination of intercompany transactions and balances):

Condensed financial statements

of consolidated variable interest entity (“VIE”) included in the consolidated balance sheets above (after elimination

of intercompany transactions and balances) consist of:

Current assets:

and equivalents

From related party

current assets

of consolidated VIE included in the consolidated balance sheets above (after elimination of intercompany transactions and balances)

Current liabilities

current liabilities

of operations of consolidated VIE included in the consolidated statements of operations above (after elimination of intercompany

transactions and balances) consist of:

Statements of operations

of goods sold

and administrative expenses

The Company accounts for income taxes in accordance

with ASC Topic 740, Income Taxes .

ASC 740 requires a company to use the asset and liability method of accounting for income taxes,

whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable

temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some

portion, or all of, the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects

of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit

only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination

being presumed to occur.

The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized

on examination.

For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company has

no material uncertain tax positions for any of the reporting periods presented and its current on all its tax filings federal and state

until 2021 inclusive.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Basic and Diluted Earnings Per Share

Earnings per share is calculated in

accordance with ASC Topic 260, Earnings Per Share .

Basic earnings per share (“EPS”) is based on the weighted average

number of common shares outstanding.

Earnings per share is calculated in accordance with

ASC Topic 260, Earnings Per Share .

Basic earnings per share (“EPS”) is based on the weighted average number of common

shares outstanding.

Diluted EPS assumes that all dilutive securities are converted.

Dilution is computed by applying

the treasury stock method.

Under this method, options and warrants are assumed to be exercised at the beginning of the period (or

at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price

during the period.

Due to the net loss incurred potentially dilutive instruments would be anti-dilutive.

Accordingly, diluted loss

per share is the same as basic loss for all periods presented.

The following potentially-dilutive shares were excluded from the

shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

Dilution is computed by applying the treasury stock

Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance,

if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

net income incurred potentially dilutive instruments would be anti-dilutive.

Accordingly, diluted loss per share is the same as basic loss

for all periods presented.

The following potentially-dilutive shares were excluded from the shares used to calculate diluted earnings

per share as their inclusion would be anti-dilutive.

Schedule of anti dilutive securities excluded from computation of earnings per share

Series B preferred stock

Series C preferred stock

Series H preferred stock

Convertible notes

B preferred stock

preferred stock

3,949,223,831

3,949,360,301

Management’s Evaluation of Subsequent

evaluates events that have occurred after the balance sheet date of December 31, 2021, through the date which the consolidated

financial statements are issued.

Based upon the review, other than described in Note 16 – Subsequent Events, the Company

did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated

financial statements.

The Company evaluates

events that have occurred after the balance sheet date of December 31, 2022, through the date which the CFS are issued.

the review, other than described in Note 20 – Subsequent Events, the Company did not identify any recognized or non-recognized

subsequent events that would have required adjustment or disclosure in the CFS.

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU

2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740).

This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC

740 and amending existing guidance to improve consistent application of ASC 740.

This update is effective for fiscal years beginning

after December 15, 2021.

The guidance in this update has various elements, some of which are applied on a prospective basis and

others on a retrospective basis with earlier application permitted.

The Company is currently evaluating the effect of this ASU

on the Company’s consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU

2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts

in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock.

For convertible

instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives

and Hedging , or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features

no longer are separated from the host contract.

ASU 2020-06 also removes certain conditions that should be considered in the derivatives

scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , and

clarify the scope and certain requirements under Subtopic 815-40.

In addition, ASU 2020-06 improves the guidance related to the

disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity.

ASU 2020-06 is effective

for public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies

as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods

within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including

In August 2020, the FASB issued ASU 2020-06 , Debt—Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic

815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

ASU 2020-06 reduces the number

of accounting models for convertible debt instruments and convertible preferred stock.

For convertible instruments with conversion features

that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging , or that do not result in

substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract.

ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives

and Hedging—Contracts in Entity’s Own Equity , and clarify the scope and certain requirements under Subtopic 815-40.

addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract

in entity’s own equity.

ASU 2020-06 is effective for public business entities that meet the definition of a SEC filer, excluding

entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including

interim periods within those fiscal years.

The Board specified that an entity should adopt the guidance as of the beginning of

its annual fiscal year.

The Company is currently evaluation the impact this ASU will have on its consolidated financial statements.

Management does not believe that any

recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial

As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

For all other entities, the amendments are effective for fiscal years beginning after December

15, 2023, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning

after December 15, 2020, including interim periods within those fiscal years.

The Board specified that an entity should adopt the guidance

as of the beginning of its annual fiscal year.

The Company adopted this ASU on the CFS in the year ended December 31, 2021.

had no material impact on the CFS for the year ended December 31, 2022.

On April 2021, the FASB issued ASU 2021-04, “ Earnings

Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718),

and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications

or Exchanges of Freestanding Equity-Classified Written Call Options” (“ ASU 2021-04 ”) to clarify

the accounting by issuers for modifications or exchanges of equity-classified warrants.

The new ASU is available here and effective for

all entities in fiscal years starting after December 15, 2021.

Early adoption is permitted.

The Company adopted this ASU on the CFS in

the year ended December 31, 2021.

The adoption had no material impact on the CFS for the year ended December 31, 2022.

Management does not believe that any recently

issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS.

As new accounting pronouncements

are issued, we will adopt those that are applicable under the circumstances.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Note 3 – Discontinued Operations

18, 2020, the Company entered into a Purchase and Sale Agreement with Mr.

LightHouse LTD .

, an Israeli corporation (“MLH”)

pursuant to which the Company agreed to sell and assign to MLH, effective July 1, 2020 all the shares, and certain specified liabilities,

of Ugopherservices Corp.

(“UGO”), a wholly owned subsidiary of the Company, in consideration of $ 100,000 to be paid

through the delivery of a promissory note payable to the Company (the “Note”), upon the terms and subject to the limitations

and conditions set forth in the Note.

There is no material relationship between the Company, on one hand, and MLH, on the other

At December 31, 2020, the Company determined that this note receivable was not collectible and took an impairment charge

of $ 100,000 .

During July 2021, MLH effected a $ 50,000 payment on the Note.

presented as discontinued operations on the accompanying financial statements.

The operating

results for UGO have been presented in the accompanying condensed consolidated statements of operations for the years ended December

31, 2021 and 2020 as discontinued operations and are summarized below:

Schedule Of Discontinued Operations

Years Ended December 31,

Cost of revenue

Operating expenses

Loss from operations

Other income (expenses)

Note 4 – Investment in Surge

Holdings, Inc.

December 31, 2022 and 2021

Note 4 – Marketable Securities

TGHI Agreement

On January 28,

2022, the Company entered into a Stock Purchase Agreement with Marko Radisic (the “Seller”) and

Touchpoint Group Holdings, Inc.

(“TGHI”) pursuant to which the Company acquired 10,000 shares

of Series A Convertible Preferred Stock (the “Touchpoint Preferred”) from the Seller for $ 125,000 .

The Touchpoint Preferred is convertible into 10,000,000 shares

of common stock of Touchpoint.

On February 22, 2022, the Company entered into an Intellectual Property License and Royalty

Agreement with TGHI pursuant to which the Company granted TGHI a worldwide license for its technologies for five

years in the domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining to the

Company’s digital currency technology (the “Technology”).

GBT will charge TGHI earned royalties based on

actual uses by TGHI of the Technology resulting from revenue attributable to the use, performance or other exploitation of

the Technology, to the extent applicable, after deducting any taxes that the Company may be required to collect, and

deducting any international sales, goods and services, value added taxes or similar taxes which the Company is required to

pay, if any, excluding deductions for taxes on the Company net income.

TGHI agreed to issue the Company 10,000,000 shares

of common stock of TGHI in the FV of $ 50,000 as

a one-time fee for the Company entering this Intellectual Property License and Royalty Agreement, which was booked contract

liabilities and amortized over the five-year term.

The Company has yet to earn any royalty income order to this agreement as

of December 31, 2022.

TGHI converted the Touchpoint Preferred into 10,000,000 shares

of common stock of Touchpoint on February 23, 2022 resulting in the Company owning 20,000,000 shares of common stock of Touchpoint

in total FV of $ 6,000 as of December 31, 2022 based on level 1 stock price in OTC markets.

MetAlert -prior name GTX Corp

April 12, 2022, GBT Tokenize Corp (“GBT Tokenize”), a Nevada corporation which the Company owns 50% of the outstanding shares

of common stock, entered into a series of agreements with GTX Corp (“GTX”) and various note holders of GTX pursuant to which

Tokenize acquired a convertible promissory note of GTX of $ 100,000 (the

“GTX Notes”).

In addition, GBT Tokenize acquired 76,923 (GBT

acquired 5,000,000 in

the original deal, where GTX to perform a corporate action of 1:65 reverse split on September 20, 2022) shares of common stock of GTX

for $ 150 ,0–0 -

in total FV of $ 12,538

of December 31, 2022 based on level 1 stock price in OTC markets.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

The GTX Notes bear 10% interest and 50% of the principal

may be converted into shares of common stock on a one-time basis at a conversion price of $ 0.01 per share.

The remaining 50% of the

principal must be paid in cash.

The closing occurred on April 12, 2022.

GTX changed its name into Metalert Inc.

September 20, 2022.

On September 30, 2022, GBT Tokenize, loaned MetAlert

Inc., a Nevada corporation (f/k/a GTX Corp.) (“MetAlert”) $ 90,000 .

For such loan, MetAlert provided Tokenize a promissory

note of $ 90,000 which is due and payable together with interest of 5 % upon the earlier of September 19, 2023 or when declared

designs, manufactures and sells various interrelated and complementary products and services in the wearable technology and IoMT (Internet

of Medical Things) marketplace.

As of December 31, 2022,

the notes had an outstanding balance of $ 190,000 and accrued interest of $ 8,475 .

As of December 31, 2022 and December 31, 2021, the

marketable security had a FV of $ 12,538 and $ 0 , respectively.

Note 5 – Investment in Surge Holdings, Inc.

Surge Holdings, Inc.

On September 30, 2019, GBT Technologies

(the “Company”) entered into an Asset Purchase Agreement (“APA”) with Surge Holdings, Inc., a Nevada corporation

(“SURG”) pursuant to which the Company agreed to sell and assign to SURG, all the assets and certain specified liabilities,

of its ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses in consideration of $ 5,000,000 to

be paid through the issuance of 3,333,333 shares of SURG’s common stock (the “SURG Common Stock”) and a convertible promissory

note in favor of the Company in the principal amount of $ 4,000,000 (the “SURG Note”), convertible into SURG’s shares

of common stock.

On January 7, 2022, the Company received payments from Surgepays Inc.

(formerly known as Surge Holdings, Inc.)

in total of $ 3,750,000 pursuant to the terms of the Settlement Agreement dated December 22, 2021.

On June 23, 2020, SURG entered into

an Exchange Agreement (the “AltCorp Exchange Agreement”) with AltCorp Trading LLC (“AltCorp”) with such AltCorp

Exchange Agreement being consented and agreed to by the Company, the parent of AltCorp.

At the expiration of the lock-up period,

in the event the VWAP for the SURG Common Stock was, during the preceding twenty-day trading period, less than $ 0.50 per share,

AltCorp retained the right to reserve additional shares of SURG Common Stock equal to the True-Up Value as defined in the AltCorp

Exchange Agreement.

(the “Company”) entered into an Asset Purchase Agreement (“APA”) with Surge Holdings, Inc., a

Nevada corporation (“SURG”) pursuant to which the Company agreed to sell and assign to SURG, all the assets and

certain specified liabilities, of its ECS Prepaid, Electronic Check Services and the Central State Legal Services businesses

for $ 5,000,000

to be paid through the issuance of 3,333,333

shares of SURG’s common stock (the “SURG Common Stock”) and a convertible promissory note in favor of

the Company in the principmountount of $ 4,000,000

(the “SURG Note”), convertible into SURG’s shares of common stock.

On January 7, 2022, the Company received

payments from Surgepays Inc.

(formerly known as Surge Holdings, Inc.) in total of $ 3,750,000

pursuant to the terms of the Settlement Agreement dated December 22, 2021.

On June 23, 2020, SURG entered into an Exchange Agreement

(the “AltCorp Exchange Agreement”) with AltCorp Trading LLC (“AltCorp”) with such AltCorp Exchange Agreement being

consented and agreed to by the Company, the parent of AltCorp.

At the expiration of the lock-up period, in the event the VWAP for the

SURG Common Stock was, during the preceding twenty-day trading period, less than $ 0.50 per share, AltCorp retained the right to reserve

additional shares of SURG Common Stock equal to the True-Up Value as defined in the AltCorp Exchange Agreement.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

On March 8, 2020, SURG filed a lawsuit

against its transfer agent from transferring millions of SURG stock that is currently in possession by the Company and assigned

to Stanley Hills, LLC.

On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual Release

and Settlement Agreement (“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement, SURG agreed to

amend the AltCorp Exchange Agreement where SURG acknowledged a debt of $ 3,300,000 (the “Debt”) to be paid in 33 monthly

payments of $ 100,000 payable in shares of common stock of SURG at a per share price equal the volume weighted average price of

Surg’s common stock during the ten (10) trading days immediately preceding the issuance.

SURG paid $ 400,000 in cash and $ 800,000

The SURG common stock issued to Altcorp have been pledged since August 12, 2020 for the benefit of Stanley to secure

Stanley’s note payable by the Company.

Accordingly, the SURG Common Stock issued to AltCorp as a result of the Settlement Agreement

were pledged to Stanley.

As of December 31, 2021 there were no surge shares pledges after the final settlement signed on December

22, 2021 and that replaced all prior settlement agreement.

The final settlement SURG agreed to make total payments of $ 4,200,000

December 31, 2022 and 2021

On March 8, 2020, SURG filed a lawsuit against its

transfer agent from transferring millions of SURG stock that is currently in possession by the Company and assigned to Stanley Hills,

On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual Release and Settlement Agreement

(“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement, SURG agreed to amend the AltCorp Exchange Agreement

where SURG acknowledged a debt of $ 3,300,000 (the “Debt”) to be paid in 33 monthly payments of $ 100,000 payable in shares

of common stock of SURG at a per share price equal the volume weighted average price of Surg’s common stock during the 10 trading

days immediately preceding the issuance.

SURG paid $ 400,000 in cash and $ 800,000 by shares.

The SURG common stock issued to Altcorp have

been pledged since August 12, 2020 for the benefit of Stanley to secure Stanley’s note payable by the Company.

Accordingly, the

SURG Common Stock issued to AltCorp as a result of the Settlement Agreement were pledged to Stanley.

As of December 31, 2021 there were

no surge shares pledges after the final settlement signed on December 22, 2021 and that replaced all prior settlement agreement.

settlement SURG agreed to make total payments of $ 4,200,000 to the Company’s trust account on or prior to January 7, 2022.

$4.2 million amount consists of $450,000 paid by SURG in November and December 2021, $100,000 to be paid on or about January 4, 2022,

and $3,650,000 to be paid on or prior to January 7, 2022 of which $375,000 will be held in escrow as described before.

The $3,750,000

was recorded as other receivable as of December 31, 2021.

As of December 31, 2021, the Company has recorded an outstanding payable balance

to Stanley amounted $1,862,928 recorded under accrued expenses.

Subsequently, SURG was a party to two lawsuits in

state District Court, the Eighth Judicial District Court for Clark County, Nevada involving AltCorp, Stanley and Glen Eagles Acquisition

LP (the “AltCorp Parties.”).

Each of these lawsuits were ultimately disputes relating to the total consideration SURG was

to pay the Company under the APA.

On October 18, 2021, the AltCorp Parties, the Company,

and SURG entered into a Memorandum of Understanding (the “MOU”) to set up a framework for an attempt to settle the two lawsuits.

On December 22, 2021 (the “Effective Date”),

pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG, Kevin Brian Cox

(SURG’s Chief Executive Office–) - in his individual capacity, entered into a Resolution of Purchase, Mutual Release, and

Settlement Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related to the

consideration paid by SURG to the Company in connection with the APA.

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

i) From the total consideration of the Final Settlement Agreement, the amount of $ 375,000

(“Escrow Amount”) will be deposited by SURG in escrow.

SURG has acquired the

Company’s rights to a certain Master Distribution and Service Agreement (“MDA”).

Under certain circumstances, if the result of the Company’s lawsuit against a third

party (the “GBT Lawsuit”) is a monetary judgment without the assignment or legal

decree of ownership of the MDA, the Company shall be entitled to receive the Escrow Amount

and shall assign to SURG the first $ 1,000,000 the Company recovers from the defendants in

the GBT Lawsuit.

In the event that the Company does not prevail in the GBT Lawsuit then it

shall be entitled to release of the Escrow Amount but shall be responsible for any fees and

costs obligation sought by the defendants in the GBT Lawsuit.

(ii) SURG agreed to make total payments of $4,200,000

to the Company’s trust account on or prior to January 7, 2022.

This $4.2 million amount consists of $450,000 paid by SURG in November

and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or prior to January 7, 2022 of

which $375,000 will be held in escrow as described before.

This $4.2 million amount consists of $450,000 paid to the Company

in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or prior to January 7, 2022

of which $375,000 will be held in escrow as described before.

The final settlement SURG agreed to make total payments of $4,200,000 to

the Company’s trust account on or prior to January 7, 2022.

The $3,750,000 was recorded as other receivable as of December 31, 2021.

As of December 31, 2021, the Company has recorded an outstanding payable balance to Stanley amounted $1,862,928 recorded under

accrued expenses.

