GBT Technologies Inc. 10-K/A

ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES We maintain a system of disclosure 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 the SEC’s rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive and Financial Officer) to allow for timely decisions regarding required disclosure. As required by SEC Rule 15d-15(b), our Chief Executive Officer (Principal Executive and Financial Officer), carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. 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 in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer (Principal Executive and Financial Officer) to allow timely decisions regarding required disclosure. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management, consisting of our Chief Executive Officer (Principal Executive and Financial Officer), is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f), is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, 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 deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management assessed the effectiveness of our ICFR reporting as of December 31, 2023. Based on this assessment, management believes that as of December 31, 2023, our ICFR reporting is not effective based on those criteria. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC to provide only management’s report in this annual report. 36 CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes during our last fiscal year that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the year ended December 31, 2023. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Executive Officers and Directors Below are the names and certain information regarding the company’s executive officers and directors. Current Directors/Officers: Name Age Title Dr. Danny Rittman 62 Chief Technology Officer and Director Mansour Khatib 62 Chief Executive Officer, Chief Financial Officer and Director Dr. Danny Rittman is a veteran software architect and integrated circuit technology expert with over 20 years of experience in the technology sector. From 2014 through the present, Dr. 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. From 2007 through 2012, Dr. 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. 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. Dr. 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. Mr. Rittman is the Company’s CTO and director. Mansour Khatib was appointed as the Company Chief Executive and Financial Officer on April 13, 2020, the Company’s Board of Directors appointed Mansour Khatib, who served as the Chief Marketing Officer and a director of the Company as Chief Executive Officer. Mr. Khatib has also previously served as Interim Chief Executive Officer from May 2018 to July 2018. From 2009 through 2012, Mansour Khatib served as the CEO and CFO of The Merchandise Company, located in Long Beach, California. From 2012 through the present, Mr. Khatib has served as a U.S. Business and Marketing Sales Representative for KB Racking, located in Toronto, Canada. From May 2013 through July 2014, Mr. Khatib served as VP of Marketing for Sun Energy Partners, LLC, developing solar rooftop projects. From July 2014 through the present, Mr. Khatib has served as the CTO for New Energy Ventures, LLC, a company that is developing utility scale projects in New Jersey, California, and smaller projects in Mexico, the Caribbean and Peru. Mr. Khatib received B.A. in Economics from Fachhochschule Wuppertal in Wuppertal, Germany in 1988 and a Bachelors in Electro Engineering & Computer Technology from University Aachen in Aachen, Germany in 1985. Mr. Khatib is the Company’s CEO and director. 37 Family Relationships There are no family relationships among our directors and executive officers. There is no arrangement or understanding between or among our executive officers and directors pursuant to which any director or officer was or is to be selected as a director or officer. None of our directors or executive officers have had direct or indirect material interest in any transaction or proposed transaction, in which the Company was or is a proposed participant, exceeding $120,000. Involvement in Certain Legal Proceedings To our knowledge, during the last ten years, none of our directors and executive officers has: ● 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 On December 17, 2015, the Company established a Nominating and Corporate Governance Committee, a Compensation Committee and an Audit Committee (collectively, the “Committees”) and approved and adopted charters to govern each of the Committees. Currently, there are no members on each of the committees and the board of directors has assumed the roles of each of the committees. Agreements with Officers and Directors On June 30, 2015, the Company appointed Dr. Danny Rittman as Chief Technical Officer and a board member. On April 6, 2018, 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 $250,000 annually payable in equal increments of $15,000 per month. An additional $70,000 shall be payable within 15 days of the end of the calendar year. On September 14, 2018, the Company and Dr. Rittman entered into a letter agreement confirming that the Company is the owner of all intellectual property developed by Dr. Rittman relating to the Internet of Things (IoT) and Artificial Intelligence enabled mobile technologies, including a global platform with both mobile and fixed solutions, commencing June 16, 2015 and continuing until Dr. Rittman’s 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. 38 On April 16, 2016 (the “Effective Date”), Mansour Khatib and the Company entered into an Employment Agreement (the “Agreement”) pursuant to which Mr. Mansour Khatib agreed to serve as the Chief Marketing Officer of the Company. Mr. Mansour Khatib was also appointed as a director of the Company on the Effective Date. Pursuant to the terms of the Employment Agreement, Mr. Khatib will receive an annual salary of $100,000 upon the Company generating $1,000,000 in revenue during any three (3) month period. There is no understanding or arrangement between Mr. Khatib and any other person pursuant to which he was appointed as an executive officer and director. Mr. Khatib does not have any family relationship with any director, executive officer or person nominated or chosen by us to become a director or an executive officer. Mr. Khatib has not had direct or indirect material interest in any transaction or proposed transaction, in which the Company was or is a proposed participant, exceeding $120,000. Effective August 15, 2016, the Employment Agreement of Mansour Khatib, our CMO, was amended and restated as follows: Upon the Company generating $1,000,000 in revenue during any three (3) month period (the “Threshold Requirement”), the Executive will receive salary at the rate of $100,000 annually (the “Base Salary”); provided, however, that that Company shall pay to Executive $5,000 per month (the “Monthly Salary Advance”) commencing on August 15, 2016, which such Monthly Salary Advance shall be an advance on the Base Salary and shall continue to be paid to Executive until such time that the Company launches its Guardian Patch technology into the consumer markets. Once the Threshold Requirement is met, the Base Salary will be payable in equal increments not less often than monthly in arrears and in any event consistent with the Company’s payroll policy and practices. On August 1, 2021, the Company amend his employment agreement pursuant to which he will receive salary at the rate of $5,000 per month. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires the Company’s executive officers, directors, and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s common stock. Such officers, directors, and persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file with the SEC. To our knowledge, based solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2023 filed with the SEC, all required Section 16 reports under the Exchange Act for our directors, executive officers, principal accounting officer and beneficial owners of greater than 10% of our common stock were filed on a timely basis during the year ended December 31, 2023. Code of Ethics We have adopted a Code of Ethics that applies to all officers, directors and employees. The Company will provide to any person without charge a copy of such code of ethics upon written request to the Company at its registered offices. ITEM 11. EXECUTIVE COMPENSATION The following tables set forth all compensation paid to our officers for the years ended December 31, 2023 and 2022. Summary Compensation Table Name and principal Stock Equity None Equity Incentive All Other Position Year Awards Salary Compensations Total Danny Rittman 2023 $ — $ 60,000 $ — $ 60,000 Chief Technology Officer and director 2022 $ — $ 60,000 $ 3,671 $ 63,671 Mansour Khatib 2023 $ — $ 60,000 $ — $ 60,000 Chief Executive Officer and director 2022 $ — $ 60,000 $ 140,000 $ 200,000 39 The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit-sharing plans for the benefit of our sole officer and director other than as described herein. Director Compensation During the years ended December 31, 2023 and 2022, there were 2 non-employee directors. Outstanding Equity Awards at Fiscal Year-End As of December 31, 2023, no new warrants were awarded to the executives. ITEM 12. 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 April 15, 2024 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 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. Common Percentage Stock of Beneficially Common Name of Beneficial Owner Owned (1) Stock (1) Dr. Danny Rittman (2) 1,980 0.00 % Mansour Khatib (2) — 0.00 % Metaverse Kit Corp (3) 500,000,000 2.97 % GBT Tokenize Corp (4) 166,000,000 0.99 % All Officers and Directors as a Group 1,980 0.0 % (1) 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 16,813,229,180 shares of common stock outstanding as of April 15, 2024 (2) Current Officer and Director of the Company. (3) Metaverse Kit Corp was 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. On March 14, 2023, the Company received a counter signed Settlement Agreement and Release by ldar Gainulin and Maria Belova 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. ldar Gainulin and Maria Belova agreed to pay $5,000 to the Company as settlement payment and surrender their shares in Metaverse Kit. 40 (4) 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. On 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 which replaced a prior joint venture entered between the parties, per which GBT Tokenize Corp to hold an additional 150,000,000 shares of the Company’s common stock. In addition, GBT Tokenize is the holder of 1,000 shares of Series I Preferred Stock (the “Series I Stock”) with a stated value of $35,000 per share which is convertible into common stock of the Company by dividing the stated value by the conversion price of $0.0035, which, if converted in full would result in the issuance of 10 billion shares of common stock of the Company. Further, the Series I Stock will vote on an as converted basis No Director, executive officer, affiliate or any owner of record or beneficial owner of more than 5% of any class of voting securities of the Company is a party adversary to the Company or has a material interest adverse to the Company. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. 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 prior Company’s Chief Executive Officer (From January 1, 2019 to April 11, 2020), 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 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 (which was the Company’s EO from January 1, 2019 until April 11, 2020) is engaged to provide services for $10,000 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 20-day VWAP. Mr. Davis will provide services in connection with the development of the business as well as GBT BitSpeed’s capital raising efforts. The term of the Consulting Agreement was two years. The closing of the BitSpeed Agreement occurred on October 14, 2019. On March 31, 2023 Doug Davis gave notice to the Company of termination of the consulting agreement dated October 10, 2019. On July 20, 2023, the Company through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into an Amended and Restated Joint Venture (the “2023 Tokenize Agreement”) with Magic Internacional Argentina FC, S.L. (“Magic”) and GBT Tokenize Corp (“GBT Tokenize”). On March 6, 2020, the Company through Greenwich entered into a Joint Venture and Territorial License Agreement (the “2020 Tokenize Agreement”) with Tokenize-It, S.A. (“Tokenize”). Under the 2020 Tokenize Agreement, the parties formed GBT Tokenize and Tokenize contributed its technology portfolio as described in the 2020 Tokenize Agreement with each Tokenize and the Company owning 50% of 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 start-ups (“Technology Portfolio”). In addition to the Technology Portfolio, Tokenize contributed the services and resources for the development of the Technology Portfolio to GBT Tokenize. The Company contributed 2,000,000 shares of common stock. On May 28, 2021, the parties agreed to amend the 2020 Tokenize Agreement to expand the territory granted for the Technology Portfolio under the license to GBT Tokenize to include the entire continental United States. The Company issued GBT Tokenize an additional 14,000,000 shares of common stock. On June 30, 2021, Tokenize and its shareholder assigned all their rights under the 2020 Tokenize Agreement, including the Company’s pledged 50% ownership in GBT Tokenize to Magic. On April 11, 2022, the Company, through Greenwich, entered into a Master Joint Venture and Territorial License Agreement (the “2022 Tokenize Agreement”) with Magic and Tokenize which replaced the 2020 Tokenize Agreement. The Company issued GBT Tokenize an additional 150,000,000 shares of common stock of the Company. GBT Tokenize has developed a vital device based on the Technology Portfolio that is ready for commercialization, 41 as well as certain derivative technologies, which positioned GBT Tokenize to further develop or license certain code sources. On April 3, 2023, GBT Tokenize entered its first commercial transaction to date through the sale of the Avant-AI! technology that been developed by GBT Tokenize, based on the Technology Portfolio pursuant to which GBT Tokenize received 26,000,000 shares of common stock of Buyer’s shares – Avant Technologies, Inc. The 2023 Tokenize Agreement restated and replaced the 2022 Tokenize Agreement. Pursuant to the 2023 Tokenize Agreement, as a result of the contribution of the Technology Portfolio by Tokenize and the subsequent contribution of services for the development of the Technology Portfolio by Tokenize and Magic, GBT Tokenize has been able to continue in operation, which has benefited the Company despite its contribution of 166 million shares of common stock valued at approximately $50,000. In order to maintain its 50% ownership interest in GBT Tokenize, the Company agreed to contribute its portfolio of intellectual property to GBT Tokenize and issue to GBT Tokenize 1,000 shares of Series I Preferred Stock (the “Series I Stock”) with a stated value of $35,000 per share which is