GBT Technologies Inc. (GTCH) — 10-K

Filed 2025-03-31 · Period ending 2024-12-31 · 49,742 words · SEC EDGAR

← GTCH Profile · GTCH JSON API

# GBT Technologies Inc. (GTCH) — 10-K

**Filed:** 2025-03-31
**Period ending:** 2024-12-31
**Accession:** 0001731122-25-000487
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1471781/000173112225000487/)
**Origin leaf:** 41568c9b4b90997e3f74866fac417a73e38ddb5af732fe697371442ae120ff6a
**Words:** 49,742



---

**
UNITED STATES**
**SECURITIES AND EXCHANGE
COMMISSION**
Washington, D.C. 20549
**FORM 10-K**
**ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
For the fiscal year ended: December 31, 2024
**TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
*Commission File Number:*000-54530
**GBT TECHNOLOGIES INC.**
(Exact name of registrant as specified in its charter)
**N/A**
(Former name of registrant as specified in its charter)
| 
Nevada | 
| 
27-0603137 | |
| 
State or other jurisdiction
of | 
| 
I.R.S. Employer | |
| 
incorporation or organization | 
| 
Identification Number | |
8557 West Knoll Dr.West HollywoodCA90069
(Address of principal executive offices)
Issuers telephone number: **888-685-7336**
Securities registered under Section 12(b) of the Exchange
Act: None
Securities registered under Section 12(g) of the Exchange
Act: Common Stock, $0.00001 par value per share
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes 
No 
Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes No
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.) Yes No 
Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to
submit and post such files). Yes No 
Indicate by check mark if disclosure of delinquent
filers in response to Item 405 of Regulation S-K is not contained herein, and will be contained, to the best of the registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. 
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of accelerated
filer, large accelerated filer or smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
| 
Largeacceleratedfiler
| 
Acceleratedfiler | 
Non-accelerated filer | 
SmallerReportingCompany
| |
| 
| 
| 
| 
| |
| 
Emerging growth company | 
| 
| 
| |
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant has
filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. 
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act) Yes No 
As of December 31, 2024, the market value of our common
stock held by non-affiliates was approximately $976,950 which is computed based upon the closing price on that date of the Common Stock
of the registrant on the OTC PINK maintained by OTC Markets Group Inc. of $0.002. For purposes of this response, the registrant has assumed
that its directors, executive officers and beneficial owners of 5% or more of its Common Stock are deemed affiliates of the registrant.
As of March 31, 2025, 16,813,229,180
shares of common stock, $0.00001 par value per share, of the registrant were outstanding.
Documents incorporated by reference: None
**FORM 10-K**
**FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024**
**INDEX**
| 
| 
| 
Page | |
| 
PART I | 
| 
2 | |
| 
ITEM 1. | 
BUSINESS | 
2 | |
| 
ITEM 1A. | 
RISK FACTORS | 
6 | |
| 
ITEM 1B. | 
UNRESOLVED STAFF COMMENTS | 
11 | |
| 
ITEM 2. | 
PROPERTIES | 
11 | |
| 
ITEM 3. | 
LEGAL PROCEEDINGS | 
11 | |
| 
ITEM 4. | 
MINE SAFETY DISCLOSURES | 
14 | |
| 
| 
| 
| |
| 
PART II | 
| 
14 | |
| 
ITEM 5. | 
MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 
14 | |
| 
ITEM 6. | 
RESERVED | 
17 | |
| 
ITEM 7. | 
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 
17 | |
| 
ITEM 7A. | 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 
25 | |
| 
ITEM 8. | 
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 
25 | |
| 
ITEM 9. | 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 
25 | |
| 
ITEM 9A. | 
CONTROLS AND PROCEDURES | 
25 | |
| 
ITEM 9B. | 
OTHER INFORMATION | 
26 | |
| 
ITEM 9C | 
DISCLOSURES REGARDING FOREIGN JURISDICATIONS THAT PREVENT INSPECTIONS | 
26 | |
| 
| 
| 
| |
| 
PART III | 
| 
26 | |
| 
ITEM 10. | 
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 
26 | |
| 
ITEM 11. | 
EXECUTIVE COMPENSATION | 
29 | |
| 
ITEM 12. | 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 
30 | |
| 
ITEM 13. | 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE | 
31 | |
| 
ITEM 14. | 
PRINCIPAL ACCOUNTANT FEES AND SERVICES | 
33 | |
| 
ITEM 15. | 
EXHIBITS | 
34 | |
| 
ITEM 16. | 
FORM 10-K SUMMARY | 
37 | |
| 
| 
SIGNATURES | 
38 | |
| 
| 
| 
| |
| 
| 
INDEX TO FINANCIAL STATEMENTS | 
F-1 | |
i
**STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**
In this annual report, references to GBT,
GOPH, GTCH or the Company, or we, or us, and our refer
to GBT Technologies Inc. or f/k/a Gopher Protocol Inc. Except for the historical information contained herein, some of the statements
in this report contain forward-looking statements that involve risks and uncertainties. These statements are found in the sections entitled
Business, Managements Discussion and Analysis of Financial Condition and Results of Operations, and
Quantitative and Qualitative Disclosures about Market Risk. They include statements concerning: our business strategy; expectations
of market and customer response; liquidity and capital expenditures; future sources of revenues; expansion of our proposed product line;
and trends in industry activity generally. In some cases, you can identify forward-looking statements by words such as may,
will, should, expect, plan, could, anticipate, intend,
believe, estimate, predict, potential, goal, or continue
or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including,
but not limited to, the risks outlined under Risk Factors, that may cause our or our industrys actual results, levels
of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from
future results include, but are not limited to our ability to successfully develop and market our products to customers; our ability to
generate customer demand for our products in our target markets; the development of our target markets and market opportunities; our ability
to manufacture suitable products at a competitive cost; market pricing for our products and for competing products; the extent of increasing
competition; technological developments in our target markets and the development of alternate, competing technologies in them; and sales
of shares by existing shareholders. Although we believe that the expectations reflected in the forward-looking statements are reasonable,
we cannot guarantee future results, levels of activity, performance or achievements. Unless we are required to do so under U.S. federal
securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.
**Below is a summary of material
factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks and
uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other
risks and uncertainties that we face, can be found under Risk Factors in Part I, Item 1A of this Annual Report on Form 10-K.
The below summary is qualified in its entirety by that more complete discussion of such risks and uncertainties. You should consider carefully
the risks and uncertainties described under Risk Factors in Part I, Item 1A of this Annual Report on Form 10-K as part of
your evaluation of an investment in our securities.**
| 
| 
| 
We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. | |
| 
| 
| 
Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance. | |
| 
| 
| 
The COVID-19 outbreak caused disruptions in our development operations, which have resulted in delays in existing projects and may have additional negative impacts on our operations. | |
| 
| 
| 
Our results of operations have not resulted in profitability and we may not be able to achieve profitability going forward. | |
| 
| 
| 
We have not generated positive cash flow from operations and our ability to generate positive cash flow is uncertain. If we are unable to generate positive cash flow or obtain sufficient capital when needed, our business and future prospects will be adversely affected and we could be forced to suspend or discontinue operations. | |
| 
| 
| 
We will require additional capital to support business growth and this capital might not be available on acceptable terms, if at all. | |
| 
| 
| 
We depend upon key personnel and need additional personnel. | |
1
| 
| 
| 
Our business requires substantial capital and if we are unable to maintain adequate cash flows from operations our profitability and financial condition will suffer and jeopardize our ability to continue operations. | |
| 
| 
| 
There is currently a limited public market for our common stock. Failure to further develop or maintain a trading market could negatively affect the value of our common stock and make it difficult or impossible for you to sell your stock. | |
| 
| 
| 
If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock. | |
| 
| 
| 
Because we are quoted on the OTC PINK marketplace instead of a national securities exchange, our investors may experience significant volatility in the market price of our stock and have difficulty selling their shares. | |
| 
| 
| 
Our stock price and trading volume may be volatile, which could result in substantial losses for our stockholders. | |
| 
| 
| 
We have not paid dividends in the past and have no immediate plans to pay cash dividends. | |
| 
| 
| 
Shares eligible for future sale may adversely affect the market for our Common Stock. | |
| 
| 
| 
You may experience future dilution as a result of future equity offerings. | |
| 
| 
| 
Our charter documents and Nevada law may inhibit a takeover that stockholders consider favorable. | |
| 
| 
| 
There are limitations on director/officer liability. | |
| 
| 
| 
Penny stock regulations may impose certain restrictions on marketability of our securities. | |
| 
| 
| 
FINRA sales practice requirements may limit a stockholders ability to buy and sell our stock. | |
**PART I**
**ITEM 1. DESCRIPTION OF BUSINESS**
**OVERVIEW**
GBT Technologies Inc. (formally known as Gopher Protocol
Inc., the Company, GBT, Gopher, Gopher Protocol GOPH or GTCH)
was incorporated on July 22, 2009 under the laws of the State of Nevada. The Company via its 50% subsidiary, 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 technologies can be grouping as (i) the provision of ITconsulting services; and (ii) from the licensing of its
technology. (ii) from selling electronic products through e-commerce platforms. (iv) an advanced RF-based computer vision system, to utilize
this platform potential to significantly enhance object detection and imaging capabilities, using radio waves to create detailed 2D and
3D images .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.
2
GBT Tokenize Joint Venture
(Impaired in 2021)
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 contributed2,000,000shares 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 additional14,000,000shares of common stock. On June 30, 2021,
Tokenize and its shareholder assigned all their rights under the 2020 Tokenize Agreement, including the Companys 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 additional150,000,000shares 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
received26,000,000shares of common stock of Buyers shares Avant Technologies, Inc.
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).
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 of166million 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 Tokenize1,000shares of Series I Preferred Stock (the Series
I Stock) with a stated value of $35,000per 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 of10billion shares of common
stock of the Company. Further, the Series I Stock will vote on an as converted basis.
On November 2, 2023, the Company received a notice
of completion (notice # 508205896) of the recoding of assignment for its portfolio of intellectual property to GBT Tokenize. The assignment
was recorded by the assignment recording branch of the U.S. Patent and Trademark Office. A complete copy of this assignment is available
at the assignment branch room on the reel and frame number 065420/0434 (in total 16 pages).
3
Active Investments: 
VisionWave:
Effective as of March 20,
2024, Tokeniz, entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (VisionWave or VW)
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 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 VisionWaves issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWaves issued and outstanding shares of Common Stock are owned by a corporation
controlled by Anat Attia. On June 4, 2024 Tokenize were issued additional 222 shares of VW for consideration of ten million Avant Technologies
Inc. (AVAI) shares. On August 17, 2024 Tokenize, the Company. and Magic entered into
agreements effective March 26, 2024 which assign the shares issued by the Company to Tokenize, 500 to GBT and 500 to Magic. Post this
transaction the Company holds 500 shares and Tokenize hold 222 shares of VW. As of September 30, 2024, the Company holds 26.53%
of VWs issued and outstanding shares. Here is the breakdown of the Company and Tokenize VWs
shareholders:
| 
Shareholders Name | 
| 
No. Of Shares | 
| 
% of Shares Held | |
| 
GBT Tokenize Corp. | 
| 
| 
222 | 
| 
| 
| 
8.16 | 
% | |
| 
GBT Technologies, Inc. | 
| 
| 
500 | 
| 
| 
| 
18.37 | 
% | |
On March 26, 2024, Bannix
Acquisition Corp., a Delaware corporation (Bannix), entered into a Business Combination Agreement (the Original Agreement),
by and among Bannix, VisionWave Technologies, Inc., a Nevada corporation (Target) and the shareholders of Target.
On September 6, 2024, Bannix
entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among Bannix, VisionWave Holdings,
Inc., a Delaware corporation and a direct, wholly owned subsidiary of Bannix (VisionWave Holdings), BNIX Merger Sub, Inc.,
a Delaware corporation and a direct, wholly owned subsidiary of VisionWave Holdings (Parent Merger Sub), BNIX VW Merger
Sub, Inc., a Nevada corporation and direct, wholly owned subsidiary of VisionWave, and Target. The Merger Agreement and the transactions
contemplated thereby were approved by the boards of directors of each of Bannix, VisionWave Holdings, Parent Merger Sub, Company Merger
Sub, and Target, and are subject to Bannix shareholders approval.
MetAlert (prior name GTX Corp):
On April 12, 2022, Tokenize, 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 acquired76,923(GBT acquired5,000,000in
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 $8,846as of June 30, 2023 based on level 1 stock price in OTC markets.
The GTX Notes bear 10% interest and 50% of the principal
may be converted into shares of common stock on a one-time basis at a conversion price of $0.01per 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 $90,000which is due and payable together with interest of5% 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.
4
On or about January 31, 2023 GTB Tokenize Corp the
Companys 50% owned subsidiary, assigned $7,500 from the GTX Notes to Stanley Hills, LLC, which in turn converted said $7,500 plus
interest into 812,671 GTX shares. Stanley Hills, LLC credit GBT Tokenize for $146,037 for the transaction, reducing its credit outstanding
balances with the Company and GBT Tokenize Corp.
As of December 31, 2024 and
2023, the notes had an outstanding balance of $46,250and accrued interest of $0, respectively.
As of December 31, 2024 and 2023, the marketable security
had a FV of $2,462 and $1,692, respectively.
Wireless mesh networking:
Wireless mesh networks consist of LAN/MAN/WAN solutions
that are infrastructural-intensive, may rely on regulated frequencies and bandwidth, often have so-called last mile problems
areas where either economics or population density make it too expensive for current solutions to cover, and difficult to manage centrally.
The Companys GopherInsight platform makes it easy to add and manage last mile capacity. The solution is easily integrated into
existing networks. The Companys AI platform is designed for easy integration with, and management of, additional coverage for customer
networks.
Wireless mesh networking marke*ts* - The Company potentially will
target telecommunications providers, corporate entities that run LAN or wide-area networks, universities, and government entities.
Wireless mesh networking markets competition - The competitors for wireless
mesh networking solutions, and AI solutions, are the entities themselves that have their own capability. The Companys strategy
is to integrate and wrap around those solutions to make them more efficient, less costly, and less infrastructural-intensive,
while at the same time solving last mile problems to the end user.
AlKhatib Consulting Group:
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.
IDL Representation Agreement
On August 17, 2023, Tokenize, which is 50% owned by
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 Tokenizes 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.
Regulatory
The Company seeks to conduct business with US government
agencies and hired a consulting firm for general guidance with the GSA (General Services Administration) application process. GSA approval
status describes an organization that have been approved to sell to the US Government through the U.S. General Services Administration
(GSA). The GSA is an independent agency of the United States Government that was established in 1949 to help manage, approve, and facilitate
government contracts, products, bids and verify that product and services properly sourced under the US Government guidelines. The GSA
is the purchasing department of the US Government and lists contracts or schedules potential vendors that can bid on to get government
business. To become eligible to bid on a GSA schedule, it is required to complete several important steps, among them are registering
in the governments SAM (System for Award Management), and providing previous customer contact information as a means for the GSA
to perform a past performance evaluation. More information can be found on GSA web site at: https://www.gsa.gov. The Company applied and
received their extension notice for SAM registration #832011626/91FW3 until May 2023. The active status makes GBT eligible to potentially
contract business with US government contractors and sub-contractors, local cities or receive federal funds. SAM (www.sam.gov) is a central
registration system for government contractors and suppliers. To remain eligible to do business with the federal government, an entity
must renew its registration with SAM every year.
5
Intellectual Property
Per the 2023 Tokenize Agreement which restated and
replaced the 2022 Tokenize Agreement, the Company assigned its entire IP Portfolio to Tokenize. On November 2, 2023, the Company received
a notice of completion (notice # 508205896) of the recoding of assignment for its portfolio of intellectual property to Tokenize. The
assignment was recorded by the assignment recording branch of the U.S. Patent and Trademark Office. A complete copy of this assignment
is available at the assignment branch room on the reel and frame number 065420/0434 (in total 16 pages).
Employees
As of December 31, 2024, we had 3 full time employees and no part time
employees. We also utilize outside consultants and contractors as needed.