Subsequently, SURG was a party to two

lawsuits in state District Court, the Eighth Judicial District Court for Clark County, Nevada involving AltCorp, Stanley and Glen

Eagles Acquisition LP (the “AltCorp Parties.”).

Each of these lawsuits were ultimately disputes relating to the total

consideration SURG was to pay the Company under the APA.

On October 18, 2021, the AltCorp Parties,

the Company, and SURG entered into a Memorandum of Understanding (the “MOU”) to set up a framework for an attempt to

settle the two lawsuits.

On December 22, 2021 (the “Effective

Date”), pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG,

Kevin Brian Cox (SURG’s Chief Executive Officer) - in his individual capacity, entered into a Resolution of Purchase, Mutual Release,

and Settlement Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related

to the consideration paid by SURG to the Company in connection with the APA.

The Final Settlement Agreement, among

other resolutions, essentially provides the following:

(i) From the total consideration of

the Final Settlement Agreement, the amount of $ 375,000 (“Escrow Amount”) will be deposited by SURG in escrow.

acquired the Company’s rights to a certain Master Distribution and Service Agreement (“MDA”).

Under certain circumstances,

if the result of the Company’s lawsuit against a third party (the “GBT Lawsuit”) is a monetary judgment without the assignment

or legal decree of ownership of the MDA, the Company shall be entitled to receive the Escrow Amount and shall assign to SURG the

first $ 1,000,000 the Company recovers from the defendants in the GBT Lawsuit.

In the event that the Company does not prevail in

the GBT Lawsuit then it shall be entitled to release of the Escrow Amount but shall be responsible for any fees and costs obligation

sought by the defendants in the GBT Lawsuit.

(ii) SURG agreed to make total payments

of $4,200,000 to the Company’s trust account on or prior to January 7, 2022.

This $4.2 million amount consists of $450,000 paid

to the Company in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or

prior to January 7, 2022 of which $375,000 will be held in escrow as described before.

The final settlement SURG agreed to make

total payments of $4,200,000 to the Company’s trust account on or prior to January 7, 2022.

The $3,750,000 was recorded as other

receivable as of December 31, 2021.

The entire balance of $3,750,000 was paid in January 2022.

(iii) Potential payments to third parties.

The Final Settlement Agreement replaces

all prior agreements between the parties.

In addition, within three (3) trading days of the last payment related to the $ 4.2 million

payment to Stanley being made, the parties shall make filings with the state District Court in Clark County, Nevada to dismiss

both lawsuits, including, regarding the lawsuit filed by AltCorp Trading, LLC, the dismissal of the lawsuit as to VStock Transfer,

The parties agreed to a full mutual release of any disputes or claims between the parties.

The final settlement of $ 3,750,000 was

received by the Company in 2022 and paid out $ 2,650,000 to the third parties in 2022.

The Final Settlement Agreement replaces all prior

agreements between the parties.

In addition, within three (3) trading days of the last payment related to the $ 4.2 million payment to

Stanley being made, the parties shall make filings with the state District Court in Clark County, Nevada to dismiss both lawsuits, including,

regarding the lawsuit filed by AltCorp Trading, LLC, the dismissal of the lawsuit as to VStock Transfer, LLC.

The parties agreed to a

full mutual release of any disputes or claims between the parties.

The final settlement of $ 3,750,000 was received by

the Company in January 2022 and paid out $ 3,750,000 to the third parties before December 31, 2022.

As the Company committed to assign certain revenue

share agreement to SURG as part of the Company’s settlement with RWJ Agreement, on October 5, 2022 and as cumulation of all settlement

agreements the Company issued a request to the SURG regarding release of certain escrow funds and the execution of an assignment of rights

as contemplated in the aforereferenced agreement.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

Note 6 - Stock Loan Receivable

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

The Company has pledged 4,005 restricted shares of its common stock valued at $ 7,610,147 (based on the

closing price on the grant date) for a term of three years in consideration of an annual payment of $ 375,000 paid in quarterly

On January 8, 2019,

the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa Rica corporation

(“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by various regulators.

The Company has pledged 4,006 restricted shares of its common stock valued

at $7,610,147 (based on the closing price on

the grant date) for a term of three years for an annual payment of $375,000 paid in quarterly

installments of $93,750.

In lieu of cash payment, Latinex may pay the Company in virtual currency of WISE Network S.A.

a 50% discount of its offering price of $10 per token.

In the event that Latinex’s required capital has decreased below $5,000,000,

Latinex is permitted to sell the pledged shares of common stock only in an amount to ensure that Latinex can satisfy the required

capital levels.

The Company must consent to such sale of the shares of common stock, which may not be unreasonably withheld.

expiration of the agreement, the remaining shares of common stock shall be returned to the Company free and clear of all liens.

The Company has recorded the value of these shares of common stock as a stock loan receivable which is presented as a contra-equity

account in the accompanying consolidated balance sheets.

At December 31, 2019, the Company wrote off the accrued interest income

as Latinex did not perform any payment and the Company has no mean to enforce this payment.

Latinex agreed in principle to return

the pledged 4,005 restricted shares to the Company for cancellation.

The 4,005 restricted shares have not yet been returned to

the Company as of December 31, 2021.

In lieu of cash payment, Latinex may pay the Company in virtual

currency of WISE Network S.A.

valued at a 50% discount of its offering price of $10 per token.

In the event that Latinex’s

required capital has decreased below $5,000,000, Latinex is permitted to sell the pledged shares of common stock

only in an amount to ensure that Latinex can satisfy the required capital levels.

The Company must consent to such sale of the

shares of common stock, which may not be unreasonably withheld.

Upon expiration of the agreement, the remaining shares of common

stock shall be returned to the Company free and clear of all liens.

The Company has recorded the value of these shares of common

stock as a stock loan receivable which is presented as a contra-equity account in the accompanying consolidated balance sheets.

At December 31, 2019, the Company wrote off the accrued interest income as Latinex did not perform any payment and the Company

has no mean to enforce this payment.

Latinex agreed in principle to return the pledged 4,006 restricted shares to the Company

for cancellation.

The 4,006 restricted shares have not yet been returned

to the Company as of December 31, 2022.

Note 7 – Impaired Investment

in GBT Technologies, S.A.

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

Technologies, Inc.

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

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 ($ 500.00 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.

GBT TECHNOLOGIES

Investment in GBT Technologies,

On June 17, 2019, the Company,

AltCorp Trading LLC, a Costa Rica company and a wholly-owned subsidiary of the Company (“AltCorp”), GBT Technologies, S.A.,

a Costa Rica company (“GBT-CR”) and Pablo Gonzalez, a shareholder’s representative of GBT-CR (“Gonzalez”),

entered into and closed an Exchange Agreement (the “GBT Exchange Agreement”) pursuant to which the parties exchanged certain

In accordance with the Exchange Agreement, AltCorp acquired 625,000 shares of GBT-CR representing 25% of its issued

and outstanding shares of common stock from Gonzalez for the issuance of 20,000 shares of Series H Convertible Preferred

Stock of the Company and a Convertible Note 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 Technologies, Inc.

(“Mobiquity”) and 60,000,000 restricted

shares of common stock of Mobiquity.

The Gopher Convertible

Note bears interest of 6% 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.

of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares

of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per

share) by the conversion price ($500 per share).

The Series H Preferred

Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one

vote for each share of common stock that the Series H Preferred Stock may be convertible into.

Upon conversion of the Gopher

Convertible Note and the 20,000 shares of Series H Preferred Stock, Gonzalez would be entitled to less than 50% of the resulting

outstanding shares of common stock of the Company following conversion in full and, as a result, such transaction is not considered

a change of control.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

2021, the Company, entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal

and Accrued Interest (the “Gonzalez Agreement”) with third party, GBT-CR, IGOR 1 Corp and Gonzalez.

Pursuant to the Gonzalez

Agreement, without any party admission of liability and to avoid litigation, the parties has agreed to (i) extend the GBT Convertible

Note maturity date to December 31,2022, (ii) amend the GBT Convertible Note terms to include a beneficial ownership blocker of

4.99% and a modified conversion feature to the GBT Convertible Note with 15% discount to the market price during the 20 trading

day period ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT

Convertible Note by Gonzalez to a third party.

GBT-CR is in the business of the strategic

management of BPO (Business Process Outsourcing) digital communications processing for enterprises and startups, distributed ledger

technology development, AI development and fintech software development and applications.

December 31, 2022 and 2021

On May 19, 2021, the

Company, entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal and Accrued

Interest (the “Gonzalez Agreement”) with third party, GBT-CR, IGOR 1 Corp and Gonzalez.

Pursuant to the Gonzalez Agreement,

without any party admission of liability and to avoid litigation, the parties had agreed to (i) extend the GBT Convertible Note

maturity date to December 31,2022, (ii) amend the GBT Convertible Note terms to include a beneficial ownership blocker of 4.99%

and a modified conversion feature to the GBT Convertible Note with 15% discount to the market price during the 20 trading day period

ending on the latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT Convertible

Note by Gonzalez to a third party.

GBT-CR is in the business of the strategic management

of BPO (Business Process Outsourcing) digital communications processing for enterprises and startups, distributed ledger technology development,

AI development and fintech software development and applications.

The Company accounted for its investment in GBT-CR

12 unchanged sentences

Investment in Joint Venture

On March 6, 2020, the Company through

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

(“Tokenize”), which is owned by a Costa Rica Trust represented by Pablo Gonzalez (“Gonzalez”).

also represents Gonzalez Costa Rica Trust, which holds a note in the principal amount of $10,000,000 and is also a shareholder

of the Company.

Under the Tokenize Agreement, the parties formed GBT Tokenize Corp., a Nevada corporation (“GBT Tokenize”).

The purpose of GBT Tokenize is to develop, maintain and support source codes for its proprietary technologies including advanced

mobile chip technologies, tracking, radio technologies, AI core engine, electronic design automation, mesh, games, data storage,

networking, IT services, business process outsourcing development services, customer service, technical support and quality assurance

for business, customizable and dedicated inbound and outbound calls solutions, as well as digital communications processing for

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

Upon generating any revenue from

the Technology Portfolio, the Joint Venture will earn the first right of refusal for other territories.

The Company pledged its 50% ownership

in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment.

The Company shall

appoint two directors and Tokenize shall appoint one director of GBT Tokenize.

Tokenize shall contribute the services

and resources for the development of the Technology Portfolio to GBT Tokenize.

The Company shall contribute 2,000,000 shares of

common stock of the Company (“GBT Shares”) to GBT Tokenize.

On March 6, 2020, the Company through Greenwich, entered

into a Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Tokenize-It, S.A.

(“Tokenize”),

which is owned by a Costa Rica Trust represented by Pablo Gonzalez (“Gonzalez”).

Gonzalez also represents Gonzalez Costa Rica

Trust, which holds a note in the principal amount of $10,000,000 and is also a shareholder of the Company.

Under the Tokenize Agreement,

the parties formed GBT Tokenize Corp., a Nevada corporation (“GBT Tokenize”).

The purpose of GBT Tokenize is to develop, maintain

and support source codes for its proprietary technologies including advanced mobile chip technologies, tracking, radio technologies, AI

core engine, electronic design automation, mesh, games, data storage, networking, IT services, business process outsourcing development

services, customer service, technical support and quality assurance for business, customizable and dedicated inbound and outbound calls

solutions, as well as digital communications processing for enterprises and startups (“Technology Portfolio”), throughout

the State of California.

Upon generating any revenue from the Technology Portfolio, the Joint Venture will earn the first right of refusal

for other territories.

The Company pledged its 50% ownership in GBT Tokenize

and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment.

The Company shall appoint two directors

and Tokenize shall appoint one director of GBT Tokenize.

Tokenize shall contribute the services and resources

for the development of the Technology Portfolio to GBT Tokenize.

The Company shall contribute 2,000,000 shares of common stock of the

Company (“GBT Shares”) to GBT Tokenize.

Tokenize and the Company will each own 50% of GBT Tokenize.

The shares were valued at $ 5,500,000 .

The shares were valued

at $ 5,500,000 .

In addition, GBT Tokenize and Gonzalez

entered into a Consulting Agreement in which Gonzalez is engaged to provide services in consideration of $ 33,333 per month payable

quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP.

will provide services in connection with the development of the business as well as GBT Tokenize’s capital raising efforts.

term of the Consulting Agreement is two years.

During year ended December 31, 2021, Gonzalez assigned all his accrued balances

of $ 424,731 to Stanley Hills in a private transaction that the Company is not part to.

The closing of the Tokenize Agreement occurred

on March 9, 2020.

entered into a Consulting Agreement in which Gonzalez is engaged to provide services for $ 33,333

per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the

Company’s 10-day VWAP.

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

Tokenize’s capital raising efforts.

The term of the Consulting Agreement is two years.

During year ended December 31,

2021, Gonzalez assigned all his accrued balances of $ 424,731

to Stanley Hills in a private transaction that the Company is not part to.

The closing of the Tokenize Agreement occurred on

March 9, 2020.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Through this Joint Venture the parties

commenced development of an intelligent human vital signs’ device, which we currently refer to as the qTerm.

The platform is an

expansion of the existing license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp.

with an exclusive territory

of California to develop certain of the Company’s technology.

As the nature of the platform cannot be restricted only to California,

the Company’s joint venture GBT Tokenize Corp.

will be compensated with additional two hundred million shares of the Company to

strengthen its funding, subject to board approval.

A provisional patent application for the qTerm Medical Device was filed on March

30, 2020 with the USPTO.

The application has been assigned serial number 63001564.

The Joint Venture completed successfully

the first prototype.

There is no guarantee that the Company will be successful in researching, developing or implementing this

product into the market.

In order to successfully implement this concept, the Company will need to raise adequate capital to support

its research and, if successfully researched, developed and granted regulatory approval, the Company would need to enter into a

strategic relationship with a third party that has experience in manufacturing, selling and distributing this product.

no guarantee that the Company will be successful in any or all of these critical steps.

On May 28, 2021, the parties agreed

to amend the Tokenize Agreement to expand territory granted for the Technology Portfolio under the license to GBT Tokenize to include

the entire continental United States.

The Company has further agreed to issue GBT Tokenize an additional 14,000,000 shares of common

stock of the Company.

The shares were valued at $ 15,400,000 .

At March 31, 2020, the Company evaluated

the carrying amount of this joint venture investment and determined that this investment was fully impaired and as a result an

impairment charge of $ 5,500,000 was taken.

At December 31, 2021, the Company evaluated the carrying amount of this joint venture

investment and determined that this investment was fully impaired and as a result an impairment charge of $ 15,400,000 was taken.

Although the investment was impaired,

the product development is still ongoing.

The carrying amount of this investment at December 31, 2021 and December 2020, was $ 0

and $ 0 , respectively.

December 31, 2022 and 2021

Through this Joint Venture the parties commenced development

of an intelligent human vital signs’ device, which we currently refer to as the qTerm.

The platform is an expansion of the existing

license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp.

with an exclusive territory of California to develop certain

of the Company’s technology.

As the nature of the platform cannot be restricted only to California, the Company’s joint venture

GBT Tokenize Corp.

will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to

board approval.

A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO.

The application

has been assigned serial number 63001564.

The Joint Venture completed successfully the first prototype.

There is no guarantee that the

Company will be successful in researching, developing or implementing this product into the market.

In order to successfully implement

this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted

regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing,

selling and distributing this product.

There is no guarantee that the Company will be successful in any or all of these critical steps.

On May 28, 2021, the parties agreed to amend the Tokenize

Agreement to expand territory granted for the Technology Portfolio under the license to GBT Tokenize to include the entire continental

United States.

The Company has further agreed to issue GBT Tokenize an additional 14,000,000 shares of common stock of the Company.

shares were valued at $ 15,400,000 .

At March 31, 2020, the Company evaluated the carrying

amount of this joint venture investment and determined that this investment was fully impaired and as a result an impairment charge of

$ 5,500,000 was taken.

At December 31, 2021, the Company evaluated the carrying amount of this joint venture investment and determined

that this investment was fully impaired and as a result an impairment charge of $ 15,400,000 was taken.

Although the investment was impaired, the product

development is still ongoing.

The carrying amount of this investment at December 31, 2022 and December 2021, was $ 0 and $ 0 , respectively.

Note 8 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at December 31, 2021

and 2020 consist of the following:

Accounts payable and accrued expenses at December 31, 2022 and 2021 consist

of the following:

Schedule of accounts payable and accrued expenses

Accounts payable

Accrued liabilities

1 unchanged sentence

Note 9 – Unearned Revenue

Unearned revenue represents the net

amount received for the purchase of products that have not seen shipped to the Company’s customers.

In 2018, the Company ran pre-sales

efforts for its pet tracker product and received prepayments for its product.

In addition, during 2018, the Company received $ 200,000

in connection with an intellectual property license and royalty agreement.

The Company has $ 249,384 and $ 249,675 of unearned at

December 31, 2021 and 2020, respectively.

Unearned revenue represents the net amount received

for the purchase of products that have not seen shipped to the Company’s customers.

In 2018, the Company ran pre-sales efforts for

its pet tracker product and received prepayments for its product.

In addition, during 2018, the Company received $ 200,000 in connection

with an intellectual property license and royalty agreement.