convertible into common stock of the Company by dividing the stated value by the conversion price of $0.0035, which, if converted in full would result in the issuance of 10 billion shares of common stock of the Company. Further, the Series I Stock will vote on an as converted basis. The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Magic to secure its Technology Portfolio investment. VisionWave: On March 19, 2024, Tokenize, the Company entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (“VisionWave”) pursuant to which VisionWave agreed to acquire from Tokenize the entire right, title, and interest of certain patents and patent applications providing an intellectual property basis for a machine learning driven technology that controls radio wave transmissions, analyzes their reflections data, and constructs 2D/3D images of stationary and in motion objects (“VisionWave PPA”). The Purchase Price for the asset is $30,000,000 (the “Purchase Price”), which VisionWave will pay with shares of common stock, $0.0001 par value per share (the “Common Stock”). The Parties agree that the final Purchase Price may be adjusted and will be governed by a valuation report issued by a professional third party (“Valuation”). If the final Purchase Price per the Valuation is less than $30,000,000, Tokenize has the option to cancel this Agreement. In accordance therewith, VisionWave agreed to issue and deliver to Tokenize, 1,000 shares of Common Stock (the “Shares”) representing 50% of VisionWave’s issued and outstanding shares of Common Stock, where the remainder of the 50% of VisionWave’s issued and outstanding shares of Common Stock are owned by a corporation controlled by Stanley Hills. Avant Investment: On April 3, 2023, Tokenize entered into an Asset Purchase Agreement (“APA”) with Avant Technologies, Inc (prior name: Trend Innovation Holdings, Inc. “AVAI”), in which GBT consented, pursuant to which Tokenize 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, AVAI is required to issue to the Seller 26,000,000 common shares of AVAI (the “Shares”). The Shares been pledge to a third party as a collateral. In addition, AVAI, Tokenize and GBT entered into a license agreement regarding the System, granting Tokenize 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 Tokenize or GBT may not sublicense its rights hereunder to any customer or client. Yello Partners Inc. As of December 31, 2023 and as of December 31, 2022, the Company has $625,000 and $505,000 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%, is unsecured and was due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023. 42 Stanley Hills LLC Convertible Note Payable (relate to 2022) On January 1, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $750,000. The convertible promissory note bears interest of 10% and is payable at maturity on June 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. As of December 31, 2023, the Company has recorded an outstanding payable balance to Stanley amounted $661,395. Consulting income for the period ended December 31, 2023 and for the year ended on December 31, 2022 were $0 and $90,000. Consulting income were derived from providing IT consulting services to Stanley Hills. As of December, 31, 2023 and December 31, 2022, the Company has recorded a due to related party of $14,239 and $62,003, respectively. On February 9, 2022 the Board approved the employment of Ms. Rittman the spouse of Mr. Rittman, as an assistant to be paid $1,500 per month. Mr. Rittman recuse himself from voting on the matter due to a conflict. Procedures for Approval of Related Party Transactions Our Board of Directors is in charged with reviewing and approving all potential related party transactions. All such related party transactions must then be reported under applicable SEC rules. We have not adopted other procedures for review, or standards for approval, of such transactions, but instead review them on a case-by-case basis. Director Independence The Company has no outside directors as of December 31, 2023. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 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, 2023 and 2022. Years Ended December 31, 2023 2022 Audit Fees $ 92,500 $ 84,161 Audit Fees - This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. Board of Directors Pre-Approval Process, Policies and Procedures All audit and permissible non-audit services provided by our independent registered public accounting firm must be pre-approved. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of service. The independent registered public accounting firm and management periodically report to the board of directors regarding the extent of services provided by the independent registered public accounting firm. Consistent with the board of directors’ policy, all audit and permissible non-audit services provided by our independent registered public accounting firm were pre-approved by our board of directors. 43 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES No. Description 3.1 Certificate of Incorporation of Forex International Trading Corp. (1) 3.2 Bylaws of Forex International Trading Corp. (1) 3.3 Certificate of Designation for Series A Preferred Stock (2) 3.4 Certificate of Designation for Series B Preferred Stock (3) 3.5 Certificate of Designation – Series C Preferred Stock (4) 3.6 Amendment to the Certificate of Designation for the Series B Preferred Stock (5) 3.7 Amendment to the Certificate of Designation for the Series C Preferred Stock(5) 3.8 Certificate of Change filed pursuant to NRS 78.209 (6) 3.9 Articles of Merger filed pursuant to NRS 92.A.200 (6) 3.10 Certificate of Amendment to the Articles of Incorporation of Gopher Protocol Inc. (8) 3.11 Certificate of Change dated July 10, 2019 (23) 3.12 Articles of Merger by and between Gopher Protocol Inc. and GBT Technologies Inc. dated July 10, 2019(23) 3.13 Certificate of Correction to the Certificate of Change (24) 3.14 Certificate of Correction to the Articles of Merger by and between Gopher Protocol Inc. and GBT Technologies Inc. dated July 10, 2019 (24) 3.15 Certificate of Amendment to the Articles of Incorporation of GBT Technologies Inc. dated September 23, 2019(26) 3.16 Certificate of Designation for Series B Preferred Stock (7) 3.17 Certificate of Designation of the Preferences, Rights and Limitations of the Series G Convertible Preferred Stock (15) 3.18 Series H Convertible Preferred Stock Certificate of Designation (21) 4.1 Form of Warrant issued to Robert Warren Jackson, Gregory Bauer, Michael Murray and Guardian Patch, LLC dated September 1, 2017 (14) 4.2 Balloon Note payable by Gopher Protocol Inc. to RWJ Advanced Marketing, LLC dated September 1, 2017 (14) 4.3 Form of Warrant issued to Derron Winfrey, Dennis Winfrey, Mark Garner and JIL Venture dated March 1, 2018 (16) 4.4 Note payable by Gopher Protocol Inc. to ECS, LLC dated March 1, 2018 (16) 4.5 Stock Option issued to Kevin Pickard dated April 16, 2018 (17) 4.6 Stock Option issued to Muhammad Khilji dated April 25, 2018 (18) 4.7 6% Convertible Note payable to Pablo Gonzalez dated June 17, 2019 (21) 4.8 Convertible Note payable to Glen Eagles Acquisition LP (22) 4.9 Amendment to Common Stock Purchase Warrant between Gopher Protocol Inc. and Glen Eagles Acquisition LP (22) 4.10 Second Amendment to Promissory Note between GBT Technologies Inc. and Ilaid Research and Trading LP dated July 20, 2020 (29) 4.11 Convertible Promissory Note August 4, 2020 issued to Redstart Holdings Corp. (30) 4.12 Fourth Amendment to Promissory Note between GBT Technologies Inc. and Iliad Research and Trading, L.P. dated May 14, 2020 – Executed May 19, 2021(31) 4.13 Convertible Promissory Note May 26, 2021 issued to Redstart Holdings Corp. – Executed on May 27, 2021 (32) 4.14 Fifth Amendment to Promissory Note between GBT Technologies Inc. and Iliad Research and Trading LP dated August 19, 2021 executed August 20, 2021 (33) 4.15 Convertible Promissory Note September 21, 2021 issued to Redstart Holdings Corp. – Executed on September 24, 2021, and Funded on September 28, 2021 (34) 4.16 Amended Loan Authorization and Agreement between GBT Technologies Inc. and U.S. Small Business Administration dated October 1, 2021 (35) 4.17 Convertible Promissory Note dated November 8, 2021 issued to Sixth Street Lending LLC (36) 4.18 Description of Securities 44 10.1 Territorial License Agreement dated March 4, 2015, by and between Gopher Protocol Inc. and Hermes Roll LLC (7) 10.2 Amended and Restated Territorial License Agreement dated June 16, 2015 by and between Gopher Protocol Inc. and Hermes Roll LLC (9) 10.3 Letter Agreement dated August 20, 2015 by and between Gopher Protocol Inc. and Dr. Danny Rittman (10) 10.4 Letter Agreement dated March 14, 2016 by and between Gopher Protocol Inc. and Dr. Danny Rittman. (11) 10.5 Amended and Restated Employment Agreement by and between Gopher Protocol Inc. and Dr. Danny Rittman dated April 19, 2016 (12) 10.6 Letter Agreement between the Company and Danny Rittman dated June 29, 2017 (13) 10.7 Asset Purchase Agreement between Gopher Protocol Inc. and RWJ Advanced Marketing, LLC dated September 1, 2017 (14) 10.8 Addendum to Asset Purchase Agreement between Gopher Protocol Inc. and RWJ Advanced Marketing, LLC dated September 1, 2017 (14) 10.9 Employment Agreement between Gopher Protocol Inc. and Gregory Bauer dated September 1, 2017 (14) 10.10 Asset Purchase Agreement between Gopher Protocol Inc. and ECS Prepaid LLC dated March 1, 2018 (16) 10.11 Employment Agreement between Gopher Protocol Inc. and Derron Winfrey dated March 1, 2018(16) 10.12 Employment Agreement between Gopher Protocol Inc. and Mark Garner dated March 1, 2018(16) 10.13 Agreement between Gopher Protocol Inc. and Mobiquity Technologies, Inc. dated September 4, 2018 (19) 10.14 Exclusive Intellectual Property License and Royalty Agreement between Gopher Protocol Inc. and GBT Technologies, S.A. dated September 14, 2018 (20) 10.15 Letter Agreement between Gopher Protocol Inc. and Dr. Danny Rittman dated September 14, 2018 (20) 10.16 Exchange Agreement entered into between Gopher Protocol Inc., Altcorp Trading LLC, GBT Technologies, S.A., a Costa Rica company and Pablo Gonzalez dated June 17, 2019 (21) 10.17 Consulting Agreement entered into between Gopher Protocol Inc. and Glen Eagles Acquisition LP (22) 10.18 Letter Agreement between Mobiquity Technologies, Inc. and GBT Technologies Inc. executed August 2, 2019 Delivered August 6, 2019 (39) 10.19 Stock Purchase Agreement between Mobiquity Technologies, Inc. and GBT Technologies Inc. Dated September 10, 2019 (25) 10.20 Stock Purchase Agreement between Marital Trust GST Subject U/W/O Leopold Salkind and GBT Technologies Inc. dated September 10, 2019 (25) 10.21 Letter Agreement between GBT Technologies Inc. and Stanley Hills LLC dated February 26, 2020 (27) 10.22 Amendment to Promissory Note between GBT Technologies Inc. and Iliad Research and Trading, L.P. dated February 27, 2020 (27) 10.23 Order dated February 27, 2020 issued by the United States District Court District of Nevada (27) 10.24 Joint Venture and Territorial License Agreement by and between GBT Technologies Inc. and Tokenize-It S.A. dated March 6, 2020 (28) 10.25 Consulting Agreement by and between Pablo Gonzalez and GBT Tokenize Corp. dated March 6, 2020 (28) 10.26 Pledge Agreement by and between GBT Tokenize Corp. and Tokenize-It S.A., dated March 6, 2020 (28) 10.27 Securities Purchase Agreement dated August 4, 2020 between GBT Technologies Inc. and Redstart Holdings Corp. (30) 10.28 Securities Purchase Agreement dated November 8, 2021 between GBT Technologies Inc. and Sixth Street Lending LLC (36) 10.29 Equity Financing Agreement between GBT Technologies Inc. and GHS Investments LLC dated December 17, 2021 (37) 10.30 Registration Rights Agreement between GBT Technologies Inc. and GHS Investments LLC dated December 17, 2021 (37) 10.31 Resolution of Purchase, Mutual Release and Settlement Agreement by and among GBT Technologies Inc. and Parties Listed Therein December 22, 2021(38) 10.33 Finders Fee Agreement between JH Darbie & Co. and GBT Technologies Inc. dated October 14, 2021 (39) 31.1 Certification of Chief Executive Officer (Principal Executive and Financial Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Executive Officer (Principal Executive and Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 45 (1) Incorporated by reference to the Form S-1 Registration Statement filed with the SEC on September 9, 2009. (2) Incorporated by reference to the Form 10-K Annual Report filed with the Securities and Exchange Commission on April 6, 2011 (3) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on May 14, 2012 (4) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 27, 2012. (5) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 20, 2012. (6) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on February 18, 2015 (7) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 12, 2015 (8) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 1, 2015 (9) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 16, 2015 (10) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 21, 2015 (11) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016 (12) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 20, 2016 (13) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 30, 2017 (14) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 7, 2017 (15) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on January 3, 2018 (16) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 21, 2018 (17) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 18, 2018 (18) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on April 26, 2018. (19) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 9, 2018. (20) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 18, 2018. (21) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on June 19, 2019. (22) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 12, 2019. (23) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on July 15, 2019. (24) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 5, 2019. (39) Incorporated by reference to the Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on August 7, 2019. (25) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 16, 2019. (26) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 25, 2019. (27) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 2, 2020. (28) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on March 11, 2020. 