**ITEM 1A. RISK FACTORS**
As a Smaller Reporting Company, the Company is not
required to include the disclosure under this Item 1A. Risk Factors. Despite the fact that we are not required to provide risk factors,
we consider the following factors to be risks to our continued growth and development:
**WE HAVE A LIMITED OPERATING HISTORY IN AN EVOLVING
INDUSTRY, WHICH MAKES IT DIFFICULT TO EVALUATE OUR FUTURE PROSPECTS AND MAY INCREASE THE RISK THAT WE WILL NOT BE SUCCESSFUL.**
We have a limited operating history in an evolving
industry that may not develop as expected. Assessing our business and future prospects is challenging in light of the risks and difficulties
we may encounter. These risks and difficulties include our ability to:
| 
| 
| 
accurately forecast our revenues and plan our operating expenses; | |
| 
| 
| 
successfully expand our business; | |
| 
| 
| 
assimilate our acquisitions; | |
| 
| 
| 
adapt to rapidly evolving trends in the ways consumers and businesses interact with technology; | |
| 
| 
| 
avoid interruptions or disruptions in the offering of our products and our services; | |
| 
| 
| 
develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment of new features and products; | |
| 
| 
| 
hire, integrate and retain talented sales, customer service, technology and other personnel; and | |
| 
| 
| 
effectively manage rapid growth in personnel and operations; and | |
| 
| 
| 
global COVID-19 pandemic | |
If the demand for our services and/or platforms/products
offered or our products under development are not finalized, our business will be harmed. We may not be able to successfully address these
risks and difficulties, which could harm our business and results of operations.
6
**OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT
FOR US TO EVALUATE OUR FUTURE BUSINESS PROSPECTS AND MAKE DECISIONS BASED ON THOSE ESTIMATES OF OUR FUTURE PERFORMANCE.**
We have a limited operating history and,as a
consequence, it is difficult, if not impossible, to forecast our future results based upon our historical data. Reliance on the historical
results may not be representative of the results we will achieve. Because of the uncertainties related to our limited historical operations,
we may be hindered in our ability to anticipate and timely adapt to increases or decreases in revenues or expenses. If we make poor budgetary
decisions as a result of unreliable historical data, we could be less profitable or continue to incur losses.
**OUR RESULTS OF OPERATIONS HAVE NOT RESULTED IN
PROFITABILITY AND WE MAY NOT BE ABLE TO ACHIEVE PROFITABILITY GOING FORWARD**
The Company does not accrue or capitalize development
costs (or any costs to this effect) and expense it to its profit and loss statements as required by US GAAP. As such, the Company incurred
operating loss of $644,697 for the year ended December 31, 2024. If we incur additional significant operating losses, our stock price,
may decline, perhaps significantly. Our management is developing plans to alleviate the negative trends and conditions described above.
Our business plan is speculative and unproven. There is no assurance that we will be successful in executing our business plan or that
even if we successfully implement our business plan, that we will be able to curtail our losses now or in the future. Further, as we are
an emerging enterprise, we expect that net losses will continue, and our working capital deficiency will increase.
**WE HAVE NOT GENERATED POSITIVE CASH FLOW FROM OPERATIONS,
AND OUR ABILITY TO GENERATE POSITIVE CASH FLOW IS UNCERTAIN. IF WE ARE UNABLE TO GENERATE POSITIVE CASH FLOW OR OBTAIN SUFFICIENT CAPITAL
WHEN NEEDED, OUR BUSINESS AND FUTURE PROSPECTS WILL BE ADVERSELY AFFECTED AND WE COULD BE FORCED TO SUSPEND OR DISCONTINUE OPERATIONS.**
Our operations have not generated positive cash flow
for any period since our inception, and we have funded our operations primarily through the issuance of common stock and short-term and
long-term debt and convertible debt. Our limited operating history makes an evaluation of our future prospects difficult. The actual amount
of funds that we will need to meet our operating needs will be determined by a number of factors, many of which are beyond our control.
These factors include the timing and volume of sales transactions, the success of our marketing strategy, market acceptance of our products,
the success of our manufacturing and research and development efforts (including any unanticipated delays), our manufacturing and labor
costs, the costs associated with obtaining and enforcing our intellectual property rights, regulatory changes, competition, technological
developments in the market, evolving industry standards and the amount of working capital investments we are required to make.
Our ability to continue to operate until we are able
to generate sufficient our cash flow from operations will depend on our ability to generate sufficient positive cash flow from our operations.
If we are unable to generate sufficient cash flow from our operations, our business and future prospects will be adversely affected and
we could be forced to suspend or discontinue operations.
The Company sustained a net operating loss of $644,697,
a total net income of $20,675,445 and our operating activities provide by cash flows of $27,142 for the year ended December 31, 2024.
The Company had a working capital deficit of $9,940,379, stockholders deficit of $10,184,119 and an accumulated deficit of $295,278,233
at December 31, 2024.
**WE WILL REQUIRE ADDITIONAL CAPITAL TO SUPPORT BUSINESS
GROWTH, AND THIS CAPITAL MIGHT NOT BE AVAILABLE ON ACCEPTABLE TERMS, IF AT ALL.**
7
We intend to continue to make investments to support
our business growth and we will require additional funds to respond to business challenges, including the need to develop new features
and products or enhance our existing products, improve our operating infrastructure or acquire complementary businesses and technologies.
Further, we need additional capital to continue operations. Accordingly, we need to engage in equity or debt financings to secure additional
funds. We expect that we have sufficient capital sources to maintain operations through the year of 2024. In order to fully implement
our business plan, we will need to raise about $12,000,000 If we raise additional funds through future issuances of equity or convertible
debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights,
preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve
restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult
for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain
additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory
to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired,
and our business may be harmed.
**WE DEPEND UPON KEY PERSONNEL AND NEED ADDITIONAL
PERSONNEL**
Our success depends on our inability to attract and
retain key personnel including, Michael Murray, our CEO, Mansour Khatib, our Secretary, and Dr. Danny Rittman, our CTO, and our inability
to do so may materially and adversely affect our business operations.The loss of qualified personnel could have a material and adverse
effect on our business operations. Additionally, the success of the Companys operations will largely depend upon its ability to
successfully attract and maintain competent and qualified key management personnel. As with any company with limited resources, there
can be no guaranty that the Company will be able to attract such individuals or that the presence of such individuals will necessarily
translate into profitability for the Company.
**OUR BUSINESS REQUIRES SUBSTANTIAL CAPITAL, AND
IF WE ARE UNABLE TO MAINTAIN ADEQUATE CASH FLOWS FROM OPERATIONS OUR PROFITABILITY AND FINANCIAL CONDITION WILL SUFFER AND JEOPARDIZE
OUR ABILITY TO CONTINUE OPERATIONS**
We require substantial capital to support our operations.
If we are unable to generate adequate cash flows from our operations, maintain adequate financing or other sources of capital are not
available, we could be forced to suspend, curtail or reduce our operations, which could harm our revenues, profitability, financial condition
and business prospects.
**THERE IS CURRENTLY A LIMITED PUBLIC MARKET FOR
OUR COMMON STOCK. FAILURE TO FURTHER DEVELOP OR MAINTAIN A TRADING MARKET COULD NEGATIVELY AFFECT THE VALUE OF OUR COMMON STOCK AND MAKE
IT DIFFICULT OR IMPOSSIBLE FOR YOU TO SELL YOUR STOCK.**
There is a limited public market for our Common Stock,
which is traded on the OTC PINK under the symbol GTCH. We cannot give any assurances that there will ever be a mature, developed market
for our common stock. Failure to further develop or maintain an active trading market could negatively affect the value of our shares
and make it difficult for you to sell your shares or recover any part of your investment in us. Even if a market for our common stock
does develop in a material way, the market price of our common stock may be highly volatile. In addition to the uncertainties relating
to our future operating performance and the profitability of our operations, factors such as variations in our interim financial results,
or various, as yet unpredictable factors, many of which are beyond our control, may have a negative effect on the market price of our
common stock.
**IF WE FAIL TO MAINTAIN
AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD. AS A RESULT,
CURRENT AND POTENTIAL STOCKHOLDERS COULD LOSE CONFIDENCE IN OUR FINANCIAL REPORTING, WHICH WOULD HARM OUR BUSINESS AND THE TRADING PRICE
OF OUR STOCK.**
8
Effective internal controls
are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports
or prevent fraud, our brand and operating results could be harmed. We have in the past discovered, and may in the future discover, areas
of our internal controls that need improvement. For example, for the years ended December 31, 2024 and 2023, we reported that our disclosure
controls and procedures were not effective due to the lack of resources and the reliance on outside consultants. We intend to increase
managements review of our financials. We cannot be certain that these measures will ensure that we implement and maintain adequate
controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties
encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior
internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our stock.
**Additional Risks Related to Our Common Stock**
**Because we are quoted on the OTC PINK marketplace
instead of a national securities exchange, our investors may experience significant volatility in the market price of our stock and have
difficulty selling their shares.**
Our Common Stock is currently quoted on the OTC Market
Groups OTC PINK marketplace under the ticker symbol GTCH. The OTC is a regulated quotation service that displays
real-time quotes and last sale prices in over-the-counter securities. Trading in shares quoted on the OTC PINK is often thin and characterized
by volatility. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence
of consistent administrative supervision of bid and ask quotations, lower trading volume and market conditions. As a result, there may
be wide fluctuations in the market price of the shares of our Common Stock for reasons unrelated to operating performance, and this volatility,
when it occurs, may have a negative effect on the market price for our securities. Moreover, the OTC PINK is not a stock exchange, and
trading of securities on this platform is more sporadic than the trading of securities listed on a national quotation system or stock
exchange. Accordingly, our stockholders may not be able to realize a fair price from their shares when they determine to sell them or
may have to hold them for a substantial period of time until the market for our Common Stock improves.
**Our stock price and trading volume may be volatile,
which could result in substantial losses for our stockholders.**
The equity trading markets may experience periods
of volatility, which could result in highly variable and unpredictable pricing of equity securities. The market price of our Common Stock
could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition.
In addition, the trading volume in our Common Stock has been low and may fluctuate and cause significant price variations to occur. We
have experienced significant volatility in the price of our stock. In addition, the stock markets in general can experience considerable
price and volume fluctuations.
**We have not paid dividends in the past and have
no immediate plans to pay cash dividends.**
We plan to reinvest all of our earnings, to the extent
we have earnings, to develop and deliver our products and cover operating costs and to otherwise become and remain competitive. We do
not plan to pay any cash dividends with respect to our securities in the foreseeable future. We cannot assure you that we would, at any
time, generate sufficient surplus cash that would be available for distribution to the holders of our Common Stock as a dividend. Therefore,
you should not expect to receive cash dividends on our Common Stock.
**Shares eligible for future sale may adversely affect
the market for our Common Stock.**
Of the 16,813,229,180 shares of our Common Stock outstanding
as of the date of this Annual Report, approximately 766,217,939 are restricted and 16,047,011,241 shares are freely tradable without restriction
pursuant to Rule 144. Any substantial sale of our Common Stock pursuant to Rule 144 or pursuant to any resale prospectus may have a material
adverse effect on the market price of our Common Stock.
9
**You may experience future dilution as a result
of future equity offerings.**
To raise additional capital, we may in the future
offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock at prices that may
not be the same as the price per share in this offering. We may sell shares or other securities in any future offering at a price per
share that is lower than the price per share paid by investors in this offering, which would result in those newly issued shares being
dilutive. In addition, investors purchasing shares or other securities in the future could have rights superior to existing stockholders,
which could impair the value of your shares. The price per share at which we sell additional shares of our Common Stock, or securities
convertible or exchangeable into shares of our Common Stock, in future transactions may be higher or lower than the price per share paid
by investors in this offering.
**Our charter documents and Nevada law may inhibit
a takeover that stockholders consider favorable.**
Provisions of our certificate of incorporation and
bylaws and applicable provisions of Nevada law may delay or discourage transactions involving an actual or potential change in control
or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions
that our stockholders might otherwise deem to be in their best interests. The provisions in our certificate of incorporation and bylaws:
| 
| 
| 
limit who may call stockholder meetings; | |
| 
| 
| 
do not provide for cumulative voting rights; and | |
| 
| 
| 
provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum. | |
**There are limitations on director/officer liability.**
As permitted by Nevada law, our certificate of incorporation
limits the liability of our directors for monetary damages for breach of a directors fiduciary duty except for liability in certain
instances. As a result of our charter provision and Nevada law, shareholders may have limited rights to recover against directors for
breach of fiduciary duty. In addition, our certificate of incorporation provides that we shall indemnify our directors and officers to
the fullest extent permitted by law.
**Penny stock regulations may impose certain restrictions on marketability
of our securities.**
The SEC adopted regulations which generally define
a penny stock to be any equity security that has a market price of less than $5 per share or an exercise price of less than
$5 per share, subject to certain exceptions. A security listed on a national securities exchange is exempt from the definition of a penny
stock. Our Common Stock is not currently listed on a national security exchange. Our Common Stock is therefore subject to rules that impose
additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited
investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse).
For transactions covered by such rules, the broker-dealer must make a special suitability determination for the purchase of such securities
and have received the purchasers written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating
to the penny stock market. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative,
current quotations for the securities and, if the broker-dealer is the sole market maker, the broker dealer must disclose this fact and
the broker-dealers presumed control over the market. Finally, monthly statements must be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in penny stocks. Broker-dealers must wait two business days
after providing buyers with disclosure materials regarding a security before effecting a transaction in such security. Consequently, the
penny stock rules restrict the ability of broker-dealers to sell our securities and affect the ability of investors to sell
our securities in the secondary market and the price at which such purchasers can sell any such securities, thereby affecting the liquidity
of the market for our Common Stock.
10
Stockholders should also be aware that, according
to the SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:
| 
| 
| 
control of the market for the security by one or more broker-dealers that are often related to the promoter or issuer; | |
| 
| 
| 
manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; | |
| 
| 
| 
boiler room practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; | |
| 
| 
| 
excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and | |
| 
| 
| 
the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses. | |
**FINRA sales practice requirements may limit a stockholders
ability to buy and sell our stock.**
The Financial Industry Regulatory Authority (referred
to as FINRA) has rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing
that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information about the customers financial status, tax status,
investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high
probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are
applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers
buy our Common Stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect
on the market for and price of our common stock.
**ITEM 1B. UNRESOLVED STAFF COMMENTS**
As a Smaller Reporting Company, the Company is not
required to include the disclosure under this Item 1B. Unresolved Staff Comments. At this time, there are no unresolved staff comments.
**ITEM 2. PROPERTIES**
The Company leases its virtual office space at 8557
N West Knoll Dr.West HollywoodCA90069 on a month-to-month lease.
**ITEM 3. LEGAL PROCEEDINGS**
*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.
*Relate to 2022:*
On December 3, 2018, the Company entered into a Securities
Purchase Agreement (the SPA) with Discover Growth Fund, LLC (the Investor) pursuant to which the Company issued
a Senior Secured Redeemable Convertible Debenture (the Debenture) of $8,340,000. In connection with the issuance of the
Debenture and pursuant to the terms of the SPA, the Company issued a Common Stock Purchase Warrant to acquire up to225,000shares
of common stock for a term of three years (the Warrant) on a cash-only basis at an exercise price of $100 per share with
respect to 50,000 Warrant Shares, $75 with respect to 75,000 Warrant Shares and $50 with respect to 100,000 Warrant Shares. The holder
may not exercise any portion of the Warrants to the extent that the holder would own more than 4.99% of the Companys outstanding
common stock immediately after exercise. The outstanding principal amount may be
11
converted at any time into shares ofthe Companyscommon
stockat a conversion price equal to 95% of the Market Price less $5 (the conversion price is lowered by 10% upon the occurrence
of each Triggering Event the current conversion price is 75% of the Market Price less $5.00). The Market Price is the average
of the 5 lowest individual daily volume weighted average prices during the period the Debenture is outstanding. On May 28, 2019, the Investor
delivered to the Company a Notice of Default and Notice of Sale of Collateral (the Notice). On December 23,
2019, in arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor. On January 31, 2020,
the Company was informed that a final award was entered (the Final Award). The Final Award affirms that certain sections
of the Debentureconstitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the Investor
was entitled to recovery of their attorneys fees. Consequently, the arbitrator awarded Investor an award of $4,034,444plus
interest of7.25% accrued from May 15, 2019 and costs of $55,613. On February 18, 2020, the Company filed a motion with the United
States District Court District of Nevada (the Nevada Court) to confirm the Final Award and a motion to consolidate Investors
application to confirm the Final Award filed in the U.S. District Court of the Virgin Islands (Case No: 3 :20-cv-00012-CVG-RM) (the Virgin
Island Court). On February 27, 2020, the Nevada Court denied the Companys motion to confirm the Final Award and motion to
consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court. As such, on February
27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration Award, address the outstanding issues
regarding whether Investors rights are subordinated to other creditors and, thereafter, oversee a commercially reasonable foreclosure
sale (Case No: 3 :20-cv-00012-CVG-RM). It was the Companys position that the Final Award must first be confirmed and all questions
regarding the rights of Investor relative to those of other creditors must be determined before any foreclosure sale can proceed. It is
further the position of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially
unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk. Nevertheless, on February
28, 2020, Investor advised that it conducted a sale of the Companys assets. As the date of this report Investor failed to present
a deed of sale for the alleged sale that allegedly took place as noticed. The Company filed with Virgin Island Court the motions disputing
the validity of the alleged sale. On July 28, 2020, Investor filed in the State of Nevada a motion for attorneys $48,844and costs
$716. The Company filed an answer on August 11, 2020.On October 16, 2020, Investor motion for attorneys $48,844and costs $716was
denied. This case is still pending with the Federal court and the Court has not taken any substantive action in the matter as of the date
of this report. Based on Discover notice in writing of selling all the Companys assets, the Company intend to invoice Discover
for that sale and offset the settlement amount at the end of the year. On January 25, 2024 Virgin Island Court ordered that Final Award
is confirmed.