The Company has $ 48,921 and $ 249,384 of unearned revenue at December 31,

2022 and 2021, respectively.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Note 9 – Convertible Notes Payable, Non-related

Partied and Related Party

Convertible notes payable – non related parties at

December 31, 2021 and 2020 consist of the following:

Of Rollfoward of convertible note

Convertible note payable to GBT Technologies S.A

Convertible notes payable to Sixth Street

Convertible notes payable to Redstart Holdings

Convertible note payable to Iliad

Total convertible notes payable, non related parties

Unamortized debt discount

Convertible notes payable – non related parties

Less current portion

Convertible notes payable – non related parties, long-term portion

$10,000,000 for GBT Technologies

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 Stock.

Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the

Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by

dividing the Stated Value ($500 per share) by the conversion price ($ 500 .00 per

This convertible note may convert into shares of the Company’s common

stock at a conversion price equal to 85 % of the lowest trading price with a 20-day look back immediately preceding the date of conversion

and therefore recorded as derivative liability (see note 12).

On May 19, 2021,

the Company, Gonzalez, GBT-CR and IGOR 1 Corp entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of

outstanding balance plus accrued interest (the “Gonzalez Agreement”).

Pursuant to the Gonzalez Agreement, without any

party admission of liability and to avoid litigation, the parties has agreed to (i) extend the GBT convertible note maturity date to

December 31, 2022, (ii) amend the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified

conversion feature to the GBT convertible note with 15% discount to the market price during the 20 trading day period ending on the

latest complete trading day prior to the conversion date and (iii) provided for an assignment of the GBT convertible note by

Gonzalez to a third party.

As a result of the change in terms of this convertible note, the Company took a charge related to the

modification of debt of $ 13,777,480 during

the year ended December 31, 2021.

This convertible note is

recorded as derivative liability because of the discounted price on conversion (see note 12).

year ended December 31, 2021, IGOR 1 converted $1,284,600 of the convertible note into 4,185,650 shares of the Company’s common

Also, on June 24, 2021, the Company transferred 5,500,000 SURG shares received as repayment of $660,000 of this convertible

note (See Note 4).

December 31, 2022 and 2021

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

Convertible notes payable – non related parties at December 31, 2022

and 2021 consist of the following:

Schedule of rollfoward of convertible note

note payable to GBT Technologies S.A

notes payable to 1800

notes payable to Redstart Holdings

Total convertible

notes payable, non related parties

debt discount

notes payable – non related parties

current portion

( 8,109,436 )

notes payable – non related parties, long-term portion

$10,000,000 for GBT Technologies S.

In accordance with the acquisition

of GBT-CR the Company issued a convertible note in the principal amount of $ 10,000,000 .

The convertible note bears interest of 6% and is payable at maturity on December 31, 2021 .

At the election of the holder, the convertible note can be converted into

a maximum of 20,000 shares of Series H Preferred Stock.

Each share of Series H Preferred Stock is convertible, at the option

of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock

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

This convertible

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

20-day look back immediately preceding the date of conversion and therefore recorded as derivative liability (see note 12).

On May 19, 2021, the Company,

Gonzalez, GBT-CR and IGOR 1 Corp entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance

plus accrued interest (the “Gonzalez Agreement”).

Pursuant to the Gonzalez Agreement, without any party admission of liability

and to avoid litigation, the parties had agreed to (i) extend the GBT convertible note maturity date to December 31, 2022, (ii) amend

the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT convertible

note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion

date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third party.

As a result of the change in terms

of this convertible note, the Company took a charge related to the modification of debt of $ 13,777,480 during the year ended December

This convertible note is recorded as derivative liability because of the discounted price on conversion (see note 13).

During the year ended December

31, 2021, IGOR 1 converted $1,284,600 of the convertible note into 4,185,650 shares of the Company’s common stock.

24, 2021, the Company transferred 5,500,000 SURG shares received as repayment of $660,000 of this convertible note (See Note7).

During the year ended December

31, 2022, IGOR 1 converted $1,659,869 of the convertible note into 590,117,647 shares of the Company’s common stock.

As of December 31, 2022,

the note had an outstanding balance of $ 6,395,531 and accrued interest of $ 2,027,148 .

Holdings Corp.

GBT TECHNOLOGIES

Redstart Holdings Corp.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Notes/Converted Notes

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 No.

1”) in the aggregate

principal amount of $ 153,600 for a purchase price of $ 128,000 .

December 31, 2022 and 2021

Paid Off Notes/Converted

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

1”) of $ 153,600 for

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.

1 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

1 had a maturity date of November

3, 2021 and the Company had agreed to pay interest on the unpaid principal balance of the

Redstart Note No.

1 at the rate of 6 %

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.

The 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 Company’s common stock at a conversion price equal

to 85% of the lowest trading price with a 20-day look back immediately preceding the date of conversion.

Since the conversion price

will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a

derivative liability.

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart

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 Company’s common

stock to 85% of the lowest trading price with a 20-day look back immediately preceding the date of conversion.

the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with

this note is accounted for as a derivative liability.

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

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

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 No.

During the year ended December 31, 2021,

the entire amount of Note No.

1 of $ 153,600 plus accrued interest was converted into 226,532 shares of common stock.

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 No.

During the year ended December 31, 2021, the entire amount of Note No.

1 of $ 153,600 plus

accrued interest was converted into 226,532 shares

of common stock.

On 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.

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

2”) of $ 93,600

for $ 78,000 .

The Redstart Note No.

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

trading price with a 20-day look back immediately preceding the date of conversion.

Since the conversion price will vary based

on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability.

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note No.

2 had a maturity date of September

15, 2021 and the Company had agreed to pay interest on the unpaid principal balance of 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.

During the year ended December 31, 2021, the

entire amount of Note No.

2 of $ 93,600 plus accrued interest was converted into 89,169 shares of common stock.

On 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 .

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.

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.

3, provided 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 Company’s common

stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back immediately preceding the date

of conversion.

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated

with this note is accounted for as a derivative liability.

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

of Default (as defined in the Redstart Note No.

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

During the year ended December 31, 2021, the entire amount of Note No.

3 of $ 100,200 plus accrued interest was converted

into 135,582 shares of common stock.

On 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 .

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.

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.

4, provided 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.

2 at the rate of 6 %

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

The transactions described above closed on September 16, 2020.

The outstanding principal amount of the Redstart

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.

4 into shares of the Company’s common

stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back immediately preceding the date

of conversion.

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated

with this note is accounted for as a derivative liability.

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

of Default (as defined in the Redstart Note No.

2 into shares of the

Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back

immediately preceding the date of conversion.

Since the conversion price will vary based on the Company’s stock price,

the beneficial conversion feature associated with this note is accounted for as a derivative liability.

In addition, upon the

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

2), 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

During the year ended December 31, 2021, the entire amount of Redstart Note No.

4 of $ 184,200 plus accrued interest

was converted into 386,146 shares of common stock.

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.

During the year ended December 31, 2021, the entire

amount of Note No.

2 of $ 93,600 plus

accrued interest was converted into 89,169 shares

of common stock.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

On 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

December 31, 2022 and 2021

On 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”) of $100,200 for $83,500.

The Redstart Note No.

5”) in the aggregate principal amount of $106,200 for a purchase price of $88,500.

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.

3 had a maturity date of December 9, 2021 and the Company had agreed to pay interest on

the unpaid principal balance of the Redstart Note No.

3 at the rate of 6% 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.

Company shall have the right to prepay the Redstart Note No.

3, 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

Following the 180 th day, Redstart may convert the Redstart Note No.

5 into shares of the Company’s common

stock at a conversion price equal to 85% of the lowest trading price with a 20-day look back immediately preceding the date

of conversion.

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated

with this note is accounted for as a derivative liability.

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

of Default (as defined in the Redstart Note No.

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

During the year ended December 31, 2021, the entire amount of Redstart Note No.

5 of $ 106,200 plus accrued interest

was converted into 317,837 shares of common stock.

On May 26, 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.

6”) in the aggregate principal amount of $106,200 for a purchase price of $88,500.

6 has a maturity date of August 26, 2022 and the Company has agreed to pay interest on the unpaid principal

balance of the Redstart Note No.

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

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.

6, provided it makes a payment including a prepayment

to Redstart as set forth in the Redstart Note No.

The transactions described above closed on May 28, 2021.

The transactions described above closed on December 11, 2020.

The outstanding principal

5 unchanged sentences

of conversion.

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated

with this note is accounted for as a derivative liability.

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

of Default (as defined in the Redstart Note No.

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature

associated with this note is accounted for as a derivative liability.

In addition, upon the occurrence and during the continuation

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

3), the Redstart Note No.

6 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

During the year ended December 31, 2021, the entire amount of Redstart Note No.

5 of $106,200 plus accrued interest

was fully repaid in total cash of $ 141,782 .

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.

During the year ended December 31, 2021, the entire amount of Note No.

3 of $100,200 plus accrued interest was converted into 135,582 shares of common stock.

On 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

4) of $ 184,200 for a purchase price of $ 153,500 .

The Redstart Note No.

4 had a maturity date

of February 5, 2022 and the Company had agreed to pay interest on the unpaid principal balance of the Redstart Note No.

the rate of 6 % 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.

4, provided 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.

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 Company’s common stock at a conversion price equal

to 85% of the lowest trading price with a 20-day look back immediately preceding the date of conversion.

Since the conversion price will

vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note No.

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.

During the year ended December 31, 2021, the entire amount of Redstart

4 of $ 184,200 plus accrued interest was converted into 386,146 shares of common stock.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Iliad Research

and Trading, L.P.

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

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.

The original issue discount is being

amortized to interest expense over the term of the promissory note.

27, 2020, the Company and Iliad entered into an Amendment to the Iliad Note (See Note 8) 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.

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature

associated with this note is accounted for as a derivative liability.

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.

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 .

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.

On May 19, 2021, the Company and Iliad entered into agreement to further extend the maturity of the Iliad

Note until August 31, 2021 in consideration of an extension fee of $1,000 representing the fourth extension of the original note.

On August 20, 2021, the Company and Iliad entered into agreement to further extend the maturity of the Iliad Note until December

31, 2021 in consideration of an extension fee of $ 1,000 .

During the year ended December 31, 2021, Iliad converted $ 2,508,737 of

its convertible note into 4,053,069 shares of the Company’s common stock.

The balance of the Iliad debt at December 31,

2021 and December 31, 2020 was $ 0 and $ 2,431,841 , respectively.

Outstanding Notes

21, 2021, the Company entered into a Securities Purchase Agreement with Redstart pursuant to which the Company issued to Redstart

a Convertible Promissory Note (the “Redstart Note No.

7”) in the aggregate principal amount of $244,500 for a purchase

price of $203,750.

December 31, 2022 and 2021

On 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

5”) of $ 106,200 for $ 88,500 .

The Redstart Note No.

7 has a maturity date of December 22, 2022 and the Company has agreed to pay

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

7 at the rate of two and a half percent (2.5%) per annum from

the date on which the Redstart Note No.

7 is issued (the “Issue Date”) until the same becomes due and payable, whether

at maturity or upon acceleration or by prepayment or otherwise.

The Company shall have the right to prepay the Redstart Note No.

5 had a maturity date

of June 15, 2022 and the Company had agreed to pay interest on the unpaid principal balance of the Redstart Note No.

rate of 6 % 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 September 28, 2021.

The transactions

described above closed on March 17, 2021.

The outstanding principal amount of the Redstart Note No.

5 unchanged sentences

trading price with a 20-day look back immediately preceding the date of conversion.

Since the conversion price will vary based

on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability.

Since the conversion price will vary based on the

Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability.

addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note No.

5), the Redstart

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.

During the year ended December 31, 2021, the entire amount of Redstart Note

5 of $ 106,200 plus accrued interest was converted into 317,837 shares of common stock.

On May 26, 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

6”) of $106,200 for $88,500.

The Redstart Note No.

6 had a maturity date

of August 26, 2022 and the Company had agreed to pay interest on the unpaid principal balance of the Redstart Note No.

the rate of 6 % from the date on which the Redstart Note No.

6 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.

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

The transactions described above closed on May 28, 2021.

The outstanding principal amount of the Redstart Note No.

6 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.

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

of the lowest trading price with a 20-day look back immediately preceding the date of conversion.

Since the conversion price will vary

based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note No.

Redstart Note No.

7 shall become immediately due and payable and the Company shall pay to Redstart, in full satisfaction of its

obligations hereunder, additional amounts as set forth in the Redstart Note No.

As of December 31, 2021, the note had an outstanding

balance of $ 244,500 and accrued interest of $ 1,591 .

GBT TECHNOLOGIES

the Redstart Note No.

6 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.

During the year ended December 31, 2021, the entire amount of Redstart

5 of $106,200 plus accrued interest was fully repaid in total cash of $ 141,782 .

On September 21, 2021, the Company entered into a Securities Purchase Agreement with Redstart pursuant

to which the Company issued to Redstart a Convertible Promissory Note (the “Redstart Note No.

7”) of $ 244,500 for

The Redstart Note No.

7 had a maturity date of December 22, 2022 and

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

7 at 2.5% from the date on which the Redstart

7 is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration

or by prepayment or otherwise.

The Company shall have the right to prepay the Redstart Note No.

7, provided it makes a payment including

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

The transactions described above closed on September 28, 2021.

outstanding principal amount of the Redstart Note No.

7 may not be converted prior to the period beginning on the date that is 180 days

following the Issue Date.

Following the 180 th day, Redstart may convert

the Redstart Note No.

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

trading price with a 20-day look back immediately preceding the date of conversion.

Since the conversion price will vary based on the

Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability.

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Redstart Note No.

7), the Redstart

7 shall become immediately due and payable and the Company shall pay to Redstart, in full satisfaction of its obligations hereunder,

additional amounts as set forth in the Redstart Note No.

During the year ended December 31, 2022, Redstart converted the entire note

into 7,656,951 shares of the Company’s common stock.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

8, 2021, the Company entered into a Securities Purchase Agreement with Sixth Street Lending LLC (“Sixth Street”) pursuant

to which the Company issued to Sixth Street a Convertible Promissory Note (the “Sixth Street Note”) in the aggregate

principal amount of $ 124,200 for a purchase price of $ 103,500 .

The Sixth Street Note has a maturity date of February 8, 2023 and

the Company has agreed to pay interest on the unpaid principal balance of the note at the rate of six percent ( 6 %) per annum from

the date on which the note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or

upon acceleration or by prepayment or otherwise.

The Company shall have the right to prepay the note, provided it makes a payment

including a prepayment to Sixth Street as set forth in the Sixth Street Note.

The outstanding principal amount of the note may

not be converted prior to the period beginning on the date that is 180 days following the Issue Date.

December 31, 2022 and 2021

Iliad Research and Trading,

On February 27,

2019, the Company entered into a note purchase agreement with a third-party invest–r - Iliad Research and Trading,

L.P.(“Iliad”), pursuant to which the Company issued a promissory note for the original principal amount of

The promissory note had an original issue discount of $ 300,000 and

the inventor paid $ 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% 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 had 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.

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

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 Company’s failure to deliver shares of common stock within three trading

days of a conversion would result in an event of default.

Since the conversion price will vary based on the Company’s

stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability.

Iliad 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 for an extension fee of $ 1,000 .

On February 28, 2021 the Company and Iliad entered into agreement to further extend the maturity of the Iliad Note until

May 31, 2021 for an extension fee of $1,000 representing the third extension of the original note.

On May 19, 2021, the

Company and Iliad entered into agreement to further extend the maturity of the Iliad Note until August 31, 2021 for an

extension fee of $1,000 representing the fourth extension of the original note.

On August 20, 2021, the Company and Iliad

entered into agreement to further extend the maturity of the Iliad Note until December 31, 2021 for an extension fee of

During the year ended December 31, 2021, Iliad converted $2,508,737 of its convertible note into 4,053,069 shares

of the Company’s common stock.

The balance of the Iliad debt at December 31, 2022 and December 31, 2021 was $ 0 and

respectively.

Sixth Street Lending LLC

– named changed - 1800 Diagonal Lending LLC - First Note

On November 8, 2021, the

Company entered into a Securities Purchase Agreement with Sixth Street Lending LLC (“Sixth Street”) pursuant to which the

Company issued to Sixth Street a Convertible Promissory Note (the “Sixth Street Note”) of $ 124,200 for $ 103,500 .

Sixth Street Note had a maturity date of February 8, 2023 and the Company agreed to pay interest on the unpaid principal balance

of the note at 6 % from the date on which the note is issued (the “Issue Date”) until the same becomes due and payable,

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

The Company shall have the right to prepay the note, provided

it makes a payment including a prepayment to Sixth Street as set forth in the Sixth Street Note.

The outstanding principal amount of the

note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date.

Following the 180 th day,

4 unchanged sentences

as a derivative liability.

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the

Sixth Street Note), the note shall become immediately due and payable and the Company shall pay to Sixth Street, in full satisfaction

of its obligations hereunder, additional amounts as set forth in the Sixth Street Note.

As of December 31, 2021, the note had an

outstanding balance of $ 124,200 and accrued interest of $ 1,061 .

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the Sixth

Street Note), the note shall become immediately due and payable and the Company shall pay to Sixth Street, in full satisfaction of its

obligations hereunder, additional amounts as set forth in the Sixth Street Note.

During the year ended December 31, 2022, Sixth Street

converted the entire note into 26,343,190 shares of the Company’s common stock.

Outstanding Notes

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Sixth Street Lending LLC

– named changed - 1800 Diagonal Lending LLC - Second Note

On May 5, 2022, the Company entered into a Securities

Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”), pursuant to which the Company issued to

DL a Convertible Promissory Note (the “DL Note”) of $ 244,500 for $ 203,500 .