46 (29) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on July 24, 2020. (30) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 10, 2020. (31) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on May 21, 2021. (32) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on June 1, 2021. (33) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on August 23, 2021. (34) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on September 29, 2021. (35) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on October 6, 2021. (36) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on November 11, 2021 (37) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 20, 2021 (38) Incorporated by reference to the Form 8-K Current Report filed with the Securities and Exchange Commission on December 28, 2021 (39) Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on January 12, 2022 Item 16. Form 10-K Summary. None 47 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GBT TECHNOLOGIES INC. Dated: August 19, 2024 By: /s/ Mansour Khatib Name: Mansour Khatib Title: Chief Executive and Financial Officer (Principal Executive, Financial and Accounting Officer) In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated. Signature Title Date /s/ Mansour Khatib Chief Executive & financial Officer & Director August 19, 2024 Mansour Khatib (Principal Executive, Financial and Accounting Officer) /s/ Dr. Danny Rittman Chief Technology Officer and Director August 19, 2024 Dr. Danny Rittman 48 GBT TECHNOLOGIES INC. Consolidated Financial Statements Contents Page Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID: 5081 ) F-2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-4 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022 F-5 Consolidated Statement of Stockholders’ Deficit for the Years Ended December 31, 2023 and 2022 F-6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 F-7 Notes to Consolidated Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the board of directors of GBT Technologies, Inc. GBT Technologies Inc. 2450 Colorado Ave., Suite 100E, Santa Monica, CA 90404 Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of GBT Technologies, Inc. the “Company”) as of December 31, 2023 and 2022, 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, 2023 and 2022, 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. 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 $ 315,993,294 as of December 31, 2023 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. 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. 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. F- 2 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. The company is involved in significant litigation related to debt settlement. The company has complex derivative instruments that require fair value measurement and accounting for potential liabilities. Company liabilities for legal $4,090,057 and derivative $14,116,062 is recorded and shown separately under current liabilities. The audit team identified the litigation and derivative liability as critical audit matters due to their materiality and complexity, requiring significant auditor attention and judgment. 1. Litigation Assessment: We assessed the company’s litigation disclosures, legal opinions, and potential outcomes. Our audit procedures included, among others, obtaining a list of litigation Company’s 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, verifying the disclosures related to provisions and contingent liabilities in the financial statements to assess consistency. Accrued settlements discussed in Note 13. Considering the judgement involved in determining the need to make a provision or disclose litigation, the matter is considered a Critical Audit Matter 2. Derivative Liability Valuation: The auditors performed detailed testing of the fair value measurement of derivative instruments. This included evaluating the valuation models used, assessing market inputs, and considering the impact of potential liabilities on the company’s financial statements. Convertible notes payable discussed in Note 11 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 Company uses a weighted average Black-Scholes option pricing model with the following assumptions to measure the FV of derivative liability in Note 14. The outcome fair value of derivative liabilities could have a significant impact on the company’s financial statements and disclosures. We focused on ensuring the accuracy and completeness of these key financial statement elements. Considering the calculation using valuation model used in determining the need to make provision is a matter considered a Critical Audit Matter. We conclude that the litigation and derivative liability met the criteria for being critical audit matters due to their materiality, complexity, and the level of judgment and estimation involved in their assessment. M.S. Madhava Rao Bengaluru, India April 19, 2024 Served as Auditor since 2022 5041 F- 3 GBT TECHNOLOGIES INC. CONSOLIDATED BALANCE SHEETS ASSETS December 31, December 31, 2023 2022 (Audited) (Audited/As Restated*) Current Assets: Cash $ 592 $ 13,058 Prepaid — 12,500 Note receivable 46,250 198,475 Marketable securities 31,206 16,198 Current assets of discontinued operations — 130,394 Total current assets 77,985 370,625 Total assets $ 77,985 $ 370,625 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities: Accounts payable and accrued expenses $ 5,372,846 $ 4,564,098 Accounts payable – Related Party 1,767,710 1,539,802 Accrued settlement 4,090,057 4,090,057 Unearned revenue — 48,921 Contract liabilities — 41,444 Convertible notes payable, current, net of discount of $ 66,512 and $ 189,060 5,665,017 6,397,727 Convertible notes payable, related party, net of discount of $ 0 and $ 0 661,395 116,605 Notes payable, current, net of original issue discount of $ 4,077 and $ 0 46,532 41,137 Notes payable, related party 140,000 140,000 Due to related party — 27,375 Derivative liability 14,116,062 1,714,143 Current liabilities of discontinued operations — 171,362 Total current liabilities 31,859,619 18,892,671 Non-Current Liabilities: Note payable, noncurrent, net of discount of $ 0 and $ 0 328,748 308,863 Total noncurrent liabilities 328,748 308,863 Total liabilities 32,188,367 19,201,534 Stockholders’ Deficit: Series B Preferred stock, $ 0.00001 par value; 20,000,000 shares authorized; 45,000 and 45,000 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Series C Preferred stock, $ 0.00001 par value; 10,000 shares authorized; 700 and 700 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Series D Preferred stock, $ 0.00001 par value; 100,000 shares authorized; 0 and 0 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Series G Preferred stock, $ 0.00001 par value; 2,000,000 shares authorized; 0 and 0 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Series H Preferred stock, $ 0.00001 par value ($500 stated value); 40,000 shares authorized; 20,000 and 20,000 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Series I Preferred stock, $ 0.00001 par value ($35,000 stated value); 1,000 shares authorized; 1,000 and 0 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Common stock, $ 0.00001 par value; 30,000,000,000 shares authorized; 10,253,695,062 and 1,535,593,440 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 102,538 15,356 Treasury stock, at cost; 8 and 1,040 shares at December 31, 2023 and December 31, 2022, respectively ( 11,059 ) ( 643,059 ) Stock loan receivable ( 7,610,147 ) ( 7,610,147 ) Shares to be cancelled ( 632,000 ) — Additional paid in capital 293,069,829 288,664,858 Accumulated deficit ( 315,993,294 ) ( 298,232,829 ) Total stockholders’ deficit ( 31,074,133 ) ( 17,805,821 ) Non-Controlling Interest ( 1,036,249 ) ( 1,025,088 ) Total stockholders’ deficit attributable to GBT Technologies, Inc. ( 32,110,382 ) ( 18,830,909 ) Total liabilities and stockholders’ deficit $ 77,985 $ 370,625 The accompanying footnotes are an integral part of these consolidated financial statements. F- 4 GBT TECHNOLOGIES INC. CONSOLIDATED STATEMENT OF OPERATIONS Years Ended December 31, 2023 2022 Sales $ — — Consulting Income – Related Party — 90,000 Total sales — 90,000 Cost of Goods Sold — — Gross Profit — 90,000 Operating expenses: General and administrative 507,261 701,270 Marketing 237,428 360,335 Professional 995,532 1,785,908 Total operating expenses 1,740,221 2,847,513 Loss from operations ( 1,740,221 ) ( 2,757,513 ) Other income (expense): Amortization of debt discount ( 322,933 ) ( 442,247 ) Change in fair value of derivative liability ( 13,759,482 ) 6,594,370 Interest expense and financing costs ( 2,581,658 ) ( 969,473 ) Gain on debt extinguishment 315,297 — Gain on RJW settlement — 3,012,355 Change in fair value of marketable securities ( 10,992 ) ( 310,462 ) Gain on loss of control 79,354 — Other income 287,394 237,803 Total other income (expense) ( 15,993,020 ) 8,122,346 Profit (Loss) before income taxes ( 17,733,241 ) 5,364,833 Income tax expense — — Profit (Loss) from continuing operations ( 17,733,241 ) 5,364,833 Discontinued operations Gain/(Loss) from discontinued operations ( 38,385 ) ( 40,977 ) Net Income (Loss) $ ( 17,771,626 ) $ 5,323,856 Less: net loss attributable to the noncontrolling interest ( 11,161 ) ( 1,025,088 ) Net loss attributable to GTB Technologies Inc. $ ( 17,760,465 ) $ 6,348,944 Weighted average common shares outstanding: Basic 4,462,434,507 696,686,911 Diluted 27,786,282,982 4,646,981,551 Net Income (Loss) per share (basic and diluted): Basic $ ( 0.00 ) $ 0.01 Diluted ( 0.00 ) 0.00 The accompanying footnotes are an integral part of the consolidated financial statements. F- 5 GBT TECHNOLOGIES INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT Series B Convertible Series C Convertible Series H Convertible Series I Convertible Stock Additional Total Preferred Stock Preferred Stock Preferred Stock Preferred Stock Common Stock Treasury Stock Share to be Cancelled Loan Paid-in Accumulated Noncontrolling Stockholders' Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Receivable Capital Deficit Interest Deficit Balance, December 31, 2021 45,000 — 700 — 20,000 — — — 33,200,198 $ 332 1,040 $ ( 643,059 ) — $ — $ ( 7,610,147 ) $ 284,072,667 $ ( 304,581,773 ) $ — $ ( 28,761,980 ) Common stock issued for conversions — — — — — — — — 847,133,242 8,471 — — — — — 2,156,989 — — 2,165,460 Fair value of derivative liability due to conversions — — — — — — — — — — — — — — — 2,209,888 — — 2,209,888 Common stock issued for cash — — — — — — — — 5,500,000 55 — — — — — 231,812 — — 231,867 Common stock issued for JV - Tokenize — — — — — — — — 150,000,000 1,500 — — — — — ( 1,500 ) — — — Cancellation of shares — — — — — — — — ( 240,000 ) ( 2 ) — — — — — 2 — — — Equity Method Investment - Meta — — — — — — — — 500,000,000 5,000 — — — — — ( 5,000 ) — — — Net loss — — — — — — — — — — — — — — — — 6,348,944 ( 1,025,088 ) 5,323,856 Balance, December 31, 2022 45,000 — 700 — 20,000 — — 1,535,593,440 $ 15,356 1,040 $ ( 643,059 ) — $ — $ ( 7,610,147 ) $ 288,664,858 $ ( 298,232,829 ) $ ( 1,025,088 ) $ ( 18,830,909 ) Common stock issued for conversions — — — — — — — — 8,618,101,622 86,182 — — — — — 1,598,489 — — 1,684,671 Fair value of derivative liability due to conversions — — — — — — — — — — — — — — — 2,727,482 — — 2,727,482 Shares issued to Tokenize — — — — — — 1,000 — — — — — — — — — — — — Common stock issued for service — — — — — — — — 100,000,000 1,000 — — — — — 79,000 — — 80,000 Reclassification of shares to be issues — — — — — — — — — — ( 1,032 ) 632,000 1,032 ( 632,000 ) — — — — — Net loss — — — — — — — — — — — — — — — — ( 17,760,465 ) ( 11,161 ) ( 17,771,626 ) Balance, December 31, 2023 45,000 — 700 — 20,000 — 1,000 — 10,253,695,062 $ 102,538 8 $ ( 11,059 ) 1,032 $ ( 632,000 ) $ ( 7,610,147 ) $ 293,069,829 $ ( 315,993,294 ) $ ( 1,036,249 ) $ ( 32,110,382 ) The accompanying footnotes are an integral part of these consolidated financial statements. F- 6 GBT TECHNOLOGIES INC. CONSOLIDATED STATEMENT OF CASH FLOWS Years Ended December 31, 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ ( 17,771,626 ) $ 5,323,856 Adjustments to reconcile net loss to net cash used in operating activities: Amortization of debt discount 322,933 442,247 Change in fair value of derivative liability 13,759,482 ( 6,594,370 ) Excess of debt discount and financing costs 1,462,446 34,175 Shares issued for services 80,000 — Change in fair value of market equity security 10,992 308,802 Gain on debt extinguishment ( 315,297 ) — Gain on debt settlement — ( 3,012,633 ) Changes in operating assets and liabilities: Account receivable — — Other receivable 152,225 3,741,525 Prepaid Expense 12,500 ( 12,500 ) Inventory — — Inventory in transit — — Unearned revenue ( 74,921 ) ( 200,463 ) Contract liabilities ( 41,444 ) ( 8,556 ) Accounts payable and accrued expenses 2,123,460 ( 253,957 ) Accounts payable and accrued expenses 227,908 — Net cash used in operating activities ( 51,342 ) ( 231,874 ) Cash Flows From Investing Activities: Investment to GTX — ( 150,000 ) Investment to TGHI — ( 125,000 ) Net cash used in investing activities — ( 275,000 ) Cash Flows From Financing Activities: Issuance of convertible notes 92,150 300,000 Issuance of note receivable — ( 190,000 ) Proceeds from sales of common stock — 231,867 Repayments to related party ( 27,375 ) ( 694,225 ) Repayment of Convertible note ( 39,043 ) ( 39,043 ) Proceeds from related party — 756,227 Repayment of note payable ( 79,070 ) — Issuance of notes payable 92,150 — Net cash provided by financing activities 38,812 364,826 Net increase in cash ( 12,529 ) ( 142,048 ) Cash, beginning of period 13,058 155,106 Cash, end of period $ 529 $ 13,058 Cash paid for: Interest $ — $ — Income taxes $ — $ — Supplemental non-cash investing and financing activities Debt discount related to convertible debt $ 35,576 $ 325,916 Reduction in derivative liability due to conversion $ 2,727,481 $ 2,209,887 Shares issued for conversion of convertible debt $ 1,684,671 $ 2,165,464 Share issuance for JV Metaverse $ — $ 5,000 Share issuance for JV Tokenize $ — $ 1,500 The accompanying footnotes are an integral part of these consolidated financial statements. F- 7 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Note 1 - Organization and Basis of Presentation Organization and Line of Business GBT Technologies 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. to GBT Technologies Inc. The Company derived revenues from (i) the provision of IT consulting services; and (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. Effective July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd. On July 20, 2023, the Company through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into an Amended and Restated Joint Venture (the “2023 Tokenize Agreement”) with Magic Internacional Argentina FC, S.L. (“Magic”) and GBT Tokenize Corp (“GBT Tokenize”). GBT Tokenize has developed a vital device based on the Technology Portfolio that is ready for commercialization, as well as certain derivative technologies, which positioned GBT Tokenize to further develop or license certain code sources. On April 3, 2023, GBT Tokenize entered its first commercial transaction to date through the sale of the Avant-AI! technology that been developed by GBT Tokenize, based on the Technology Portfolio. As of September 30, 2023, the Company did not record the commercial transactions as it was contingent per the Lock-Up term. 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 CFS were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Stock Split 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. 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. F- 8 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 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 by the Company’s board. On October 12, 2023, the Company amended its articles of incorporation to increase its authorized shares of common stock to 30,000,000,000 (the “Increase Amendment”). The Increase Amendment was approved by the board of directors as well as the shareholders holding in excess of a majority of the issued and outstanding voting shares of the Company. 