As part of its financial review for the fiscal year
ended December 31, 2024, the Board of Directors of the Company conducted an assessment of the Companys Accrued Settlement Liability,
a balance originally recorded in 2020 in connection with the arbitration award issued in favor of Discover Growth Fund, LLC (DGF).
On February 28, 2020, DGF conducted a foreclosure sale of the Companys assets. However, the Company was not provided with an accounting
of the sale or details of the proceeds received by DGF. The Company has maintained its position that the foreclosure sale satisfied the
arbitration award in full. Additionally, DGF has not taken any action to enforce collection of the liability since the arbitration award
was confirmed by the U.S. District Court for the Virgin Islands on January 25, 2024.
Accounting Treatment
In accordance with ASC 405-20-40-1 (Liabilities -
Extinguishment of Liabilities), a liability should be derecognized when it has been extinguished. Extinguishment occurs when the debtor
is legally released from the obligation or when the obligation is otherwise settled. Given that:
The Companys assets were foreclosed
and sold by DGF in 2020;
No further collection efforts have been initiated
by DGF;
The Company maintains that the foreclosure
sale satisfied the judgment;
The Company does not intend to make any payment
toward the liability; and
Carrying the liability indefinitely would misrepresent
the Companys financial position, inflating its balance sheet without a true expectation of payment;
12
The Board of Directors approved the write-off of the
remaining Accrued Settlement Liability in the amount of $5,755,400, recognizing it as a gain in the Companys financial statements
for the year ended December 31, 2024.
Financial Statement Impact
As a result of this decision, the Company recognized
a $5,755,400 gain on extinguishment of liability, which is included in other income in the consolidated statement of operations. The corresponding
reduction in liabilities is reflected in the balance sheet under Accrued Settlement Liabilities, reducing the Companys total liabilities.
Going Concern Consideration
The Company continues to operate under going concern
uncertainty. This write-off does not impact the Companys assessment of its financial viability, as its ability to continue operations
depends on factors including access to financing and future business performance. However, if any party disputes the Companys position
in the future and initiates collection efforts, the Company will defend its position and disclose any developments accordingly.
*Relate to 2023:*
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 attorneys 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. As of filing date, the Company has not collected any amount issued by the Court from Terry Taylor and TTSG.
*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 pledged4,006restricted
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 Latinexs 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, 2024.
13
*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, market and distribute the Meta Portfolio
throughout the world. The Company was required to contribute500,000,000shares 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 its50% 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 $25,000per month payable quarterly
which Metaverse Kit has the option to pay in shares of common stock calculated by the amount owed divided by the Companys 10-day
VWAP. Licensor and Elentina were to provide services in connection with the development of the business as well as Metaverse Kits
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 $5,000to the Company as settlement payment and surrender their shares in Metaverse Kit.
**ITEM 4. MINE SAFERY DISCLOSURES**
Not applicable.
**PART II**
**ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.**
The Company is authorized to issue 30,000,000,000
of its $0.00001 par value common stock and 20,000,000 shares of its $0.00001 par value preferred stock Series B and 10,000 shares of its
$0.00001 par value preferred stock Series C, 100,000 shares of its $0.00001 par value preferred Series D shares, 2,000,000 of its $0.00001
par value preferred Series G shares, 40,000 of its $0.00001 par value preferred Series H shares and 1,000 of its $0.00001 par value preferred
Series I shares. As of December 31, 2024, 16,813,229,180 shares of common stock, as well as 45,000 shares of preferred stock Series B,
700 shares of preferred stock Series C, zero shares of preferred stock Series D, zero shares of preferred stock Series G, 20,000 shares
of preferred stock Series H and 1,000 shares of preferred stock Series I were issued and outstanding. The Board of Directors reserves
the right to issue shares of preferred stock in the future indicating preference or rights as appropriate.
**Market Information**
Our common stock commenced
quotation on the OTC PINK under the symbol GTCH. The Companys subsequent symbol was GOPH. The following
table sets forth the range of high and low prices per share of our common stock for each period indicated (after given effect to reverse
split of 1 for 100 split in 2019 and 1 for 50 in 2021)
| 
Quarters
Ended | | 
March
31 | | 
June
30 | | 
September
30 | | 
December
31 | |
| 
| | 
High | | 
Low | | 
High | | 
Low | | 
High | | 
Low | | 
High | | 
Low | |
| 
| | 
| | 
| | 
| | 
| | 
| | 
| | 
| | 
| |
| 
2023 | | | 
$ | 0.0006 | | | 
$ | 0.0004 | | | 
$ | 0.0003 | | | 
$ | 0.0002 | | | 
$ | 0.0002 | | | 
$ | 0.0001 | | | 
$ | 0.0002 | | | 
$ | 0.0001 | | |
| 
2024 | | | 
$ | 0.0002 | | | 
$ | 0.0001 | | | 
$ | 0.0001 | | | 
$ | 0.0001 | | | 
$ | 0.0001 | | | 
$ | 0.0001 | | | 
$ | 0.0002 | | | 
$ | 0.0001 | | |
****
****
14
****
****
**Record Holders**
The number of holders of record for our common stock
as of December 31, 2024 was 94.
**Dividends**
The Company has not yet adopted any policy regarding
payment of dividends. No cash dividends have been paid or declared since the Date of Inception.
**Securities Authorized for Issuance Under Equity
Compensation Plans**
We presently do not have equity compensation plans authorized.
**Transfer Agent**
The Company transfer agent is Nevada Agency and Transfer
Company (NATCO) with a business address at 50 West Liberty Street, Suite 880, Reno NV 89501; NATCOs website is www.natco.com,
and their phone number is (775) 322-0626.
**Penny Stock**
Our common stock is considered penny stock
under the rules of the SEC under the Securities Exchange Act of 1934. The SEC adopted rules that regulate broker-dealer practices in connection
with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5, other than securities registered
on certain national securities exchanges or quoted on the NASDAQ Stock Market System, provided that current price and volume information
with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:
| 
| 
contains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading; | |
| 
| 
contains a description of the brokers or dealers duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities laws; contains a brief, clear, narrative description of adealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; | |
| 
| 
contains a toll-free telephone number for inquiries on disciplinary actions; | |
| 
| 
| |
| 
| 
defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and | |
| 
| 
contains such other information and is in such form, including language, type, size and format, as the Commission shall requireby rule or regulation. | |
The broker-dealer also must provide, prior to effecting
any transaction in a penny stock, the customer with:
| 
| 
bid and offer quotations for the penny stock; | |
| 
| 
the compensation of the broker-dealer and its salesperson in the transaction; | |
| 
| 
the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and | |
| 
| 
monthly account statements showing the market value of each penny stock held in the customers account. | |
15
In addition, the penny stock rules that require that
prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the purchasers written acknowledgement of the receipt
of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably
statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.
**Recent Issuances of Unregistered Securities**
2023:
For the year ended December 31, 2023, the Company
issued 1,003,997,711 shares of Company common stock upon the conversion of the convertible promissory note and accrued interest to 1800
Diagonal Lending.
For the year ended December 31, 2023, the Company
issued 1,157,809,793 shares of Company common stock upon the conversion of the convertible promissory note and accrued interest to Stanley
Hills.
For the year ended December 31, 2023, the Company
issued 147,058,824 shares of Company common stock upon the conversion of the convertible promissory note and accrued interest to Glen
Eagles.
For the year ended December 31, 2023, the Company
issued 6,309,235,294 shares of Company common stock upon the conversion of the convertible promissory note and accrued interest to IGOR
Corp.
Of100,000,000Shares 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
$80,000was determined based on the FV of the Companys common stock at the time of issuance.
2024
For the year ended December 31, 2024, the Company
issued 6,559,534,118 shares for the conversion of convertible notes of $555,680 and accrued interest of $1,880.
*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 Tokenize1,000shares of Series I Preferred Stock (the
Series I Stock) with a stated value of $35,000per 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, 2024, there are1,000shares
of Series I Preferred Shares outstanding.
We claimed exemption from registration under the Securities
Act for the sales and issuances of these securities under Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder,
in that such sales and issuances did not involve a public offering. All of the purchasers of unregistered securities for which we relied
on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as defined under the Securities Act. We claimed
such exemption on the basis that (a) the purchasers in each case represented that they intended to acquire the securities for investment
only and not with a view to the distribution thereof and that they either received adequate information about the registrant or had access,
through employment or other relationships, to such information and (b) appropriate legends were affixed to the stock certificates issued
in such transactions.
16
**ITEM 6. RESERVED**
None.
**ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION**
The following discussion should be read in conjunction
with our financial statements and related notes included elsewhere in this report. In addition to historical information, this discussion
includes forward-looking information that involves risks and assumptions, which could cause actual results to differ materially from managements
expectations. See Forward-Looking Statements included in this report.
**Forward-Looking Statements**
This Annual Report on Form 10-K contains forward looking
statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy
of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation
the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion;
(ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated
from time to time in our filings with the Securities and Exchange Commission.
In some cases, you can identify forward-looking statements
by terminology such as may, will, should, could,
expects, plans, intends, anticipates,
believes, estimates, predicts, potential,
or continue or the negative of such terms or other comparable terminology. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.
Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update
any of the forward-looking statements after the date of this Report.
This section of the report should be read together
with Footnotes of the Company audited financials. The audited statements of operations for the years ended December 31, 2024 and 2023
are compared in the sections below.
**General Overview**
GBT Technologies Inc. (the Company,
GBT, or GTCH) was incorporated on July 22, 2009 under the laws of the State of Nevada. The Company via its
50% subsidiary, 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. The Company technologies can be grouping as (i) the provision
of ITconsulting services; and (ii) from the licensing of its technology. (ii) from selling electronic products through e-commerce
platforms. (iv) an advanced RF-based computer vision system, to utilize this platform potential to significantly enhance object detection
and imaging capabilities, using radio waves to create detailed 2D and 3D images .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.
*Recent Developments*
Due to litigation with Discover
Fund, in April 2020, GBT was forced to make the decision of changing the Companys direction by developing a portfolio of intellectual
property within the area of microchips technology and design. The years 2019 and 2020 were compounded with recuring legal issues and COVID-19
restrictions creating extremely difficult times and challenges. GBT focused on its core competency in the area of Research & Development
(R&D) creating an IP portfolio combined of patents, trade secrets and prototypes further defining GBTs new mission.
GBT is now developing IP in areas which will leverage its competencies and experience with the goal of diversifying in various fast-growing
semiconductor industries in todays leading, growing market segments.
17
As described in Part I; Item 1, On July 20, 2023,
the Company through 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).Via vis this 2023 Tokenize
Agreement, GBT will focus on expanding the families of various patents and concentrating on strategic potential partnerships with the
goal of integrating these technologies into a broad marketplace, one that will potentially diversify the risk within these areas:
| 
| 
1. | 
Build a portfolio pipeline of IP related to microchip technology. | |
| 
| 
2. | 
Seek to actively introduce this new technology to strategic partners, large companies and VCs creating market opportunities. | |
| 
| 
3. | 
Using market diversification to create access to new fields and future growth. | |
*GBT Tokenize Joint Venture -*2023 Tokenize
Agreement
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. On November 2, 2023, the Company received a notice of completion (notice # 508205896) of the recoding of
assignment for its portfolio of intellectual property to GBT Tokenize. The assignment was recorded by the assignment recording branch
of the U.S. Patent and Trademark Office. A complete copy of this assignment is available at the assignment branch room on the reel and
frame number 065420/0434 (in total 16 pages).
Active Investments: 
VisionWave:
Effective as of March 20,
2024, Tokeniz, entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (VisionWave or VW)
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 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 VisionWaves issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWaves issued and outstanding shares of Common Stock are owned by a corporation
controlled by Anat Attia. On June 4, 2024 Tokenize were issued additional 222 shares of VW for consideration of ten million Avant Technologies
Inc. (AVAI) shares. On August 17, 2024 Tokenize, the Company. and Magic entered into
agreements effective March 26, 2024 which assign the shares issued by the Company to Tokenize, 500 to GBT and 500 to Magic. Post this
transaction the Company holds 500 shares and Tokenize hold 222 shares of VW. As of September 30, 2024, the Company holds 26.53%
of VWs issued and outstanding shares. Here is the breakdown of the Company and Tokenize VWs
shareholders:
On March 26, 2024, Bannix
Acquisition Corp., a Delaware corporation (Bannix), entered into a Business Combination Agreement (the Original Agreement),
by and among Bannix, VisionWave Technologies, Inc., a Nevada corporation (Target) and the shareholders of Target.
18
On September 6, 2024, Bannix
entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among Bannix, VisionWave Holdings,
Inc., a Delaware corporation and a direct, wholly owned subsidiary of Bannix (VisionWave Holdings), BNIX Merger Sub, Inc.,
a Delaware corporation and a direct, wholly owned subsidiary of VisionWave Holdings (Parent Merger Sub), BNIX VW Merger
Sub, Inc., a Nevada corporation and direct, wholly owned subsidiary of VisionWave, and Target. The Merger Agreement and the transactions
contemplated thereby were approved by the boards of directors of each of Bannix, VisionWave Holdings, Parent Merger Sub, Company Merger
Sub, and Target, ans subject to Bannix shareholders approval.
MetAlert:
On April 12, 2022, Tokenize, 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 acquired76,923(GBT acquired5,000,000in
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 $8,846as of June 30, 2023 based on level 1 stock price in OTC markets.
The GTX Notes bear 10% interest and 50% of the principal
may be converted into shares of common stock on a one-time basis at a conversion price of $0.01per 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 $90,000which is due and payable together with interest of5% 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
Companys 50% owned subsidiary, assigned $7,500 from the GTX Notes to Stanley Hills, LLC, which in turn converted said $7,500 plus
interest into 812,671 GTX shares. Stanley Hills, LLC credit GBT Tokenize for $146,037 for the transaction, reducing its credit outstanding
balances with the Company and GBT Tokenize Corp.
As of December 31, 2024 and
2023, the notes had an outstanding balance of $46,250and accrued interest of $0, respectively.
As of December 31, 2024 and 2023, the marketable security
had a FV of $2,462 and $1,692, respectively.
Wireless mesh networking:
Wireless mesh networks consist of LAN/MAN/WAN solutions
that are infrastructural-intensive, may rely on regulated frequencies and bandwidth, often have so-called last mile problems
areas where either economics or population density make it too expensive for current solutions to cover, and difficult to manage centrally.
The Companys GopherInsight platform makes it easy to add and manage last mile capacity. The solution is easily integrated into
existing networks. The Companys AI platform is designed for easy integration with, and management of, additional coverage for customer
networks.
Wireless mesh networking marke*ts* - The Company potentially will
target telecommunications providers, corporate entities that run LAN or wide-area networks, universities, and government entities.
Wireless mesh networking markets competition - The
competitors for wireless mesh networking solutions, and AI solutions, are the entities themselves that have their own capability. The
Companys strategy is to integrate and wrap around those solutions to make them more efficient, less costly, and less
infrastructural-intensive, while at the same time solving last mile problems to the end user.
19
**Risks and Uncertainties**
Management is currently evaluating
the impact of the COVID-19 pandemic on the Company and has concluded that while it is reasonably possible that the virus could have a
negative effect on the Companys financial position, results of its operations, and/or search for a target company, the specific
impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In February 2022, the Russian
Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including
the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and
related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Companys
financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.
In October 2023, the Hamas
Terror Organization attacked the Southern part of Israel, which in turn, commenced a military action with Gaza Strip. As a result, these
actions, have created and are expected to create global economic consequences. The specific impact on the Companys financial condition,
results of operations, and cash flows is also not determinable as of the date of these financial statements.
**Consideration of Inflation
Reduction Act Excise Tax**
On August 16, 2022, the Inflation
Reduction Act of 2022 (the IR Act) was signed into federal law. The IR Act provides for, among other things, a new U.S.
federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries
of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation
itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value
of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations
are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the
same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the Treasury)
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
**Investment Company Act
1940**
Under the current rules and
regulations of the SEC we are not deemed an investment company for purposes of the Investment Company Act; however, on March 30, 2022,
the SEC proposed new rules (the Proposed Rules) relating, among other matters, to the circumstances in which SPACs such
as the Company could potentially be subject to the Investment Company Act and the regulations thereunder. The Proposed Rules provide a
safe harbor for companies from the definition of investment company under Section 3(a)(1)(A) of the Investment Company Act,
provided that a company satisfies certain criteria.