The DL Note had a maturity date of August

4, 2023 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at 6.0 % from the date on which

the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration

or by prepayment or otherwise.

The Company shall have the right to prepay the DL Note at any time from the Issue Date and continuing through

180 days following the Issue Date, provided it makes a payment including a prepayment premium to DL as set forth in the DL Note.

The transactions

described above funded on May 9, 2022.

The outstanding principal amount of the DL Note may

not be converted prior to the period beginning on the date that is 180 days following the Issue Date.

Following the 180 th day,

DL may convert the DL Note into shares of the Company’s common stock at

a conversion price equal to 85% of the lowest trading price during the 20-day period immediately preceding the date of conversion.

In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the DL Note), the DL Note shall become

immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as

set forth in the DL Note.

In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company

common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company.

Unless the Company shall have first delivered to DL,

at least 48 hours prior to the closing of any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future

Offering”), written notice describing the proposed Future Offering and providing the Buyer an option during the 48 hour period following

delivery of such notice to DL the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering

then the Company is restricted from conducting the Future Offering during the period beginning on the Issue Date and ending nine months

following the Issue Date.

During the year ended December 31, 2022, 1800

Diagonal lending converted $130,400 of the convertible note into 222,091,971 shares of the Company’s common stock.

As of December 31, 2022,

the note had an outstanding balance of $ 114,100 and accrued interest of $ 7,674 .

Sixth Street Lending LLC

– named changed - 1800 Diagonal Lending LLC - Third Note

On September 13, 2022, the Company entered into a

Securities Purchase Agreement (dated September 9, 2022) with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant

to which the Company issued to DL a Promissory Note (the “DL Note”) of $ 116,200 with

an original issue discount of $12,450 resulting in net proceeds of the Company of $ 103,750 .

The DL Note had a maturity date of September

9, 2023 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0%

from the date on which the DL Note is issued (the “Issue Date”).

A one-time interest charge of 12 % or $ 13,944 was

applied on the Issue Date to the principal amount owed under the DL Note.

Accrued, unpaid interest and outstanding principal, subject

to adjustment, shall be paid in ten payments of $13,014.40 resulting in a total payback to DL of $130,144.

payment is due October 30, 2022 with nine subsequent payments each month thereafter.

The Company shall have a five-day grace period with

respect to each payment.

The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty.

Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal amount of the DL Note may not be converted

into the Company common shares except in the event of default.

In the event of default on the DL Note, DL may convert the DL Note into

shares of the Company’s common stock at a conversion price equal to 75 %

of the lowest trading price with a 10-day look back immediately preceding the date of conversion.

In addition, upon the occurrence and

during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the

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

shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned

by DL and its affiliates would exceed 4.99 % of the outstanding shares of the common stock of the Company.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

During the year ended December 31, 2022, the

company paid back $ 39,043 to 1800 Diagonal lending.

As of December 31, 2022,

the note had an outstanding balance of $ 77,157 and an interest of $ 13,944 .

As of December 31, 2022 and

December 31, 2021, the nonrelated party convertible notes had total outstanding balance of $ 6,393,497 and 8,145,233 , net of

debt discount, and accrued interest of $ 2,068,799 and $ 1,547,924 , respectively.

Convertible notes payable – related parties at December 31, 2022

1 unchanged sentence

Summary of convertible notes payable

Convertible note payable to Stanley Hills

Unamortized debt discount

Convertible notes payable, net, related party

Less current portion

Convertible notes payable, net, related party, long-term portion

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 Stanley to continue

to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due

to Stanley in the amount of $ 1,214,900 may be converted into shares of common stock of the Company at a conversion price equal

to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete

trading day prior to the conversion date.

note payable to Stanley Hills

debt discount

notes payable, net, related party

current portion

notes payable, net, related party, long-term portion

Stanley Hills LLC

Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received

more than $ 1,000,000

in loans (the “Debt”) from May 2019 up to December 2019.

On February 26, 2020, in order to induce Stanley

to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note

payable balance due to Stanley of $ 1,214,900 may

be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest

one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to

the conversion date.

Since the conversion price will vary based on the Company’s stock price, the beneficial

conversion feature associated with this note is accounted for as a derivative liability.

Stanley has agreed to restrict its

ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and

its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares

of common stock.

During the year ended December 31, 2021, Stanley converted $ 1,231,466 of its convertible note plus interest

into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the

Company an additional $ 325,000 .

Also, during the year ended December 31, 2021, the Company transferred the SURG shares received

as repayment of $ 800,000 of this convertible note (See Note 4) and also converted $ 126,003 of accrued interest into the principal

During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $ 424,731 to Stanley in a private

transaction that the Company is not part to (See Note 5).

The balance of the Stanley debt at December 31, 2021 and December 31,

2020 was $ 116,605 and $ 1,009,469 , respectively.

Stanley had agreed to restrict

its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held

by it and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued

and outstanding shares of common stock.

During the year ended December 31, 2021, Stanley converted $ 1,231,466 of

its convertible note plus interest into 4,420,758 shares

of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an

additional $ 325,000 .

Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $ 800,000 of

this convertible note (See Note 10) and also converted $ 126,003

of accrued interest into the principal balance.

During the year ended December 31, 2021, Gonzalez assigned all his

accrued balances of $ 424,731 to

Stanley in a private transaction that the Company is not part to (See Note 10).

As of December 31, 2022 and 2021 the

principal balance of Stanley debt is $ 116,605

respectively.

The unpaid interest of the Stanley debt at December 31, 2022 and 2021 was $ 20,033 and

respectively.

The Stanley debt is secured via a pledge agreement on the SURG shares.

Discounts on convertible notes

The Company recognized interest expense

of $ 824,238 and $ 4,149,550 during the years ended December 31, 2021 and 2020, respectively, related to the amortization of the

debt discount on convertible notes.

The Company recognized interest expense of $ 438,015

and $ 824,238 during the years ended December 31, 2022 and 2021, respectively, related to the amortization of the debt discount on convertible

The unamortized debt discount at December 31, 2022 and 2021 was $ 189,060 and $ 278,867 , respectively.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

A roll-forward

of the convertible notes payable from December 31, 2019 to December 31, 2021 is below:

Schedule Of Roll Forward Convertible Notes

Convertible notes payable, December 31, 2019

Issued for cash

Accrued interest added to convertible note

Exchange of convertible note for other company assets

Notes payable converted to convertible

Original issue discount

Conversion to common stock

Debt discount related to new convertible

Amortization of debt discounts

Convertible notes payable, December 31, 2020

Issued for cash

Convertible note issued for accounts payable

Accrued interest added to convertible note

Payment with marketable securities

Payment with cash

Original issue discount

Conversion to common stock

Debt discount related to new convertible notes

Amortization of debt discounts

Convertible notes payable, December 31, 2021

Note 10 - Notes Payable, Non-related

Parties and Related Party

Notes payable, Non-related parties at

December 31, 2021 and December 31, 2020 consist of the following:

December 31, 2022 and 2021

A roll-forward of the convertible notes payable from

December 31, 2020 to December 31, 2022 is below:

Schedule of roll forward convertible notes payable

notes payable, December 31, 2020

note issued for accounts payable

interest added to convertible note

with marketable securities

( 1,460,000 )

issue discount

to common stock

( 5,649,000 )

discount related to new convertible notes

of debt discounts

notes payable, December 31, 2021

issue discount

to common stock

( 2,158,971 )

discount related to new convertible notes

of debt discounts

notes payable, December 31, 2022

Note –11 - Notes Payable, Non-related Parties

and Related Party

Notes payable, non-related parties at December 31,

2022 and December 31, 2021 consist of the following:

Schedule of notes payable

RWJ acquisition note

Total notes payable

Unamortized debt discount

acquisition note

debt discount

Notes payable

Less current portion

( 2,612,397 )

current portion

( 2,612,397 )

Notes payable, long-term portion

payable, long-term portion

RWJ Acquisition Note

In 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, 2021.

The balance of the note at December 31, 2021 and 2020 was $ 2,600,000 and $ 2,600,000

plus accrued interest of $ 394,666 and $ 307,631 , respectively.

In connection with the acquisition of RWJ in September

2017, the Company issued a note payable.

The note accrues interest at 3.5 %, was due on December 31, 2019 and is secured by the

assets purchased in the acquisition.

The Company contests the validity of the note, as such the note has not been repaid as of December

The balance of the note at December 31, 2022 and 2021 was $ 0 and $ 2,600,000 plus accrued interest of $ 0 and $ 394,666 , respectively.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

On June 22, 2020, the Company received

a loan from the Small Business Administration under the Economic Injury Disaster Loan program related to the COVID-19 relief efforts.

The loan bears interest at 3.75 % per annum, requires monthly principal and interest payments of $ 731 after 12 months from funding

and is due 30 years from the date of issuance.

The monthly payments have been extended by the SBA to all EIDL borrowers with additional

Monthly payments will be commenced on or around June 16, 2022.

On October 1, 2021, the Company entered an Amended Loan

Authorization and Agreement with the SBA providing for the modification of the Original Note providing for monthly principal and

interest payments of $ 1,771 after 24 months from the Original Note commencing on or around June 22, 2022.

On March 17, 2022 the SBA notified it deferred the payments to all COVID-19

EIDL loans will have the first payment due extended from 24-months to 30-months from the date of the note.

Modified Note will continue to bear interest at 3.75 % per annum and is due 30 years from the date of issuance of the Original

The Modified Note is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT

Tokenize Corp.

The additional funding of $ 200,000 was received by the Company on October 5, 2021.

The balance of the note

at December 31, 2021 and 2020 was $ 350,000 and $ 150,000 plus accrued interest of $ 10,582 and $ 3,067 , respectively.

December 31, 2021 and 2020

On June 22, 2020, the Company received a loan from

the Small Business Administration under the Economic Injury Disaster Loan program related to the COVID-19 relief efforts.

The loan bears

interest at 3.75 %, requires monthly principal and interest payments of $ 731 after 12 months from funding and is due 30 years

from the date of issuance.

The monthly payments have been extended by the SBA to all EIDL borrowers with additional 12 months.

payments will be commenced on or around June 16, 2022.

On October 1, 2021, the Company entered an Amended Loan Authorization and Agreement

with the SBA providing for the modification of the Original Note providing for monthly principal and interest payments of $ 1,771 after 24 months

from the Original Note commencing on or around June 22, 2022.

On March 17, 2022 the SBA notified it deferred the payments to

all COVID-19 EIDL loans will have the first payment due extended from 24-months to 30-months from the date of the note.

Note will continue to bear interest at 3.75 % and is due 30 years from the date of issuance of the Original Note.

Note is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT Tokenize Corp.

The additional

funding of $ 200,000 was received by the Company on October 5, 2021.

The balance of the note at December 31, 2022 and 2021 was $ 350,000

and $ 350,000 plus accrued interest of $ 23,707 and $ 10,582 , respectively.

Notes payable, related party at December 31, 2022

1 unchanged sentence

Schedule of notes payable related parties

Alpha Eda note payable

Total notes payable, related party

Unamortized debt discount

Notes payable, net, related party

Less current portion

Notes payable, net, related party, long-term portion

Eda note payable

payable, related party

debt discount

Notes payable,

net, related party

current portion

payable, net, related party, long-term portion

On November 15, 2020, the Company issued

a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000.

The note accrues interest at 10% per

annum, is unsecured and is due on September 30, 2021.

On June 20, 2021 Alpha and the Company extended the note maturity to December

The balance of the note at December 31, 2021 and 2020 was $140,000 and $140,000 plus accrued interest of $16,633

and $1,803, respectively.

The note accrues interest

at 10%, is unsecured and was due on September 30, 2021.

On June 20, 2021 Alpha and the Company extended the note

maturity to December 31, 2021.

The balance of the note at December 31, 2022 and 2021 was $ 140,000 and

plus accrued interest of $ 32,633

and $ 16,633 ,

respectively.

Discounts on Promissory Note

The Company recognized interest expense

of $0 and $47,671 during the years ended December 31, 2021 and 2020, respectively, related to the amortization of the debt discount

on promissory notes.

The Company recognized interest expense of $ 0 and

$ 47,671 during the years ended December 31, 2021 and 2020, respectively, related to the amortization of the debt discount on promissory

The unamortized debt discount at December 31, 2021 and 2020 was $ 0 .

Note 12 – Accrued Settlement

In connection with a legal matter filed

by the Investor of the $ 8,340,000 Senior Secured Redeemable Convertible Debenture, on December 23, 2019, in the pending 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 Senior

Secured Redeemable Convertible Debenture (the “Debenture”) constitute unenforceable liquidated damages penalties

and were stricken.

Further, it was determined that the Investor was entitled to recovery of their attorney’s fees.

Consequently,

the arbitrator awarded Investor an award of $ 4,034,444 plus interest of 7.25 % accrued from May 15, 2019 (presented separately

in accounts payable and accrued expenses) and costs in the amount of $ 55,613 .

In connection with a legal matter filed by the Investor

of the $ 8,340,000 Senior Secured Redeemable Convertible Debenture, on December 23, 2019, in the pending 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 Senior Secured Redeemable Convertible

Debenture (the “Debenture”) constitute unenforceable liquidated damages penalties and were stricken.

Further, it was

determined that the Investor was entitled to recovery of their attorney’s fees.

Consequently, the arbitrator awarded Investor an

award of $ 4,034,444 plus interest of 7.25 % accrued from May 15, 2019 (presented separately in accounts payable and accrued expenses)

and costs of $ 55,613 .

(See Note 17).

In connection with this settlement,

the Company recognized a gain on the settlement of debt of $ 1,375,556 in 2019 as the difference between the carrying amount

of the debt and the amount awarded by the arbitrator (See Note 15).

The Company recorded accrued settlement of $ 4,090,057 and $ 4,090,057

at December 31, 2021 and 2020, respectively.

In connection with this settlement, the Company recognized a gain on the settlement

of debt of $ 1,375,556 in 2019 as the difference between the carrying amount of the debt and the amount awarded by the arbitrator

(See Note 17).

The Company recorded accrued settlement of $ 4,090,057 and $ 4,090,057 at December 31, 2022 and 2021, respectively.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

Note 13 - Derivative Liability

Certain of the convertible notes payable

discussed in Note 8 have a conversion price that can be adjusted based on the Company’s stock price which results in the conversion

feature being recorded as a derivative liability.

The fair value of the derivative liability

is recorded and shown separately under current liabilities.

Changes in the fair value of the derivative liability is recorded in

the statement of operations under other income (expense).

The Company uses a weighted average

Black-Scholes option pricing model with the following assumptions to measure the fair value of derivative liability at December

31, 2021 and 2020:

Certain of the convertible notes payable discussed

in Note 10 have a conversion price that can be adjusted based on the Company’s stock price which results in the conversion feature

being recorded as a derivative liability.

The FV of the derivative liability is recorded

and shown separately under current liabilities.

Changes in the FV of the derivative liability is recorded in the statement of operations

under other income (expense).

The Company uses a weighted average Black-Scholes

option pricing model with the following assumptions to measure the FV of derivative liability at December 31, 2022 and 2021:

Schedule of assumptions to measure fair value

2 unchanged sentences

Conversion/ Exercise price

$ 0.102 - 0.103

$ .008 - .0085

Dividend rate

1 unchanged sentence

derivative liability activity for the years ended December 31, 2022 and 2021:

Schedule of Derivative Liabilities at Fair Value

Derivative liability balance, December 31, 2019

Issuance of derivative liability during the period

Fair value of beneficial conversion feature of debt converted

Change in derivative liability during the period

Derivative liability balance, December 31, 2020

Debt modification

Issuance of derivative liability during the period

Fair value of beneficial conversion feature of debt converted

Change in derivative liability during the period

Derivative liability balance, December 31, 2021

Derivative instruments and hedging activities

liability balance, December 31, 2019

of derivative liability during the period

value of beneficial conversion feature of debt converted

( 2,038,392 )

in derivative liability during the period

liability balance, December 31, 2020

of derivative liability during the period

value of beneficial conversion feature of debt converted

in derivative liability during the period

liability balance, December 31, 2021

of derivative liability during the period

value of beneficial conversion feature of debt converted

( 2,209,887 )

in derivative liability during the period

( 6,594,370 )

liability balance, December 31, 2022

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Note 14 - Stockholders’ Equity

The Board of Directors of the Company

approved, on April 13, 2020, a reverse stock split of all of the Company’s Common Stock, pursuant to which every 50 shares of Common

The Board of Directors of the Company approved,

on April 13, 2020, a reverse stock split of all of the Company’s Common Stock, pursuant to which every 50 shares of Common

Stock of the Company shall be reverse split, reconstituted and converted into one (1) share of Common Stock of the Company (the

5 unchanged sentences

of State of the State of Nevada subject to FINRA approval.

Since this reverse stock split has not yet been approved by the State

of Nevada, the financial statements have not been retroactively restated to reflect this reverse stock split.

On June 8, 2020 FINRA

advised the Company that such request is deficient due to the fact that a holder of an outstanding convertible note of the Company

had entered into two settlements with the Securities and Exchange Commission that related to securities laws violations but were

in no way related to the Company.

As a result, FINRA advised that it is necessary for the protection of investors, the public interest,

and to maintain fair and orderly markets that documentation related to the Reverse Stock Split not be processed.

The Company appealed

the decision made by FINRA on June 15, 2020.

On June 8, 2020 FINRA advised the Company that such request is deficient

due to the fact that a holder of an outstanding convertible note of the Company had entered into two settlements with the Securities

and Exchange Commission that related to securities laws violations but were in no way related to the Company.