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 $ 315,993,294 and has a working capital deficit of $ 31,781,634 as of December 31, 2023, which raises substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through some private placement offerings of debt and equity securities. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. These CFS do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. Note 3 – Discontinued Operations On February 18, 2022, the Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company shares in revenues generated by Mahaser e-commerce sales through the online retail platform in the United States of America. Mahaser owns an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics. The Company will operate the e-commerce platform and entitled to 95% for all revenue generated by and received by Mahaser from March 1, 2022 through December 31, 2022. The RSA provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $ 100,000 no later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common stock. Effective July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd. The following table presents the aggregate carrying amounts of assets and liabilities of discontinued operations of Mahaser Ltd. in the consolidated balance sheet as of December 31, 2022: Schedule of aggregate carrying amounts of assets and liabilities Carrying amounts of assets included as part of discontinued operations: Cash and cash equivalents $ 93,581 Accounts receivable, net 25,244 Inventory 11,569 Total assets classified as discontinued operations in the consolidated balance sheet $ 130,394 Carrying amounts of liabilities included as part of discontinued operations: Accounts payable and accrued expenses $ 136,734 Notes payable, noncurrent 34,628 Total liabilities classified as discontinued operations in the consolidated balance sheet $ 171,362 F- 9 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 The financial results of Mahaser Ltd. are present as loss from discontinued operations, net of income taxes on our consolidated income through December 31, 2023 and 2022, when our deconsolidation occurred. The following table presents the financial results of Mahaser: Schedule of loss from discontinued operations Year ended December 31, 2023 2022 Revenues $ 349,204 $ 1,107,555 Cost of revenue 324,918 817,754 Gross profit 24,286 289,801 Operating expense Professional expenses 20,039 28,635 General and administrative expenses 42,605 302,012 Total operating expense 62,644 330,647 Loss from operations of discontinued operations ( 38,358 ) ( 40,846 ) Other expense Other income 10 2 Nonoperating expense - interest expense and financing 37 127 Total other expense 27 132 Loss from discontinued operations before provision for income taxes ( 38,385 ) ( 40,978 ) Provision for income taxes — — Loss from discontinued operations, net of income taxes $ ( 38,385 ) $ ( 40,978 ) Note 4 – Summary of Significant Accounting Policies Use of Estimates The preparation of CFS in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying CFS include valuation of derivatives and valuation allowance on deferred tax assets. Principles of Consolidation The accompanying CFS include the accounts of the Company and its subsidiaries; the Company’s 50% owned subsidiaries: GBT Tokenize Corp; and GBT BitSpeed Corp. (currently inactive) and , 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. F- 10 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 For entities determined to be VIEs, an evaluation is required to determine whether the Company is the primary beneficiary. The Company evaluates its economic interests in the entity specifically determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE (“the benefits”). When making the determination whether the benefits received from an entity are significant, the Company considers the total economics of the entity, and analyzes whether the Company’s share of the economics is significant. The Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis. In addition, the Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially be significant to Mahaser. As a result of this analysis, the Company concluded it is the primary beneficiary of Mahaser and therefore consolidates the balance sheets, results of operations and cash flows of Mahaser. The Company performs a qualitative assessment of Mahaser on an ongoing basis to determine if it continues to be the primary beneficiary. Effective July 1, 2023 the Company terminated its joint venture revenue sharing (“Termination Agreement”) with Mahaser LTD (“Mahaser”). Until June 30, 2023, the Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially be significant to Mahaser. As a result of this analysis, the Company concluded it is the primary beneficiary of Mahaser and therefore consolidates the balance sheets, results of operations and cash flows of Mahaser until June 30, 2023. The Company performs a qualitative assessment of Mahaser on an ongoing basis to determine if it continues to be the primary beneficiary. Per the Termination Agreement, the Company has no access to Mahaser and ceased consolidated Mahaser as it does not comply with the condition in the qualitative assess, and as such this CFS does not include Mahaser operations for the period ended December 31, 2023. Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly-liquid debt instruments with original maturities of three months or less. As of December 31, 2023 and 2022, the Company did no t have any cash equivalents. Funds in Escrow Restricted cash is $ 375,000 as part of the SURG settlements proceeds that needs to stay in escrow and $ 19,694 restricted cash that the court on January 28, 2022 awarded the Company with injunction against RWJ defendants, where all funds generating from resale should be deposited into GBT blocked account, and therefore RWJ defendants cannot use these funds without court order, neither the Company. According to 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”) and W.L. Petrey Wholesale Company, Inc., (“Petrey”) on one hand; and GBT Technologies Inc., on behalf of itself and its agents (collectively the GBT Parties”), on the other hand. The Company the RJW Agreement effective September 26, 2022 with final signatures delivered to the Company on or about October 5, 2022. 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. F- 11 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Inventory (2022 and interim 2023) Inventory consists of electronic product ready for sale online on e-commerce platforms. 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 (2022) On September 18, 2020, the Company entered into a Purchase and Sale Agreement with Mr. LightHouse LTD . , an Israeli corporation (“MLH”) pursuant to which the Company agreed to sell and assign to MLH, effective July 1, 2020 all the shares, and certain specified liabilities, of Ugopherservices Corp. (“UGO”), a wholly owned subsidiary of the Company for $ 100,000 to be paid through the delivery of a promissory note payable to the Company (the “Note”), upon the terms and subject to the limitations and conditions set forth in the Note. At December 31, 2020, the Company determined this note was not collectible and took an impairment charge of $ 100,000 . During July 2021, MLH effected a $ 50,000 payment on the Note. During April 2022, MLH effected a second payment for additional $ 50,000 on the Note exhausting the Note balance. Derivative Financial Instruments The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its FV and is then re-valued at each reporting date, with changes in the 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 instrument was an embedded conversion feature associated with convertible notes payable due to certain provisions that allow for a change in the conversion price based on a percentage of the Company’s stock price at the date of conversion. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 820, Fair Value Measurements and Disclosures , requires disclosure of the FV of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments , defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement. F- 12 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 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 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, 2023 and 2022, 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 Fair Value Measurements at As of December 31, 2022 Description December 31, 2022 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Conversion feature on convertible notes $ 1,714,143 $ — $ 1,714,143 $ — Fair Value Fair Value Measurements at As of December 31, 2023 Description December 31, 2023 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Conversion feature on convertible notes $ 14,116,062 $ — $ 14,116,062 $ — 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 Company has 8 shares as treasury shares from acquisitions that were commenced in 2011. 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. Effective July 1, 2023 the Company terminated its joint venture revenue sharing (“Termination Agreement”) with Mahaser LTD (“Mahaser”). Until June 30, 2023, the Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially be significant to Mahaser. The Company evaluated for the period ended on June 30, 2023, 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. As termination Agreement took place during the reporting period, the financial been classified to disclose this operation as discontinued operation. F- 13 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Revenue Recognition Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ Topic 606 ”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. The Company had no significant post-delivery obligations, this new standard did 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 for expected consideration and includes the following elements: ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s IT revenue category, is summarized below: ● IT consulting services - revenue is recorded on a monthly basis as services are provided. These five elements, as applied to each of the Company’s license revenue category, is summarize below: ● License services – the one-time related party licensing income recorded as other income upon agreement is executed and services are provided and recognized over the term of five years. E-Commerce sales – (discontinued during 2023) ● Identify the contract(s) with a customer. ASC 606 defines a contract as “an agreement between two or more parties that creates enforceable rights and obligations”. Since this is an e-commerce sale on the Amazon 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; Identify the performance obligations in the contract. According to the contract, the Company is responsible for operation exclusively. The Company is entitled to all revenue which is being paid by Amazon or eBay into a designated bank account and the Company is responsible for all product acquisitions as well as shipments. The only performance obligations were the electronic products that were listed on Amazon or eBay websites and the Company determined each order is one single obligation; Determine the transaction price. The transaction price set to be the listed price on the Amazon or eBay websites.; Allocation the transaction price to the performance obligations in the contract.; and Recognize revenue when the Company satisfies a performance obligation. Sales are being recognized upon shipment. F- 14 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Unearned revenue 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 $ 0 and $ 48,921 of unearned revenue at December 31, 2023 and 2022, 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, 2023 and December 31, 2022 was $ 0 and $ 41,444 , respectively. On or about May 10, 2023 TGHI filed with the SEC Form 15 choosing to become a non-reporting entity. As such the Company void its entire contract liability with TGHI. Variable Interest Entity On February 18, 2022, the Company, effective March 1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company shares in revenues generated by Mahaser e-commerce sales through the online retail platform in the United States of America. Mahaser owns an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics. The Company will operate the e-commerce platform and entitled to 95% for all revenue generated by and received by Mahaser from March 1, 2022 through December 31, 2022. The RSA provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $ 100,000 no later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common stock. The Company shall have no obligations to make any further payments to Mahaser. For any further extensions, the Company will have the option to extend the RSA for annual payment of $ 200,000 , which can be payable with the Company’s shares of common stock payable based on 20 days VWAP prior to issuance. On March 16, 2022 the parties entered into Amendment No. 1 to the to the RSA, where all consideration to be paid or issued to Mahaser will be deferred until such time where the e-commerce platform generated in cumulative revenue of $1,000,000. On March 31, 2022, the parties entered into Amendment No. 2 to the RSA, where Mahaser agreed to pay the Company 100% per year for all revenue generated by and received by seller from the sales by Amazon within the United States of America as follows from March 1, 2022 through December 31, 2022. The Company will be responsible for 100% of the cost of goods sold as well. In addition, the Company is entitled to earn 100% revenues and cost of goods sold of the period from February 1, 2022 to February 28, 2022. On January 1, 2023 the company extended their partnership to December 31, 2023. Effective July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd. The years ended on December 31, 2023 and December 31, 2022 does not include the result of operation by Mahaser, as it ceases being VIE. F- 15 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes . ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented and its current on all its tax filings federal and state until 2022 inclusive. F- 16 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 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. 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 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 earnings per share December 31, December 31, 2023 2022 Series B preferred stock 45,000 45,000 Series C preferred stock 700 700 Series H preferred stock 20,000 20,000 Series I preferred stock 1,000 Warrants 70,770 70,770 Convertible notes 74,974,606,196 3,949,223,831 Total 74,974,742,666 3,949,360,301 Management’s Evaluation of Subsequent Events The Company evaluates events that have occurred after the balance sheet date of December 31, 2022, through the date which the CFS are issued. Based upon the review, other than described in Note 20 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the CFS. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06 , Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging , or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , and clarify the scope and certain requirements under Subtopic 815-40. In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company adopted this ASU on the CFS in the year ended December 31, 2021. The adoption had no material impact on the CFS for the years ended December 31, 2023 and 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 years ended December 31, 2023 and 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. F- 17 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Note 5 – 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, 2023. 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. On or about May 10, 2023 TGHI filed with the SEC Form 15 choosing to become a non-reporting entity. As such the Company depreciate its entire investment with TGHI. MetAlert -prior name GTX Corp On April 12, 2022, GBT Tokenize Corp (“GBT Tokenize”), a Nevada corporation which the Company owns 50% of the outstanding shares of common stock, entered into a series of agreements with GTX Corp (“GTX”) and various note holders of GTX pursuant to which Tokenize acquired a convertible promissory note of GTX of $ 100,000 (the “GTX Notes”). In addition, GBT Tokenize acquired 76,923 (GBT acquired 5,000,000 in the original deal, where GTX to perform a corporate action of 1:65 reverse split on September 20, 2022) shares of common stock of GTX for $ 150,000 - in total FV of $ 12,538 as of December 31, 2022 based on level 1 stock price in OTC markets. The GTX Notes bear 10% interest and 50% of the principal may be converted into shares of common stock on a one-time basis at a conversion price of $ 0.01 per share. The remaining 50% of the principal must be paid in cash. The closing occurred on April 12, 2022. As of December 31, 2023, the Company wrote off the 50% of the convertible principal with all unpaid interest in total of $ 65,613 due to the collectability issue. GTX changed its name into Metalert Inc. on or about September 20, 2022. On September 30, 2022, GBT Tokenize, loaned MetAlert Inc., a Nevada corporation (f/k/a GTX Corp.) (“MetAlert”) $ 90,000 . For such loan, MetAlert provided Tokenize a promissory note of $ 90,000 which is due and payable together with interest of 5% upon the earlier of September 19, 2023 or when declared by Tokenize. As of December 31, 2023, the Company wrote off the entire of the convertible principal with all unpaid interest in total of $ 95,770 due to the collectability issue. MetAlert designs, manufactures and sells various interrelated and complementary products and services in the wearable technology and IoMT (Internet of Medical Things) marketplace. On or about January 31, 2023 GTB Tokenize Corp the Company’s 50 % owned subsidiary, assigned $ 7,500 from the GTX Notes to Stanley Hills, LLC, which in turn converted said $ 7,500 plus interest into 812,671 GTX shares. Stanley Hills, LLC credit GBT Tokenize for $ 146,037 for the transaction, reducing its credit outstanding balances with the Company and GBT Tokenize Corp. F- 18 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 As of December 31, 2022, the notes had an outstanding balance of $ 190,000 and accrued interest of $ 8,475 . As of December 31, 2023, the notes had an outstanding balance of $ 46,250 and accrued interest of $ 0 . As of December 31, 2023 and December 31, 2022, the marketable security had a FV of $ 1,692 and $ 12,538 , respectively. Note 6 – Investment Avant . On April 3, 2023, GBT Tokenize Corp., a subsidiary that is owned 50 % by the Company entered into an Asset Purchase Agreement (“APA”) with Trend Innovation Holdings, Inc. (“TREN”), in which the Company consented, pursuant to which Tokenize 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 or client. On July 18, 2023 TREN changed its name into: Avant Technologies, Inc and its ticker symbol on OTC Markets was changed into AVAI. Note 7 - Stock Loan Receivable On January 8, 2019, the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa Rica corporation (“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by various regulators. The Company has pledged 4,006 restricted shares of its common stock valued at $7,610,147 (based on the closing price on the grant date) for a term of three years for an annual payment of $375,000 paid in quarterly installments of $93,750. In lieu of cash payment, Latinex may pay the Company in virtual currency of WISE Network S.A. valued at a 50% discount of its offering price of $10 per token. In the event that Latinex’s required capital has decreased below $5,000,000, Latinex is permitted to sell the pledged shares of common stock only in an amount to ensure that Latinex can satisfy the required capital levels. The Company must consent to such sale of the shares of common stock, which may not be unreasonably withheld. Upon expiration of the agreement, 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 of its common stock to the Company for cancellation. The 4,006 restricted shares of common stock have not yet been returned to the Company as of December 31, 2023. Note 8 – Impaired Investment Investment in GBT Technologies, S.A. F- 19 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 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 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. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($500 per share). The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. Upon conversion of the Gopher Convertible Note and the 20,000 shares of Series H Preferred Stock, Gonzalez would be entitled to less than 50% of the resulting outstanding shares of common stock of the Company following conversion in full and, as a result, such transaction is not considered a change of control. On May 19, 2021, the Company, entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal and Accrued Interest (the “Gonzalez Agreement”) with third party, GBT-CR, IGOR 1 Corp and Gonzalez. Pursuant to the Gonzalez Agreement, without any party admission of liability and to avoid litigation, the parties had agreed to (i) extend the GBT 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 using the equity method of accounting; however, in 2020, the Company owned less than 20% after GBT-CR issued additional shares to other investors therefore exercised no control over GBT-CR; therefore, this investment is currently accounted for under the cost method. Moreover, on March 19, 2020, California Governor Gavin Newsom issued a stay-at-home order to protect the health and well-being of all Californians and to establish consistency across the state in order to slow the spread of COVID-19. California was therefore under strict quarantine control and travel has been severely restricted, resulting in disruptions to work, communications, and access to files (due to limited access to facilities). The stay-at-home order was lifted in California only on January 25, 2021. As such, the Company was unable to access or to contact GBT-CR on an on-going basis, and cannot get information about GBT-CR. F- 20 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Investment in Joint Venture GBT Tokenize Corp On March 6, 2020, the Company through Greenwich, entered into a Joint Venture and Territorial License Agreement (the “Tokenize Agreement”) with Tokenize-It, S.A. (“Tokenize”), which is owned by a Costa Rica Trust represented by Pablo Gonzalez (“Gonzalez”). Gonzalez also represents Gonzalez Costa Rica Trust, which holds a note in the principal amount of $10,000,000 and is also a shareholder of the Company. Under the Tokenize Agreement, the parties formed GBT Tokenize Corp., a Nevada corporation (“GBT Tokenize”). The purpose of GBT Tokenize is to develop, maintain and support source codes for its proprietary technologies including advanced mobile chip technologies, tracking, radio technologies, AI core engine, electronic design automation, mesh, games, data storage, networking, IT services, business process outsourcing development services, customer service, technical support and quality assurance for business, customizable and dedicated inbound and outbound calls solutions, as well as digital communications processing for enterprises and startups (“Technology Portfolio”), throughout the State of California. Upon generating any revenue from the Technology Portfolio, the Joint Venture will earn the first right of refusal for other territories. The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Tokenize to secure its Technology Portfolio investment. The Company shall appoint two directors and Tokenize shall appoint one director of GBT Tokenize. Tokenize shall contribute the services and resources for the development of the Technology Portfolio to GBT Tokenize. The Company shall contribute 2,000,000 shares of common stock of the Company (“GBT Shares”) to GBT Tokenize. Tokenize and the Company will each own 50% of GBT Tokenize. The shares were valued at $ 5,500,000 . In addition, GBT Tokenize and Gonzalez entered into a Consulting Agreement in which Gonzalez is engaged to provide services for $ 33,333 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 10-day VWAP. Gonzalez will provide services in connection with the development of the business as well as GBT Tokenize’s capital raising efforts. The term of the Consulting Agreement 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. Through this Joint Venture the parties commenced development of an intelligent human vital signs’ device, which we currently refer to as the qTerm. The platform is an expansion of the existing license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp. with an exclusive territory of California to develop certain of the Company’s technology. As the nature of the platform cannot be restricted only to California, the Company’s joint venture GBT Tokenize Corp. will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to board approval. A provisional patent application for the qTerm Medical Device was filed on March 30, 2020 with the USPTO. The application has been assigned serial number 63001564. The Joint Venture completed successfully the first prototype. There is no guarantee that the Company will be successful in researching, developing or implementing this product into the market. In order to successfully implement this concept, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling and distributing this product. There is no guarantee that the Company will be successful in any or all of these critical steps. On May 28, 2021, the parties agreed to amend the Tokenize Agreement to expand territory granted for the Technology Portfolio under the license to GBT Tokenize to include the entire continental United States. The Company has further agreed to issue GBT Tokenize an additional 14,000,000 shares of common stock of the Company. The shares were valued at $ 15,400,000 . At March 31, 2020, the Company evaluated the carrying amount of this joint venture investment and determined 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. On July 20, 2023, the Company through its wholly owned inactive subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into an Amended and Restated Joint Venture (the “2023 Tokenize Agreement”) with Magic Internacional Argentina FC, S.L. (“Magic”) and GBT Tokenize Corp (“GBT Tokenize”). F- 21 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 The 2023 Tokenize Agreement restated and replaced the 2022 Tokenize Agreement. Pursuant to the 2023 Tokenize Agreement, as a result of the contribution of the Technology Portfolio by Tokenize and the subsequent contribution of services for the development of the Technology Portfolio by Tokenize and Magic, GBT Tokenize has been able to continue in operation, which has benefited the Company despite its contribution of 166 million shares of common stock valued at approximately $ 50,000 . In order to maintain its 50% ownership interest in GBT Tokenize, the Company agreed to contribute its portfolio of intellectual property to GBT Tokenize and issue to GBT Tokenize 1,000 shares of Series I Preferred Stock (the “Series I Stock”) with a stated value of $ 35,000 per share which is convertible into common stock of the Company by dividing the stated value by the conversion price of $ 0.0035 , which, if converted in full would result in the issuance of 10 billion shares of common stock of the Company. Further, the Series I Stock will vote on an as converted basis. The Company pledged its 50% ownership in GBT Tokenize and its 100 % ownership of Greenwich to Magic to secure its Technology Portfolio investment. Although the investment was impaired, the product development is still ongoing. The carrying amount of this investment at December 31, 2023 and December 31, 2022, was $ 0 and $ 0 , respectively. Note 9 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at December 31, 2023 and 2022 consist of the following: Schedule of accounts payable and accrued expenses 2023 2022 Accounts payable $ 773,974 $ 876,266 Accrued liabilities 499,492 543,887 Accrued interest 4,099,380 3,143,945 Total $ 5,372,846 $ 4,564,098 Note 10 – 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. The Company has $ 0 and $ 48,921 of unearned revenue at December 31, 2023 and December 31, 2022, respectively. Note 11 – Convertible Notes Payable, Non-related Partied and Related Party Convertible notes payable – non related parties at December 31, 2023 and 2022 consist of the following: Schedule of convertible notes payable – non related parties December 31, December 31, 2023 2022 Convertible note payable to GBT Technologies S.A $ 5,175,496 $ 6,395,531 Convertible notes payable to 1800 70,760 191,275 Convertible notes payable to Glen 462,500 — Total convertible notes payable, non related parties 5,708,756 6,586,788 Unamortized debt discount ( 43,739 ) ( 189,060 ) Convertible notes payable – non related parties 5,665,017 6,397,727 Less current portion ( 5,665,017 ) ( 6,397,727 ) Convertible notes payable – non related parties, long-term portion $ — $ — F- 22 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 $10,000,000 for GBT Technologies S. A. acquisition In accordance with the acquisition of GBT-CR the Company issued a convertible note in the principal amount of $ 10,000,000 . The convertible note bears interest of 6 % and is payable at maturity on December 31, 2021 . At the election of the holder, the convertible note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($ 500 per share). This convertible note may convert into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price with a 20-day look back immediately preceding the date of conversion and therefore recorded as derivative liability. 