The Investment Company Act
defines an investment company as any issuer which (i) is or holds itself out as being engaged primarily, or proposes to engage primarily,
in the business of investing, reinvesting, or trading in securities; (ii) is engaged or proposes to engage in the business of issuing
face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or (iii)
is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes
to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of Government securities and
cash items) on an unconsolidated basis.
20
**Results of Operations:**
**Years ended December 31, 2024 and 2023**
A comparison of the statements of operations for the years ended December
31, 2024 and 2023 is as follows:
| 
| 
| 
Years Ended December 31, | 
| 
Change | |
| 
| 
| 
2024 | 
| 
2023 | 
| 
$ | 
| 
% | |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
General and administrative expenses | 
| 
$ | 
76,281 | 
| 
| 
$ | 
507,261 | 
| 
| 
| 
(430,980 | 
) | 
| 
| 
(85 | 
%) | |
| 
Marketing expenses | 
| 
| 
192,912 | 
| 
| 
| 
237,428 | 
| 
| 
| 
(44,516 | 
) | 
| 
| 
(19 | 
%) | |
| 
Professional expenses | 
| 
| 
375,504 | 
| 
| 
| 
995,532 | 
| 
| 
| 
(620,028 | 
) | 
| 
| 
(62 | 
%) | |
| 
Income (loss) from operations | 
| 
| 
(644,697 | 
) | 
| 
| 
(1,740,221 | 
) | 
| 
| 
(1,095,524 | 
) | 
| 
| 
(63 | 
%) | |
| 
Other income (expense), net | 
| 
| 
21,320,142 | 
| 
| 
| 
(15,993,020 | 
) | 
| 
| 
37,313,162 | 
| 
| 
| 
233 | 
% | |
| 
Income (loss) before provision for income taxes | 
| 
| 
20,675,445 | 
| 
| 
| 
(17,733,241 | 
) | 
| 
| 
38,408,686 | 
| 
| 
| 
217 | 
% | |
| 
Provision for income taxes | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Income (loss) from continued operations | 
| 
| 
20,675,445 | 
| 
| 
| 
(17,733,241 | 
) | 
| 
| 
38,447,071 | 
| 
| 
| 
217 | 
% | |
| 
Discontinued operations | 
| 
| 
| 
| 
| 
| 
(38,385 | 
) | 
| 
| 
38,385 | 
| 
| 
| 
100 | 
% | |
| 
Net income (loss) | 
| 
$ | 
20,675,445 | 
| 
| 
$ | 
(17,771,626 | 
) | 
| 
$ | 
38,481,934 | 
| 
| 
| 
216 | 
% | |
The Company have not generated any revenues for the
years ended December 31, 2024 and 2023.
Operating expenses for the year ended December 31,
2024 were $644,697, compared to $1,740,221 for the same period in 2023. The decrease of $1,095,524 or 63% was principally due to a decrease
in marketing expenses of $44,516, decrease in general and administrative expenses of $430,980, and decrease in professional expenses of
$620,028 for the year ended December 31, 2024 due to the cash flow issues.
Other income for the year ended December 31, 2024
was $21,320,142, an increase of $37,313,162 or 217% from $15,993,020 expenses for the same period in 2023. The increase in other income
was principally due to i) a gain from debt extinguishment of $7,800,449; ii) gain from change in FV of derivative liability by $14,035,071;
iii) reduction in interest expense and financing costs of $457,436.
Net income for the year ended December 31, 2024 was
$20,675,445 compared to the net loss of $17,771,626 for the same period in 2023 due to the factors described above.
**Liquidity and Capital Resources**
*Going Concern*
The accompanying cash flow statements have been prepared
assuming the Companywill continue as a going concern.The Companyhas an accumulated deficit of $295,278,233 and has a
working capital deficit of $9,940,379 as of December 31, 2024, which raises substantial doubt about its ability to continue as a going
concern.
The Companys 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 aboutthe Companys 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.
Our cash was $125 and $529 at December 31, 2024 and
2023, respectively. Cash provided by operating activities during the year ended December 31, 2024 was $27,142, compared to $51,341 used
in operating activities during the same period in 2023. The amount provided by operating activities for the year ended December 31 2024
was primarily related to a net income of $20,675,445 and offset by amortization of debt discount of $46,003, excess of debt discount and
financing costs of $7,084, change in FV of derivative liability of $14,035,071, change in FV of market equity security of $10,000, gain
on debt extinguishment of $7,800,449, and net working capital increase of $1,087,393. Our working capital position changed by going from
a working capital deficit of $31,781,634 at December 31, 2023 to a working capital deficit of $9,940,379 at December 31, 2024.
21
The amount used in operating activities for the year
ended December 31, 2023 was primarily related to a net loss of $17,771,626 offset by amortization of debt discount of $322,933, excess
of debt discount and financing costs of $1,462,446, change in FV of derivative liability of $13,759,482, gain on debt extinguishment of
$315,297, loss on loss of control of $38,385, shares issued for services of 80,000, change in fair value of market equity security of
$10,992, and net working capital deficit increase of $13,259,588.
Cash flows used in investing activities were $0 during
the years ended December 31, 2024 and 2023.
Cash used in financing activities for the year ended
December 31, 2024 was $27,546, compared to $38,182 provided by the same period in 2023. The decrease is due to the repayment of notes
payable of $27,546.
We obtained a net income of $20,675,445 for the year
ended December 31, 2024. In addition, we had a working capital deficit of $9,940,379 and an accumulated deficit of $295,278,233 at December
31, 2024.
**Off-Balance Sheet Arrangements**
The Company does not have any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on the Companys financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
**Critical Accounting Policies and Use of Estimates**
Our Managements Discussion and Analysis of
Financial Condition and Results of Operations is based upon our financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America (U.S. GAAP). The preparation of our financial statements in
accordance with U.S. GAAP requires us to make certain estimates, judgments and assumptions that affect the reported amount of assets and
liabilities as of the date of the financial statements, the reported amounts and classification of revenues and expenses during the periods
presented, and the disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on an ongoing basis and
material changes in these estimates or assumptions could occur in the future. Changes in estimates are recorded on the period in which
they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under
the circumstances and at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily-apparent from other sources. Actual results may differ materially from these estimates if past experience or other
assumptions do not turn out to be substantially accurate.
We believe that the accounting policies described
below are critical to understanding our business, results of operations, and financial condition because they involve significant judgments
and estimates used in the preparation of our financial statements. An accounting is deemed to be critical if it requires a judgment or
accounting estimate to be made based on assumptions about matters that are highly uncertain, and if different estimates that could have
been used, or if changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our financial
statements. Other significant accounting policies, primarily those with lower levels of uncertainty than those discussed below, are also
critical to understanding our financial statements. The notes to our financial statements contain additional information related to our
accounting policies and should be read in conjunction with this discussion.
*Presentation of Financial Statements*
The accompanying financial statements have been prepared
in accordance with U.S. GAAP.
*Stock Split*
On October 26, 2021, the Company effectuated a1
for 50reverse stock split.The share and per share information has been retroactively restated to reflect this reverse stock
split.
22
*Marketable Equity Securities*
The Company accounts for marketable equity securities
in accordance with ASC Topic 321, *Investments equity securities.*Marketable equity securities are reported at 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 twelve 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.
*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 Companys 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 Companys 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 is recognized under*Topic 606*as
follows:
| 
| 
| 
executed contracts with the Companys 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 Companys revenue
category, is summarized below:
| 
| 
| 
ITconsulting services revenue is recorded on a monthly basis as services are provided; and | |
| 
| 
| 
License fees and Royalties revenue is recognized based on the terms of the agreement with its customer. | |
*E-Commerce sales* (relate to interim
reporting as this segment was discontinued)
| 
| 
| 
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. | |
23
*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, 2023, the Companys 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
Companys stock price at the date of conversion.
*Fair Value of Financial Instruments*
For certain of the Companys 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 us one or more unobservable inputs which are significant to the FV measurement. | |
The Company analyzes all financial instruments with
features of both liabilities and equity under FASB ASC Topic 480, *Distinguishing Liabilities from Equity*, and FASB ASC Topic 815,
*Derivatives and Hedging*.
For certain financial instruments, the carrying amounts
reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as a financial instrument,
and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected
realization and their current market rate of interest.
The Company uses Level 2 inputs for its valuation
methodology for derivative liabilities as their FV were determined by using the Black-Scholes-Merton pricing model based on various assumptions.
The Companys 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.
24
*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 willnot be realized. Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit
only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination
being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized
on examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company has
no material uncertain tax positions for any of the reporting periods presented and its current on all its tax filings federal and state
until 2021 inclusive.
**Dividends**
The Company has not yet adopted any policy regarding
payment of dividends. No cash dividends have been paid or declared since the Date of Inception.
**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK**
As a Smaller Reporting Company, the Company is not
required to include the disclosure under this Item.
**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**
The information required by Item 8 appears at Page F-1, which appears after
the signature page to this report.
**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE**
Not applicable.
**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 SECs 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.
25
**MANAGEMENTS 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, 2024. Based on this assessment, management believes that as of December 31, 2024, our ICFR reporting is not
effective based on those criteria.
This annual report does not include an attestation
report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements
report was not subject to attestation by the Companys registered public accounting firm pursuant to rules of the SEC to provide
only managements report in this annual report.
**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 December31, 2024.
**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 companys
executive officers and directors.
26
Current Directors/Officers:
| 
Name | 
| 
Age | 
| 
Title | |
| 
Dr. Danny Rittman | 
| 
63 | 
| 
Chief Technology Officer and Director | |
| 
Mansour Khatib | 
| 
63 | 
| 
Secretary and Director | |
| 
Michael Murray | 
| 
56 | 
| 
Chief Executive Officer, Chief Financial Officer | |
**Michael Murray** - OnNovember 27, 2024, the Company appointedMichael
D. Murrayas its interim Chief Executive Officer. Mr. Murray will continue in his role as the Chief Executive Officer ofTokenize,
where he has served since June 2022. However, he will not serve as a director of the Company at this time. Additionally,Mansour
Khatib, the current Chief Executive Officer of the Company, will transition to the role ofSecretary of the Company.
Mr. Murray brings over two decades of diverse experience
spanning real estate administration, asset management, and corporate governance. Over the past five years, his key roles have included
serving as the Chief Executive Officer of GBT Tokenize Corp. from June 2022 to present GBT Tokenize Corp is engaged in Artificial Intelligence
and blockchain technologies, achieving substantial shareholder value through strategic intellectual property monetization. Mr. Murray
has served as self-employed Executive Director Real Estate and Loan broker from January 2022 to present where he modeled and managed commercial
and residential real estate transactions, specializing in financial engineering and risk analysis which include tasks as a managing director
and general contractor for Residential Homes where he supervised construction and development projects, securing entitlements and navigating
regulatory compliance for large-scale real estate ventures
**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 Companys 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 companys 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 companys technological
direction, research and development of EDA software tools for integrated circuits and back-end design. Dr. Rittman received a BS in Electrical
Engineerig - VLSI Design from the University of Bridgeport, graduating Magna Cum Laude in 1992; a MS in Computer Sciene
- 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 Companys CTO and director.
**Mansour Khatib** was
appointed as the Company Chief Executive and Financial Officer on April 13, 2020, the Companys 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 Companys
secretary and director.
**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.
27
**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. Rittmans
employment agreement is terminated. On August 1, 2021, the Company and Danny Rittman, Chief Technology Officer and a Director of the Company,
agreed to amend his employment agreement pursuant to which he will receive salary at the rate of $5,000 per month.
On April 16, 2016 (the Effective Date),
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.
28
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 Companys 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**
Section16(a) of the Exchange Act requires the
Companys executive officers, directors, and persons who beneficially own more than ten percent of a registered class of the Companys
equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of the Companys common
stock. Such officers, directors, and persons are required by SEC regulation to furnish the Company with copies of all Section16(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 December31, 2024 filed with the SEC, all required
Section16 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 December31, 2024.
**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, 2024 and 2023.
**Summary Compensation Table**
| 
| 
| 
| 
| 
| 
| 
None | 
| 
| 
| 
| |
| 
| 
| 
| 
| 
Stock | 
| 
Equity | 
| 
| 
| 
| |
| 
Name and principal | 
| 
| 
| 
Equity | 
| 
Incentive | 
| 
All Other | 
| 
| |
| 
Position | 
| 
Year | 
| 
Awards | 
| 
Salary | 
| 
Compensations | 
| 
Total | |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Danny Rittman | 
| 
| 
2024 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| |
| 
Chief Technology | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Officer and director | 
| 
| 
2023 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Mansour Khatib | 
| 
| 
2024 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| |
| 
Current Secretary (Chief Executive | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Officer) and director | 
| 
| 
2023 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| 
| 
$ | 
| 
| 
| 
$ | 
60,000 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Michael Murray | 
| 
| 
2024 | 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
| 
Chief Executive | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Officer | 
| 
| 
2023 | 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
29
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, 2024, there were 3 non-employee and 2 directors and 2023 there were 2 non-employee and directors.
**Outstanding Equity Awards at Fiscal Year-End**
As of December 31, 2024, 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 January 30, 2025 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 | 
| 
| 
666,001,980 | 
| 
| 
| 
3.96 | 
% | |
| 
| 
(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 January 30, 2025. | |
| 
| 
(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. | |
30
| 
(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 MagicInternationalArgentina F.C, S.L. Controlled by Sergio Fridman, a third party GBT Tokenize Corp hold 16,000,000 shares of the Companys 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 Companys common stock. In addition, GBT Tokenizeis the holder of 1,000shares of Series I Preferred Stock (the Series I Stock) with a stated value of $35,000per 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 of10billion 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 Companys
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 Companys
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 Companys 20-day VWAP. Mr. Davis will provide services in
connection with the development of the business as well as GBT BitSpeeds 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
31
Tokenize Agreement, including the Companys 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 Buyers
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:
Effective as of March 20,
2024, Tokeniz, entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (VisionWave or VW)
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 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 VisionWaves issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWaves issued and outstanding shares of Common Stock are owned by a corporation
controlled by Anat Attia. On June 4, 2024 Tokenize were issued additional 222 shares of VW for consideration of ten million Avant Technologies
Inc. (AVAI) shares. On August 17, 2024 Tokenize, the Company. and Magic entered into
agreements effective March 26, 2024 which assign the shares issued by the Company to Tokenize, 500 to GBT and 500 to Magic. Post this
transaction the Company holds 500 shares and Tokenize hold 222 shares of VW. As of September 30, 2024, the Company holds 26.53%
of VWs issued and outstanding shares. Here is the breakdown of the Company and Tokenize VWs
shareholders:
****
On March 26, 2024, Bannix
Acquisition Corp., a Delaware corporation (Bannix), entered into a Business Combination Agreement (the Original Agreement),
by and among Bannix, VisionWave Technologies, Inc., a Nevada corporation (Target) and the shareholders of Target.
On September 6, 2024, Bannix
entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among Bannix, VisionWave Holdings,
Inc., a Delaware corporation and a direct, wholly owned subsidiary of Bannix (VisionWave Holdings), BNIX Merger Sub, Inc.,
a Delaware corporation and a direct, wholly owned subsidiary of VisionWave Holdings (Parent Merger Sub), BNIX VW Merger
Sub, Inc., a Nevada corporation and direct, wholly owned subsidiary of VisionWave, and Target. The Merger Agreement and the transactions
contemplated thereby were approved by the boards of directors of each of Bannix, VisionWave Holdings, Parent Merger Sub, Company Merger
Sub, and Target, and it subject to Bannix shareholders approval.
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
Seller26,000,000common shares of AVAI (the Shares). The Shares been pledge to a third party as a collateral.
32
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, 2024 and 2023, the Company has
$760,000 and $625,000 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 at10%, is unsecured and was
due onSeptember 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity toDecember 31, 2023. As of December
31, 2024 and 2023, the Company has $140,000 owed to Alpha Eda, respectively.
*Stanley Hills LLC Convertible
Note Payable*
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 Companys common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding
the date of conversion.
On December 31, 2024, the
Company entered into an amendment by and between the Company and Stanley Hills LLC to (1) Extended the maturity date of the note to December
31, 2025; (2) Amended the conversion price to a fixed price of $0.00001 per share; (3) The total outstanding principal balance including
accrued interest shall be adjusted to $600,000; and (4) The maximum number of shares that may be issued under the fixed conversion price
remain subject to the terms set forth in the original note and shall not be adjusted further by this amendment. The maximum number of
shares that can be issued is 60,000,000,000.
As of December 31, 2024 and 2023, the Company has
recorded an outstanding note payable to Stanley amounting to $600,000 and $661,395, respectively.
*Payables to Stanley Hills LLC*
As of December 31, 2024 and 2023, the Company has
recorded a due to related party of $1,264,873 and $901,595, respectively.
**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, 2024.
**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 for the years ended December 31, 2024 and 2023.
33
| 
| 
| 
Years Ended December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Audit Fees | 
| 
$ | 
80,000 | 
| 
| 
$ | 
92,500 | 
| |
*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.
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.
**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) | |
34
| 
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 | |
| 
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) | |
35
| 
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 ThereinDecember 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. | |
| 
(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. | |
36
| 
(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. | |
| 
(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
37
**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: March 31, 2025 | 
By: | 
/s/ Michael Murray | |
| 
| 
Name: | 
Michael Murray | |
| 
| 
Title: | 
Chief Executive and Financial Officer
(Principal Executive, Financial and Accounting Officer)
| |
| 
Dated: March 31, 2025 | 
By: | 
/s/ Mansour Khatib | |
| 
| 
Name: | 
Mansour Khatib | |
| 
| 
Title: | 
Secretary and Director | |
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 | 
| 
Secretary
& Director | 
| 
March
31, 2025 | |
| 
Mansour
Khatib | 
| 
| 
| 
| |
| 
| 
| 
| |
| 
/s/
Dr. Danny Rittman | 
| 
Chief
Technology Officer and Director | 
| 
March
31, 2025 | |
| 
Dr.
Danny Rittman | 
| 
| 
| 
| |
| 
| 
| 
| 
| 
| |
| 
/s/
Michael Murray | 
| 
Chief
Executive Officer & financial Officer (Principal Executive, Financial and Accounting Officer) | 
| 
March
31, 2025 | |
| 
Michael
Murray | 
| 
| 
| 
| |
38
**GBT TECHNOLOGIES INC.
Consolidated Financial Statements**
**Contents**
| 
| 
| 
Page | |
| 
Financial Statements: | 
| 
| |
| 
| 
| 
| |
| 
Report of Independent Registered Public Accounting Firm | 
| 
F-2 | |
| 
| 
| 
| |
| 
Consolidated Balance Sheets as of December 31, 2024 and 2023 | 
| 
F-4 | |
| 
| 
| 
| |
| 
Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 | 
| 
F-5 | |
| 
| 
| 
| |
| 
Consolidated Statement of Stockholders Deficit for the Years Ended December 31, 2024 and 2023 | 
| 
F-6 | |
| 
| 
| 
| |
| 
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 | 
| 
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.
8557 West Knoll Dr.
West Hollywood, CA 90069
****
**Opinion on the Financial Statements**
We have audited the accompanying consolidated balance
sheet of GBT Technologies, Inc. the "Company") as of December 31, 2024 and 2023, the related statement of operations, stockholders'
equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2024 and 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States.
**Substantial Doubt about the Companys 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
a deficit of $ 295,278,233 as of December 31, 2024 and has incurred recurring operating losses. These conditions raise substantial doubt
about its ability to continue as a going concern. Managements 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.
****
**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.
F-2
As part of our audit of the
financial statements, we identified the companys litigation and derivative liability as Critical Audit Matters due to their materiality,
complexity, and the significant judgment required in assessing their financial impact.
**1. Litigation Assessment :**The company has
been involved in significant litigation related to debt settlement. The company's legal liabilities, previously recorded at $4,090,057,
along with accrued interest $1,665,342, were written off and recognized as gain on debt extinguishment income in the year ended December
31, 2024.
****
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 Companys 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 10.
Accrued settlements were referenced in Note 10 of
the financial statements. Following management assessment, the recorded liability was removed and treated as gain on extinguishment of
debt.
Given the significant judgment and estimation uncertainty
involved in determining the appropriate accounting treatment for litigation write-offs, we have determined this matter to be a Critical
Audit Matter requiring enhanced auditor attention and professional judgment.
**2. Derivative Liabilities
:** As part of our audit, we identified the valuation of derivative liabilities as a Critical Audit Matter due to the complexity
of fair value measurement, the reliance on significant assumptions, and the potential impact on the companys financial statements
and disclosures.
Convertible notes payable discussed in Note 8 have
a conversion price that can be adjusted based on the Companys 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 11. 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. The significant decrease in the fair value of derivative liability was mainly due to all convertible
notes were modified to a fixed price on December 31, 2024
Given the significant estimation uncertainty and the
potential material impact of derivative liabilities on the companys financial statements, we placed a heightened focus on ensuring
the accuracy, completeness, and reasonableness of these financial statement elements.
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
March 31, 2025
5081
Served as Auditor since 2022
F-3
**GBT TECHNOLOGIES INC.**
**CONSOLIDATED BALANCE SHEETS**
****
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
ASSETS | 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
| 
| 
(Audited) | 
| 
(Audited) | |
| 
Current Assets: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Cash | 
| 
$ | 
125 | 
| 
| 
$ | 
529 | 
| |
| 
Note receivable | 
| 
| 
| 
| 
| 
| 
46,250 | 
| |
| 
Marketable securities | 
| 
| 
8,462 | 
| 
| 
| 
31,206 | 
| |
| 
Total current assets | 
| 
| 
8,587 | 
| 
| 
| 
77,985 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Total assets | 
| 
$ | 
8,587 | 
| 
| 
$ | 
77,985 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
LIABILITIES AND STOCKHOLDERS DEFICIT | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Current Liabilities: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Accounts payable and accrued expenses | 
| 
$ | 
973,706 | 
| 
| 
$ | 
5,372,846 | 
| |
| 
Accounts payable Related Party | 
| 
| 
3,126,694 | 
| 
| 
| 
1,767,710 | 
| |
| 
Accrued settlement | 
| 
| 
| 
| 
| 
| 
4,090,057 | 
| |
| 
Convertible notes payable, current, net discount of $0 and $66,512 | 
| 
| 
5,110,911 | 
| 
| 
| 
5,665,017 | 
| |
| 
Convertible notes payable, related party, net of discount of $0 and $0 | 
| 
| 
491,395 | 
| 
| 
| 
661,395 | 
| |
| 
Notes payable, current, net of original issue discount of $0 and $4,077 | 
| 
| 
106,260 | 
| 
| 
| 
46,532 | 
| |
| 
Notes payable, related party | 
| 
| 
140,000 | 
| 
| 
| 
140,000 | 
| |
| 
Derivative liability | 
| 
| 
| 
| 
| 
| 
14,116,062 | 
| |
| 
Total current liabilities | 
| 
| 
9,948,966 | 
| 
| 
| 
31,859,619 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Non-Current Liabilities: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Note payable, noncurrent, net of discount of $0 and $0 | 
| 
| 
243,740 | 
| 
| 
| 
328,748 | 
| |
| 
Total noncurrent liabilities | 
| 
| 
243,740 | 
| 
| 
| 
328,748 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Total liabilities | 
| 
| 
10,192,706 | 
| 
| 
| 
32,188,367 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
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, 2024 and 2023, respectively | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Series C Preferred stock, $0.00001 par value; 10,000 shares authorized; 700 and 700 shares issued and outstanding at December 31, 2024 and 2023, respectively | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Series D Preferred stock, $0.00001 par value; 100,000 shares authorized; 0 and 0 shares issued and outstanding at December 31, 2024 and 2023, respectively | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Series G Preferred stock, $0.00001 par value; 2,000,000 shares authorized; 0 and 0 shares issued and outstanding at December 31, 2024 and 2023, 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, 2024 and 2023, 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, 2024 and 2023, respectively | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Common stock, $0.00001 par value; 30,000,000,000 shares authorized; 16,813,229,180 and 10,253,695,062 shares issued and outstanding at December 31, 2024 and 2023, respectively | 
| 
| 
168,133 | 
| 
| 
| 
102,538 | 
| |
| 
Treasury stock, at cost; 8 and 1,040 shares at December 31, 2024 and 2023, respectively | 
| 
| 
(11,059 | 
) | 
| 
| 
(11,059 | 
) | |
| 
Stock loan receivable | 
| 
| 
(7,610,147 | 
) | 
| 
| 
(7,610,147 | 
) | |
| 
Shares to be cancelled | 
| 
| 
(632,000 | 
) | 
| 
| 
(632,000 | 
| |
| 
Additional paid in capital | 
| 
| 
294,255,052 | 
| 
| 
| 
293,069,829 | 
| |
| 
Accumulated deficit | 
| 
| 
(295,278,233 | 
) | 
| 
| 
(315,993,294 | 
) | |
| 
Total stockholders deficit | 
| 
| 
(9,108,254 | 
) | 
| 
| 
(31,074,133 | 
) | |
| 
Non-Controlling Interest | 
| 
| 
(1,075,865 | 
) | 
| 
| 
(1,036,249 | 
) | |
| 
Total stockholders deficit attributable to GBT Technologies, Inc. | 
| 
| 
(10,184,119 | 
) | 
| 
| 
(32,110,382 | 
) | |
| 
Total liabilities and stockholders deficit | 
| 
$ | 
8,587 | 
| 
| 
$ | 
77,985 | 
| |
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, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Sales | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
| 
Total sales | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Cost of Goods Sold | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Gross Profit | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Operating expenses: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
General and administrative | 
| 
| 
76,281 | 
| 
| 
| 
507,261 | 
| |
| 
Marketing | 
| 
| 
192,912 | 
| 
| 
| 
237,428 | 
| |
| 
Professional | 
| 
| 
375,504 | 
| 
| 
| 
995,532 | 
| |
| 
Total operating expenses | 
| 
| 
644,697 | 
| 
| 
| 
1,740,221 | 
| |
| 
Loss from operations | 
| 
| 
(644,697 | 
) | 
| 
| 
(1,740,221 | 
) | |
| 
Other income (expense): | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Amortization of debt discount | 
| 
| 
(46,003 | 
) | 
| 
| 
(322,933 | 
) | |
| 
Change in fair value of derivative liability | 
| 
| 
14,035,071 | 
| 
| 
| 
(13,759,482 | 
) | |
| 
Interest expense and financing costs | 
| 
| 
(457,436 | 
) | 
| 
| 
(2,581,658 | 
) | |
| 
Gain (loss) on equity method investment | 
| 
| 
(10,000 | 
) | 
| 
| 
| 
| |
| 
Gain on debt extinguishment | 
| 
| 
7,800,449 | 
| 
| 
| 
315,297 | 
| |
| 
Change in fair value of marketable securities | 
| 
| 
(1,939 | 
) | 
| 
| 
(10,992 | 
) | |
| 
Gain on loss of control | 
| 
| 
| 
| 
| 
| 
79,354 | 
| |
| 
Other income | 
| 
| 
| 
| 
| 
| 
287,394 | 
| |
| 
Total other income (expense) | 
| 
| 
21,320,142 | 
| 
| 
| 
(15,993,020 | 
) | |
| 
Profit (Loss) before income taxes | 
| 
| 
20,675,445 | 
| 
| 
| 
(17,733,241 | 
) | |
| 
Income tax expense | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Profit (Loss) from continuing operations | 
| 
| 
20,675,445 | 
| 
| 
| 
(17,733,241 | 
) | |
| 
Discontinued operations | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Gain/(Loss) from discontinued operations | 
| 
| 
| 
| 
| 
| 
(38,385 | 
) | |
| 
Net Income (Loss) | 
| 
$ | 
20,675,445 | 
| 
| 
$ | 
(17,771,626 | 
) | |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Less: net loss attributable to the noncontrolling interest | 
| 
| 
(39,616 | 
) | 
| 
| 
(11,161 | 
) | |
| 
Net loss attributable to GTB Technologies Inc. | 
| 
$ | 
20,715,061 | 
| 
| 
$ | 
(17,760,465 | 
) | |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Weighted average common shares outstanding: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Basic | 
| 
| 
16,416,809,970 | 
| 
| 
| 
4,462,434,507 | 
| |
| 
Diluted | 
| 
| 
589,342,635,993 | 
| 
| 
| 
27,786,282,982 | 
| |
| 
Net Income (Loss) per share (basic and diluted): | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Basic | 
| 
$ | 
0.00 | 
| 
| 
$ | 
(0.00 | 
) | |
| 
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, 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 | 
) | |
| 
Common stock issued for conversions | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
6,559,534,118 | 
| 
| 
| 
65,595 | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
491,965 | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
557,560 | 
| |
| 
Fair value of derivative liability due to conversions | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
694,918 | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
694,918 | 
| |
| 
Tokenize investment reclassification | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
(1,660 | 
) | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
(1,660 | 
) | |
| 
Net income | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
20,715,061 | 
| 
| 
| 
(39,616 | 
) | 
| 
| 
20,675,445 | 
| |
| 
Balance, December 31, 2024 | 
| 
| 
45,000 | 
| 
| 
$ | 
| 
| 
| 
| 
700 | 
| 
| 
$ | 
| 
| 
| 
| 
20,000 | 
| 
| 
$ | 
| 
| 
| 
| 
1,000 | 
| 
| 
$ | 
| 
| 
| 
| 
16,813,229,180 | 
| 
| 
$ | 
168,133 | 
| 
| 
| 
8 | 
| 
| 
$ | 
(11,059 | 
) | 
| 
| 
1,032 | 
| 
| 
$ | 
(632,000 | 
) | 
| 
$ | 
(7,610,147 | 
) | 
| 
$ | 
294,255,052 | 
| 
| 
$ | 
(295,278,233 | 
) | 
| 
$ | 
(1,075,865 | 
) | 
| 
$ | 
(10,184,119 | 
) | |
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, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Cash Flows From Operating Activities: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Net income (loss) | 
| 
$ | 
20,675,445 | 
| 
| 
$ | 
(17,771,626 | 
) | |
| 
Adjustments to reconcile net loss to net cash used in operating activities: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Amortization of debt discount | 
| 
| 
46,003 | 
| 
| 
| 
322,933 | 
| |
| 
Change in fair value of derivative liability | 
| 
| 
(14,035,071 | 
) | 
| 
| 
13,759,482 | 
| |
| 
Excess of debt discount and financing costs | 
| 
| 
| 
| 
| 
| 
1,462,446 | 
| |
| 
Shares issued for services | 
| 
| 
| 
| 
| 
| 
80,000 | 
| |
| 
Change in fair value of market equity security | 
| 
| 
1,084 | 
| 
| 
| 
10,992 | 
| |
| 
Gain on debt extinguishment | 
| 
| 
(7,800,449 | 
) | 
| 
| 
(315,297 | 
) | |
| 
Loss on equity method investment | 
| 
| 
10,000 | 
| 
| 
| 
| 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Changes in operating assets and liabilities: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Other receivable | 
| 
| 
46,250 | 
| 
| 
| 
152,225 | 
| |
| 
Prepaid Expense | 
| 
| 
| 
| 
| 
| 
12,500 | 
| |
| 
Unearned revenue | 
| 
| 
| 
| 
| 
| 
(74,921 | 
) | |
| 
Contract liabilities | 
| 
| 
| 
| 
| 
| 
(41,444 | 
) | |
| 
Accounts payable and accrued expenses | 
| 
| 
(224,524 | 
) | 
| 
| 
2,123,460 | 
| |
| 
Accounts payable and accrued expenses - RP | 
| 
| 
1,308,404 | 
| 
| 
| 
227,909 | 
| |
| 
Net cash used in operating activities | 
| 
| 
27,142 | 
| 
| 
| 
(51,341 | 
) | |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Cash Flows From Financing Activities: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Issuance of convertible notes | 
| 
| 
| 
| 
| 
| 
92,150 | 
| |
| 
Repayments to related party | 
| 
| 
| 
| 
| 
| 
(27,375 | 
) | |
| 
Repayment of Convertible note | 
| 
| 
| 
| 
| 
| 
(39,043 | 
) | |
| 
Repayment of note payable | 
| 
| 
(27,546 | 
) | 
| 
| 
(79,070 | 
) | |
| 
Issuance of notes payable | 
| 
| 
| 
| 
| 
| 
92,150 | 
| |
| 
Net cash provided by financing activities | 
| 
| 
(27,142 | 
) | 
| 
| 
38,812 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Net increase in cash | 
| 
| 
(404 | 
) | 
| 
| 
(12,529 | 
) | |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Cash, beginning of period | 
| 
| 
529 | 
| 
| 
| 
13,058 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Cash, end of period | 
| 
$ | 
125 | 
| 
| 
$ | 
529 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Cash paid for: | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Interest | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
| 
Income taxes | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Supplemental non-cash investing and financing activities | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Debt discount related to convertible debt | 
| 
$ | 
694,919 | 
| 
| 
$ | 
35,576 | 
| |
| 
Reduction in derivative liability due to conversion | 
| 
$ | 
557,560 | 
| 
| 
$ | 
2,727,481 | 
| |
| 
Shares issued for conversion of convertible debt | 
| 
$ | 
| 
| 
| 
$ | 
1,684,671 | 
| |
| 
Tokenize investment reclassification | 
| 
$ | 
1,660 | 
| 
| 
$ | 
| 
| |
The accompanying footnotes are an integral part of
these consolidated financial statements.
F-7
**GBT TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023**
**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. The Company derived revenues from (i) the provision of ITconsulting 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 or 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.
Effective as of March 20,
2024, Tokeniz, entered into a Patent Purchase Agreement with VisionWave Technologies Inc. (VisionWave or VW)
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 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 VisionWaves issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWaves issued and outstanding shares of Common Stock are owned by a corporation
controlled by Anat Attia. On June 4, 2024 Tokenize were issued additional 222 shares of VW for consideration of ten million Avant Technologies
Inc. (AVAI) shares. On August 17, 2024 Tokenize, the Company. and Magic entered into
agreements effective March 26, 2024 which assign the shares issued by the Company to Tokenize, 500 to GBT and 500 to Magic. Post this
transaction the Company holds 500 shares and Tokenize hold 222 shares of VW. As of December 31, 2024, the Company holds 26.53%
of VWs issued and outstanding shares. Here is the breakdown of the Company and Tokenize VWs
shareholders:
****
| 
Schedule of the company shareholder shares | | 
| | | | 
| | | |
| 
Shareholders Name | | 
No. Of Shares | | 
% of Shares Held | |
| 
GBT Tokenize Corp. | | 
| 222 | | | 
| 8.16 | % | |
| 
GBT Technologies, Inc. | | 
| 500 | | | 
| 18.37 | % | |
On March 26, 2024, Bannix
Acquisition Corp., a Delaware corporation (Bannix), entered into a Business Combination Agreement (the Original Agreement),
by and among Bannix, VisionWave Technologies, Inc., a Nevada corporation (Target) and the shareholders of Target.
F-8
On September 6, 2024, Bannix
entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among Bannix, VisionWave Holdings,
Inc., a Delaware corporation and a direct, wholly owned subsidiary of Bannix (VisionWave Holdings), BNIX Merger Sub, Inc.,
a Delaware corporation and a direct, wholly owned subsidiary of VisionWave Holdings (Parent Merger Sub), BNIX VW Merger
Sub, Inc., a Nevada corporation and direct, wholly owned subsidiary of VisionWave, and Target. The Merger Agreement and the transactions
contemplated thereby were approved by the boards of directors of each of Bannix, VisionWave Holdings, Parent Merger Sub, Company Merger
Sub, and Target.
**The Mergers**
Pursuant to and in accordance
with the terms set forth in the Merger Agreement, (a)Parent Merger Sub will merge with and into Bannix, with Bannix continuing as
the surviving entity (the Parent Merger), as a result of which, (i)Bannix will become a wholly owned subsidiary of
VisionWave Holdings, and (ii)each issued and outstanding security of Bannix immediately prior to the effective time of the Parent
Merger (the Parent Merger Effective Time) (other than shares of Bannix Common Stock that have been redeemed or are owned
by Bannix or any of its direct or indirect subsidiaries as treasury shares and any Dissenting Parent Shares) shall no longer be outstanding
and shall automatically be cancelled in exchange for the issuance to the holder thereof of a substantially equivalent security of VisionWave
Holdings (other than the Parent Rights, which shall be automatically converted into shares of VisionWave Holdings), and, (b)immediately
following the consummation of the Parent Merger but on the same day, Company Merger Sub will merge with and into Target, with Target continuing
as the surviving entity (the Company Merger and, together with the Parent Merger, the Mergers), as a result
of which, (i)Target will become a wholly owned subsidiary of VisionWave Holdings, and (ii)each issued and outstanding security
of Target immediately prior to the effective time of the Company Merger (the Company Merger Effective Time) (other than
any Cancelled Shares or Dissenting Shares) shall no longer be outstanding and shall automatically be cancelled in exchange for the issuance
to the holder thereof of a substantially equivalent security of VisionWave Holdings. The Mergers and the other transactions contemplated
by the Merger Agreement are hereinafter referred to as the Business Combination.
Subject to a six month extension
the termination date by which the Company must consummate a business combination from September 14, 2024, the date that is 36 months from
the closing date of the Companys initial public offering of units, to March 14, 2025, the Business Combination is expected to close
in the first quarter of 2025, subject to customary closing conditions, including the satisfaction of the minimum available cash condition,
the receipt of certain governmental approvals and the required approval by the stockholders of Bannix and Target.
**Consideration**
Pursuant to and in accordance
with the terms set forth in the Merger Agreement, at the Parent Merger Effective Time, (a) each share of Bannix common stock, par value
$0.001 per share (Bannix Common Stock) outstanding immediately prior to the Parent Merger Effective Time that has not been
redeemed, is not owned by Bannix or any of its direct or indirect subsidiaries as treasury shares and is not a Dissenting Parent Share
will automatically convert into one share of common stock, par value $0.001, of VisionWave Holdings (each, a share of VisionWave
Holdings Common Stock), (b) each Bannix Warrant shall automatically convert into one warrant to purchase shares of VisionWave Holdings
Common Stock (each, a VisionWave Holdings Warrant) on substantially the same terms and conditions; and (c) each Bannix Right
will be automatically converted into the number of shares of VisionWave Holdings Common Stock that would have been received by the holder
of such Bannix Right if it had been converted upon the consummation of a business combination in accordance with Bannixs organizational
documents.
In accordance with the terms
and subject to the conditions of the Merger Agreement, at the Company Merger Effective Time, (a)each share of issued and outstanding
Target common stock, par value $0.01 (Target Common Stock), shall be cancelled and converted into 4,041 shares of VisionWave
Holdings Common Stock.
Subject of closing the transaction,
the Company and Tokenize holdings will exchange their holdings in VW for about 2,917,708 new shares of VisionWave Holdings, represent
about 20.47% of VisionWave Holdings post-closing.
The audited consolidated financial statements 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 Companys
financial position, the results of its operations, and cash flows for the periods presented.
*Basis of Presentation*
The accompanying condensed consolidated financial
statements were prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).
F-9
*Stock Split*
On October 26, 2021, the Company
effectuated a1 for 50reverse 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.
| 
| 
| 
To amend the Companys 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 Companys 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 Companys 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 Companys 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 condensed consolidated financial
statements have been prepared assuming the Companywill continue as a going concern.The Companyhas an accumulated deficit
of $295,278,233 and has a working capital deficit of $9,940,379 as of December 31, 2024, which raises substantial doubt about its ability
to continue as a going concern.
The Companys 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 aboutthe Companys 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 $100,000no
later than March 1, 2022 and issue Mahaser1,000,000shares of the Companys restricted common stock, which were never
issued. Effective July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd.
F-10
The financial results of Mahaser Ltd. are present
as loss from discontinued operations, net of income taxes on our consolidated income through September 30, 2023, when our deconsolidation
occurred.
**Note 4 Summary of Significant Accounting Policies**
*Use of Estimates*
The preparation of condensed consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements 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 Companys 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 condensed
consolidated financial statements include valuation of derivatives and valuation allowance on deferred tax assets.
*Principles of Consolidation*
The accompanying condensed consolidated financial
statements include the accounts of the Company and its subsidiaries; the Companys 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.
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 VIEs 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 Companys share of the economics is significant. The
Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis. In addition, the Companys
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
Companys 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 year ended December 31, 2024.
F-11
*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, 2024 and 2023, the Company did not have any cash equivalents.
*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.
*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, 2024 and 2023, the Companys 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 Companys stock price at the date of conversion.
*Fair Value of Financial Instruments*
For certain of the Companys 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. | |
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.
F-12
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 Companys 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, 2024 and 2023, the Company identified
the following liabilities that are required to be presented on the balance sheet at FV:
| 
Schedule of liabilities
to be presented on balance sheet at fair value | 
| 
| 
| 
| |
| 
| 
| 
Fair Value | 
| 
Fair Value Measurements at | |
| 
| 
| 
As of | 
| 
December 31, 2024 | |
| 
Description | 
| 
December 31, 2024 | 
| 
Using Fair Value Hierarchy | |
| 
| 
| 
| 
| 
Level 1 | 
| 
Level 2 | 
| 
Level 3 | |
| 
Conversion feature on convertible notes | 
| 
$ | 
| 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
| 
| 
| 
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 treasury stock from acquisitions that 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
Companys 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. Mahasers 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.
*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 Companys 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 Companys accompanying condensed consolidated financial statements 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*.
F-13
Revenue from providing ITconsultingservices
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 Companys 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 Companys IT revenue
category, is summarized below:
| 
| 
| 
IT consultingservices - revenue is recorded on a monthly basis as services are provided. | |
These five elements, as applied to each of the Companys
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. | |
*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 $100,000no
later than March 1, 2022 and issue Mahaser1,000,000shares of the Companys restricted common stock, which were never
issued. 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 Companys 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, 2024 and 2023 does not include
the result of operation by Mahaser, as it ceases being VIE.
*Deconsolidation of Variable Interest Entities*
As discussed in Notes 5 and 6 to the consolidated
financial statements, the Company holds an equity investment in VisionWave Technologies Inc. (VW) and accounts for its investment
as a consolidated variable interest entity (VIE) for the period ended June 30, 2024. During the year ended December 31,
2024, the Company ceased their control and deconsolidated the VIE and now accounts its investment under the equity method. To reach its
accounting conclusion, the Company claimed it holds no controlling financial interest in VisionWave.
F-14
*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 willnot 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 2024 inclusive.
*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 potentially- dilutive shares | 
| 
| 
| 
| |
| 
| 
| 
December 31, 2024 | 
| 
December 31, 2023 | |
| 
Series B preferred stock | 
| 
| 
150,000 | 
| 
| 
| 
3,000 | 
| |
| 
Series C preferred stock | 
| 
| 
385,000 | 
| 
| 
| 
7,700 | 
| |
| 
Series H preferred stock | 
| 
| 
1,000,000 | 
| 
| 
| 
20,000 | 
| |
| 
Series I preferred stock | 
| 
| 
10,000,000,000 | 
| 
| 
| 
10,000,000,000 | 
| |
| 
Warrants | 
| 
| 
400 | 
| 
| 
| 
400 | 
| |
| 
Convertible notes | 
| 
| 
579,341,100,593 | 
| 
| 
| 
74,974,606,196 | 
| |
| 
Total | 
| 
| 
589,342,635,993 | 
| 
| 
| 
84,974,637,296 | 
| |
*Managements Evaluation of Subsequent Events*
The Company evaluates events that have occurred after
the balance sheet date of December 31, 2024, through the date which the condensed consolidated financial statements are issued. Based
upon the review, other than described in Note 17 Subsequent Events, the Company did not identify any recognized or non-recognized
subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.
*Recent Accounting Pronouncements*
In December 2023, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements
to Income Tax Disclosures, which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation
and income taxes paid and effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial
statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is
permitted. The Company is currently evaluating the effects of this pronouncement on its financial statements and disclosures.
F-15
Management does not believe that any recently issued,
but not yet effective, accounting standards could have a material effect on the accompanying condensed consolidated financial statements.
As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
**Note 5 Marketable Securities**
| 
Schedule of marketable securities | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, 2024 | 
| 
December 31, 2023 | |
| 
Marketable Securities from AVAI. | 
| 
$ | 
6,000 | 
| 
| 
$ | 
26,000 | 
| |
| 
Marketable Securities from MetAlert Inc. | 
| 
| 
2,462 | 
| 
| 
| 
5,206 | 
| |
| 
Total Fair Value of Marketable Securities | 
| 
$ | 
8,462 | 
| 
| 
$ | 
31,206 | 
| |
Investment Avant Trend Innovation Holdings, Inc- AVAI.
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.
On June 4, 2024 Tokenize entered into Security and
Exchange Agreement together with Subscription Agreement with VisionWave Technologies Inc. (VW), where Tokenize invested
10,000,000 of the Shares for 222 of VW, reducing the holding in the Shares to 16,000,000.
On July 1, 2024, the Company, GBT Tokenize Corp., together with Igor 1
Corp (the Note Holder), entered into an agreement to amend the terms of a previously issued convertible note. The amendment
includes the following changes:
| 
| 
1. | 
Reduction of Outstanding Balance: The outstanding balance of the note as of June 30, 2024, was $7,818,411.03, with a reported balance of $5,320,420. The balance was reduced by $3,000,000 through the transfer of 10,000,000 restricted shares of AVAI, resulting in a new balance of $4,818,411.03. | |
| 
| 
2. | 
Fixed Conversion Price: The conversion feature of the note was amended to establish a fixed conversion price of $0.00001 per share. This conversion price will remain unaffected by any future corporate actions, including reverse splits, dividends, or other similar actions. | |
| 
| 
3. | 
Conversion Limits: The note includes a maximum share issuance of 481,841,103,000 shares under the fixed conversion price and maintains a 4.99% beneficial ownership blocker. | |
F-16
This transaction reducing the holding in the AVAI
Shares to 6,000,000 as of December 31, 2024.
As of December 31, 2024 and 2023, the marketable security
had a fair value of $6,000and $26,000, respectively.
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 acquired76,923(GBT acquired5,000,000in 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 $0.01per 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 $90,000which is due and payable together with interest of5% upon the earlier of September 19, 2023 or when declared
by Tokenize. As of December 31, 2023, the Company wrote off the entire 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.
As of December 31, 2024 and 2023, the marketable security
had a fair value of $2,462 and $3,546, respectively.
**Note 6 Impaired Investment**
Investment in GBT Technologies,
S.A.
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 shareholders representative of GBT-CR (Gonzalez),
entered into and closed an Exchange Agreement (the GBT Exchange Agreement) pursuant to which the parties exchanged certain
securities. In accordance with the Exchange Agreement, AltCorp acquired625,000shares of GBT-CR representing 25% of its issued
and outstanding shares of common stock from Gonzalez for the issuance of20,000shares of Series H Convertible Preferred Stock
of the Company and a Convertible Note in the principal amount of $10,000,000issued by the Company (the Gopher Convertible
Note) as well as the transfer and assignment of a PromissoryNote 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 of6% and is payable at maturity onDecember 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 ($500per share) by the conversion price ($500per 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.
F-17
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. The Company was unable to access or to
contact GBT-CR on an on-going basis, and cannot get information about GBT-CR.
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 Companys 10-day VWAP. Gonzalez will provide services in connection
with the development of the business as well as GBT Tokenizes 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.
F-18
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 Companys technology. As the nature of the platform cannot be restricted only to California, the Companys joint venture
GBT Tokenize Corp. will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to
board approval. A provisional patent application for the term 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).
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.
Effective as of March 20,
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 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 VisionWaves issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWaves issued and outstanding shares of Common Stock are owned by a corporation
controlled by Stanley Hills, LLC. Effective June 4, 2024 Tokenize been issued additional 222 from VisionWave for consideration of 10 million
AVAI shares that been vested under VisionWave. 
Although the investment was impaired, the product
development is still ongoing. The carrying amount of this investment at December 31, 2024 and 2023, was $0, respectively.
F-19
**Note 7 Accounts Payable and Accrued Expenses**
Accounts payable and accrued expenses at December 31, 2024 and 2023 consist
of the following:
| 
Schedule of accounts payable and accrued expenses | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Accounts payable | 
| 
$ | 
686,242 | 
| 
| 
$ | 
773,974 | 
| |
| 
Accrued liabilities | 
| 
| 
| 
| 
| 
| 
499,492 | 
| |
| 
Accrued interest | 
| 
| 
287,464 | 
| 
| 
| 
4,099,380 | 
| |
| 
Total | 
| 
$ | 
973,706 | 
| 
| 
$ | 
5,372,846 | 
| |
Accounts payable consisted of $561,740 aged outstanding
balances due to two vendors over 2 years.
The decrease in accrued liabilities was due to the
reclassification of $499,492 to other payable RP.
Accrued expenses consisted of approximately $4.1million
accrued settlement to one of the previous vendors over 2 years. Refer to note 15 legal proceedings.
| 
Schedule of accounts payable related parties | | 
| | | | 
| | | |
| 
| | 
| | | | 
| | | |
| 
| | 
2024 | | 
2023 | |
| 
Accounts
payable related parties | | 
$ | 1,160,000 | | | 
$ | 770,000 | | |
| 
Accrued
interest - related parties | | 
| 171,408 | | | 
| 96,115 | | |
| 
Other
payables - related parties | | 
| 1,795,286 | | | 
| 901,595 | | |
| 
Total | | 
$ | 3,126,694 | | | 
$ | 1,767,710 | | |
Accounts payable related parties consisted
of approximately $1,085,000 aged outstanding balances due to two major related parties for business purpose over 2 years.
Accrued interest related parties consisted
of unpaid interest from related parties note payable as of December 31, 2024.