As a result, FINRA

advised that it is necessary for the protection of investors, the public interest, and to maintain fair and orderly markets that

documentation related to the Reverse Stock Split not be processed.

The Company appealed the decision made by FINRA on June 15,

On August 4, 2020, FINRA notified the Company that its appeal had been denied.

October 25, 2021 FINRA approved the Reverse Stock Split and on October 26, 2021, the Company effectuated a 1 for 50 reverse

On October 25, 2021 FINRA approved the Reverse

Stock Split and on October 26, 2021, the Company effectuated a 1 for 50 reverse stock split.

In July 7, 2022 the Company filed a preliminary information

statement to the stockholders of record (the “Record Date”) in connection with certain actions to be taken by the written

consent by stockholders holding a majority of the voting stock of the Company, dated as of June 28, 2022.

To amend the Company’s Articles of Incorporation, (the “Articles of Incorporation”) to increase the number of authorized shares of common stock, par value $ 0.00001 per share (the “Common Stock”), of the Company from 2,000,000,000 shares to 10,000,000,000 shares.

This action concluded on August 11, 2022.

(i) authorize the Company’s Board of Directors to effect, in its sole discretion, a reverse stock split of the Common Stock in a ratio of up to 1-for-500 (the “Reverse Stock Split”), and (ii) authorize the filing of an amendment to the Company’s Articles of Incorporation to implement the Reverse Stock Split and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time prior to December 31, 2023.

This action was not commenced yet by the Company’s board.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 202 0

During the year ended December 31, 2021,

the Company had the following transactions in its common stock:

an aggregate of 13,821,709 for the conversion of convertible notes of $ 5,649,000 and accrued

interest of $ 28,868 ;

● issued 245,000 shares

to consultants for services rendered.

The value of the shares of $ 281,750 was determined

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

● issued 14,000,000 shares

to GBT Tokenize for a joint venture agreement.

The value of the common stock of $ 15,400,000 was

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

During the year ended December 31, 2020,

the Company had the following transactions in its common stock:

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 Company’s common

stock on the grant date.

December 31, 2022 and 2021

During the year ended December 31, 2022, the Company

had the following transactions in its common stock:

Of 5,500,000 Shares issued

for cash of $ 231,866 ;

Of 847,133,242 Shares issued

for the conversion of convertible notes of $ 2,158,969 and accrued interest of $ 6,491 ;

cancelled 240,000 for services rendered

Of 150,000,000

Shares issued to GBT Tokenize for certain joint venture agreement between Magic International Argentina FC, S.L.

The value of the shares of $ 1,500 was

determined based on the FV of the Company’s common stock;

Of 500,000,000

Shares issued to Metaverse for certain equity method investment.

The value of the shares of $5,000 was determined based

on the FV of the Company’s common stock;

Series B Preferred Shares

On November 1, 2011, the Company and

certain creditors entered into a Settlement Agreement (the “Settlement Agreement”) whereby without admitting any wrongdoing

on either part, the parties settled all previous agreements and resolved any existing disputes.

Under the terms of the Settlement

Agreement, the Company agreed to issue the creditors 45,000 shares of Series B Preferred Stock of the Company on a pro-rata basis.

Following the issuance and delivery of the shares of Series B Preferred Stock to said creditors, as well as surrendering the undelivered

shares, the Settlement Agreement resulted in the settlement of all debts, liabilities and obligations between the parties.

The Series B Preferred Stock has a stated

value of $100 per share and is convertible into the Company’s common stock at a conversion price of $ 30.00 per share representing

30 posts split common shares.

Furthermore, the Series B Preferred Stock votes on an as converted basis and carries standard anti-dilution

The Series B Preferred Stock has a stated value of

$100 per share and is convertible into the Company’s common stock at a conversion price of $ 30 per share representing 30 posts

split common shares.

Furthermore, the Series B Preferred Stock votes on an as converted basis and carries standard anti-dilution rights.

These rights were subsequently removed, except in cases of stock dividends or splits.

As of December 31, 2021 and 2020, there

were 45,000 Series B Preferred Shares outstanding.

As of December 31, 2022 and 2021, there were 45,000

Series B Preferred Shares outstanding.

Series C Preferred Shares

On April 29, 2011, GV Global Communications,

(“GV”) provided funding to the Company in the aggregate principal amount of $111,000 (the “Loan”).

September 25, 2012, the Company and GV entered into a Conversion Agreement pursuant to which the Company agreed to convert the

Loan into 10,000 shares of Series C Preferred Stock of the Company, which was approved by the Board of Directors.

Each share of Series C Preferred Stock

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

Value (as defined below) by the Conversion Price (as defined below).

The Conversion Price for each share is equal to a 50% discount

to the average of the lowest three lowest closing bid prices of the Company’s common stock during the 10-day trading period prior

to the conversion with a minimum conversion price of $0.02.

Each share of Series C Preferred Stock is convertible,

at the option of GV, into such number of shares of common stock of the Company as determined by dividing the Stated Value (as defined

below) by the Conversion Price (as defined below).

The Conversion Price for each share is equal to a 50% discount to the average

of the lowest three lowest closing bid prices of the Company’s common stock during the 10-day trading period prior to the

conversion with a minimum conversion price of $0.02.

The stated value is $11 per share (the “Stated Value”).

The Series C Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series C Preferred Stock shall

be entitled to one vote for each share of common stock that the Series C Preferred Stock shall be convertible into.

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.

C Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series C Preferred Stock shall be entitled

to one vote for each share of common stock that the Series C Preferred Stock shall be convertible into.

GV has contractually

agreed to restrict its ability to convert the Series C Preferred Stock and receive shares of the Company’s common stock such

that the number of shares of the Company’s common stock held by it and its affiliates after such conversion does not exceed

4.9% of the then issued and outstanding shares of the Company’s common stock.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

During the year ended December 31, 2014,

GV Global Communications, Inc.

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 amount that both they and the

Company believed that they were owed.

At December 31, 2021 and 2020, GV owns 700 Series C Preferred Shares.

The issuance of the Series C Preferred

Stock was made in reliance upon exemptions from registration pursuant to Section 4(a)(2) under the Securities Act of 1933 and Rule

506 promulgated under Regulation D thereunder.

GV is an accredited investor as defined in Rule 501 of Regulation D promulgated

under the Securities Act of 1933.

As of December 31, 2021 and 2020, there

were 700 Series C Preferred Shares outstanding.

December 31, 2022 and 2021

At December 31, 2022 and 2021, GV owns 700

Series C Preferred Shares.

The issuance of the Series

C Preferred Stock was made in reliance upon exemptions from registration pursuant to Section 4(a)(2) under the Securities Act

of 1933 and Rule 506 promulgated under Regulation D thereunder.

GV is an accredited investor as defined in Rule 501 of Regulation

D promulgated under the Securities Act of 1933.

As of December 31, 2022 and 2021, there were 700 Series

C Preferred Shares outstanding.

Series D Preferred Shares

As of December 31, 2021 and 2020, there

are 0 and 0 shares of Series D Preferred Shares outstanding, respectively.

As of December 31, 2022 and 2021, there are 0 and

0 shares of Series D Preferred Shares outstanding, respectively.

Series G Preferred Shares

As of December 31, 2021 and 2020, there

are 0 and 0 shares of Series G Preferred Shares outstanding, respectively.

As of December 31, 2022 and 2021, there are 0 and

0 shares of Series G Preferred Shares outstanding, respectively.

Series H Preferred Shares

On June 17, 2019, the Company, AltCorp

Trading LLC, a Costa Rica company and a wholly-owned subsidiary of the Company (“AltCorp”), GBT Technologies, S.A., a

Costa Rica company (“GBT-CR”) and Pablo Gonzalez, a shareholder’s representative of GBT-CR (“Gonzalez”), entered

into and closed an Exchange Agreement (the “GBT Exchange Agreement”) pursuant to which the parties exchanged certain

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 additional consideration.

The 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.

On July 8, 2019, the Company entered a Consulting Agreement

with Glen Eagles Glen Eagles Acquisition LP (“Glen”) as consultant to provide services in connection with the Company’s

acquisition of 25% of GBT-CR.

Consultant will provide analysis, interaction with related professional and other services as requested

by the Company to integrate and expand capabilities between GBT-CR and the Company.

(See Note 14 for further details.)

As of December 31, 2021 and 2020, there

are 20,000 shares of Series H Preferred Shares outstanding.

GBT TECHNOLOGIES

On June 17, 2019, the Company, AltCorp Trading LLC,

a Costa Rica company and a wholly-owned subsidiary of the Company (“AltCorp”), GBT Technologies, S.A., a Costa Rica company

(“GBT-CR”) and Pablo Gonzalez, a shareholder’s representative of GBT-CR (“Gonzalez”), entered into and closed

an Exchange Agreement (the “GBT Exchange Agreement”) pursuant to which the parties exchanged certain securities.

In accordance

with the Exchange Agreement, AltCorp acquired 625,000 shares of GBT-CR representing 25% of its issued and outstanding shares of common

stock from Gonzalez for the issuance of 20,000 shares of Series H Convertible Preferred Stock of the Company and a Convertible

Note of $ 10,000,000 issued by the Company (the “Gopher Convertible Note”) as well as additional consideration.

The Gopher Convertible Note bears interest of 6% and 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

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.

2019, the Company entered a Consulting Agreement with Glen Eagles Glen Eagles Acquisition LP (“Glen”) as consultant to provide

services in connection with the Company’s acquisition of 25% of GBT-CR.

Consultant will provide analysis, interaction with related

professional and other services as requested by the Company to integrate and expand capabilities between GBT-CR and the Company.

Note 14 for further details.)

As of December 31, 2022 and 2021, there are 20,000

shares of Series H Preferred Shares outstanding.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

The following is a summary of warrant

December 31, 2022 and 2021

The following is a summary of warrant activity.

Summary of warrant activity

Outstanding, December 31, 2020

Outstanding, December 31, 2021

Exercisable, December 31, 2021

The exercise price for warrant outstanding

and exercisable at December 31, 2020:

December 31, 2021

December 31, 2022

The exercise price for warrant outstanding and exercisable

at December 31, 2022:

Summary of exercise price for warrant outstanding

Equity Purchase

Agreement and Registration Rights Agreement

Equity Purchase Agreement

and Registration Rights Agreement

On December 17,

2021 (the “Effective Date”), GBT Technologies Inc.

(the “Company”) entered into an equity financing agreement

(the “Equity Financing Agreement”) and a registration rights agreement (the “Registration Rights Agreement”)

with GHS Investments LLC (“GHS”), pursuant to which GHS shall purchase from the Company, up to that number of shares

of common stock of the Company (the “Shares”) having an aggregate Purchase Price of $ 10,000,000 , subject to certain limitations

and conditions set forth in the Equity Financing Agreement from time to time over the course of 24 months after an effective registration

of the Shares with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement,

is declared effective by the SEC (the “Contract Period”).

(the “Company”) entered into an equity financing

agreement (the “Equity Financing Agreement”) and a registration rights agreement (the “Registration Rights

Agreement”) with GHS Investments LLC (“GHS”), pursuant to which GHS shall purchase from the Company, up to

that number of shares of common stock of the Company (the “Shares”) for $ 10,000,000 ,

subject to certain limitations and conditions set forth in the Equity Financing Agreement from time to time over the course

of 24 months after an effective registration of the Shares with the Securities and Exchange Commission (the

“SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC (the “Contract

The Equity Financing Agreement

17 unchanged sentences

The Equity Financing Agreement terminates upon any of the following events:

when GHS has purchased an aggregate of $10,000,000

when GHS has purchased $10,000,000

in the Common Stock of the Company pursuant to the Equity Financing Agreement;

1 unchanged sentence

Equity Financing Agreement was executed.

GBT TECHNOLOGIES

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

of shares of Common Stock to GHS under the Equity Financing Agreement will depend on a variety of factors to be determined by the

Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations

by the Company as to the appropriate sources of funding for the Company and its operations.

December 31, 2022 and 2021

Actual sales of shares of

Common Stock to GHS under the Equity Financing Agreement will depend on a variety of factors to be determined by the Company from time

to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the

appropriate sources of funding for the Company and its operations.

For the year ended December 31, 2022,

1 unchanged sentence

Note 15 - Income Taxes

At December 31, 2021 and 2020, the significant components

of the deferred tax assets are summarized below:

Of Components of deferred tax assets

At December 31, 2022 and 2021, the significant components of the deferred

tax assets are summarized below:

Schedule Of Components of deferred tax assets

income tax asset

operating loss carryforwards

deferred income tax asset

Net operating loss carryforwards

Total deferred income tax asset

valuation allowance

( 8,945,238 )

( 8,232,796 )

Total deferred income tax asset

The valuation allowance increased by

$ 712,442 and $ 808,722 in 2021 and 2020, respectively, as a result of the Company generating additional net operating losses.

Company’s net operating loss carryforward of approximately $ 30,845,649 begin to expire in 2025.

deferred income tax asset

The valuation allowance increased by $ 237,089 and

$ 712,442 in 2022 and 2021, respectively, as a result of the Company generating additional net operating losses.

The Company’s net

operating loss carryforward of approximately $ 31,663,196 begin to expire in 2025.

No income tax expense reflected in the consolidated

statements of income for the years 2022 and 2021.

The reconciliation of the effective income tax rate to the

federal statutory rate for the years ended December 31, 2021 and 2020 is as follows:

The reconciliation of the effective income tax rate to the federal statutory

rate for the years ended December 31, 2022 and 2021 is as follows:

Schedule of Effective Income Tax Rate Reconciliation

Federal statutory rates

$ ( 7,125,391 )

$ ( 3,757,564 )

State income taxes

( 2,714,435 )

( 1,431,453 )

Permanent differences

Valuation allowance against net deferred tax assets

Effective rate

The Company periodically evaluates the

likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation

allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not.

considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative

earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to

the Company for tax reporting purposes, and other relevant factors.

Future changes in the unrecognized tax

benefit will have no impact on the effective tax rate due to the existence of the valuation allowance.

The Company estimates that

the unrecognized tax benefit will not change significantly within the next twelve months.

The Company will continue to classify

income tax penalties and interest as part of general and administrative expense in its consolidated statements of operations.

were no interest or penalties accrued as of December 31, 2021 and 2020.

statutory rates

allowance against net deferred tax assets

The Company periodically evaluates the likelihood

of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the

extent the future realization of the deferred tax assets is not judged to be more likely than not.

The Company considers many factors

when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by

taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting

purposes, and other relevant factors.

Future changes in the unrecognized tax benefit will

have no impact on the effective tax rate due to the existence of the valuation allowance.

The Company estimates that the unrecognized

tax benefit will not change significantly within the next twelve months.

The Company will continue to classify income tax penalties and

interest as part of general and administrative expense in its consolidated statements of operations.

There were no interest or penalties

accrued as of December 31, 2022 and 2021.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

Note 16 - Related Parties

Related parties are natural persons

or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over

the party in making financial and operating decisions.

Related parties include other parties that are subject to common control

or that are subject to common significant influences.

On August 1, 2021, the Company and Danny

Rittman, Chief Technology Officer and a Director of the Company, agreed to amend his employment agreement pursuant to which he

will receive salary at the rate of $5,000 per month.

Related parties are natural persons or other entities

that have the ability, directly or indirectly, to control another party or exercise significant influence over the party in making financial

and operating decisions.

Related parties include other parties that are subject to common control or that are subject to common significant

On August 1, 2021, the Company and Danny Rittman,

Chief Technology Officer and a Director of the Company, agreed to amend his employment agreement pursuant to which he will receive

salary of $5,000 per month.

On September 1, 2017, the Company entered

into and closed an Asset Purchase Agreement with a third party, RWJ Advanced Marketing, LLC (“RWJ”), a Georgia corporation,

pursuant to which the Company purchased certain assets from RWJ, including inventory, terminals, licenses and permits and intangible

into and closed an Asset Purchase Agreement with a third party, RWJ Advanced Marketing, LLC (“RWJ”), a Georgia

corporation, pursuant to which the Company purchased certain assets from RWJ, including inventory, terminals, licenses and

permits and intangible assets.

At closing, the Company and Mr.

Greg Bauer entered into an Employment Agreement pursuant to which Mr.

Bauer was retained

as Chief Executive Officer for a term of one year, subject to an automatic extension, unless terminated, in consideration of a

base salary of $ 250,000 and a bonus of 10% of net profit generated by the assets acquired.

Bauer was also appointed to the

Board of Directors of the Company.

Greg Bauer entered into an Employment Agreement pursuant to

Bauer was retained as Chief Executive Officer for a term of one year, subject to an automatic extension, unless

terminated, for a base salary of $ 250,000

and a bonus of 10% of net profit generated by the assets acquired.

Bauer was also appointed to the Board of Directors of

As of the closing date, Mr.

Murray resigned as Chief Executive Officer of the Company but will

remain as a director of the Company.

Murray resigned as Chief Executive Officer of the Company but will remain as a

director of the Company.

Bauer, since 2004 through present, has served as executive director with W.L.

3 unchanged sentences

– See Note 18– - Contingencies.

On January 1, 2019, the Company and

Douglas Davis entered into an Amended and Restated Employment Agreement pursuant to which Mr.

Davis was retained as Chief Executive

Davis served as Interim Chief Executive Officer since July 2018 until his resignation on April 11, 2020.

Davis’ employment was for two years through January 1, 2021.

Davis was entitled to an annual base salary of $ 250,000 ,

which was to be increased to $ 400,000 upon the Company up-listing to a national exchange.