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 31, 2021. This convertible note is recorded as derivative liability because of the discounted price on conversion. During the period ended December 31, 2023, IGOR 1 converted $1,182,535 of the convertible note into 6,309,235,294 shares of the Company’s common stock. As of December 31, 2023, the note had an outstanding balance of $ 5,175,496 and accrued interest of $ 2,358,241 . Paid Off Notes/Converted Notes Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC - 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. F- 23 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Unless the Company shall have first delivered to DL, at least 48 hours prior to the closing of any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future Offering”), written notice describing the proposed Future Offering and providing the Buyer an option during the 48 hour period following delivery of such notice to DL the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering then the Company is restricted from conducting the Future Offering during the period beginning on the Issue Date and ending nine months following the Issue Date. During the period ended March 31, 2023, the entire balance of convertible note of $ 114,100 plus accrued interest of $ 7,335 was converted into 367,004,026 shares of common stock. Convertible 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. The first payment is due October 30, 2022 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company. The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75 % of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99 % of the outstanding shares of the common stock of the Company. During the period ended December 31, 2023, the company paid back $ 39,043 to 1800 Diagonal lending and the remaining convertible note balance been converted into 136,993,684 shares. As of December 31, 2023, the note had an outstanding balance of $ 0 and an interest of $ 0 . Outstanding Notes Glen Eagle The Company entered into a series of loan arrangements with Glen Eagles Acquisition LP pursuant to which it received $ 512,500 in loans (the “Debt”) from August 2021 up to September 2022. The original funded amount of $ 457,500 included convertible feature into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price during the 20-day period preceding the date of conversion. In order to include a convertible feature for the $ 55,000 which was not covered by convertible feature, on January 24, 2023, the Company issued a consolidated convertible promissory note to Glen Eagles Acquisition LP in the principal amount of $ 512,500 , which include all prior convertible notes with addition of the $ 55,000 straight note. The convertible promissory note bears interest of 10 % and is payable at maturity on December 31, 2023 . Glen Eagles Acquisition LP may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a loss on debt extinguishment of $ 92,737 at the issuance date. F- 24 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 As of December 31, 2023, the consolidated convertible note had an outstanding balance of $ 462,500 and an accrued interest of $ 106,072 . Sixth Street Lending LLC – named changed - 1800 Diagonal Lending LLC Straight Note – with Convertible Feature - On March 1, 2023, the Company entered into a Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) of $ 59,408 with an original issue discount of $ 6,258 resulting in net proceeds of the Company of $ 53,150 . The DL Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% from the date on which the DL Note is issued. A one-time interest charge of 12 % or $ 7,128 was applied on the issuance date of the DL Note to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments of $ 6,654 resulting in a total payback to DL of $ 66,536 . The first payment is due April 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company. The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75 % of the lowest trading price during the 10 day period immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99 % of the outstanding shares of the common stock of the Company. As of December 31, 2023, the note had an outstanding balance of $ 1,486 . Convertible Note - On March 1, 2023, the Company entered into a Securities Purchase Agreement with DL pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Convertible Note”) of $ 62,680 for a purchase price of $ 52,150 . The DL Convertible Note had a maturity date of June 1, 2024 and the Company had agreed to pay interest on the unpaid principal balance of the DL Convertible Note at the rate of 6.0% from the date on which the DL Convertible Note is issued until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Convertible Note, provided it makes a payment including a prepayment to DL as set forth in the DL Convertible Note. The outstanding principal amount of the DL Convertible Note may not be converted prior to the period beginning on the date that is 180 days following the date the DL Convertible Note is issued. Following the 180th day, DL may convert the DL Convertible Note into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price during the 20-day period preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Convertible Note), the DL Convertible Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Convertible Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99 % of the outstanding shares of the common stock of the Company. During the period ended December 31, 2023, 1800 Diagonal converted $ 42,500 of the convertible note into 500,000,000 shares of the Company’s common stock. As of December 31, 2023, the note had an outstanding balance of $ 20,180 and accrued interest of $ 6,041 . F- 25 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Straight Note $47,208 - On April 24, 2023, the Company entered into a Securities Purchase Agreement, with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Promissory Note (the “DL Note”) in the aggregate principal amount of $ 47,208 with an original issue discount of $ 5,058 resulting in net proceeds of the Company of $ 42,150 . The DL Note has a maturity date of April 24, 2024 and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of 12.0% per annum from the date on which the DL Note is issued (the “Issue Date”). A one-time interest charge of 12 % or $ 5,664 was applied on the Issue Date to the principal amount owed under the DL Note. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten payments each in the amount of $ 5,287 .20 resulting in a total payback to DL of $ 52,872 . The first payment is due June 15, 2023 with nine subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral or any assets of the Company. The outstanding principal amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75 % of the lowest trading price with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99 % of the outstanding shares of the common stock of the Company. As of December 31, 2023, the note had an outstanding balance of $ 26,059 and a one-time interest of $ 5,665 . Convertible Note $50,580 - On April 24, 2023, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor (“DL”) pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) in the aggregate principal amount of $ 50,580 for a purchase price of $ 42,150 . The DL Note has a maturity date of July 24, 2024 and the Company has agreed to pay interest on the unpaid principal balance of the DL Note at the rate of six percent (6.0%) per annum from the date on which the DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company shall have the right to prepay the DL Note, provided it makes a payment including a prepayment to DL as set forth in the DL Note. The outstanding principal amount of the DL Note may not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180 th day, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price with a 20-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of an Event of Default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99 % of the outstanding shares of the common stock of the Company. As of December 31, 2023, the note had an outstanding balance of $ 50,580 and an accrued interest of $ 3,966 . Convertible notes payable – prior related parties at December 31, 2023 and December 31, 2022 consist of the following: Schedule of convertible note payable December 31, December 31, 2023 2022 Convertible note payable to Stanley Hills 661,395 116,605 Unamortized debt discount — — Convertible notes payable, net, related party 661,395 116,605 Less current portion ( 661,395 ) ( 116,605 ) Convertible notes payable, net, related party, long-term portion $ — $ — F- 26 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Stanley Hills LLC The Company entered into a series of loan agreements with Stanley Hills LLC (“Stanley”) pursuant to which it received more than $ 1,000,000 in loans (the “Debt”) from May 2019 up to December 2019. On February 26, 2020, in order to induce Stanley to continue to provide funding, the Company and Stanley entered into a letter agreement providing that the current note payable balance due to Stanley of $ 1,214,900 may be converted into shares of common stock of the Company at a conversion price equal to 85 % multiplied by the lowest one trading price for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted for as a derivative liability. Stanley had agreed to restrict its ability to convert the Debt and receive shares of common stock such that the number of shares of common stock held by it and its affiliates after such conversion or exercise does not exceed 4.99 % of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted $ 1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and during the year ended December 31, 2021, Stanley loaned the Company an additional $ 325,000 . Also, during the year ended December 31, 2021, the Company transferred the SURG shares received as repayment of $ 800,000 of this convertible note and also converted $ 126,003 of accrued interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $ 424,731 to Stanley in a private transaction that the Company is not part to (See Note 10). On January 2, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $ 750,000 . The convertible promissory note bears interest of 10 % and is payable at maturity on June 30, 2024 . Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a gain on debt extinguishment of $ 408,034 at the issuance date. As of December 31, 2023 and December 31, 2022 the principal balance of Stanley debt is $ 661,395 and $ 116,605 respectively. The unpaid interest of the Stanley debt at December 31, 2023 and December 31, 2022 was $ 49,482 and $ 20,033 , respectively. Discounts on convertible notes The Company recognized debt discount of $ 113,260 and $ 438,015 during the twelve months ended December 31, 2023 and 2022, respectively, related to the amortization of the debt discount on convertible notes. The unamortized debt discount at December 31, 2023 and at December 31, 2022 was $ 43,739 and $ 189,060 , respectively. A roll-forward of the convertible notes payable from December 31, 2022 to December 31, 2023 is below: Schedule of roll-forward of the convertible notes payable Convertible notes payable, December 31, 2022 $ 6,514,332 Issued for cash 1,375,760 Debt discount related to new convertible notes ( 113,260 ) Payment with cash ( 76,543 ) Conversion to common stock ( 1,632,459 ) Amortization of debt discounts 258,582 Convertible notes payable, December 31, 2023 $ 6,326,412 Note –12 - Notes Payable, Non-related Parties and Related Party Notes payable, non-related parties at December 31, 2023 and December 31, 2022 consist of the following: F- 27 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Schedule of notes payable December 31, December 31, 2023 2022 1800 note $ 27,546 $ — SBA loan 350,000 350,000 Total notes payable 377,546 350,000 Unamortized debt discount ( 2,265 ) — Notes payable 375,281 350,000 Less current portion ( 46,533 ) ( 41,137 ) Notes payable, long-term portion $ 328,748 $ 308,863 SBA Loan 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. 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. The Modified Note will continue to bear interest at 3.75 % and is due 30 years from the date of issuance of the Original Note. The Modified Note is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT Tokenize Corp. The additional funding of $ 200,000 was received by the Company on October 5, 2021. The balance of the note at December 31, 2023 and at December 31, 2022 was $ 350,000 and $ 350,000 plus accrued interest of $ 36,832 and $ 23,707 , respectively. The Company did not perform any payment on the loan and seeking hardship from the SBA for reduce payment which was not yet addressed by the SBA. Discounts on Promissory Note The Company recognized debt discount of $ 64,351 and $ 0 during the period ended December 31, 2023 and December 31, 2022, respectively, related to the amortization of the debt discount on promissory notes. The unamortized debt discount at December 31, 2023 and at December 31, 2022 was $ 2,265 and $ 0 , respectively. Notes payable, related party at December 31, 2023 and December 31, 2022 consist of the following: Schedule of notes payable related parties December 31, December 31, 2023 2022 Alpha Eda note payable $ 140,000 $ 140,000 Total notes payable, related party 140,000 140,000 Unamortized debt discount — — Notes payable, net, related party 140,000 140,000 Less current portion ( 140,000 ) ( 140,000 ) Notes payable, net, related party, long-term portion $ — $ — Alpha Eda On November 15, 2020, the Company issued a promissory note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and was due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023. The balance of the note at December 31, 2023 and at December 31, 2022 was $ 140,000 and $ 140,000 plus accrued interest of $ 46,633 and $ 32,633 , respectively. F- 28 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Note 13 – 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 of $ 55,613 . 