Other payables consisted of approximately $1,780,836
advanced payments from one of the related parties for business purposes.
**Note 8 Convertible Notes Payable, Non-related Partied and Related
Party**
Convertible notes payable nonrelated parties at December 31, 2024
and 2023 consist of the following:
| 
Schedule of convertible notes payable non related parties | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Convertible note payable to GBT Technologies S.A | 
| 
$ | 
4,818,411 | 
| 
| 
$ | 
5,175,496 | 
| |
| 
Convertible notes payable to 1800 | 
| 
| 
| 
| 
| 
| 
70,760 | 
| |
| 
Convertible notes payable to Glen | 
| 
| 
292,500 | 
| 
| 
| 
462,500 | 
| |
| 
Total convertible notes payable, non-related parties | 
| 
| 
5,110,911 | 
| 
| 
| 
5,708,756 | 
| |
| 
Unamortized debt discount | 
| 
| 
| 
| 
| 
| 
(43,739 | 
) | |
| 
Convertible notes payable nonrelated parties | 
| 
| 
5,110,911 | 
| 
| 
| 
5,665,017 | 
| |
| 
Less current portion | 
| 
| 
(5,110,911 | 
) | 
| 
| 
(5,665,017 | 
) | |
| 
Convertible notes payable nonrelated parties, long-term portion | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
*$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 onDecember 31, 2021. At the election of the holder, the convertible note can be converted into a maximum
of20,000shares 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 ($500per share). This convertible note may convert
into shares of the Companys common stock at a conversion price equal to 85% of the lowest trading price with a 20-day lookback
immediately preceding the date of conversion and therefore recorded as derivative liability.
F-20
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 $13,777,480during 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 September
30, 2024,IGOR 1 converted $195,500 of the convertible note into 2,300,000,000 shares of the Companys common stock.
On July 1, 2024, the Company
entered into an amendment by and between the Company and IGOR 1 to (1) The Company agrees to transfer 10,000,000 restricted shares of
AVAI to the note holder valued at $3,000,000 on the effective date; (2) Amended the conversion price to a fixed price of $0.00001 per
share; (3) The total outstanding principal balance including accrued interest shall be adjusted to $4,818,411; and (4) The maximum number
of shares that may be issued under the fixed conversion price remain subject to the terms set forth in the original note and shall not
be adjusted further by this amendment. The maximum number of shares that can be issued is 481,841,103,000. The Company recognized gain
on debt modification of $1,638,163 on the effective date.
As of December 31, 2024,
the note had an outstanding balance of $4,818,411 and accrued interest of $145,740.
Paid Off Notes/Converted
Notes
*1800 Diagonal Lending
LLC*
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 Companys common
stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. In addition,
upon the occurrence and during the continuation of an event of default (as defined in the DL Convertible Note), the DL Convertible Note
shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional
amounts as set forth in the DL Convertible Note. In no event shall DL be allowed to effect a conversion if such conversion, along with
all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the
common stock of the Company.
As of December 31, 2023,
the note had an outstanding balance of $20,180 and accrued interest of $6,041.
During the period ended December
31, 2024, 1800 Diagonal converted the remaining $20,180 of the convertible note with all accrued interest into 295,534,118 shares of the
Companys common stock.
As of December 31, 2024,
the note had an outstanding balance of $0 and an interest of $0.
F-21
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 Companys 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 Companys 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.
During the period ended September
30, 2024,Glen Eagle converted $170,000 of the convertible note into 2,000,000,000 shares of the Companys common stock.
On December 31, 2024, the
Company entered into an amendment by and between the Company and Glen Eagle to (1) Amended the conversion price to a fixed price of $0.00001
per share; (2) The total outstanding principal balance including accrued interest shall be adjusted to $349,157; and (4) The maximum number
of shares that may be issued under the fixed conversion price remain subject to the terms set forth in the original note and shall not
be adjusted further by this amendment. The maximum number of share that can be issued is 37,500,000,000. The Company recognized gain on
debt modification of $156,833 on the effective date.
As of December 31, 2024,
the consolidated convertible note had an outstanding balance of $292,500 and an accrued interest of $82,500.
*1800 Diagonal Lending LLC*
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 180th day,
DL may convert the DL Note into shares ofthe Companyscommon stockat 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.
During the year ended December 31, 2024, the note
was fully paid off.
As of December 31, 2024,
the note had an outstanding balance of $0 and an accrued interest of $0.
F-22
**Convertible notes payable** ** Stanley Hills at December
31, 2024 and 2023 consist of the following:**
| 
Schedule of convertible note payable related parties | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Convertible note payable to Stanley Hills | 
| 
| 
491,395 | 
| 
| 
| 
661,395 | 
| |
| 
Unamortized debt discount | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Convertible notes payable, net, related party | 
| 
| 
491,395 | 
| 
| 
| 
661,395 | 
| |
| 
Less current portion | 
| 
| 
(491,395 | 
) | 
| 
| 
(661,395 | 
) | |
| 
Convertible notes payable, net, related party, long-term portion | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
*Stanley Hills LLC*
The Company entered into
a series of loan agreements with Stanley Hills LLC (Stanley) pursuant to which it received more than $1,000,000 in loans
(the Debt) from May 2019 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 $1,214,900may
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 Companys stock price, the beneficial conversion feature associated with this note is accounted
for as a derivative liability. Stanleyhad agreed to restrict its ability to convert the Debt and receive shares of common stock
such that the number of shares of commonstock held by itand itsaffiliates after suchconversionor 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
$1,231,466of its convertible note plus interest into4,420,758shares of the Companys 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 $800,000of 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 $424,731to
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 September 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Companys
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.
During the period ended September
30, 2024,Stanley Hills converted $170,000 of the convertible note into 2,000,000,000 shares of the Companys common stock.
On December 31, 2024, the
Company entered into an amendment by and between the Company and Stanley Hills LLC to (1) Extended the maturity date of the note to December
31, 2025; (2) Amended the conversion price to a fixed price of $0.00001 per share; (3) The total outstanding principal balance including
accrued interest shall be adjusted to $600,000; and (4) The maximum number of shares that may be issued under the fixed conversion price
remain subject to the terms set forth in the original note and shall not be adjusted further by this amendment. The maximum number of
shares that can be issued is 60,000,000,000. The Company recognized gain on debt modification of $250,054 on the effective date.
As of December 31, 2024 and
December 31, 2023 the principal balance of Stanley debt was $491,395 and $661,395 respectively. The unpaid interest of the Stanley debt
at December 31, 2024 and December 31, 2023 was $108,605 and $49,482, respectively.
As of December 31, 2024,
the Company recognized gain on debt modification in total amount of $2,045,049.
F-23
**Discounts on convertible notes**
The Company recognized debt discount of $50,873 and
$268,423 during the years ended December 31, 2024 and 2023, respectively, related to the amortization of the debt discount on convertible
notes. The unamortized debt discount at December 31, 2024 and 2023 was $0 and $46,003, respectively.
**Note 9 Notes Payable, Non-related Parties
and Related Party**
Notes payable, non-related parties at December 31,
2024 and 2023 consist of the following:
| 
Schedule of notes payable, non-related parties | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
1800 note | 
| 
$ | 
| 
| 
| 
$ | 
27,546 | 
| |
| 
SBA loan | 
| 
| 
350,000 | 
| 
| 
| 
350,000 | 
| |
| 
Total notes payable | 
| 
| 
350,000 | 
| 
| 
| 
377,546 | 
| |
| 
Unamortized debt discount | 
| 
| 
| 
| 
| 
| 
(2,265 | 
) | |
| 
Notes payable | 
| 
| 
350,000 | 
| 
| 
| 
375,281 | 
| |
| 
Less current portion | 
| 
| 
(106,260 | 
) | 
| 
| 
(46,533 | 
) | |
| 
Notes payable, long-term portion | 
| 
$ | 
243,740 | 
| 
| 
$ | 
328,748 | 
| |
*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 $1,771after24months
from the Original Note commencing on or aroundJune 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 at3.75% 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 $200,000was received by the Company on October 5, 2021. The current portion of principal balance of the note at December
31, 2024 and December 31, 2023 was $106,260 and $21,252 plus accrued interest of $50,204 and $43,377 , respectively. The noncurrent portion
of principal balance of the note at December 31, 2024 and 2023 was $243,740 and $328,748, respectively. The Company did not make any payment
on the loan and seeking hardship from the SBA for reduce payment which was not yet addressed by the SBA.
*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.
F-24
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 Companys 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.
During the year ended December
31, 2024, the note has been fully repaid.
As of December 31, 2024 and 2023, the note had an outstanding balance of
$0 and $1,486 and a one-time interest of $0 and $7,129, respectively.
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 resulting in a total payback to DL of $52,872. The first payment is due June 15, 2023 with nine
subsequent payments each month thereafter. The Company shall have a five-day grace period with respect to each payment. The Company has
right to accelerate payments or prepay in full at any time with no prepayment penalty. This DL Note shall not be secured by any collateral
or any assets of the Company.
The outstanding principal amount of the DL Note may
not be converted into the Company common shares except in the event of default. In the event of default on the DL Note, DL may convert
the DL Note into shares ofthe Companyscommon stockat 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.
During the year ended December
31, 2024, the note has been fully repaid.
As of December 31, 2024 and
2023, the note had an outstanding balance of $0 and $26,059 and a one-time interest of $0 and $5,665, respectively.
**Notes payable, related party at December 31, 2024
and 2023 consist of the following:**
| 
Schedule of notes payable, related parties | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
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 | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
F-25
*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 at10%, is unsecured and was
due onSeptember 30, 2021. On December 31, 2024 Alpha and the Company extended the note maturity toDecember 31, 2025. The balance
of the note at December 31, 2024 and 2023 was $140,000and $140,000 plus accrued interest of $62,803 and $46,633, respectively.
**Note 10 Accrued Settlement**
| 
Schedule of accrued settlement | 
| 
| 
| 
| |
| 
| 
| 
December 31, 2024 | 
| 
December 31, 2023 | |
| 
Accrued Settlement Payable | 
| 
| 
| 
| 
| 
| 
4,090,057 | 
| |
| 
Total | 
| 
$ | 
| 
| 
| 
$ | 
4,090,057 | 
| |
In connection with a legal matter filed by the Investor
of the $8,340,000Senior 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 attorneys fees. Consequently, the arbitrator awarded Investor an
award of $4,034,444plus interest of7.25% 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 $1,375,556in
2019 as the difference between the carrying amount of the debt and the amount awarded by the arbitrator. The Company recorded accrued
settlement of $0 at December 31, 2024 and 4,090,057 at December 31, 2023, respectively. As part of its financial review for the fiscal
year ended December 31, 2024, the Board of Directors of the Company conducted an assessment of the Companys Accrued Settlement
Liability, a balance originally recorded in 2020 in connection with the arbitration award issued in favor of Discover Growth Fund, LLC
(DGF). On February 28, 2020, DGF conducted a foreclosure sale of the Companys assets. However, the Company was not
provided with an accounting of the sale or details of the proceeds received by DGF. The Company has maintained its position that the foreclosure
sale satisfied the arbitration award in full. Additionally, DGF has not taken any action to enforce collection of the liability since
the arbitration award was confirmed by the U.S. District Court for the Virgin Islands on January 25, 2024.
Accounting Treatment
In accordance with ASC 405-20-40-1 (Liabilities -
Extinguishment of Liabilities), a liability should be derecognized when it has been extinguished. Extinguishment occurs when the debtor
is legally released from the obligation or when the obligation is otherwise settled. Given that:
The Companys assets were foreclosed
and sold by DGF in 2020;
No further collection efforts have been initiated
by DGF;
The Company maintains that the foreclosure
sale satisfied the judgment;
The Company does not intend to make any payment
toward the liability; and
Carrying the liability indefinitely would misrepresent
the Companys financial position, inflating its balance sheet without a true expectation of payment;
The Board of Directors approved the write-off of the
remaining Accrued Settlement Liability in the amount of $5,755,400, recognizing it as a gain in the Companys financial statements
for the year ended December 31, 2024.
F-26
Financial Statement Impact
As a result of this decision, the Company recognized
a $5,755,400 gain on extinguishment of liability, which is included in other income in the consolidated statement of operations. The corresponding
reduction in liabilities is reflected in the balance sheet under Accrued Settlement Liabilities, reducing the Companys total liabilities.
Going Concern Consideration
The Company continues to operate under going concern
uncertainty. This write-off does not impact the Companys assessment of its financial viability, as its ability to continue operations
depends on factors including access to financing and future business performance. However, if any party disputes the Companys position
in the future and initiates collection efforts, the Company will defend its position and disclose any developments accordingly.
**Note 11 - Derivative Liability**
Certain of the convertible notes payable discussed
in Note 10 have a conversion price that can be adjusted based on the Companys stock price which results in the conversion feature
being recorded as a derivative liability.
The fair value of the derivative liability is recorded
and shown separately under current liabilities. Changes in the fair value of the derivative liability is recorded in the statement of
operations under other income (expense).
The Company uses a weighted average Black-Scholes
option pricing model with the following assumptions to measure the fair value of derivative liability at December 31, 2024 and 2023:
| 
Schedule of assumptions | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Stock price | 
| 
$ | 
0.0001 | 
| 
| 
$ | 
0.0002 | 
| |
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Risk free rate | 
| 
| 
4.24 5.46 | 
% | 
| 
| 
5.26 5.60 | 
% | |
| 
Volatility | 
| 
| 
218 509 | 
% | 
| 
| 
427 502 | 
% | |
| 
Conversion/ Exercise price | 
| 
$ | 
0.000085 | 
| 
| 
$ | 
0.000075 0.000085 | 
| |
| 
Dividend rate | 
| 
| 
0 | 
% | 
| 
| 
0 | 
% | |
The following table represents the Companys
derivative liability activity for the period ended September 30, 2024:
| 
Schedule of derivative liability activity | 
| 
| 
| 
| |
| 
Derivative liability balance, December 31, 2023 | 
| 
$ | 
14,116,062 | 
| |
| 
Mark to Market | 
| 
| 
613,928 | 
| |
| 
Fair value of beneficial conversion feature of debt converted | 
| 
| 
(694,919 | 
) | |
| 
Change in derivative liability during the period | 
| 
| 
(12,755,202 | 
) | |
| 
Derivative liability balance, December 31, 2024 | 
| 
$ | 
| 
| |
The significant decrease in the fair value of derivative
liability was mainly due to the all the convertible notes were modified to a fixed price in December 31, 2024. Refer to FN #9 above.
**Note 12 - 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-27
| 
| 
| 
To amend the Companys Articles of Incorporation, (the Articles of Incorporation) to increase the number of authorized shares of common stock, par value $0.00001per share (the Common Stock), of the Company from2,000,000,000shares to 10,000,000,000 shares. This action concluded on August 11, 2022. | |
| 
| 
| 
(i) authorize the Companys Board of Directors to effect, in its sole discretion, a reverse stock split of the Common Stock in a ratio of up to1-for-500(the Reverse Stock Split), and (ii) authorize the filing of an amendment to the Companys 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 Companys 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 year ended December 31, 2024, the Company
had the following transactions in its common stock:
| 
| 
| 
Of 6,559,534,118 shares issued for the conversion of convertible notes of $555,680 and accrued interest of $1,880. | |
As of December 31, 2024 and 2023, there were 16,813,229,180
and 10,253,695,062 shares of common stock issued and outstanding, respectively.
*Series B Preferred Shares*
The Series B Preferred Stock has a stated value of
$100 per share and is convertible into the Companys common stock at a conversion price of $30 per share representing 3,000 posts
reverse 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, 2024 and 2023, there were 45,000
Series B Preferred Shares outstanding, respectively.
*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 Companys 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 Companys common stock such that the number of shares of the Companys
common stock held by it and its affiliates after such conversion does not exceed 4.9% of the then issued and outstanding shares of the
Companys common stock.
The issuance of the Series C Preferred Stock was made
in reliance upon exemptions from registration pursuant to Section 4(a)(2) under the Securities Act of 1933 and Rule 506 promulgated under
Regulation D thereunder. GV is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933.
At December 31, 2024 and 2023, GV owns 700 Series
C Preferred Shares, respectively.
F-28
*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 shareholders representative of GBT-CR (Gonzalez), entered into and closed
an Exchange Agreement (the GBT Exchange Agreement) pursuant to which the parties exchanged certain securities. 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, 2024 and 2023, there are 20,000
shares of Series H Preferred Shares outstanding, respectively.
*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, 2024 and 2023, there are 1,000
shares of Series I Preferred Shares outstanding, respectively.
*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 September 30, 2024 and December 31, 2023, the
Company has 8 treasury stock on a cost basis of $11,059, respectively.
*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 Companys
counsel, who had previously been issued 32,000 shares as compensation, returned those shares to the Company.
F-29
As of December 31, 2024 and 2023, the Company has
1,032 shares to be cancelled on a cost basis of $632,000, respectively.
*Warrants*
The following is a summary of warrant activity.
| 
Schedule of warrant activity | | | 
| | | | 
| | | | 
| | | | 
| | | |
| 
| | 
| | 
| | 
Weighted | | 
| |
| 
| | 
| | 
Weighted | | 
Average | | 
| |
| 
| | 
| | 
Average | | 
Remaining | | 
Aggregate | |
| 
| | 
Warrants | | 
Exercise | | 
Contractual | | 
Intrinsic | |
| 
| | 
Outstanding | | 
Price | | 
Life | | 
Value | |
| 
Outstanding, December 31, 2023 | | | 
| 400 | | | 
$ | 1,595 | | | 
| 0.02 | | | 
$ | | | |
| 
Granted | | | 
| | | | 
| | | | 
| | | | 
| | | |
| 
Forfeited | | | 
| | | | 
| | | | 
| | | | 
| | | |
| 
Exercised | | | 
| | | | 
| | | | 
| | | | 
| | | |
| 
Outstanding, December 31, 2024 | | | 
| 400 | | | 
$ | 1,595 | | | 
| 0.02 | | | 
$ | | | |
| 
Exercisable, December 31, 2024 | | | 
| 400 | | | 
$ | 1,595 | | | 
| 0.02 | | | 
$ | | | |
**Note 13 - 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.
**Note 14 - Contingencies**
*GBT Technologies, S.A.*
On September 14, 2018, the
Company entered into an Exclusive Intellectual Property License and Royalty Agreement (the GBT License Agreement) with GBT-CR,
a fully compliant and regulated crypto currency exchange platform that currently operates in Costa Rica as a decentralized crypto currency
platform, pursuant to which, among other things, the Company granted to GBT-CR an exclusive, royalty-bearing right and license relating
intellectual property relating to systems and methods of converting electronic transmissions into digital currency as reflected in that
certain patent filed with the United Stated Patent and Trademark Office on or about June 14, 2018 (EFS ID: 32893586; Application Number:
16008069; Type: Utility under 35 USC 111(a); Confirmation Number: 6787)(collectively, the Digital Currently Technology).
Pursuant to the GBT License Agreement, the Company granted GBT-CR an exclusive worldwide license to use the Digital Currency Technology
to make, use, sell, lease or otherwise commercialize and dispose of products and devices utilizing the Digital Currently Technology. Under
the terms of the GBT License Agreement, the Company is entitled to receive a royalty payment of 2% of gross revenue of each licensed product
sold by GBT-CR during the period starting in which revenue is first generated using the licensed products and continuing for five years
thereafter. Upon signing the GBT-CR License Agreement, GBT-CR paid the Company $300,000 which is nonrefundable. The Company recognized
the $300,000as 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 $200,000to 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.
F-30
*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 pledged4,006restricted
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 $375,000paid 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 Latinexs 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. The4,006restricted shares have not yet been returned to the Company as
of December 31, 2024.
*Accrued Settlement*
**
On December 3, 2018, the Company entered into a Securities
Purchase Agreement (the SPA) with Discover Growth Fund, LLC (the Investor) pursuant to which the Company issued
a Senior Secured Redeemable Convertible Debenture (the Debenture) of $8,340,000. In connection with the issuance of the
Debenture and pursuant to the terms of the SPA, the Company issued a Common Stock Purchase Warrant to acquire up to225,000shares
of common stock for a term of three years (the Warrant) on a cash-only basis at an exercise price of $100 per share with
respect to 50,000 Warrant Shares, $75 with respect to 75,000 Warrant Shares and $50 with respect to 100,000 Warrant Shares. The holder
may not exercise any portion of the Warrants to the extent that the holder would own more than 4.99% of the Companys outstanding
common stock immediately after exercise. The outstanding principal amount may be converted at any time into shares ofthe Companyscommon
stockat a conversion price equal to 95% of the Market Price less $5 (the conversion price is lowered by 10% upon the occurrence
of each Triggering Event the current conversion price is 75% of the Market Price less $5.00). The Market Price is the average
of the 5 lowest individual daily volume weighted average prices during the period the Debenture is outstanding. On May 28, 2019, the Investor
delivered to the Company a Notice of Default and Notice of Sale of Collateral (the Notice). On December 23,
2019, in arbitration between the Company and the Investor, an Interim Award was entered in favor of the Investor. On January 31, 2020,
the Company was informed that a final award was entered (the Final Award). The Final Award affirms that certain sections
of the Debentureconstitute unenforceable liquidated damages penalties and were stricken. Further, it was determined that the Investor
was entitled to recovery of their attorneys fees. Consequently, the arbitrator awarded Investor an award of $4,034,444plus
interest of7.25% accrued from May 15, 2019 and costs of $55,613. On February 18, 2020, the Company filed a motion with the United
States District Court District of Nevada (the Nevada Court) to confirm the Final Award and a motion to consolidate Investors
application to confirm the Final Award filed in the U.S. District Court of the Virgin Islands (Case No: 3 :20-cv-00012-CVG-RM) (the Virgin
Island Court). On February 27, 2020, the Nevada Court denied the Companys motion to confirm the Final Award and motion to
consolidate and further decided that the confirmation of the Final Award should be litigated in the Virgin Island Court. As such, on February
27, 2020, the Company filed a Notice of Entry of Order as well as a Motion to Confirm the Arbitration Award, address the outstanding issues
regarding whether Investors rights are subordinated to other creditors and, thereafter, oversee a commercially reasonable foreclosure
sale (Case No: 3 :20-cv-00012-CVG-RM). It was the Companys position that the Final Award must first be confirmed and all questions
regarding the rights of Investor relative to those of other creditors must be determined before any foreclosure sale can proceed. It is
further the position of the Company that the previously disclosed foreclosure sale scheduled by Investor is being conducted in a commercially
unreasonable manner and that if Discover proceeded forward with the foreclosure sale it did so at its own risk. Nevertheless, on February
28, 2020, Investor advised that it conducted a sale of the Companys assets. As the date of this report Investor failed to present
a deed of sale for the alleged sale that allegedly took place as noticed. The Company filed with Virgin Island Court the motions disputing
the validity of the alleged sale. On July 28, 2020, Investor filed in the State of Nevada a motion for attorneys $48,844and costs
$716. The Company filed an answer on August 11, 2020.On October 16, 2020, Investor motion for attorneys $48,844and costs $716was
denied. This case is still pending with the Federal court and the Court has not taken any substantive action in the matter as of the date
of this report. Based on Discover notice in writing of selling all the Companys assets, the Company intend to invoice Discover
for that sale and offset the settlement amount at the end of the year. On January 25, 2024 Virgin Island Court ordered that Final Award
is confirmed.
F-31
As part of its financial review for the fiscal year
ended December 31, 2024, the Board of Directors of the Company conducted an assessment of the Companys Accrued Settlement Liability,
a balance originally recorded in 2020 in connection with the arbitration award issued in favor of Discover Growth Fund, LLC (DGF).
On February 28, 2020, DGF conducted a foreclosure sale of the Companys assets. However, the Company was not provided with an accounting
of the sale or details of the proceeds received by DGF. The Company has maintained its position that the foreclosure sale satisfied the
arbitration award in full. Additionally, DGF has not taken any action to enforce collection of the liability since the arbitration award
was confirmed by the U.S. District Court for the Virgin Islands on January 25, 2024.
Accounting Treatment
In accordance with ASC 405-20-40-1 (Liabilities -
Extinguishment of Liabilities), a liability should be derecognized when it has been extinguished. Extinguishment occurs when the debtor
is legally released from the obligation or when the obligation is otherwise settled. Given that:
The Companys assets were foreclosed
and sold by DGF in 2020;
No further collection efforts have been initiated
by DGF;
The Company maintains that the foreclosure
sale satisfied the judgment;
The Company does not intend to make any payment
toward the liability; and
Carrying the liability indefinitely would misrepresent
the Companys financial position, inflating its balance sheet without a true expectation of payment;
The Board of Directors approved the write-off of the
remaining Accrued Settlement Liability in the amount of $5,755,400, recognizing it as a gain in the Companys financial statements
for the year ended December 31, 2024.
Financial Statement Impact
As a result of this decision, the Company recognized
a $5,755,400 gain on extinguishment of liability, which is included in other income in the consolidated statement of operations. The corresponding
reduction in liabilities is reflected in the balance sheet under Accrued Settlement Liabilities, reducing the Companys total liabilities.
Going Concern Consideration
The Company continues to operate under going concern
uncertainty. This write-off does not impact the Companys assessment of its financial viability, as its ability to continue operations
depends on factors including access to financing and future business performance. However, if any party disputes the Companys position
in the future and initiates collection efforts, the Company will defend its position and disclose any developments accordingly.
F-32
*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, 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 Companys 10-day VWAP.
Licensor and Elentina were to provide services in connection with the development of the business as well as Metaverse Kits 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 till 2025.
*Potential IPs Sale*
Effective as of March 20,
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 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 VisionWaves issued and outstanding shares of Common Stock, where the
remainder of the 50% of VisionWaves issued and outstanding shares of Common Stock are owned by a corporation controlled by Stanley
Hills. Effective June 4, 2024 Tokenize been issued additional 222 shares from VisionWave for consideration of 10 million AVAI shares that
been vested under VisionWave name.
On March 26, 2024, Bannix
Acquisition Corp., a Delaware corporation (Bannix), entered into a Business Combination Agreement (the Original Agreement),
by and among Bannix, VisionWave Technologies, Inc., a Nevada corporation (Target) and the shareholders of Target.
F-33
On September 6, 2024, Bannix
entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among Bannix, VisionWave Holdings,
Inc., a Delaware corporation and a direct, wholly owned subsidiary of Bannix (VisionWave Holdings), BNIX Merger Sub, Inc.,
a Delaware corporation and a direct, wholly owned subsidiary of VisionWave Holdings (Parent Merger Sub), BNIX VW Merger
Sub, Inc., a Nevada corporation and direct, wholly owned subsidiary of VisionWave, and Target. The Merger Agreement and the transactions
contemplated thereby were approved by the boards of directors of each of Bannix, VisionWave Holdings, Parent Merger Sub, Company Merger
Sub, and Target.
**The Mergers**
Pursuant to and in accordance
with the terms set forth in the Merger Agreement, (a)Parent Merger Sub will merge with and into Bannix, with Bannix continuing as
the surviving entity (the Parent Merger), as a result of which, (i)Bannix will become a wholly owned subsidiary of
VisionWave Holdings, and (ii)each issued and outstanding security of Bannix immediately prior to the effective time of the Parent
Merger (the Parent Merger Effective Time) (other than shares of Bannix Common Stock that have been redeemed or are owned
by Bannix or any of its direct or indirect subsidiaries as treasury shares and any Dissenting Parent Shares) shall no longer be outstanding
and shall automatically be cancelled in exchange for the issuance to the holder thereof of a substantially equivalent security of VisionWave
Holdings (other than the Parent Rights, which shall be automatically converted into shares of VisionWave Holdings), and, (b)immediately
following the consummation of the Parent Merger but on the same day, Company Merger Sub will merge with and into Target, with Target continuing
as the surviving entity (the Company Merger and, together with the Parent Merger, the Mergers), as a result
of which, (i)Target will become a wholly owned subsidiary of VisionWave Holdings, and (ii)each issued and outstanding security
of Target immediately prior to the effective time of the Company Merger (the Company Merger Effective Time) (other than
any Cancelled Shares or Dissenting Shares) shall no longer be outstanding and shall automatically be cancelled in exchange for the issuance
to the holder thereof of a substantially equivalent security of VisionWave Holdings. The Mergers and the other transactions contemplated
by the Merger Agreement are hereinafter referred to as the Business Combination.
Subject to a six month extension
the termination date by which the Company must consummate a business combination from September 14, 2024, the date that is 36 months from
the closing date of the Companys initial public offering of units, to March 14, 2025, the Business Combination is expected to close
in the first quarter of 2025, subject to customary closing conditions, including the satisfaction of the minimum available cash condition,
the receipt of certain governmental approvals and the required approval by the stockholders of Bannix and Target.
**Consideration**
Pursuant to and in accordance
with the terms set forth in the Merger Agreement, at the Parent Merger Effective Time, (a) each share of Bannix common stock, par value
$0.001 per share (Bannix Common Stock) outstanding immediately prior to the Parent Merger Effective Time that has not been
redeemed, is not owned by Bannix or any of its direct or indirect subsidiaries as treasury shares and is not a Dissenting Parent Share
will automatically convert into one share of common stock, par value $0.001, of VisionWave Holdings (each, a share of VisionWave
Holdings Common Stock), (b) each Bannix Warrant shall automatically convert into one warrant to purchase shares of VisionWave Holdings
Common Stock (each, a VisionWave Holdings Warrant) on substantially the same terms and conditions; and (c) each Bannix Right
will be automatically converted into the number of shares of VisionWave Holdings Common Stock that would have been received by the holder
of such Bannix Right if it had been converted upon the consummation of a business combination in accordance with Bannixs organizational
documents.
In accordance with the terms
and subject to the conditions of the Merger Agreement, at the Company Merger Effective Time, (a)each share of issued and outstanding
Target common stock, par value $0.01 (Target Common Stock), shall be cancelled and converted into 4,041 shares of VisionWave
Holdings Common Stock.
Subject of closing the transaction,
the Company and Tokenize holdings will exchange their holdings in VW for about 2,917,708 new shares of VisionWave Holdings, represent
about 20.47% of VisionWave Holdings post-closing.
*Service Agreement*
On February 24, 2023, the Company entered into a service
agreement withPacific Capital Markets LLC, where100,000,000 Shares issued to it for certain for service agreement between
Pacific Capital Markets LLC. and the Company. The value of the shares of $80,000was determined based on the stock price of the Companys
common stock at grant date of $0.0008 per share.
F-34
*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 Tokenizes 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 15 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. During the year ended December
31, 2024, the Company assessed the collectability of the note receivable and wrote off the outstanding receivable note balance due from
Metalert in total of $46,250.
Liquidity risk
The Companyhas an accumulated deficit of $300,992,896
and has a working capital deficit of $15,570,034 as of December 31, 2024, 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.
**Note 16 - Income Taxes**
At December31, 2024 and 2023, the significant components of the deferred
tax assets are summarized below:
| 
Schedule of components of deferred tax assets | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
December 31, | 
| 
December 31, | |
| 
| 
| 
2024 | 
| 
2023 | |
| 
Deferred income tax asset | 
| 
| 
| 
| 
| 
| 
| 
| |
| 
Net operating loss carryforwards | 
| 
$ | 
6,736,778 | 
| 
| 
$ | 
10,216,110 | 
| |
| 
Total deferred income tax asset | 
| 
| 
6,736,778 | 
| 
| 
| 
10,216,110 | 
| |
| 
Less: valuation allowance | 
| 
| 
(6,736,778 | 
) | 
| 
| 
(10,216,110 | 
) | |
| 
Total deferred income tax asset | 
| 
$ | 
| 
| 
| 
$ | 
| 
| |
The valuation allowance decreased by $3,479,332 and
increased by $1,074,366 in 2024 and 2023, respectively, as a result of the Company generating a gain from change in fair value of derivatives
and gain from debt modifications.
No income tax expense reflected in the consolidated
statements of income for the years 2024 and 2023.
F-35
The reconciliation of the effective income tax rate to the federal statutory
rate for the years ended December 31, 2024 and 2023 is as follows:
| 
Schedule of effective income tax rate reconciliation | 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
| |
| 
| 
| 
2024 | 
| 
2023 | |
| 
| 
| 
Amount | 
| 
Percent | 
| 
Amount | 
| 
Percent | |
| 
Federal statutory rates | 
| 
$ | 
4,349,165 | 
| 
| 
| 
21.0 | 
% | 
| 
$ | 
(3,735,296 | 
) | 
| 
| 
21.0 | 
% | |
| 
State income taxes | 
| 
| 
1,656,825 | 
| 
| 
| 
8.0 | 
% | 
| 
| 
(1,422,970 | 
) | 
| 
| 
8.0 | 
% | |
| 
Permanent differences | 
| 
| 
(2,526,658 | 
) | 
| 
| 
-12.2 | 
% | 
| 
| 
4,083,900 | 
| 
| 
| 
-33.5 | 
% | |
| 
Valuation allowance against net deferred tax assets | 
| 
| 
(3,479,332 | 
) | 
| 
| 
-16.8 | 
% | 
| 
| 
1,074,366 | 
| 
| 
| 
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, 2024 and 2023.
**Note 17
- Subsequent Events**
The Company has evaluated its operations subsequent
to December 31, 2024 to the date these audited consolidated financial statements were available to be issued and determined the following
subsequent events and transactions required disclosure in these consolidated financial statements.
F-36