Davis was also entitled to the issuance

of Stock Options to acquire an aggregate of 50,000 shares of common stock of the Company, exercisable for five years, subject to

The options were to be earned and vested (i) with respect to 20,000 shares of common stock on the date hereof, (ii) 5,000

shares of common stock upon the successful dual list of the Company on an international exchange such as SIX Zurich Stock Exchange

or Euronext, (iii) 15,000 shares of common stock upon the successful up listing to a national exchange such as the Nasdaq, NYSE

Euronext, TSX, AMEX or other, and (iv) with respect to 5,000 shares of common stock at each of the six (6) month anniversaries

(July 1, 2019 and January 1, 2020).

The exercise price of such options shall be the closing price of the Company on the date prior

to such event.

On January 1, 2019, the Company and Douglas Davis

entered into an Amended and Restated Employment Agreement pursuant to which Mr.

Davis was retained as Chief Executive Officer.

served as Interim Chief Executive Officer since July 2018 until his resignation on April 11, 2020.

The term of Mr.

Davis’ employment

was for two years through January 1, 2021.

Davis was entitled to an annual base salary of $ 250,000 , which was to be increased to $ 400,000

upon the Company up-listing to a national exchange.

Davis was also entitled to the issuance of Stock Options to acquire

of 50,000 shares of common stock of the Company, exercisable for five years, subject to vesting.

The options were to be earned and vested

(i) with respect to 20,000 shares of common stock on the date hereof, (ii) 5,000 shares of common stock upon the successful dual list

of the Company on an international exchange such as SIX Zurich Stock Exchange or Euronext, (iii) 15,000 shares of common stock upon the

successful up listing to a national exchange such as the Nasdaq, NYSE Euronext, TSX, AMEX or other, and (iv) with respect to 5,000 shares

of common stock at each of the six (6) month anniversaries (July 1, 2019 and January 1, 2020).

The exercise price of such options shall

be the closing price of the Company on the date prior to such event.

On October 10, 2019, the Company entered

into a Joint Venture Agreement (the “BitSpeed Agreement”) with BitSpeed LLC, which is owned by Douglas Davis, the Company’s

Chief Executive Officer, to form GBT BitSpeed Corp., a Nevada company (“GBT BitSpeed”).

The purpose of GBT BitSpeed is

to develop, maintain and support its proprietary Extreme Transfer Software Application Concurrency, a software application to transfer

secure, accelerated transmission of large file data over networks, and connection to cloud storage, Network-Attached Storage (NAS)

and Storage Area Networks (SANs) (“Concurrency”).

BitSpeed shall contribute the services and resources for the development

of Concurrency to GBT BitSpeed.

The Company shall contribute 10 million shares of common stock (valued at $17,900,000) of the Company

to GBT BitSpeed.

BitSpeed and the Company will each own 50% of GBT BitSpeed.

The Company shall appoint two directors and BitSpeed

shall appoint one director of GBT BitSpeed.

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”).

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 BitSpeed.

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

In addition, GBT BitSpeed and Mr.

Davis entered into a Consulting Agreement in which

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 20-day VWAP.

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

The closing of the BitSpeed Agreement occurred on October 14, 2019.

On April 11, 2020, Douglas Davis resigned as Chief

Executive Officer of the Company so that he may fully devote all of his efforts to GBT Tokenize Corp., the Company’s joint venture,

which intends to develop a new product.

Davis’ resignation was not the result of any disagreements with management or board

of directors of the Company.

Davis entered into a Consulting Agreement in which Mr.

Davis is engaged to

provide services for $10,000 per month payable quarterly which may be paid in shares of common stock calculated by the

amount owed divided by the Company’s 20-day VWAP.

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.

closing of the BitSpeed Agreement occurred on October 14, 2019.

On April 11, 2020, Douglas Davis resigned as Chief Executive

Officer of the Company so that he may fully devote all of his efforts to GBT Tokenize Corp., the Company’s joint

venture, which intends to develop a new product.

Davis’ resignation was not the result of any disagreements with

management or board of directors of the Company.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

On March 6, 2020, the Company through

Greenwich, entered into the Tokenize Agreement with Tokenize, which is owned by a Costa Rica Trust represented by Gonzalez.

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.

Gonzalez also represents Gonzalez Costa Rica Trust, which holds a note of $ 10,000,000

and is also a shareholder of the Company.

Under the Tokenize Agreement, the parties formed GBT Tokenize.

The purpose of GBT Tokenize is to develop Technology

Portfolio, throughout the State of California.

Upon generating any revenue from the Technology Portfolio, the Joint Venture will

earn the first right of refusal for other territories.

Tokenize shall contribute the services and resources for the development

of the Technology Portfolio to GBT Tokenize.

The Company contributed 100,000,000 GBT Shares to GBT Tokenize.

Tokenize and the Company

will each own 50% of GBT Tokenize.

The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to

Tokenize to secure its Technology Portfolio investment.

The Company shall appoint two directors and Tokenize shall appoint one

director of GBT Tokenize.

In addition, GBT Tokenize and Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged

to provide services in consideration of $ 33,333 .33 per month payable quarterly which may be paid in shares of common stock calculated

by the amount owed divided by the Company’s 10-day VWAP.

Gonzalez will provide services in connection with the development of the

business as well as GBT Tokenize’s capital raising efforts.

The purpose of GBT

Tokenize is to develop Technology Portfolio, throughout the State of California.

Upon generating any revenue from the

Technology Portfolio, the Joint Venture will earn the first right of refusal for other territories.

Tokenize shall contribute

the services and resources for the development of the Technology Portfolio to GBT Tokenize.

The Company contributed 100,000,000

GBT Shares to GBT Tokenize.

Tokenize and the Company will each own 50% of GBT Tokenize.

The Company pledged its 50%

ownership in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment.

Company shall appoint two directors and Tokenize shall appoint one director of GBT Tokenize.

In addition, GBT Tokenize and

Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged to provide services for $ 33,333 .33

per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the

Company’s 10-day VWAP.

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

Tokenize’s capital raising efforts.

The term of the Consulting Agreement is two years.

The closing of the

Tokenize Agreement occurred on March 9, 2020.

Via this Joint Venture the parties commenced development of a development of an intelligent

human vital signs’ device, suggested named qTerm.

The platform is an expansion of the existing license agreement with GBT Tokenize

Corp., which provided GBT Tokenize Corp.

with an exclusive territory of California to develop certain of the Company’s technology.

As the nature of the platform cannot be restricted only to California, the Company’s joint venture GBT Tokenize Corp.

will be compensated

with additional two hundred million shares of the Company to strengthen its funding, subject to board approval.

A provisional patent

application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO.

The application has been assigned serial

number 63001564.

The closing of the Tokenize

Agreement occurred on March 9, 2020.

Via this Joint Venture the parties commenced development of a development of an

intelligent human vital signs’ device, suggested named qTerm.

The platform is an expansion of the existing license

agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp.

with an exclusive territory of California to develop certain of the

Company’s technology.

As the nature of the platform cannot be restricted only to California, the Company’s joint venture GBT

Tokenize Corp.

will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to board

A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO.

The application

has been assigned serial number 63001564.

The Joint Venture completed successfully the first prototype.

There is no guarantee that the Company will be successful

in researching, developing or implementing this product into the market.

In order to successfully implement this concept, the Company

will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval,

the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling

and distributing this product.

There is no guarantee that the

Company will be successful in researching, developing or implementing this product into the market.

In order to successfully implement

this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted

regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing,

selling and distributing this product.

There is no guarantee that the Company will be successful in any or all of these critical steps.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Yello Partners Inc.

As of December 31, 2021 and 2020, the

Company has $ 385,000 and $ 230,000 owed to Yello Partners, Inc., a Company owned by the CEO.

Alpha Eda Note Payable – Related

As of December 31, 2022 and 2021, the Company has

$ 505,000 and $ 385,000 owed to Yello Partners, Inc., a Company owned by the CEO.

Alpha Eda Note Payable – Related Party

On November 15, 2020, the Company issued

a promissory note to Alpha Eda, LLC (“Alpha”), a related party, for $ 140,000 .

The note accrues interest at 10 % per

annum, is unsecured and is due on September 30, 2021 .

The note accrues interest at 10 %,

is unsecured and was due on September

On June 20, 2021 Alpha and the Company extended the note maturity to December

The balance of the note at December 31, 2021 and 2020 was $ 140,000 and $ 140,000 plus accrued interest of $ 16,633

and $ 1,803 , respectively.

Hills LLC Convertible Note Payable – Related Party

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 Stanley to continue

to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due

to Stanley in the amount of $ 1,214,900 may be converted into shares of common stock of the Company at a conversion price equal

to 85% multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete

trading day prior to the conversion date.

Since the conversion price will vary based on the Company’s stock price, the beneficial

conversion feature associated with this note is accounted for as a derivative liability.

Stanley has agreed to restrict its

ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and

its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares

of common stock.

During the year ended December 31, 2021, Stanley converted $ 1,231,466 of its convertible note plus interest

into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the

Company an additional $ 325,000 .

Also, during the year ended December 31, 2021, the Company transferred the SURG shares received

as repayment of $ 800,000 of this convertible note (See Note 4) and converted $ 126,003 of accrued interest into the principal

During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $ 424,731 to Stanley in a private

transaction that the Company is not part to (See Note 5).

The balance of the Stanley convertible note payable at December 31, 2021

and December 31, 2020 was $ 116,605 and $ 1,009,469 , respectively.

The Stanley debt is secured via a pledge agreement on the

GBT TECHNOLOGIES

The balance of the note at December 31, 2022 and 2021 was $ 140,000 and

plus accrued interest of $ 32,633

and $ 16,333 ,

respectively.

Stanley Hills LLC Convertible

Note Payable – Related Party

The Company entered into

a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $ 1,000,000 in loans

(the “Debt”) from May 2019 up to December 2019.

On February 26, 2020, in order to induce Stanley to continue to provide funding,

the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley of

$ 1,214,900 may be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest

one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion

Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with

this note is accounted for as a derivative liability.

Stanley had agreed to restrict its ability to convert the Debt and receive

shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or

exercise does not exceed 4.99% of the then issued and outstanding shares of common stock.

During the year ended December 31, 2021, Stanley

converted $ 1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and

during the year ended December 31, 2021, Stanley loaned the Company an additional $ 325,000 .

Also, during the year ended December 31, 2021,

the Company transferred the SURG shares received as repayment of $ 800,000 of this convertible note (See Note 10) and converted $ 126,003

of accrued interest into the principal balance.

During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of

$ 424,731 to Stanley in a private transaction that the Company is not part to (See Note 10).

The balance of the Stanley convertible

note payable at December 31, 2022 and December 31, 2021 was $ 116,605 and $ 116,605 , respectively.

The Stanley debt is secured via

a pledge agreement on the SURG shares.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Hills LLC Accounts Payable – Related Party

On March 8, 2020, SURG filed a lawsuit

against its transfer agent, Vstock from transferring millions of SURG stock that is currently in possession by the Company and

assigned to Stanley Hills, LLC.

On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual

Release and Settlement Agreement (“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement, SURG agreed

to amend the AltCorp Exchange Agreement where SURG acknowledged a debt of $ 3,300,000 (the “Debt”) to be paid in 33 monthly

payments of $ 100,000 payable in shares of common stock of SURG at a per share price equal the volume weighted average price of

Surg’s common stock during the ten (10) trading days immediately preceding the issuance.

SURG paid $ 400,000 in cash and $ 800,000

The SURG common stock issued to Altcorp have been pledged since August 12, 2020 for the benefit of Stanley to secure

Stanley’s note payable by the Company.

Accordingly, the SURG Common Stock issued to AltCorp as a result of the Settlement Agreement

were pledged to Stanley.

As of December 31, 2021 there were no surge shares pledges after the final settlement signed on December

22, 2021 and that replaced all prior settlement agreement.

The final settlement SURG agreed to make total payments of $ 4,200,000

to the Company on or prior to January 7, 2022.

This $4.2 million amount consists of $450,000 paid by SURG in November and December

2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000 to be paid on or prior to January 7, 2022 of which $375,000

will be held in escrow as described before.

The $ 3,750,000 was recorded as other receivable as of December 31, 2021.

As of December

31, 2021, the Company has recorded an outstanding payable balance to Stanley amounted $ 1,862,928 recorded under accrued expenses.

Sales for both the years ended December

31, 2021 and 2020 were $ 180,000 .

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

Note 16 - Contingencies

Legal Proceedings

From time to time, the Company may be

involved in various litigation matters, which arise in the ordinary course of business.

There is currently no litigation that management

believes will have a material impact on the financial position of the Company.

On or around January 30, 2019, RWJ Advanced

Marketing, LLC, Greg Bauer, and Warren Jackson sued the Company and multiple third and related parties in Superior Court of the

State of California - County of Los Angeles, General District in connection with the acquisition of UGO in September 2017.

case number is 19STCV03320 (the “Original Lawsuit”).

The complaint in the Original Lawsuit alleges breach of contract,

among other causes of action.

The Company answered the complaint and filed a cross-complaint against the plaintiffs in the case

and third parties on or around February 15, 2019.

On or about September 10, 2020, the Company through its agent of service was

“served” with a complaint (the Company contested service) that was recently filed against the Company and third parties

by Robert Warren Jackson and Gregory Bauer in Los Angeles Superior Court Case No.:

December 31, 2022 and 2021

Stanley Hills LLC Accounts

Payable – Related Party

On March 8, 2020, SURG filed a lawsuit against its

transfer agent, Vstock from transferring millions of SURG stock that is currently in possession by the Company and assigned to Stanley

On January 1, 2021, SURG, AltCorp and Stanley Hills, LLC (“Stanley”) entered into a Mutual Release and Settlement

Agreement (“Settlement Agreement”).

Pursuant to the terms of the Settlement Agreement, SURG agreed to amend the AltCorp Exchange

Agreement where SURG acknowledged a debt of $ 3,300,000 (the “Debt”) to be paid in 33 monthly payments of $ 100,000 payable

in shares of common stock of SURG at a per share price equal the volume weighted average price of Surg’s common stock during the

10 trading days immediately preceding the issuance.

SURG paid $ 400,000 in cash and $ 800,000 by shares.

The SURG common stock issued

to Altcorp has been pledged since August 12, 2020 for the benefit of Stanley to secure Stanley’s note payable by the Company.

the SURG Common Stock issued to AltCorp as a result of the Settlement Agreement were pledged to Stanley.

As of December 31, 2021 there

were no surge shares pledges after the final settlement signed on December 22, 2021 and that replaced all prior settlement agreement.

The final settlement SURG agreed to make total payments of $ 4,200,000 to the Company on or prior to January 7, 2022.

This $4.2 million

amount consists of $450,000 paid by SURG in November and December 2021, $100,000 to be paid on or about January 4, 2022, and $3,650,000

to be paid on or prior to January 7, 2022 of which $375,000 will be held in escrow as described before.

The $ 3,750,000 was recorded as

other receivable as of December 31, 2021.

As of December 31, 2022, the Company has recorded an outstanding payable balance to Stanley

amounted $ 927,136 recorded under accrued expenses.

Consulting income for both the years ended December 31, 2022 and

2021 were $ 45,000 and $ 180,000 .

Consulting income are derived from providing IT consulting services to Stanley Hills, a related party.

Note 17 - Legal Proceedings

From time to time, the Company may be involved in

various litigation matters, which arise in the ordinary course of business.

There is currently no litigation that management believes

will have a material impact on the financial position of the Company.

On or around January 30, 2019, RWJ

Advanced Marketing, LLC, Greg Bauer, and Warren Jackson sued the Company and multiple third and related parties in Superior

Court of the State of California - County of Los Angeles, General District in connection with the acquisition of UGO in

September 2017.

The case number is 19STCV03320 (the “Original Lawsuit”).

The complaint in the Original Lawsuit

alleges breach of contract, among other causes of action.

The Company answered the complaint and filed a cross-complaint

against the plaintiffs in the case and third parties on or around February 15, 2019.

On or about September 10, 2020, the

Company through its agent of service was “served” with a complaint (the Company contested service) that was

recently filed against the Company and third parties by Robert Warren Jackson and Gregory Bauer in Los Angeles Superior Court

20STCV32709 (“Second Lawsuit”).

the Original Lawsuit filed, the court rejected the plaintiff’s claims that they were filing a purported quasi-derivative lawsuit.

As such, in this current litigation, the plaintiff is now again claiming the action is a derivative lawsuit.

On October 13, 2020,

the Second Lawsuit was removed by other defendants into Central District of California (CASE NO.

In the Original Lawsuit filed, the court rejected the

plaintiff’s claims that they were filing a purported quasi-derivative lawsuit.

As such, in this current litigation, the

plaintiff is now again claiming the action is a derivative lawsuit.

On October 13, 2020, the Second Lawsuit was removed by

other defendants into Central District of California (CASE NO.

2:20−cv−09399−RGK−AGR).

On February 2, 2021 the Central District of California dismissed the entire Second Lawsuit based on “demand futility”.

In the Original lawsuit, the Company filed a cross complaint against the plaintiff and other third parties.

Recently, the court

has scheduled various hearings and a trial date set for December 27, 2021 which was later continued by the Court to September 28,

It was the Company’s intention to dividend its holdings of its wholly owned subsidiary Ugopherservices Corp.

As UGO is the main dispute in the litigations described above, the Company has elected to sell UGO to a third-party effective July

1, 2020 (See Note 3).

On September 17, 2020, the Company terminated Greg Bauer as consultant (resulting from the sale of UGO),

which he confirmed in writing.