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. The Company recorded accrued settlement of $ 4,090,057 and $ 4,090,057 at December 31, 2023 and at December 31, 2022, respectively. Note 14 - Derivative Liability Certain of the convertible notes payable discussed in Note 10 have a conversion price that can be adjusted based on the Company’s stock price which results in the conversion feature being recorded as a derivative liability. The FV of the derivative liability is recorded and shown separately under current liabilities. Changes in the FV of the derivative liability is recorded in the statement of operations under other income (expense). The Company uses a weighted average Black-Scholes option pricing model with the following assumptions to measure the FV of derivative liability at December 31, 2023 and 2022: Schedule of assumptions to measure fair value December 31, December 31, 2023 2022 Stock price $ 0.001 $ 0.001 Risk free rate 5.26 – 5.60 % 4.42 – 4.76 % Volatility 427 – 502 % 213 – 277 % Conversion/ Exercise price $ 0.000075 – 0.000085 $ 0.0015 – 0.0017 Dividend rate 0 % 0 % The following table represents the Company’s derivative liability activity for the period ended December 31, 2023: Schedule of derivative liability activity Derivative liability balance, December 31, 2022 $ 1,714,143 Issuance of derivative liability during the period 1,369,920 Fair value of beneficial conversion feature of debt converted ( 2,727,482 ) Change in derivative liability during the period 13,759,482 Derivative liability balance, December 31, 2023 $ 14,116,062 The significant increase in the fair value of derivative liability was mainly due to the Company’s stock price dropping from $ 0.001 at December 31, 2022 to $ 0.0001 at December 31, 2023. It reduced the strike price of the convertible notes and increased the total liabilities of the total convertible shares into common stock as of December 31, 2023. Note 15 - Stockholders’ Equity Common Stock 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. F- 29 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 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. On October 12, 2023, the Company amended its articles of incorporation to increase its authorized shares of common stock to 30,000,000,000 (the “Increase Amendment”). The Increase Amendment was approved by the board of directors as well as the shareholders holding in excess of a majority of the issued and outstanding voting shares of the Company. During the period ended December 31, 2023, the Company had the following transactions in its common stock: ● Of 8,618,101,622 shares issued for the conversion of convertible notes of $ 1,632,459 and accrued interest of $ 52,211 ; and ● Of 100,000,000 Shares issued to Pacific Capital Markets LLC for certain for service agreement between Pacific Capital Markets LLC. and the Company. The value of the shares of $ 80,000 was determined based on the FV of the Company’s common stock at the time of issuance; Series B Preferred Shares 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, 2023 and as of December 31, 2022, there were 45,000 Series B Preferred Shares outstanding. Series C Preferred Shares 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. GV has contractually agreed to restrict its ability to convert the Series C Preferred Stock and receive shares of the Company’s common stock such that the number of shares of the Company’s common stock held by it and its affiliates after such conversion does not exceed 4.9% of the then issued and outstanding shares of the Company’s common stock. The issuance of the Series C Preferred Stock was made in reliance upon exemptions from registration pursuant to Section 4(a)(2) under the Securities Act of 1933 and Rule 506 promulgated under Regulation D thereunder. GV is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933. F- 30 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 At December 31, 2023 and at December 31, 2022, GV owns 700 Series C Preferred Shares. Series D Preferred Shares As of December 31, 2023 and as of December 31, 2022, there are 0 and 0 shares of Series D Preferred Shares outstanding, respectively. Series G Preferred Shares As of December 31, 2023 and as of December 31, 2022, there are 0 and 0 shares of Series G Preferred Shares outstanding, respectively. Series H Preferred Shares On June 17, 2019, the Company, AltCorp Trading LLC, a Costa Rica company and a wholly-owned subsidiary of the Company (“AltCorp”), GBT Technologies, S.A., a Costa Rica company (“GBT-CR”) and Pablo Gonzalez, a shareholder’s representative of GBT-CR (“Gonzalez”), entered into and closed an Exchange Agreement (the “GBT Exchange Agreement”) pursuant to which the parties exchanged certain securities. In accordance with the Exchange Agreement, AltCorp acquired 625,000 shares of GBT-CR representing 25% of its issued and outstanding shares of common stock from Gonzalez for the issuance of 20,000 shares of Series H Convertible Preferred Stock of the Company and a Convertible Note of $ 10,000,000 issued by the Company (the “Gopher Convertible Note”) as well as additional consideration. The Gopher Convertible Note bears interest of 6% and is payable at maturity on December 31, 2021 . At the election of Gonzalez, the Gopher Convertible Note can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company as determined by dividing the Stated Value ($ 500 per share) by the conversion price ($10 per share). The Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. As of December 31, 2023 and as of December 31, 2022, there are 20,000 shares of Series H Preferred Shares outstanding. Series I Preferred Shares On July 20, 2023, the Company through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into an Amended and Restated Joint Venture (the “2023 Tokenize Agreement”) with Magic and GBT Tokenize. The 2023 Tokenize Agreement restated and replaced the 2022 Tokenize Agreement. Pursuant to the 2023 Tokenize Agreement, as a result of the contribution of the Technology Portfolio by Tokenize and the subsequent contribution of services for the development of the Technology Portfolio by Tokenize and Magic, GBT Tokenize has been able to continue in operation, which has benefited the Company despite its contribution of 166 million shares of common stock valued at approximately $50,000. In order to maintain its 50% ownership interest in GBT Tokenize, the Company agreed to contribute its portfolio of intellectual property to GBT Tokenize and issue to GBT Tokenize 1,000 shares of Series I Preferred Stock (the “Series I Stock”) with a stated value of $ 35,000 per share which is convertible into common stock of the Company by dividing the stated value by the conversion price of $ 0.0035 , which, if converted in full would result in the issuance of 10 billion shares of common stock of the Company. Further, the Series I Stock will vote on an as converted basis. As of December 31, 2023, there are 1,000 shares of Series I Preferred Shares outstanding. F- 31 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Treasury Shares On April 25, 2011, the Company issued a press release announcing that its Board of Directors approved a share repurchase program. Under the program, the Company is authorized to purchase up to 200-post-split (1,000,000 pre-split) of its shares of common stock in open market transactions at the discretion of management. All stock repurchases will be subject to the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended and other rules that govern such purchases. As of December 31, 2023, the Company has 8 treasury shares on a cost basis of $ 11,059 . Shares T o B e C ancelled As of December 31, 2013, the Company had repurchased 8-post-split shares (38,000 pre-split) shares of its common shares in the open market, which were returned to treasury. On December 31, 2014, the Company returned 40,000 post-split shares (200,000,000 pre-split shares) to the Company in connection with the dissolution of the licensing agreement with Micrologic. During the first quarter of 2015, the Company’s counsel, who had previously been issued 32,000 shares as compensation, returned those shares to the Company. As of December 31, 2023, the Company has 1,032 shares to be cancelled on a cost basis of $ 632,000 . Warrants The following is a summary of warrant activity. Schedule of for warrant activity Weighted Weighted Average Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2022 70,770 $ 205.07 0.30 $ — Granted — — — Forfeited 70,370 Exercised — Outstanding, December 31, 2023 400 $ 1,595 0.02 $ — Exercisable, December 31, 2023 400 $ 1,595 0.02 $ — Note 16 - Income Taxes At December 31, 2023 and 2022, the significant components of the deferred tax assets are summarized below: Schedule of components of deferred tax assets December 31, December 31, 2023 2022 Deferred income tax asset Net operating loss carryforwards $ 10,216,110 $ 9,182,327 Total deferred income tax asset 10,216,110 9,182,327 Less: valuation allowance ( 10,216,110 ) ( 9,182,327 ) Total deferred income tax asset $ — $ — The valuation allowance increased by $ 1,072,552 and $ 237,089 in 2023 and 2022, 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. F- 32 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 No income tax expense reflected in the consolidated statements of income for the years 2023 and 2022. The reconciliation of the effective income tax rate to the federal statutory rate for the years ended December 31, 2023 and 2022 is as follows: Schedule of effective income tax rate reconciliation 2023 2022 Amount Percent Amount Percent Federal statutory rates $ ( 3,735,296 ) 21.0 % $ 1,118,010 21.0 % State income taxes ( 1,422,970 ) 8.0 % 425,908 8.0 % Permanent differences 4,083,900 - 33.5 % ( 1,784,116 ) - 33.5 % Valuation allowance against net deferred tax assets 1,074,366 4.5 % 237,089 4.5 % 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. 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, 2023 and 2022. Note 17 - 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 October 10, 2019, the Company entered into a Joint Venture Agreement (the “BitSpeed Agreement”) with BitSpeed LLC, which is owned by Douglas Davis, the prior Company’s Chief Executive Officer (From January 1, 2019 to April 11, 2020), 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 of the Company to GBT BitSpeed. BitSpeed and the Company will each own 50 % of GBT BitSpeed. The Company shall appoint two directors and BitSpeed shall appoint one director of GBT BitSpeed. In addition, GBT BitSpeed and Mr. Davis entered into a Consulting Agreement in which Mr. Davis is engaged to provide services for $ 10,000 per month payable quarterly which may be paid in shares of common stock calculated by the amount owed divided by the Company’s 20-day VWAP. Mr. Davis will provide services in connection with the development of the business as well as GBT BitSpeed’s capital raising efforts. The term of the Consulting Agreement was two years. The closing of the BitSpeed Agreement occurred on October 14, 2019. On March 31, 2023 Doug Davis gave notice to the Company of termination of the consulting agreement dated October 10, 2019. F- 33 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 On July 20, 2023, the Company through its wholly owned subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into an Amended and Restated Joint Venture (the “2023 Tokenize Agreement”) with Magic Internacional Argentina FC, S.L. (“Magic”) and GBT Tokenize Corp (“GBT Tokenize”). On March 6, 2020, the Company through Greenwich entered into a Joint Venture and Territorial License Agreement (the “2020 Tokenize Agreement”) with Tokenize-It, S.A. (“Tokenize”). Under the 2020 Tokenize Agreement, the parties formed GBT Tokenize and Tokenize contributed its technology portfolio as described in the 2020 Tokenize Agreement with each Tokenize and the Company owning 50 % of 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 start-ups (“Technology Portfolio”). In addition to the Technology Portfolio, Tokenize contributed the services and resources for the development of the Technology Portfolio to GBT Tokenize. The Company contributed 2,000,000 shares of common stock. On May 28, 2021, the parties agreed to amend the 2020 Tokenize Agreement to expand the territory granted for the Technology Portfolio under the license to GBT Tokenize to include the entire continental United States. The Company issued GBT Tokenize an additional 14,000,000 shares of common stock. On June 30, 2021, Tokenize and its shareholder assigned all their rights under the 2020 Tokenize Agreement, including the Company’s pledged 50 % ownership in GBT Tokenize to Magic. On April 11, 2022, the Company, through Greenwich, entered into a Master Joint Venture and Territorial License Agreement (the “2022 Tokenize Agreement”) with Magic and Tokenize which replaced the 2020 Tokenize Agreement. The Company issued GBT Tokenize an additional 150,000,000 shares of common stock of the Company. GBT Tokenize has developed a vital device based on the Technology Portfolio that is ready for commercialization, as well as certain derivative technologies, which positioned GBT Tokenize to further develop or license certain code sources. On April 3, 2023, GBT Tokenize entered its first commercial transaction to date through the sale of the Avant-AI! technology that been developed by GBT Tokenize, based on the Technology Portfolio pursuant to which GBT Tokenize received 26,000,000 shares of common stock of Buyer’s shares – Avant Technologies, Inc. The 2023 Tokenize Agreement restated and replaced the 2022 Tokenize Agreement. Pursuant to the 2023 Tokenize Agreement, as a result of the contribution of the Technology Portfolio by Tokenize and the subsequent contribution of services for the development of the Technology Portfolio by Tokenize and Magic, GBT Tokenize has been able to continue in operation, which has benefited the Company despite its contribution of 166 million shares of common stock valued at approximately $ 50,000 . In order to maintain its 50 % ownership interest in GBT Tokenize, the Company agreed to contribute its portfolio of intellectual property to GBT Tokenize and issue to GBT Tokenize 1,000 shares of Series I Preferred Stock (the “Series I Stock”) with a stated value of $ 35,000 per share which is convertible into common stock of the Company by dividing the stated value by the conversion price of $ 0.0035 , which, if converted in full would result in the issuance of 10 billion shares of common stock of the Company. Further, the Series I Stock will vote on an as converted basis. The Company pledged its 50% ownership in GBT Tokenize and its 100% ownership of Greenwich to Magic to secure its Technology Portfolio investment. Yello Partners Inc. As of December 31, 2023 and as of December 31, 2022, the Company has $ 625,000 and $ 505,000 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 %, is unsecured and was due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023 . As of December 31, 2023 and as of December 31, 2022, the Company has $ 140,000 and $ 140,000 owed to Alpha Eda, respectively. F- 34 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Stanley Hills LLC Convertible Note Payable – Prior Related Party On January 1, 2023, the Company issued a convertible promissory note to Stanley for its credit balances in the principal amount of $ 750,000 . The convertible promissory note bears interest of 10% and is payable at maturity on June 30, 2024 . Stanley may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85 % of the lowest trading price during the 20-day period preceding the date of conversion. As of December 31, 2023 and as of December 31, 2022, the Company has recorded an outstanding balance to Stanley note payable amounted $ 661,395 and $ 0 , respectively. Stanley Hills LLC Accounts Payable As of December 31, 2023 and 2022, the Company has recorded an outstanding payable balance to Stanley amounted $ 901,595 and $ 927,136 , respectively, recorded under accrued expenses. Consulting income for the year ended December 31, 2023 and for the year ended on December 31, 2022 were $ 0 and $ 90,000 . Consulting income were derived from providing IT consulting services to Stanley Hills, a related party back then. Note 18 - 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. TTSG 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 AG On or about February 2, 2022, GBT was served with a First Amended Complaint (the “Complaint”) initiated by Gregory Mancuso and Rainer AG, a Swiss corporation, Case No. 21SMCV01430, filed in the Superior Court of the State of California for the County of Los Angeles. The Complaint names a number of different parties, including GBT, and asserts, among other things, claims for conversion, unjust enrichment, breach of contract, and breach of implied covenant of fair dealing, which Plaintiffs allege arise out of a brokerage agreement entered into between Plaintiff Rainer AG and co-defendant Consul Group re Dos Mil Veintiuno S.R.L (“Consul”). GBT was sued under an alter ego theory of liability, and its only involvement in the above-referenced chain of events seems to be that its shares were deposited with Rainer by Consul upon the opening of the brokerage account. GBT will be filling a demurrer to the First Amended Complaint based on a variety of deficiencies with the First Amended Complaint, and will ask the Court to dismiss the claims against GBT. Note 19 - Contingencies GBT Technologies, S.A. On September 14, 2018, the Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the “GBT License Agreement”) with GBT-CR, a fully compliant and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized crypto currency platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right and license relating intellectual property relating to systems and methods of converting electronic transmissions into digital currency as reflected in that certain patent filed with the United Stated Patent and Trademark Office on or about June 14, F- 35 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 2018 (EFS ID: 32893586; Application Number: 16008069; Type: Utility under 35 USC 111(a); Confirmation Number: 6787)(collectively, the “Digital Currently Technology”). Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide license to use the Digital Currency Technology to make, use, sell, lease or otherwise commercialize and dispose of products and devices utilizing the Digital Currently Technology. Under the terms of the GBT License Agreement, the Company is entitled to receive a royalty payment of 2% of gross revenue of each licensed product sold by GBT-CR during the period starting in which revenue is first generated using the licensed products and continuing for five years thereafter. Upon signing the GBT-CR License Agreement, GBT-CR paid the Company $ 300,000 which is nonrefundable. The Company recognized the $ 300,000 as revenue during the years ended December 31, 2018. Upon GBT-CR making available for sale (the “Commercial Event”) an ICO (Initial Coin Offering) (the “Coin”), GBT-CR will make a payment to the Company of $ 5,000,000 . Further, upon the Commercial Event, GBT-CR will grant the Company the ability to acquire 30% of the Coin at a 30% discount of such offering price of the Coin. The GBT License Agreement commenced as of the signing date and, unless terminated in accordance with the termination provisions of the GBT License Agreement, shall remain in force until the expiration of the patent pertaining to the Digital Currency Technology; provided that the right to use trade secrets shall survive the expiration of the GBT License Agreement provided the Company has not terminated. Prior to the signing of the GBT License Agreement, GBT-CR advanced $ 200,000 to the Company, which the parties have agreed will be applied toward the $ 5,000,000 fee when it becomes due. On February 27, 2020 GBT Technologies, S.A., as successor in interest to Hermes Roll, LLC had notified the Company that it was in default on its Amended and Restated Territorial License Agreement (“ARTLA”) dated June 15, 2015 and that the ARTLA had been cancelled and rescinded. Stock Loan Receivable On January 8, 2019, the Company entered into a Stock Pledge Agreement with Latin American Exchange Latinex Casa de Cambio, S.A., a Costa Rica corporation (“Latinex”), to provide that Latinex may maintain its required regulatory capital as required by various regulators. The Company pledged 4,006 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 withheld. Upon expiration of the agreement, the remaining shares of common stock shall be returned to the Company free and clear of all liens. The Company recorded the value of these shares of common stock as a stock loan receivable which is presented as a contra-equity account in the accompanying consolidated balance sheets. At December 31, 2019, the Company wrote off the accrued interest income as Latinex did not perform any payment and the Company has no mean to enforce this payment. Latinex agreed in principle to return the pledged 4,006 restricted shares to the Company for cancellation. The 4,006 restricted shares have not yet been returned to the Company as of December 31, 2023. Metaverse Agreements 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, F- 36 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 market and distribute the Meta Portfolio throughout the world. The Company was required to contribute 500,000,000 shares of common stock of the Company (“GBT Shares”) to Metaverse Kit. Licensor and the Company were to each own 50% of Metaverse Kit. The Company pledged its 50 % ownership in Metaverse Kit to Igor 1 Corp. to secure a convertible note held by Igor 1 Corp. The Company was to appoint two directors and Licensor was allowed to appoint one director of Metaverse Kit. 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. 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, 2023 for 24 consecutive months. Assets Sale - TREN On April 3, 2023, GBT Tokenize Corp. (“Seller”), a subsidiary that is owned 50 % by the Company, entered into an agreement to sell certain assets relating to a proprietary system and method named Avant-Ai to TREN. Avant-Ai is a text-generation, deep learning self-training model. In exchange for the assets, TREN is required to issue 26,000,000 common shares (“Shares”) to Seller. The Shares will be restricted under Rule 144 of the Securities Act of 1933, as amended, and Seller agreed to a lock-up period of nine months following closing. If TREN is unable to up-list to Nasdaq either through a business combination or otherwise within nine months of the closing, Seller may request that all transactions contemplated by the agreement be unwound. On July 18, 2023, TREN changed its name to Avant Technologies, Inc. and its ticker symbol on OTC Markets was changed to AVAI. Potential IP’s Sale On April 17, 2023, Bannix Acquisition Corp. (“Bannix”), EVIE Autonomous Group Ltd. (“EVIE”) and EVIE’s shareholders entered into a Business Combination Agreement pursuant to which Bannix agreed to acquire EVIE. In addition, Bannix agreed to acquire from GBT Technologies Inc. (the “Company” or “GBT”), the Apollo System which is intellectual property covered by patent application filed with the US Patent and Trademark Office. This patent application describes a machine learning driven technology that controls radio wave transmissions, analyzes their reflections data, and constructs 2D/3D images of stationary and moving objects. The Apollo system is based on radio waves and can detect an entity’s moving and stationary positions, enabling imaging technology to show these movements and positions on a screen in real time. This includes an AI technology that controls the radio waves transmission and analyzes the reflections. The goal is to integrate the Apollo System as an efficient driver monitoring system, detecting impaired or distracted drivers, providing audible and visual alerts (“the “Patents”). On August 8, 2023, Bannix entered into a Patent Purchase Agreement (“PPA”) with GBT Tokenize Corp. (“Tokenize”), which is 50 % owned by GBT, where GBT provided its consent, to acquire the entire right, title, and interest of the Patents. The closing date of the PPA will be immediately follow the closing of the acquisition of EVIE by Bannix. The Purchase Price is set at 5% of the consideration that Bannix is paying to the shareholders of EVIE. The Business Combination Agreement sets the consideration to be paid by Bannix at $ 850 million and, in turn, the consideration in the PPA to be paid to Tokenize is $ 42.5 million. If the final purchase price is less than $ 30 million, Tokenize has the option to cancel the PPA. F- 37 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 In accordance therewith, Bannix agrees to pay, issue and deliver to Tokenize, $ 42,500,000 in series A preferred stock to Tokenize, which such terms will be more fully set forth in the Series A Preferred Stock Certificate of Designation to be filed with the Secretary of State of the State of prior to the Closing Date. The Series A Preferred Stock will have stated value of face value of $ 1,000 per share and is convertible, at the option of Tokenize, into shares of common stock of Bannix at 5% discount to the VWAP during the 20 trading days prior to conversion, and in any event not less than $ 1.00 . The Series A Preferred Stock will not have voting rights and will be entitled to dividends only in the event of liquidation. The Series A Preferred Stock will have a 4.99 % beneficial ownership limitation. Series A Preferred Stock and the shares of common stock issuable upon conversion of the Series A Preferred Stock (the “Conversion Shares”) shall be subject to a lock-up beginning on the Closing Date and ending on the earliest of (i) the six (6) months after such date, (ii) a Change in Control, or (iii) written consent of Purchaser (the “Seller Lockup Period”) On December 18, 2023, Bannix and Tokenize entered into Amendment No. 1 to the PPA. Per the amendment, Bannix and Tokenize agreed that the shares of common stock to be issued upon conversion of the Series A Preferred Stock will not exceed 19.99% of the aggregate number of shares of common stock issued and outstanding as of the closing of Bannix’s acquisition of EVIE (such maximum number of shares, the “ Exchange Cap ”) unless Bannix’s stockholders have approved the issuance of shares of common stock upon conversion of the Series A Preferred Stock pursuant to the PPA in excess of the Exchange Cap in accordance with the applicable rules of the market or exchange on which Bannix’s shares of common stock trade. On March 11, 2024, Bannix sent EVIE and the shareholder of EVIE a notice providing that the BCA has been terminated (“BNIX EVIE Termination Letter”). As the PPA was contingent upon Bannix closing the acquisition of the EVIE and due to the BNIX EVIE Termination Letter, on March 19, 2024 Bannix and Tokenize agreed to terminate the PPA which was consented to by the Company. Effective as of March 19, 2024, Tokeniz, entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (“VisionWave”) pursuant to which VisionWave agreed to acquire from Tokenize the entire right, title, and interest of certain patents and patent applications providing an intellectual property basis for a machine learning driven technology that controls radio wave transmissions, analyzes their reflections data, and constructs 2D/3D images of stationary and in motion objects (“VisionWave PPA”). The Purchase Price for the asset is $ 30,000,000 (the “Purchase Price”), which VisionWave will pay with shares of common stock, $0.0001 par value per share (the “Common Stock”). The Parties agree that the final Purchase Price may be adjusted and will be governed by a valuation report issued by a professional third party (“Valuation”). If the final Purchase Price per the Valuation is less than $ 30,000,000 , Tokenize has the option to cancel this Agreement. In accordance therewith, VisionWave agreed to issue and deliver to Tokenize, 1,000 shares of Common Stock (the “Shares”) representing 50% of VisionWave’s issued and outstanding shares of Common Stock, where the remainder of the 50% of VisionWave’s issued and outstanding shares of Common Stock are owned by a corporation controlled by Anat Attia. Service Agreement On February 24, 2023 the Company entered into service agreement with Pacific Capital Markets LLC, where 100,000,000 Shares issued to it for certain for service agreement between Pacific Capital Markets LLC. and the Company. The value of the shares of $ 80,000 was determined based on the FV of the Company’s common stock. F- 38 GBT TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Representation Agreement On August 17, 2023, Tokenize, which is 50 % owned of the Company, which provided its consent, entered into a Representation Agreement (the ‘RA’) with IDL Concepts, LLC (the ‘Agent’) , to represent Tokenize in a potential purchase transaction facilitated by the Agent transferring all of Tokenize’s right, title, and interest in certain Assigned Patent Rights, as defined in the RA, free and clear of any restrictions, liens, claims, and encumbrances, and may include rights to technology and software developed by Tokenize. Tokenize owns certain provisional patent applications, patent applications, patents, and/or related foreign patents and applications, and wishes potentially to sell all right, title, and interest in such patents and applications and the causes of action to sue for infringement thereof and other enforcement rights. Tokenize will pay Agent a commission of 20% of any proceeds of any closed transaction under this RA, including all cash, equity payments and any other form of consideration upon a sale, or any monetization activity under the RA. The RA carved out certain intellectual properties held by Tokenize that Tokenize is in active negotiation with third parties. Note 20 – Concentrations Concentration of Credit Risk Financial instruments, which potentially subject the Company to a concentration of credit risk for the years, consist principally of temporary cash investments. There have been no losses in these accounts through December 31, 2023 and 2022. Liquidity risk The Company has an accumulated deficit of $ 316,911,353 and has a working capital deficit of $ 31,620,271 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. Customers Per the Termination Agreement with Mahaser, the Company did not recognize revenue in the year ended on December 31, 2023. The Consulting income from related party for the year ended December 31, 2023 and 2022 was $ 0 and $ 90,000 . Note 21 - Subsequent Events Effective as of March 19, 2024, Tokenize, which is 50 % owned by the Company entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (“VisionWave”) pursuant to which VisionWave agreed to acquire from Tokenize the entire right, title, and interest of certain patents and patent applications providing an intellectual property basis for a machine learning driven technology that controls radio wave transmissions, analyzes their reflections data, and constructs 2D/3D images of stationary and in motion objects (“VisionWave PPA”). The Purchase Price for the asset is $ 30,000,000 (the “Purchase Price”), which VisionWave will pay with shares of common stock, $0.0001 par value per share (the “Common Stock”). The Parties agree that the final Purchase Price may be adjusted and will be governed by a valuation report issued by a professional third party (“Valuation”). If the final Purchase Price per the Valuation is less than $ 30,000,000 , Tokenize has the option to cancel this Agreement. In accordance therewith, VisionWave agreed to issue and deliver to Tokenize, 1,000 shares of Common Stock (the “Shares”) representing 50% of VisionWave’s issued and outstanding shares of Common Stock, where the remainder of the 50% of VisionWave’s issued and outstanding shares of Common Stock are owned by a corporation controlled by Anat Attia. On August 8, 2023, Bannix Acquisition Corp. (“Bannix”) entered into a Patent Purchase Agreement (“PPA”) with Tokenize, which is 50 % owned by the Company, which was consented to by the Company. The closing date of the PPA was set to be immediately follow the closing of the Business Combination Agreement (“BCA”) by Bannix with EVIE Autonomous Group Ltd. (“EVIE”). On March 11, 2024, Bannix sent EVIE and the shareholder of EVIE a notice providing that the BCA has been terminated (“BNIX EVIE Termination Letter”) As the PPA was contingent upon Bannix closing the acquisition of the EVIE and due to the BNIX EVIE Termination Letter, on March 19, 2024 Bannix and Tokenize agreed to terminate the PPA which was consented to by the Company. F-39