On or about June 14, 2021 the Company stipulated with plaintiff that all third parties will be released

and plaintiff may file a new first amendment complaint that will name only the Company.

As such, all third parties other than prior

transfer agent of the Company have been dismissed from this litigation.

On February 2,

2021 the Central District of California dismissed the entire Second Lawsuit based on “demand futility”.

Original lawsuit, the Company filed a cross complaint against the plaintiff and other third parties.

Recently, the court has

scheduled various hearings and a trial date set for December 27, 2021 which was later continued by the Court to September 28,

It was the Company’s intention to dividend its holdings of its wholly owned subsidiary Ugopher services Corp.

As UGO is the main dispute in the litigations described above, the Company has elected to sell UGO to a

third-party effective July 1, 2020.

On September 17, 2020, the Company terminated Greg Bauer as consultant (resulting from

the sale of UGO), which he confirmed in writing.

On or about June 14, 2021 the Company stipulated with plaintiff that all

third parties will be released and plaintiff may file a new first amendment complaint that will name only the Company.

such, all third parties other than prior transfer agent of the Company have been dismissed from this litigation.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

Following the sale of UGO (See Note

3), the Company noticed third parties (including SURG, via its asset manager) to wire the UGO funds to its new bank account.

never answered the notice.

SURG is the clearing house for UGO.The Company noticed certain third parties that it intends to take

legal actions to resolve this issue.

On November 12, 2020 the Company filed a complaint in the United States District Court –

District of Nevada - Case 2:20-cv-02078 against RWJ, Mr.

December 31, 2022 and 2021

Following the sale of UGO, the Company noticed third

parties (including SURG, via its asset manager) to wire the UGO funds to its new bank account.

SURG never answered the notice.

the clearing house for UGO.The Company noticed certain third parties that it intends to take legal actions to resolve this issue.

12, 2020 the Company filed a complaint in the United States District Court – District of Nevada - Case 2:20-cv-02078 against RWJ,

Jackson and against W.L.

Petrey Wholesale Company Inc for fraud,

breach of contract, Unjust Enrichment and other claims.

On January 28, 2022 the court awarded the Company with injunction against

RWJ defendants, where all fee funds generating from resale should be deposited into GBT blocked account, and therefore RWJ defendants

cannot use these funds without court order.

Petrey Wholesale Company Inc for fraud, breach of contract, Unjust Enrichment and other claims.

On January 28, 2022 the court awarded the Company with injunction against RWJ defendants, where all fee funds generating from resale should

be deposited into GBT blocked account, and therefore RWJ defendants cannot use these funds without court order.

The Company entered into

the Confidential Settlement Agreement and Mutual Release (“RJW Agreement”) by and between RWJ Advanced Marketing, LLC, Robert

Warren Jackson, Gregory Bauer (collectively the “RJW Parties”) and W.L.

Petrey Wholesale Company, Inc., (“Petrey”)

and GBT Technologies Inc., on behalf of itself and its agents (collectively the GBT Parties”), on the other hand.

Company the RJW Agreement effective September 26, 2022 with final signatures delivered to the Company on or about October 5, 2022.

to the RJW Agreement, the parties have agreed to settle, release, and otherwise resolve all known or unknown claims between them and agreed

to jointly stipulate, move, or otherwise dismiss the lawsuits filed in the United States District Court of Nevada (Case No.

2:20-cv- 02078),

in the Superior Court of the State of California, County of Los Angeles, Central District (Case Nos.

19STCV03320 and 20STCV32709), and

in the United States District Court of the Central District of California (Case No.

2:20-cv-09399-RGK-AGR) with prejudice.

agreed and stipulated to release all funds currently being held in a blocked account of $ 19,809 with 50% distributed to the RWJ Parties

and 50% distributed the Company or its assignee.

The Parties also entered into the InComm Assignment Agreement (“IAA”) which

assigned, transferred and conveyed all proceeds derived from the RWJ Parties’ agreements with Interactive Communications International,

Inc., and its affiliate Hi Technology Corp., including but not limited to that Master Distribution and Service Agreement between Interactive

Communications International, Inc.

and Petrey d/b/a UGO-HUB dated August 29, 2016, as amended (collectively referred to as the “InComm

Proceeds”), and which shall divide the InComm Proceeds 90% to the Company or its assignee and 10% to the RWJ Parties or their assignee.

Finally, the Company agreed to pay $ 40,000 to the RWJ Parties or their assignee.

The Company accrued $ 49,847 expenses represent

the final amounts due to the RJW Parties.

The Company under a different

settlement agreement with SURG, committed to assign the IAA.

As such, on October 5, 2022 and as cumulation of all settlement agreements

the Company issued a request to SURG regarding release of certain escrow funds and the execution of an assignment of rights as contemplated

in the aforereferenced agreement.

On December 3, 2018, the Company entered

into a Securities Purchase Agreement (the “SPA”) with Discover Growth Fund, LLC (the “Investor”) pursuant to

which the Company issued a Senior Secured Redeemable Convertible Debenture (the “Debenture”) in the aggregate face value

of $ 8,340,000 .

In connection with the issuance of the Debenture and pursuant to the terms of the SPA, the Company issued a Common

Stock Purchase Warrant to acquire up to 225,000 shares of common stock for a term of three years (the “Warrant”)

on a cash-only basis at an exercise price of $100.00 per share with respect to 50,000 Warrant Shares, $75.00 with respect to 75,000

Warrant Shares and $50.00 with respect to 100,000 Warrant Shares.

The holder may not exercise any portion of the Warrants to the

extent that the holder would own more than 4.99% of the Company’s outstanding common stock immediately after exercise.

The outstanding

principal amount may be converted at any time into shares of the Company’s common stock at a conversion price equal

to 95% of the Market Price less $5.00 (the conversion price is lowered by 10% upon the occurrence of each Triggering Event –

the current conversion price is 75% of the Market Price less $5.00).

into a Securities Purchase Agreement (the “SPA”) with Discover Growth Fund, LLC (the “Investor”)

pursuant to which the Company issued a Senior Secured Redeemable Convertible Debenture (the “Debenture”) of

$ 8,340,000 .

In connection with the issuance of the Debenture and pursuant to the terms of the SPA, the Company issued a Common Stock

Purchase Warrant to acquire up to 225,000 shares

of common stock for a term of three years (the “Warrant”) on a cash-only basis at an exercise price of $100 per

share with respect to 50,000 Warrant Shares, $75 with respect to 75,000 Warrant Shares and $50 with respect to 100,000

Warrant Shares.

The holder may not exercise any portion of the Warrants to the extent that the holder would own more than

4.99% of the Company’s outstanding common stock immediately after exercise.

The outstanding principal amount may be

converted at any time into shares of the Company’s common stock at a conversion price equal to 95% of

the Market Price less $5 (the conversion price is lowered by 10% upon the occurrence of each Triggering Event – the

current conversion price is 75% of the Market Price less $5.00).

The Market Price is the average of the 5 lowest individual

daily volume weighted average prices during the period the Debenture is outstanding.

On May 28, 2019, the Investor delivered to

the Company a “Notice of Default and Notice of Sale of Collateral” (the “Notice”).

On December 23, 2019, in

arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor.

On January 31, 2020, the

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

The Final Award affirms that certain sections

of the Debenture constitute unenforceable liquidated damages penalties and were stricken.

Further, it was determined that

the Investor was entitled to recovery of their attorney’s fees.

Consequently, the arbitrator awarded Investor an award of $ 4,034,444 plus

interest of 7.25 % accrued from May 15, 2019 and costs in the amount of $ 55,613 .

On February 18, 2020, the Company filed a

motion with the United States District Court District of Nevada (the “Nevada Court”) to confirm the Final Award and a

motion to consolidate Investor’s application to confirm the Final Award filed in the U.S.

District Court of the Virgin Islands

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

On February 27, 2020, the Nevada Court denied the Company’s

motion to confirm the Final Award and motion to consolidate and further decided that the confirmation of the Final Award should

be litigated in the Virgin Island Court.

As such, on February 27, 2020, the Company filed a Notice of Entry of Order as well as

a Motion to Confirm the Arbitration Award, address the outstanding issues regarding whether Investor’s rights are subordinated

to other creditors and, thereafter, oversee a commercially reasonable foreclosure sale (Case No:

On May 28, 2019, the Investor delivered

to the Company a “Notice of Default and Notice of Sale of Collateral” (the “Notice”).

On December 23,

2019, in arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor.

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.

it was determined that the Investor was entitled to recovery of their attorney’s fees.

Consequently, the arbitrator

awarded Investor an award of $ 4,034,444 plus

interest of 7.25 %

accrued from May 15, 2019 and costs of $ 55,613 .

On February 18, 2020, the Company filed a motion with the United States District Court District of Nevada (the “Nevada

Court”) to confirm the Final Award and a motion to consolidate Investor’s application to confirm the Final Award

filed in the U.S.

District Court of the Virgin Islands (Case No:

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

On February 27, 2020, the Nevada Court denied the Company’s motion to confirm the Final Award and motion

to consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court.

As such, on February 27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration

Award, address the outstanding issues regarding whether Investor’s rights are subordinated to other creditors and,

thereafter, oversee a commercially reasonable foreclosure sale (Case No:

3 :20-cv-00012-CVG-RM).

the Company’s position that the Final Award must first be confirmed and all questions regarding the rights of Investor relative

to those of other creditors must be determined before any foreclosure sale can proceed.

It is further the position of the Company

that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially unreasonable manner and

that if Discover proceeded forward with the foreclosure sale it did so at its own risk.

Nevertheless, on February 28, 2020, Investor

advised that it conducted a sale of the Company’s assets.

As the date of this report Investor failed to present a deed of sale

for the alleged sale that allegedly took place as noticed.

The Company filed with Virgin Island Court the motions disputing the

validity of the alleged sale.

On July 28, 2020, Investor filed in the State of Nevada a motion for attorneys $ 48,844 and costs

Company’s position that the Final Award must first be confirmed and all questions regarding the rights of Investor

relative to those of other creditors must be determined before any foreclosure sale can proceed.

It is further the position

of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially

unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk.

Nevertheless,

on February 28, 2020, Investor advised that it conducted a sale of the Company’s assets.

As the date of this report

Investor failed to present a deed of sale for the alleged sale that allegedly took place as noticed.

The Company filed with

Virgin Island Court the motions disputing the validity of the alleged sale.

On July 28, 2020, Investor filed in the State

of Nevada a motion for attorneys $ 48,844 and

costs $ 716 .

The Company filed an answer on August 11, 2020.

On October 16, 2020, Investor motion for attorneys $ 48,844 and

costs $ 716 was denied.

This case is still pending with the Federal court and the Court has not taken any substantive action

in the matter as of the date of this report.

costs $ 716 was

This case is still pending with the Federal court and the Court has not taken any substantive action in the matter as

of the date of this report.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

In connection with SURG Exchange Agreement (see Note

5) - On November 4, 2020, Altcorp and Stanley filed an Ex Parte Motion in the District Court, Clark County, Nevada (Case No:

A-20-823039-B,

43) to appoint receiver and issue a temporary restraining Order against SURG and its transfer agent for alleged defaults on

prior exchange agreement.

On December 4, 2020, the parties entered an interim agreement which set the material terms of the settlement.

A final settlement was achieved per the interim agreement terms on January 1, 2021.

On March 4, 2021 the Company filed a motion to enforce

settlement agreements, as the Company alleged that SURG owes an additional $240,000 which is due and owing under the settlement agreements.

On June 24, 2021 per the June 23, 2020 Agreement,

the Company together with AltCorp sent SURG and its transfer agent via registered mail, a true-up shares demand for an additional 14,870,370

SURG shares as calculated per the Agreement.

As of the filing date of this report, SURG’s transfer agent did not answer the Company’s

Subsequently, SURG was a party to two lawsuits in

state District Court, the Eighth Judicial District Court for Clark County, Nevada involving AltCorp, Stanley and Glen Eagles Acquisition

LP (the “AltCorp Parties.”).

Each of these lawsuits were ultimately disputes relating to the total consideration SURG was

to pay the Company under the APA.

On October 18, 2021, the AltCorp Parties, the Company,

and SURG entered into a Memorandum of Understanding (the “MOU”) to set up a framework for an attempt to settle the two lawsuits.

On December 22, 2021 (the “Effective Date”),

pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG, Kevin Brian Cox

(SURG’s Chief Executive Officer) - in his individual capacity, entered into a Resolution of Purchase, Mutual Release, and Settlement

Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related to the consideration

paid by SURG to the Company in connection with the APA.

On or about July 9, 2021 the Company filed a lawsuit

in District Court in Clack County Nevada – Department 19 (Case number A-21-837631-C) against Terry Taylor and TTSG Holdings, Inc

for breach of contract, breach of covenant of Good Faith and Fair Dealing, Unjust Enrichment and declaratory relief for failure of providing

consulting services per contract they entered.

The Company is demanding the return of 240,000 shares issued, return of the $5,000 payments,

recission of the consulting agreement, and attorney’s fees and costs.

As Terry Taylor and TTSG Holdings failed to appear to a notice

of deposition, the Company filed for a summary judgment.

On January 20, 2023 the court issued a $708,821 writ of execution against Terry

Taylor and TTSG

Gregory Mancuso and Rainer

On or about February 2, 2022,

GBT was served with a First Amended Complaint (the “Complaint”) initiated by Gregory Mancuso and Rainer AG, a Swiss corporation,

21SMCV01430, filed in the Superior Court of the State of California for the County of Los Angeles.

The Complaint names a number

of different parties, including GBT, and asserts, among other things, claims for conversion, unjust enrichment, breach of contract, and

breach of implied covenant of fair dealing, which Plaintiffs allege arise out of a brokerage agreement entered into between Plaintiff

Rainer AG and co-defendant Consul Group re Dos Mil Veintiuno S.R.L (“Consul”).

GBT was sued under an alter ego theory of liability,

and its only involvement in the above-referenced chain of events seems to be that its shares were deposited with Rainer by Consul upon

the opening of the brokerage account.

GBT will be filling a demurrer to the First Amended Complaint based on a variety of deficiencies

with the First Amended Complaint, and will ask the Court to dismiss the claims against GBT.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

Note 18 - Contingencies

GBT Technologies, S.A.

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

with GBT-CR, a fully compliant and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized

crypto currency platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right

and license relating intellectual property relating to systems and methods of converting electronic transmissions into digital

currency as reflected in that certain patent filed with the United Stated Patent and Trademark Office on or about June 14, 2018

Application Number:

On September 14, 2018, the

Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the “GBT License Agreement”) with

GBT-CR, a fully compliant and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized crypto

currency platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right and license

relating intellectual property relating to systems and methods of converting electronic transmissions into digital currency as reflected

in that certain patent filed with the United Stated Patent and Trademark Office on or about June 14, 2018 (EFS ID:

Utility under 35 USC 111(a);

Confirmation Number:

6787)(collectively, the

“Digital Currently Technology”).

Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide

license to use the Digital Currency Technology to make, use, sell, lease or otherwise commercialize and dispose of products and

devices utilizing the Digital Currently Technology.

Under the terms of the GBT License Agreement, the Company is entitled to receive

a royalty payment of 2% of gross revenue of each licensed product sold by GBT-CR during the period starting in which revenue is

first generated using the licensed products and continuing for five years thereafter.

Upon signing the GBT-CR License Agreement,

GBT-CR paid the Company $ 300,000 which is nonrefundable.

The Company has recognized the $300,000 as revenue during the years

ended December 31, 2018.

Upon GBT-CR making available for sale (the “Commercial Event”) an ICO (Initial Coin Offering)

(the “Coin”), GBT-CR will make a payment to the Company in the amount of $ 5,000,000 .

Further, upon the Commercial Event,

GBT-CR will grant the Company the ability to acquire 30% of the Coin at a 30% discount of such offering price of the Coin.

GBT License Agreement commenced as of the signing date and, unless terminated in accordance with the termination provisions of

the GBT License Agreement, shall remain in force until the expiration of the patent pertaining to the Digital Currency Technology;

provided that the right to use trade secrets shall survive the expiration of the GBT License Agreement provided the Company has

not terminated.

Prior to the signing of the GBT License Agreement, GBT-CR advanced $ 200,000 to the Company, which the parties

have agreed will be applied toward the $5,000,000 fee when it becomes due.

The $200,000 is recorded as unearned revenue at

December 31, 2018 and reclassified to accrued expense at December 31, 2019.

On February 27, 2020 GBT Technologies, S.A., as successor

in interest to Hermes Roll, LLC had notified the Company that it was in default on its Amended and Restated Territorial License

Agreement (“ARTLA”) dated June 15, 2015 and that the ARTLA had been cancelled and rescinded.

In connection with SURG Exchange Agreement

(see Note 4) - On November 4, 2020, Altcorp and Stanley filed an Ex Parte Motion in the District Court, Clark County, Nevada (Case

A-20-823039-B, in Dep No:

43) to appoint receiver and issue a temporary restraining Order against SURG and its transfer agent

for alleged defaults on prior exchange agreement.

On December 4, 2020, the parties entered an interim agreement which set the material

terms of the settlement.

A final settlement was achieved per the interim agreement terms on January 1, 2021.

On March 4, 2021 the

Company filed a motion to enforce settlement agreements, as the Company alleged that SURG owes an additional $240,000 which is

due and owing under the settlement agreements.

On June 24, 2021 per the June 23, 2020

Agreement, the Company together with AltCorp sent SURG and its transfer agent via registered mail, a true-up shares demand for

an additional 14,870,370 SURG shares as calculated per the Agreement.

As of the filing date of this report, SURG’s transfer agent

did not answer the Company’s request.

Subsequently, SURG was a party to two lawsuits

in state District Court, the Eighth Judicial District Court for Clark County, Nevada involving AltCorp, Stanley and Glen Eagles

Acquisition LP (the “AltCorp Parties.”).

Each of these lawsuits were ultimately disputes relating to the total consideration

SURG was to pay the Company under the APA.

On October 18, 2021, the AltCorp Parties, the

Company, and SURG entered into a Memorandum of Understanding (the “MOU”) to set up a framework for an attempt to settle

the two lawsuits.

On December 22, 2021 (the “Effective

Date”), pursuant to the framework in the MOU, the AltCorp Parties (and an additional third party), the Company, ECS, and SURG,

Kevin Brian Cox (SURG’s Chief Executive Officer) - in his individual capacity, entered into a Resolution of Purchase, Mutual Release,

and Settlement Agreement (the “Final Settlement Agreement”) to settle the two lawsuits and resolve all disputes related

to the consideration paid by SURG to the Company in connection with the APA.

On or about July 9, 2021 the Company filed

a lawsuit in District Court in Clack County Nevada – Department 19 (Case number A-21-837631-C) against Terry Taylor and TTSG

Holdings, Inc for breach of contract, breach of covenant of Good Faith and Fair Dealing, Unjust Enrichment and declaratory relief

for failure of providing consulting services per contract they entered.

The Company is demanding the return of 12,000,000 shares

issued, return of the $ 5,000 payments, recission of the consulting agreement, and attorney’s fees and costs.

The lawsuit is still

pending as of the date of this report.

6787)(collectively, the “Digital Currently Technology”).

Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide license to use the Digital Currency Technology

to make, use, sell, lease or otherwise commercialize and dispose of products and devices utilizing the Digital Currently Technology.

Under the terms of the GBT License Agreement, the Company is entitled to receive a royalty payment of 2% of gross revenue of each licensed

product sold by GBT-CR during the period starting in which revenue is first generated using the licensed products and continuing for

five years thereafter.

Upon signing the GBT-CR License Agreement, GBT-CR paid the Company $ 300,000

which is nonrefundable.

The Company recognized the $300,000 as revenue during the years ended December 31, 2018.

making available for sale (the “Commercial Event”) an ICO (Initial Coin Offering) (the “Coin”), GBT-CR will make

a payment to the Company of $ 5,000,000 .

Further, upon the Commercial Event, GBT-CR will grant the Company the ability to acquire 30% of the Coin at a 30% discount of such offering

price of the Coin.

The GBT License Agreement commenced as of the signing date and, unless terminated in accordance with the termination

provisions of the GBT License Agreement, shall remain in force until the expiration of the patent pertaining to the Digital Currency

provided that the right to use trade secrets shall survive the expiration of the GBT License Agreement provided the Company

has not terminated.

Prior to the signing of the GBT License Agreement, GBT-CR advanced $ 200,000 to

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

On February 27, 2020 GBT Technologies,

S.A., as successor in interest to Hermes Roll, LLC had notified the Company that it was in default on its Amended and Restated Territorial

License Agreement (“ARTLA”) dated June 15, 2015 and that the ARTLA had been cancelled and rescinded.

Stock Loan Receivable

On January 8,

2019, the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa

Rica corporation (“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by

various regulators.

The Company pledged 4,006 restricted

shares of its common stock valued at $7,610,147 (based

on the closing price on the grant date) for three years for an annual payment of $375,000 paid

in quarterly installments of $93,750.

In lieu of cash payment, Latinex may pay the Company in virtual currency of WISE Network S.A.

valued at a 50% discount of its

offering price of $10 per token.

In the event that Latinex’s required capital has decreased below $5,000,000,

Latinex is permitted to sell the pledged shares of common stock only in an amount to ensure that Latinex can satisfy the

required capital levels.

The Company must consent to such sale of the shares of common stock, which may not be unreasonably

Upon expiration of the agreement, the remaining shares of common stock shall be returned to the Company free and

clear of all liens.

The Company recorded the value of these shares of common stock as a stock loan receivable which is

presented as a contra-equity account in the accompanying consolidated balance sheets.

At December 31, 2019, the Company wrote

off the accrued interest income as Latinex did not perform any payment and the Company has no mean to enforce this payment.

Latinex agreed in principle to return the pledged 4,006 restricted shares to the Company for

cancellation.

The 4,006 restricted

shares have not yet been returned to the Company as of December 31, 2022.

Assignment of lease

On May 17, 2022, Mahaser

LLC (“Assignee”) entered into an assignment and assumption of lease agreement by and between 2819 Coldwater LLC (“Assignor”),

Sunset Place Holdings LLC (“Lessor”) and Yossi Attia (“Guarantor”).

Pursuant to the agreement, Lessor agreed to

lease to Assignor certain Standard Industrial/Commercial Multi-Tenant Lease – Gross agreement dated February 7, 2022 (the “Lease”)

and expiring on January 31, 2024, which premises commonly known as 8265 Sunset Boulevard, Suite #107, West Hollywood, CA 90046.

rent payment shall equal $4,100 per month and share of common area operating expense shall equal $ 200 per month.

Guarantor has guaranteed

payment of Assignor’s obligations under the Lease and Assignor assigned all of its right, title and interest in the Lease to Assignee

and Assignee assumed Assignor’s obligations under the Lease.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

December 31, 2022 and 2021

Note 19 – Concentrations

1 unchanged sentence

Financial instruments, which potentially subject

the Company to a concentration of credit risk, consist principally of temporary cash investments.

There have been no losses in

these accounts through December 31, 2021 and 2020.

the Company to a concentration of credit risk for the years, consist principally of temporary cash investments.

There have been

no losses in these accounts through December 31, 2022 and 2021.

Liquidity risk

The Company has an accumulated

deficit of $ 304,581,773 and has a working capital deficit of $ 28,388,580 as of December 31, 2021, which raises substantial doubt

about its ability to continue as a going concern as the Company does not have sufficient funds to discharge its current liabilities.

For the years ended December 31, 2021 and 2020,

our Company earned net revenues of $ 180,000 and $ 180,000 respectively.

All these revenues were derived from one customer., a related

The Company has an accumulated deficit of $ 299,257,917

and has a working capital deficit of $ 18,522,046 as of December 31, 2022, which raises substantial doubt about its ability to continue

as a going concern as the Company does not have sufficient funds to discharge its current liabilities.

Sales for both the years ended December 31, 2022 and 2021 were $ 1,152,555

The Consulting income from related party for both the years ended December 31, 2022 and 2021 was $ 45,000 and $ 180,000 .

derived from providing IT consulting services to a related party and sales from amazon and Ebay.

Note 20 - Subsequent Events

7, 2022, the Company received payments from Surgepays Inc.

(formerly known as Surge Holdings,

Inc.) in total of $ 3,750,000 p ursuant to the terms of the Settlement Agreement dated December

The final settlement of $ 3,750,000 was received by the Company in 2022 and paid out $ 2,650,000 to the third parties in

On January 28, 2022, the Company entered into a Stock Purchase Agreement with Marko Radisic (the “Seller”) and Touchpoint Group

Holdings, Inc.

(“Touchpoint”) pursuant to which the Company acquired 10,000 shares of Series A Convertible Preferred

Stock (the “Touchpoint Preferred”) from the Seller in consideration of $ 125,000 .

The Touchpoint Preferred is convertible

into 10,000,000 shares of common stock of Touchpoint and cannot be diluted regardless of any future corporate action by Touchpoint.

Accordingly, the Touchpoint Preferred will always convertible into 10,000,000 shares of common stock of Touchpoint as if no corporate

action has occurred.

Touchpoint converted the Touchpoint Preferred into 10,000,000 shares of common stock of Touchpoint on February

23,2022 resulting in the Company owning 20,000,000 shares of common stock of Touchpoint at this time.

On February 18, 2022,

the Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD.

pursuant to which the Company acquired the opportunity to share in revenues generated by MAHASER with respect to e-commerce sales through

the world biggest online retail platform in the United States of America.

MAHASER owns an e-commerce platform as a store which is the

legal, exclusive owner of Ravenholm Electronics.

The Company will operate the e-commerce platform and will be entitled to 95% for all

revenue generated by and received by MAHASER for the period from March 1, 2022 through December 31, 2022.

The RSA provides that the Company

will be entitled to appoint a manager to MAHASER.

As consideration, the Company will pay MAHASER $ 100,000

no later than March 1, 2022 and issue MAHASER 1,000,000

shares of the Company’s restricted common stock.

The Company shall have no obligations to make any further payments to MAHASER.

For any further extensions, the Company will have the option to extend the RSA for annual payment of $ 200,000 ,

which can be payable with the Company’s shares of common stock payable based on 20 days VWAP prior to issuance.

2022 the parties entered into Amendment No.

1 to the to the RSA, where all consideration to be paid or issued to MAHASER will be deferred

until such time where the e-commerce platform generated in cumulative revenue of $ 1,000,000 .

GBT TECHNOLOGIES

On January 24, 2023, the Company issued a convertible

promissory note to Glen Eagles Acquisition LP in the principal amount of $ 512,500 .

The convertible promissory note bears interest of 10 % and is payable at maturity on December 31, 2023 .

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021 and 2020

22, 2022, the Company entered into an Intellectual Property License and Royalty Agreement with Touchpoint Group Holdings,

(“Touchpoint” or “TGHI”) pursuant to which the Company granted TGHI a worldwide license for its technologies

for a term of five years in the domains of Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies pertaining

to the Company’s digital currency technology (the “Technology”).

GBT will charge TGHI earned royalties based on actual

uses by TGHI of the Technology resulting from revenue attributable to the use, performance or other exploitation of the Technology,

to the extent applicable, after deducting any taxes that the Company may be required to collect, and deducting any international

sales, goods and services, value added taxes or similar taxes which the Company is required to pay, if any, excluding deductions

for taxes on the Company net income.

TGHI agreed to issue the Company 10,000,000 shares of common stock of TGHI in consideration

of the Company entering this Intellectual Property License and Royalty Agreement.

Gregory Mancuso and Rainer AG

On or about February 2, 2022, GBT was

served with a First Amended Complaint (the “Complaint”) initiated by Gregory Mancuso and Rainer AG, a Swiss corporation,

21SMCV01430, filed in the Superior Court of the State of California for the County of Los Angeles.

The Complaint names

a number of different parties, including GBT, and asserts, among other things, claims for conversion, unjust enrichment, breach

of contract, and breach of implied covenant of fair dealing, which Plaintiffs allege arise out of a brokerage agreement entered

into between Plaintiff Rainer AG and co-defendant Consul Group re Dos Mil Veintiuno S.R.L (“Consul”).

GBT was sued under

an alter ego theory of liability, and its only involvement in the above-referenced chain of events seems to be that its shares

were deposited with Rainer by Consul upon the opening of the brokerage account.

GBT’s responsive pleading is due on March 17, 2022.

GBT will be filling a demurrer to the First Amended Complaint based on a variety of deficiencies with the First Amended Complaint,

and will ask the Court to dismiss the claims against GBT.

The Company issued 463,303 shares

with net proceeds of $66,942 from the Equity Financing Agreement in February 2022.

December 31, 2022 and 2021

2023, the Company entered into a Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor

(“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) of $ 59,408

with an original issue discount of $ 6,258

resulting in net proceeds of the Company of $ 53,150 .

The DL Note had a maturity date of June

1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at

the rate of 12.0% from the date on which the DL Note is issued.

A one-time interest charge of 12 %

was applied on the issuance date of the DL Note to the principal amount owed under the DL Note.

Accrued, unpaid interest and

outstanding principal, subject to adjustment, shall be paid in ten payments of $ 6,653 .60

resulting in a total payback to DL of $ 66,536 .

The first payment is due April 15, 2023 with nine subsequent payments each month thereafter.

The Company shall have a

five-day grace period with respect to each payment.

The Company has right to accelerate payments or prepay in full at any

time with no prepayment penalty.

This DL Note shall not be secured by any collateral or any assets of the Company.

The outstanding principal

amount of the DL Note may not be converted into the Company common shares except in the event of default.

In the event of default on the

DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading

price during the 10 day period immediately preceding the date of conversion.

In addition, upon the occurrence and during the continuation

of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to

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

In no event shall DL be allowed

to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates

would exceed 4.99% of the outstanding shares of the common stock of the Company.

On March 1, 2023, the Company

entered into a Securities Purchase Agreement with DL pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL

Convertible Note”) of $ 62,680 for a purchase price of $ 52,150 .

The DL Convertible Note had a maturity

date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Convertible Note at the rate

of 6.0 % from the date on which the DL Convertible Note is issued until the same becomes due and payable, whether

at maturity or upon acceleration or by prepayment or otherwise.

The Company shall have the right to prepay the DL Convertible Note, provided

it makes a payment including a prepayment to DL as set forth in the DL Convertible Note.

The outstanding principal

amount of the DL Convertible Note may not be converted prior to the period beginning on the date that is 180 days following the date the

DL Convertible Note is issued .

Following the 180th day, DL may convert the DL Convertible Note into shares of the Company’s common

stock at a conversion price equal to 85% of the lowest trading price during the 20 day period preceding the date of conversion.

upon the occurrence and during the continuation of an event of default (as defined in the DL Convertible Note), the DL Convertible Note

shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional

amounts as set forth in the DL Convertible Note.

In no event shall DL be allowed to effect a conversion if such conversion, along with

all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the

common stock of the Company.

GBT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022 and 2021

On June 10, 2022, GBT Technologies,

(the “Company”), entered into a Joint Venture and Territorial License Agreement (the “Metaverse Agreement”)

with Ildar Gainulin and Maria Belova (collectively, the “Licensor”).

Under the Metaverse

Agreement, the parties formed Metaverse Kit Corp., a Nevada corporation (“Metaverse Kit”).

The purpose of Metaverse Kit was

to develop, maintain and support source codes for its proprietary technologies and comprehensive platform that combines a core virtual

reality platform and an extended set of real-world functions to provide a metaverse experience initially within the area of sports and

then expanding into virtual worlds of entertainment, live events, gaming, communications and other cross over product opportunities (the

“Meta Portfolio”).

Under the Metaverse Agreement, Licensor agreed to provide Metaverse Kit with the licensed technology and

In connection therewith, the parties entered an Asset Purchase Agreement (the “Metaverse APA”) concurrently with

the Metaverse Agreement whereby Licensor sold Metaverse Kit all source codes pertaining to the Meta Portfolio.

Further, Licensor provided

an exclusive license to Metaverse Kit throughout the world for the invented product/service and the related platforms relating to the

Meta Portfolio and to use the know how to develop, manufacture, sell, market and distribute the Meta Portfolio throughout the world.

Company was required to contribute 500,000,000 shares of common stock of the Company (“GBT Shares”) to Metaverse Kit.

and the Company were to each own 50% of Metaverse Kit.

The Company pledged its 50% ownership in Metaverse Kit to Igor 1 Corp.

a convertible note held by Igor 1 Corp.

The Company was to appoint two directors and Licensor was allowed to appoint one director of Metaverse

Metaverse Kit, Licensor and Elentina Group, LLC (“Elentina”) entered into a Consulting Agreements in which IGBM

and Elentina, each were engaged to provide services for $ 25,000

per month payable quarterly which Metaverse Kit has the option to pay in shares of common stock calculated by the amount owed

divided by the Company’s 10-day VWAP.

Licensor and Elentina were to provide services in connection with the development

of the business as well as Metaverse Kit’s capital raising efforts.

The term of the Consulting Agreement was two

The closing of the Metaverse

Agreement occurred on June 13, 2022.

On March 14, 2023, the Company

received a counter signed Settlement Agreement and Release by Licensor dated March 2, 2023 (“Settlement Agreement”).

to the Settlement Agreement, the parties agreed that Metaverse Agreement, the Metaverse APA and the Consulting Agreement are void and

Licensor agreed to pay $ 5,000 to the Company as settlement payment and surrender their shares in Metaverse Kit.

On February 1, 2023, the

Company engaged AlKhatib Consulting Group to provide exclusive representation services in connect with managing market partners, effective

on February 1, 2012 for 24 consecutive months.

On April 3, 2023, GBT Tokenize Corp.

a subsidiary that is owned 50 % by GBT Technologies, Inc (“GBT”) entered into an Asset Purchase Agreement (“APA”)

with Trend Innovation Holdings, Inc.

( “TREN”), in which GBT consented, pursuant to which Seller sold certain assets relating

to proprietary system and method named Avant-Ai, which is a text-generation, deep learning self-training model (the “System”).

In consideration of acquiring the System, TREN is

required to issue to the Seller 26,000,000 common shares of TREN (the “Shares”).

The Shares will be restricted per Rule 144

as promulgated under the Securities Act of 1933, as amended (the “1933 Act”) and Seller agreed to a lock-up period of nine

(9) months following closing (the “Lock Up Term”).

In the event that TREN is unable to up-list to Nasdaq either through a

business combination or otherwise prior to the expiration of the Lock Up Term, the Seller may request within three (3) business days of

the expiration of the Lock-Up Term, that all transactions contemplated by the APA be unwound.

In addition, TREN, Seller and GBT entered into a license

agreement regarding the System, granting the Seller and/or GBT a perpetual, irrevocable, non-exclusive, non-transferable license for using

the System to be used in its own development, as in-house tool, where Seller or GBT may not sublicense its rights hereunder to any customer

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures