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United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(Mark One) |
|
☒ |
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the quarterly period ended September 30, 2024 |
☐ |
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commissions file number: 000-54530
GBT TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Nevada |
27-0603137 |
State or other jurisdiction of |
I.R.S. Employer Identification Number |
incorporation or organization |
|
8557 N West Knoll Dr. West Hollywood CA 90069
(Address of principal executive offices)
Issuer ’s telephone number: 888-685-7336
Securities registered pursuant
to Section 12(b) of the Act: Not applicable.
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
Not applicable. |
|
|
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒
☐ No
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
|
|
|
|
Non-accelerated filer ☒ |
Smaller reporting company ☒ |
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of Exchange Act). Yes ☐
No ☒
State the number of shares outstanding of each of
the issuer’s classes of common equity, as of the latest practicable date:
Common Stock, $0.00001 par value |
16,813,229,180 Common Shares |
(Class) |
(Outstanding at November 13, 2024) |
GBT TECHNOLOGIES INC.
TABLE OF CONTENTS
Item 1: Condensed consolidated financial statements
| |
| | | |
| | |
GBT TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
ASSETS | |
September 30, 2024 | |
December 31, 2023 |
| |
(Unaudited) | |
(Audited) |
Current Assets: | |
| | | |
| | |
| |
| | | |
| | |
Cash | |
$ | 1,505 | | |
$ | 529 | |
| |
| | | |
| | |
Note receivable | |
| 46,250 | | |
| 46,250 | |
| |
| | | |
| | |
Marketable securities | |
| 9,546 | | |
| 31,206 | |
| |
| | | |
| | |
Total current assets | |
| 57,301 | | |
| 77,985 | |
| |
| | | |
| | |
Total assets | |
$ | 57,301 | | |
$ | 77,985 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
| |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 2,634,471 | | |
$ | 5,372,846 | |
| |
| | | |
| | |
Accounts Payable and accrued expenses - related party | |
| 2,911,941 | | |
| 1,767,710 | |
| |
| | | |
| | |
Accrued settlement | |
| 4,090,057 | | |
| 4,090,057 | |
Convertible notes payable, current, net of discount of $0 and $43,739 | |
| 5,131,491 | | |
| 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 $2,265 | |
| 21,252 | | |
| 46,532 | |
| |
| | | |
| | |
Notes payable, related party | |
| 140,000 | | |
| 140,000 | |
| |
| | | |
| | |
Derivative liability | |
| 665,941 | | |
| 14,116,062 | |
| |
| | | |
| | |
Total current liabilities | |
| 16,086,548 | | |
| 31,859,619 | |
| |
| | | |
| | |
Non-Current Liabilities: | |
| | | |
| | |
| |
| | | |
| | |
Note payable, noncurrent, net of discount of $0 and $0 | |
| 328,748 | | |
| 328,748 | |
| |
| | | |
| | |
Total noncurrent liabilities | |
| 328,748 | | |
| 328,748 | |
| |
| | | |
| | |
Total liabilities | |
| 16,415,296 | | |
| 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 September 30, 2024 and December 31, 2023, respectively | |
| — | | |
| — | |
Series C Preferred stock, $0.00001 par value; 10,000 shares authorized; 700 and 700 shares issued and outstanding at September 30, 2024 and December 31, 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 September 30, 2024 and December 31, 2023, respectively | |
| — | | |
| — | |
Series I Preferred stock, $0.00001 par value ($350 stated value); 1,000 shares authorized; 1,000 and 1,000 shares issued and outstanding at September 30, 2024 and December 31, 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 September 30, 2024 and December 31, 2023, respectively | |
| 168,133 | | |
| 102,538 | |
Treasury stock, at cost; 21 shares at September 30, 2024 and December 31, 2023, respectively | |
| (11,059 | ) | |
| (11,059 | ) |
| |
| | | |
| | |
Shares to be cancelled | |
| (632,000 | ) | |
| (632,000 | ) |
| |
| | | |
| | |
Stock loan receivable | |
| (7,610,147 | ) | |
| (7,610,147 | ) |
| |
| | | |
| | |
Additional paid in capital | |
| 294,255,052 | | |
| 293,069,829 | |
| |
| | | |
| | |
Accumulated deficit | |
| (301,481,439 | ) | |
| (315,993,294 | ) |
| |
| | | |
| | |
Total stockholders’ deficit | |
| (15,311,460 | ) | |
| (31,074,133 | ) |
| |
| | | |
| | |
Non-Controlling Interest | |
| (1,046,536 | ) | |
| (1,036,249 | ) |
Total stockholders’ deficit attributable to GBT Technologies, Inc. | |
| (16,357,995 | ) | |
| (32,110,382 | ) |
| |
| | | |
| | |
Total liabilities and stockholders’ deficit | |
$ | 57,301 | | |
$ | 77,985 | |
The accompanying footnotes are an integral part of
the unaudited condensed consolidated financial statements.
GBT TECHNOLOGIES INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited/As Restated)
| |
| | | |
| | | |
| | | |
| | |
| |
Three Months Ended September 30, | |
Nine Months Ended September 30, |
| |
2024 | |
2023 | |
2024 | |
2023 |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
General and administrative expenses | |
$ | 18,120 | | |
$ | 47,359 | | |
$ | 24,588 | | |
$ | 287,688 | |
Marketing expenses | |
| 57,672 | | |
| 80,311 | | |
| 147,912 | | |
| 192,308 | |
Professional expenses | |
| 122,815 | | |
| 189,749 | | |
| 360,815 | | |
| 607,509 | |
Total operating expenses | |
| 198,607 | | |
| 317,419 | | |
| 533,315 | | |
| 1,087,505 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (198,607 | ) | |
| (317,419 | ) | |
| (533,315 | ) | |
| (1,087,505 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Amortization of debt discount | |
| (2,656 | ) | |
| (29,927 | ) | |
| (46,003 | ) | |
| (298,348 | ) |
Change in fair value of derivative liability | |
| 4,004,405 | | |
| 365,121 | ) | |
| 12,755,202 | | |
| (12,663,365 | ) |
Interest expense and financing costs | |
| (175,962 | ) | |
| (156,497 | ) | |
| (322,560 | ) | |
| (2,111,400 | ) |
Loss from Investment -Equity Method | |
| (10,000 | ) | |
| | | |
| (10,000 | ) | |
| 315,297 | |
Gain on loss of control | |
| | | |
| 38,385 | | |
| | | |
| 38,385 | |
| |
| | | |
| | | |
| | | |
| | |
Change in fair value of marketable securities | |
| (63 | ) | |
| | | |
| (732 | ) | |
| (3,692 | ) |
Gain from Debt Settlement | |
| 2,658,977 | | |
| | | |
| 2,658,977 | | |
| | |
Other income - related party licensing income | |
| — | | |
| 66,353 | | |
| — | | |
| 269,553 | |
Total other income (expense) | |
| 6,474,701 | | |
| 283,435 | | |
| 15,034,884 | | |
| (14,453,570 | ) |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Income tax expense | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) from continuing operations | |
| 6,276,094 | | |
| (33,984 | ) | |
| 14,501,569 | | |
| (15,541,075 | ) |
| |
| | | |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | | |
| | |
Gain/(Loss) from discontinued operations | |
| — | | |
| (38,385 | ) | |
| — | | |
| (38,385 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 6,276,094 | | |
$ | (72,369 | ) | |
$ | 14,501,569 | | |
$ | (15,579,460 | ) |
| |
| | | |
| | | |
| | | |
| | |
Less: net (loss) income attributable to the noncontrolling interest | |
| (7,523 | ) | |
| 193 | ) | |
| (10,287 | ) | |
| 43,807 | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) attributable to GTB Technologies Inc. | |
$ | 6,283,617 | | |
$ | (72,562 | ) | |
$ | 14,511,856 | | |
$ | (15,623,267 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average common shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 16,813,229,180 | | |
| 5,342,065,441 | | |
| 16,261,212,589 | | |
| 4,462,434,507 | |
Diluted | |
| 27,631,580,912 | | |
| 28,665,913,915 | | |
| 27,079,564,321 | | |
| 27,786,282,982 | |
Net loss per share (basic and diluted): | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | 0.00 | | |
$ | (0.00 | ) | |
$ | 0.00 | | |
$ | (0.00 | ) |
Diluted | |
| 0.00 | | |
| (0.00 | ) | |
| 0.00 | | |
| (0.00 | ) |
The accompanying footnotes are an integral part of
the unaudited condensed consolidated financial statements.
*The following unaudited balances were updated to reflect
the discontinued operations of Mahaser Ltd.
The accompanying footnotes are an integral part of
the unaudited condensed consolidated financial statements.
GBT TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT |
(Unaudited/As Restated*) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
Series B Convertible Preferred Stock | |
Series C Convertible Preferred Stock | |
Series H Convertible Preferred Stock | |
Series I Convertible Preferred Stock | |
Common Stock | |
Treasury Stock | |
Share to be Cancelled | |
Stock Loan | |
Additional Paid-in | |
Accumulated | |
Noncontrolling | |
Total 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 | | |
| 65,596 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 491,965 | | |
| — | | |
| — | | |
| 557,561 | |
Fair value of derivative liability due to conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 694,919 | | |
| — | | |
| — | | |
| 694,919 | |
Tokenize investment reclassification | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,660 | ) | |
| — | | |
| — | | |
| (1,660 | ) |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| | | |
| 7,161,989 | | |
| (2,100 | ) | |
| 7,159,889 | |
Balance, March 31, 2024 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| 1,000 | | |
$ | — | | |
| 16,813,229,180 | | |
$ | 168,134 | | |
| 8 | | |
$ | (11,059 | ) | |
| 1,032 | | |
$ | (632,000 | ) | |
$ | (7,610,147 | ) | |
$ | 294,255,053 | | |
$ | (308,831,305 | ) | |
$ | (1,038,349 | ) | |
$ | (23,699,672 | ) |
VisionWave investment reclassification | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
$ | — | | |
$ | — | | |
| — | |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,073,773 | | |
| (664 | ) | |
| 1,073,109 | |
Balance, June 30, 2024 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| 1,000 | | |
$ | — | | |
| 16,813,229,180 | | |
$ | 168,134 | | |
| 8 | | |
$ | (11,059 | ) | |
| 1,032 | | |
$ | (632,000 | ) | |
$ | (7,610,147 | ) | |
$ | 294,255,052 | | |
$ | (307,757,533 | ) | |
$ | (1,039,013 | ) | |
$ | (22,626,566 | ) |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 6,276,094 | | |
| (7,523 | ) | |
| 6,268,571 | |
Balance, September 30, 2024 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| 1,000 | | |
$ | — | | |
| 16,813,229,180 | | |
$ | 168,134 | | |
| 8 | | |
$ | (11,059 | ) | |
| 1,032 | | |
$ | (632,000 | ) | |
$ | (7,610,147 | ) | |
$ | 294,255,052 | | |
$ | (301,481,439 | ) | |
$ | (1,046,536 | ) | |
$ | (16,357,995 | ) |
| |
Series B Convertible Preferred Stock | |
Series C Convertible Preferred Stock | |
Series H Convertible Preferred Stock | |
Series I Convertible Preferred Stock | |
Common Stock | |
Treasury Stock | |
Share to be Cancelled | |
Stock Loan | |
Additional Paid-in | |
Accumulated | |
Noncontrolling | |
Total Stockholders' |
| |
Shares | |
Amount | |
Shares | |
Amount | |
Shares | |
Amount | |
Shares | |
Amount | |
Shares | |
Amount | |
Shares | |
Amount | |
Shares | |
Amount | |
Receivable | |
Capital | |
Deficit | |
Interest | |
Deficit |
Balance, December 31, 2022 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| — | | |
$ | — | | |
| 1,535,593,440 | | |
$ | 15,356 | | |
| 1,040 | | |
$ | (643,059 | ) | |
| — | | |
$ | — | | |
$ | (7,610,147 | ) | |
$ | 288,664,858 | | |
$ | (299,257,917 | ) | |
$ | — | | |
$ | (18,830,908 | ) |
Common stock issued for conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,294,508,379 | | |
| 12,945 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 390,603 | | |
| — | | |
| — | | |
| 403,548 | |
Fair value of derivative liability due to conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 316,223 | | |
| — | | |
| — | | |
| 316,223 | |
Common stock issued for Service | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 100,000,000 | | |
| 1,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 79,000 | | |
| — | | |
| — | | |
| 80,000 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (5,680,068 | ) | |
| 50,355 | | |
| (5,629,713 | ) |
Balance, March 31, 2023 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| — | | |
$ | — | | |
| 2,930,101,819 | | |
$ | 29,301 | | |
| 1,040 | | |
$ | (643,059 | ) | |
| — | | |
$ | — | | |
$ | (7,610,147 | ) | |
$ | 289,450,684 | | |
$ | (304,937,985 | ) | |
$ | 50,355 | | |
$ | (23,660,850 | ) |
Common stock issued for conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,620,652,067 | | |
| 26,207 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 855,165 | | |
| — | | |
| — | | |
| 881,372 | |
Fair value of derivative liability due to conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,686,461 | | |
| — | | |
| — | | |
| 1,686,461 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (9,826,830 | ) | |
| (6,741 | ) | |
| (9,833,571 | ) |
Balance, June 30, 2023 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| — | | |
$ | — | | |
| 5,550,753,886 | | |
$ | 55,508 | | |
| 1,040 | | |
$ | (643,059 | ) | |
| — | | |
$ | — | | |
$ | (7,610,147 | ) | |
$ | 291,992,310 | | |
$ | (314,764,815 | ) | |
$ | 43,614 | | |
$ | (30,926,588 | ) |
Common stock issued for conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,352,941,176 | | |
| 13,529 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 101,471 | | |
| — | | |
| — | | |
| 115,000 | |
Fair value of derivative liability due to conversions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 260,109 | | |
| — | | |
| — | | |
| 260,109 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (72,562 | ) | |
| 193 | | |
| (72,369 | ) |
Balance, September 30, 2023 | |
| 45,000 | | |
$ | — | | |
| 700 | | |
$ | — | | |
| 20,000 | | |
$ | — | | |
| — | | |
$ | — | | |
| 6,903,695,062 | | |
$ | 69,037 | | |
| 1,040 | | |
$ | (643,059 | ) | |
| — | | |
$ | — | | |
$ | (7,610,147 | ) | |
$ | 292,353,890 | | |
$ | (314,837,377 | ) | |
$ | 43,807 | | |
$ | (30,623,848 | ) |
The accompanying footnotes are an integral part of
these unaudited condensed consolidated financial statements.
GBT TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
| |
| | | |
| | |
| |
Nine
Months Ended September 30, |
| |
2024 | |
2023 |
Cash
Flows From Operating Activities: | |
| | | |
| | |
Net
Income (loss) | |
$ | 14,501,569 | | |
$ | (15,579,460 | ) |
Adjustments
to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Amortization
of debt discount | |
| 46,003 | | |
| 298,348 | |
Change
in fair value of derivative liability | |
| (12,755,202 | ) | |
| 12,663,365 | |
Excess
of debt discount and financing costs | |
| — | | |
| 1,500,196 | |
Shares
issued for services | |
| — | | |
| 80,000 | |
Change
in fair value of market equity security | |
| 10,000 | | |
| 3,692 | |
Gain
on debt extinguishment | |
| (2,658,977 | ) | |
| (315,297 | ) |
Changes
in operating assets and liabilities: | |
| | | |
| | |
Account
receivable | |
| — | | |
| — | |
Other
receivable | |
| — | | |
| (2,297 | ) |
Prepaid | |
| — | | |
| 12,500 | |
Inventory | |
| — | | |
| — | |
Other
assets | |
| — | | |
| — | |
Unearned
revenue | |
| — | | |
| (74,921 | ) |
Contract
liabilities | |
| — | | |
| (41,444 | ) |
Accounts
payable and accrued expenses | |
| (229,102 | ) | |
| 1,382,820 | |
Accounts
payable and accrued expenses - RP | |
| 1,114,231 | | |
| — | |
Net
cash provided by (used in) operating activities | |
| 28,522 | | |
| (72,498 | ) |
| |
| | | |
| | |
Cash
Flows From Financing Activities: | |
| | | |
| | |
Issuance
of convertible notes | |
| — | | |
| 92,150 | |
Repayments
to note payables | |
| (27,546 | ) | |
| (61,071 | ) |
Repayments
to related party | |
| — | | |
| (27,375 | ) |
Repayment
of Convertible note | |
| — | | |
| (35,822 | ) |
Proceeds
from related party | |
| — | | |
| — | |
Issuance
of notes payable | |
| — | | |
| 92,150 | |
Net
cash (used in) provided by financing activities | |
| (27,546 | ) | |
| 60,032 | |
| |
| | | |
| | |
Net
changes in cash | |
| 976 | | |
| (12,466 | ) |
| |
| | | |
| | |
Cash,
beginning of period | |
| 529 | | |
| 13,058 | |
| |
| | | |
| | |
Cash,
end of period | |
$ | 1,505 | | |
$ | 592 | |
| |
| | | |
| | |
Cash
paid for: | |
| | | |
| | |
Interest | |
$ | — | | |
$ | — | |
Income
taxes | |
$ | — | | |
$ | — | |
| |
| | | |
| | |
Supplemental
non-cash investing and financing activities | |
| | | |
| | |
Reduction
in derivative liability due to conversion | |
$ | 694,919 | | |
$ | 63,379 | |
Shares
issued for conversion of convertible debt | |
$ | 557,560 | | |
$ | 2,002,684 | |
Debt
discount related to convertible debt | |
$ | — | | |
$ | 1,284,920 | |
VisionWave
investment reclassification | |
$ | — | | |
$ | — | |
Tokenize
investment reclassification | |
$ | 1,660 | | |
$ | — | |
*The following unaudited balances were updated
to reflect the discontinued operations of Mahaser Ltd.
The accompanying footnotes are an integral part
of these unaudited condensed consolidated financial statements.
GBT Technologies, Inc.
Notes to Unaudited Condensed Consolidated Financial
Statements
For the Nine Months Ended September 30, 2024 and
2023 (Unaudited)
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 IT consulting services; and (ii) from the
licensing of its technology. (ii) from selling electronic products through e-commerce platforms.
On February 18, 2022 the Company, effective March
1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company
shares revenues generated by Mahaser with respect to e-commerce sales through the online retail platform in the United States of America.
Effective July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd.
On July 20, 2023, the Company through its wholly owned
subsidiary, Greenwich International Holdings, a Costa Rica corporation (“Greenwich”), entered into an Amended and Restated
Joint Venture (the “2023 Tokenize Agreement”) with Magic Internacional Argentina FC, S.L. (“Magic”) and GBT Tokenize
Corp (“GBT Tokenize” 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 VisionWave’s issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWave’s issued and outstanding shares of Common Stock are owned by a corporation
controlled by Anat Attia. On 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 VW’s issued and outstanding shares. Here is the breakdown of the Company and Tokenize VW’s
shareholders:
Schedule of the company shareholder shares | |
| | | |
| | |
Shareholder’s 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.
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 Company’s 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 Bannix’s 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 unaudited condensed 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 Company’s
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”).
Stock Split
On October 26, 2021, the Company
effectuated a 1 for 50 reverse stock split. The share and per share information has been retroactively restated to reflect
this reverse stock split.
In July 2, 2022 the Company filed
a preliminary information statement to the stockholders of record (the “Record Date”) in connection with certain actions to
be taken by the written consent by stockholders holding a majority of the voting stock of the Company, dated as of June 28, 2022.
|
● |
To amend the Company’s Articles of Incorporation, (the “Articles of Incorporation”) to increase the number of authorized shares of common stock, par value $0.00001 per share (the “Common Stock”), of the Company from 2,000,000,000 shares to 10,000,000,000 shares. This action concluded on August 11, 2022: |
|
|
(i) authorize the Company’s Board of Directors to effect, in its sole discretion, a reverse stock split of the Common Stock in a ratio of up to 1-for-500 (the “Reverse Stock Split”), and (ii) authorize the filing of an amendment to the Company’s Articles of Incorporation to implement the Reverse Stock Split and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time prior to December 31, 2023. This action was not commenced by the Company’s board. |
On October 12, 2023, the Company amended its articles
of incorporation to increase its authorized shares of common stock to 30,000,000,000 (the “Increase Amendment”). The Increase
Amendment was approved by the board of directors as well as the shareholders holding in excess of a majority of the issued and outstanding
voting shares of the Company.
Note 2 – Going Concern
The accompanying condensed consolidated financial
statements have been prepared assuming the Company will continue as a going concern. The Company has an accumulated deficit
of $301,481,439 and has a working capital deficit of $16,029,247 as of September 30, 2024, which raises substantial doubt about its ability
to continue as a going concern.
The Company’s ability to continue as a going
concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional
capital through some private placement offerings of debt and equity securities. These plans, if successful, will mitigate the factors
which raise substantial doubt about the Company’s ability to continue as a going concern. These CFS do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result
from this uncertainty.
Note 3 – Discontinued Operations
On February 18, 2022, the Company, effective March
1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company
shares in revenues generated by Mahaser e-commerce sales through the online retail platform in the United States of America. Mahaser owns
an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics. The Company will operate the e-commerce
platform and entitled to 95% for all revenue generated by and received by Mahaser from March 1, 2022 through December 31, 2022. The RSA
provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $100,000 no
later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common stock, which were never
issued. Effective July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd.
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 Company’s estimates. To the extent there are material differences between
the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying 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 Company’s 50% owned subsidiaries: GBT Tokenize Corp, and
GBT BitSpeed Corp. (currently inactive) and , Gopher Protocol Costa Rica Sociedad De Responsabilidad Limitada (currently inactive), a
wholly owned subsidiary, AltCorp Trading LLC, a Costa Rica company (“AltCorp” currently inactive) and Greenwich International
Holdings, a Costa Rica corporation (“Greenwich” currently inactive). All significant intercompany transactions and balances
were eliminated.
For entities determined to be VIEs, an evaluation
is required to determine whether the Company is the primary beneficiary. The Company evaluates its economic interests in the entity specifically
determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic
performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be significant
to the VIE (“the benefits”). When making the determination whether the benefits received from an entity are significant, the
Company considers the total economics of the entity, and analyzes whether the Company’s share of the economics is significant. The
Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis. In addition, the Company’s
variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits that could potentially
be significant to Mahaser. As a result of this analysis, the Company concluded it is the primary beneficiary of Mahaser and therefore
consolidates the balance sheets, results of operations and cash flows of Mahaser. The Company performs a qualitative assessment of Mahaser
on an ongoing basis to determine if it continues to be the primary beneficiary.
Effective July 1, 2023, the Company terminated its
joint venture revenue sharing (“Termination Agreement”) with Mahaser LTD (“Mahaser”). Until June 30, 2023, the
Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits
that could potentially be significant to Mahaser. As a result of this analysis, the Company concluded it is the primary beneficiary of
Mahaser and therefore consolidates the balance sheets, results of operations and cash flows of Mahaser until June 30, 2023. The Company
performs a qualitative assessment of Mahaser on an ongoing basis to determine if it continues to be the primary beneficiary. Per the Termination
Agreement, the Company has no access to Mahaser and ceased consolidated Mahaser as it does not comply with the condition in the qualitative
assess, and as such this CFS does not include Mahaser operations for the period ended September 30, 2024.
Cash Equivalents
For the purpose of the statement of cash flows, cash
equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months
or less. As of September 30, 2024 and December 31, 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 September 30, 2024 and December 31, 2023, the Company’s only derivative financial instrument was an embedded conversion
feature associated with convertible notes payable due to certain provisions that allow for a change in the conversion price based on a
percentage of the Company’s stock price at the date of conversion.
Fair Value of Financial Instruments
For certain of the Company’s financial instruments,
including cash, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their 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:
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Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. |
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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. |
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Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement. |
The Company analyzes all financial instruments with
features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815,
Derivatives and Hedging.
For certain financial instruments, the carrying amounts
reported in the balance sheets for cash and current liabilities, including convertible notes payable, each qualify as a financial instrument,
and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected
realization and their current market rate of interest.
The Company uses Level 2 inputs for its valuation
methodology for derivative liabilities as their FV were determined by using the Black-Scholes-Merton pricing model based on various assumptions.
The Company’s derivative liabilities are adjusted to reflect FV at each period end, with any increase or decrease in the FV being
recorded in results of operations as adjustments to FV of derivatives.
At September 30, 2024 and December 31, 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 | |
| |
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| |
Fair Value | |
Fair Value Measurements at |
| |
As of | |
September 30, 2024 |
Description | |
September 30, 2024 | |
Using Fair Value Hierarchy |
| |
| |
Level 1 | |
Level 2 | |
Level 3 |
Conversion feature on convertible notes | |
$ | 665,941 | | |
$ | — | | |
$ | 665,941 | | |
$ | — | |
| |
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
Company’s variable interests in Mahaser obligate the Company to absorb deficits and provide it with the right to receive benefits
that could potentially be significant to Mahaser. The Company evaluated for the period ended on June 30, 2023, whether it has a variable
interest in Mahaser, whether Mahaser is a VIE and whether the Company has a controlling financial interest in Mahaser. The Company concluded
that it has variable interests in Mahaser on the basis of GBT has 100% control over the JV/revenue sharing, and as such should consolidate
the JV into its books and records as it assigned 100% financial responsibility. Mahaser’s equity at risk, as defined by GAAP, is
considered to be insufficient to finance its activities without additional support, and, therefore, Mahaser is considered a VIE. As termination
Agreement took place during the reporting period, the financial been classified to disclose this operation as discontinued operation.
Revenue Recognition
Accounting Standards Update (“ASU”) No.
2014-09, Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on
January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this
new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation
of Topic 606. The Company had no significant post-delivery obligations, this new standard did not result in a
material recognition of revenue on the Company’s accompanying 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.
Revenue from providing IT consulting services
are recognized under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return
for expected consideration and includes the following elements:
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executed contracts with the Company’s customers that it believes are legally enforceable; |
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identification of performance obligations in the respective contract; |
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determination of the transaction price for each performance obligation in the respective contract; |
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allocation the transaction price to each performance obligation; and |
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recognition of revenue only when the Company satisfies each performance obligation. |
These five elements, as applied to each of the Company’s IT revenue
category, is summarized below:
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IT consulting services - revenue is recorded on a monthly basis as services are provided. |
These five elements, as applied to each of the Company’s
license revenue category, is summarize below:
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License services – the one-time related party licensing income recorded as other income upon agreement is executed and services are provided and recognized over the term of five years. |
E-Commerce sales – (discontinued during
2023)
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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.
Variable Interest Entity
On February 18, 2022, the Company, effective March
1, 2022 entered into a Revenue Sharing Agreement (“RSA”) with Mahaser LTD. (“Mahaser”) pursuant to which the Company
shares in revenues generated by Mahaser e-commerce sales through the online retail platform in the United States of America. Mahaser owns
an e-commerce platform as a store which is the legal, exclusive owner of Ravenholm Electronics. The Company will operate the e-commerce
platform and entitled to 95% for all revenue generated by and received by Mahaser from March 1, 2022 through December 31, 2022. The RSA
provides that the Company will be entitled to appoint a manager to Mahaser. As consideration, the Company will pay Mahaser $100,000 no
later than March 1, 2022 and issue Mahaser 1,000,000 shares of the Company’s restricted common stock, 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 Company’s shares of common stock payable
based on 20 days VWAP prior to issuance. On March 16, 2022 the parties entered into Amendment No. 1 to the to the RSA, where all
consideration to be paid or issued to Mahaser will be deferred until such time where the e-commerce platform generated in cumulative revenue
of $1,000,000.
On March 31, 2022, the parties entered into Amendment
No. 2 to the RSA, where Mahaser agreed to pay the Company 100% per year for all revenue generated by and received by seller from the sales
by Amazon within the United States of America as follows from March 1, 2022 through December 31, 2022. The Company will be responsible
for 100% of the cost of goods sold as well. In addition, the Company is entitled to earn 100% revenues and cost of goods sold of the period
from February 1, 2022 to February 28, 2022. On January 1, 2023 the company extended their partnership to December 31, 2023. Effective
July 1, 2023, the Company agreed to terminate the RSA with Mahaser Ltd. The period ended on September 30, 2024 and year ended December
31, 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 period ended September 30,
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.
Income Taxes
The Company accounts for income taxes in accordance
with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes,
whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some
portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit
only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination
being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized
on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has
no material uncertain tax positions for any of the reporting periods presented and its current on all its tax filings federal and state
until 2023 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 | |
| |
|
| |
September 30, 2024 | |
December 31, 2023 |
Series B preferred stock | |
| 30 | | |
| 30 | |
Series C preferred stock | |
| 8 | | |
| 8 | |
Series H preferred stock | |
| 1,000,000 | | |
| 1,000,000 | |
Series I preferred stock | |
| 1,000,000,000 | | |
| 1,000,000,000 | |
Warrants | |
| 400 | | |
| 400 | |
Convertible notes | |
| 9,817,351,294 | | |
| 74,974,606,196 | |
Total | |
| 10,818,351,732 | | |
| 75,975,606,634 | |
Management’s Evaluation of Subsequent Events
The Company evaluates events that have occurred after
the balance sheet date of September 30, 2024, through the date which the condensed consolidated financial statements are issued. Based
upon the review, other than described in Note 18 – 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 August 2020, the FASB issued ASU 2020-06, Debt—Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic
815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number
of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features
that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in
substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract.
ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives
and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In
addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract
in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a SEC filer, excluding
entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including
interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December
15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning
after December 15, 2020, including interim periods within those fiscal years. The Board specified that an entity should adopt the guidance
as of the beginning of its annual fiscal year. The Company adopted this ASU on the consolidated financial statements in the year ended
December 31, 2021. The adoption had no material impact on the consolidated financial statements for the period ended September 30, 2024
and year ended December 31, 2023.
On April 2021, the FASB issued ASU 2021-04, “Earnings
Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718),
and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications
or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”) to clarify
the accounting by issuers for modifications or exchanges of equity-classified warrants. The new ASU is available here and effective for
all entities in fiscal years starting after December 15, 2021. Early adoption is permitted. The Company adopted this ASU on the consolidated
financial statements in the year ended December 31, 2021. The adoption had no material impact on the consolidated financial statements
for the period ended September 30, 2024 and year ended December 31, 2023.
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 | |
| |
|
| |
September 30, 2024 | |
December 31, 2023 |
Marketable Securities from AVAI. | |
$ | 6,000 | | |
$ | 26,000 | |
Marketable Securities from MetAlert Inc. | |
| 3,546 | | |
| 5,206 | |
Total Fair Value of Marketable Securities | |
$ | 9,546 | | |
$ | 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. |
This transaction reducing the holding in the AVAI
Shares to 6,000,000.
As of September 30, 2024 and December 31, 2023, the
marketable security including the investment via VW had a FV of $6,000 and $6,000, 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 acquired 76,923 (GBT acquired 5,000,000 in the original deal,
where GTX to perform a corporate action of 1:65 reverse split on September 20, 2022) shares of common stock of GTX for $150,000 -
in total FV of $12,538 as of December 31, 2022 based on level 1 stock price in OTC markets.
The GTX Notes bear 10% interest and 50% of the principal
may be converted into shares of common stock on a one-time basis at a conversion price of $0.01 per share. The remaining 50% of the
principal must be paid in cash. The closing occurred on April 12, 2022. As of December 31, 2023, the Company wrote off the 50% of the
convertible principal with all unpaid interest in total of $65,613 due to the collectability issue.
GTX changed its name into Metalert Inc. on or about
September 20, 2022.
On September 30, 2022, GBT Tokenize, loaned MetAlert
Inc., a Nevada corporation (f/k/a GTX Corp.) (“MetAlert”) $90,000. For such loan, MetAlert provided Tokenize a promissory
note of $90,000 which is due and payable together with interest of 5% upon the earlier of September 19, 2023 or when declared
by Tokenize. As of December 31, 2023, the Company wrote off the entire 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 September 30, 2024 and December 31, 2023, the
marketable security had a FV of $3,546 and $5,206, respectively.
On or about January 31, 2023 GTB Tokenize Corp the
Company’s 50% owned subsidiary, assigned $7,500 from the GTX Notes to Stanley Hills, LLC, which in turn converted said $7,500 plus
interest into 812,671 GTX shares. Stanley Hills, LLC credit GBT Tokenize for $146,037 for the transaction, reducing its credit outstanding
balances with the Company and GBT Tokenize Corp.
As of September 30, 2024
and December 31, 2023, the notes had an outstanding balance of $46,250 and accrued interest of $0, 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 shareholder’s representative of GBT-CR (“Gonzalez”),
entered into and closed an Exchange Agreement (the “GBT Exchange Agreement”) pursuant to which the parties exchanged certain
securities. In accordance with the Exchange Agreement, AltCorp acquired 625,000 shares of GBT-CR representing 25% of its issued
and outstanding shares of common stock from Gonzalez for the issuance of 20,000 shares of Series H Convertible Preferred Stock
of the Company and a Convertible Note in the principal amount of $10,000,000 issued by the Company (the “Gopher Convertible
Note”) as well as the transfer and assignment of a Promissory Note payable by Gopher Protocol Costa Rica Sociedad De Responsabilidad
Limitada to the Company in the principal amount of $5,000,000 dated February 6, 2019 (of which the underlying security for this Promissory
Note is 30,000,000 restricted shares of common stock of Mobiquity Technologies, Inc. (“Mobiquity”) and 60,000,000 restricted
shares of common stock of Mobiquity.
The Gopher Convertible Note
bears interest of 6% and is payable at maturity on December 31, 2021. At the election of Gonzalez, the Gopher Convertible Note
can be converted into a maximum of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at
the option of the holder but subject to the Company increasing its authorized shares of common stock, into such number of shares of common
stock of the Company as determined by dividing the Stated Value ($500 per share) by the conversion price ($500 per share). The
Series H Preferred Stock has no liquidation preference, does not pay dividends and the holder of Series H Preferred Stock shall be entitled
to one vote for each share of common stock that the Series H Preferred Stock may be convertible into. Upon conversion of the Gopher
Convertible Note and the 20,000 shares of Series H Preferred Stock, Gonzalez would be entitled to less than 50% of the resulting outstanding
shares of common stock of the Company following conversion in full and, as a result, such transaction is not considered a change of control.
On May 19, 2021, the Company
entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of Note Balance Principal and Accrued Interest (the
“Gonzalez Agreement”) with third party, GBT-CR, IGOR 1 Corp and Gonzalez. Pursuant to the Gonzalez Agreement, without any
party admission of liability and to avoid litigation, the parties had agreed to (i) extend the GBT Convertible Note maturity date to December
31,2022, (ii) amend the GBT Convertible Note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature
to the GBT Convertible Note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading
day prior to the conversion date and (iii) provided for an assignment of the GBT Convertible Note by Gonzalez to a third party.
GBT-CR is in the business of the strategic management
of BPO (Business Process Outsourcing) digital communications processing for enterprises and startups, distributed ledger technology development,
AI development and fintech software development and applications.
The Company accounted for its investment in GBT-CR
using the equity method of accounting; however, in 2020, the Company owned less than 20% after GBT-CR issued additional shares to other
investors therefore exercised no control over GBT-CR; therefore, this investment is currently accounted for under the cost method. Moreover,
on March 19, 2020, California Governor Gavin Newsom issued a stay-at-home order to protect the health and well-being of all Californians
and to establish consistency across the state in order to slow the spread of COVID-19. California was therefore under strict quarantine
control and travel has been severely restricted, resulting in disruptions to work, communications, and access to files (due to limited
access to facilities). The stay-at-home order was lifted in California only on January 25, 2021. 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 Company’s 10-day VWAP. Gonzalez will provide services in connection
with the development of the business as well as GBT Tokenize’s capital raising efforts. The term of the Consulting Agreement is
two years. During year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to Stanley Hills in a private transaction
that the Company is not part to. The closing of the Tokenize Agreement occurred on March 9, 2020.
Through this Joint Venture the parties commenced development
of an intelligent human vital signs’ device, which we currently refer to as the qTerm. The platform is an expansion of the existing
license agreement with GBT Tokenize Corp., which provided GBT Tokenize Corp. with an exclusive territory of California to develop certain
of the Company’s technology. As the nature of the platform cannot be restricted only to California, the Company’s joint venture
GBT Tokenize Corp. will be compensated with additional two hundred million shares of the Company to strengthen its funding, subject to
board approval. A provisional patent application for the 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 VisionWave’s issued and outstanding shares
of Common Stock, where the remainder of the 50% of VisionWave’s issued and outstanding shares of Common Stock are owned by a corporation
controlled by Stanley Hills, 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 September 30, 2024 and December 31, 2023, was $0 and $0, respectively.
Note 7 – Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses at September 30, 2024 and December
31, 2023 consist of the following:
Schedule of accounts payable and accrued expenses | |
| |
|
| |
2024 | |
2023 |
Accounts payable | |
$ | 790,043 | | |
$ | 773,974 | |
Accrued liabilities | |
| — | | |
| 499,492 | |
Accrued interest | |
| 1,844,429 | | |
| 4,099,380 | |
Total | |
$ | 2,634,472 | | |
$ | 5,372,846 | |
Accounts payable consisted of approximately $659k
aged outstanding balances due to two vendors over 2 years.
The decrease in accrued liabilities was due to the
reclassification of $490k 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 - RP | |
$ | 1,070,000 | | |
$ | 770,000 | |
Accrued interest - RP | |
| 144,644 | | |
| 96,115 | |
Other payables - RP | |
| 1,697,297 | | |
| 901,595 | |
Total | |
$ | 2,911,941 | | |
$ | 1,767,710 | |
Accounts payable – related parties consisted
of approximately $1,070k 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 September 30, 2024.
Other payables consisted of approximately $1.7 million
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 September 30, 2024
and December 31, 2023 consist of the following:
Schedule of convertible notes payable – non related parties | |
| |
|
| |
September 30, | |
December 31, |
| |
2024 | |
2023 |
Convertible note payable to GBT Technologies S.A | |
$ | 4,818,411 | | |
$ | 5,175,496 | |
Convertible notes payable to 1800 | |
| 20,580 | | |
| 70,760 | |
Convertible notes payable to Glen | |
| 292,500 | | |
| 462,500 | |
Total convertible notes payable, non-related parties | |
| 5,131,491 | | |
| 5,708,756 | |
Unamortized debt discount | |
| (0 | ) | |
| (43,739 | ) |
Convertible notes payable – nonrelated parties | |
| 5,131,491 | | |
| 5,665,017 | |
Less current portion | |
| (5,131,491 | ) | |
| (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 on December 31, 2021. At the election of the holder, the convertible note can be converted into a maximum
of 20,000 shares of Series H Preferred Stock. Each share of Series H Preferred Stock is convertible, at the option of the holder
but subject to the Company increasing its authorized shares of common stock, into such number of shares of common stock of the Company
as determined by dividing the Stated Value ($500 per share) by the conversion price ($500 per share). This convertible note may convert
into shares of the Company’s common stock at a conversion price equal to 85% of the lowest trading price with a 20-day lookback
immediately preceding the date of conversion and therefore recorded as derivative liability.
On May 19, 2021, the Company,
Gonzalez, GBT-CR and IGOR 1 Corp entered into a Mutual Release and Settlement Agreement and Irrevocable Assignment of outstanding balance
plus accrued interest (the “Gonzalez Agreement”). Pursuant to the Gonzalez Agreement, without any party admission of liability
and to avoid litigation, the parties had agreed to (i) extend the GBT convertible note maturity date to December 31, 2022, (ii) amend
the GBT convertible note terms to include a beneficial ownership blocker of 4.99% and a modified conversion feature to the GBT convertible
note with 15% discount to the market price during the 20 trading day period ending on the latest complete trading day prior to the conversion
date and (iii) provided for an assignment of the GBT convertible note by Gonzalez to a third party. As a result of the change in terms
of this convertible note, the Company took a charge related to the modification of debt of $13,777,480 during the year ended December
31, 2021. This convertible note is recorded as derivative liability because of the discounted price on conversion.
During the period ended September
30, 2024, IGOR 1 converted $195,500 of the convertible note into 2,300,000,000 shares of the Company’s common stock.
As detailed in this report,
during the period ended September 30, 2024, IGOR 1 settled $3,000,000 outstanding note balance in exchange of 10,000,000 restricted shares
of AVAI owned by the Company.
As of September 30, 2024,
the note had an outstanding balance of $4,818,411 and accrued interest of $72,870.22.
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 Company’s common
stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion. In addition,
upon the occurrence and during the continuation of an event of default (as defined in the DL Convertible Note), the DL Convertible Note
shall become immediately due and payable and the Company shall pay to DL, in full satisfaction of its obligations hereunder, additional
amounts as set forth in the DL Convertible Note. In no event shall DL be allowed to effect a conversion if such conversion, along with
all other shares of Company common stock beneficially owned by DL and its affiliates would exceed 4.99% of the outstanding shares of the
common stock of the Company.
As of December 31, 2023,
the note had an outstanding balance of $20,180 and accrued interest of $6,041.
During the period ended September
30, 2024, 1800 Diagonal converted the remaining $20,180 of the convertible note with all accrued interest into 295,534,118 shares of the
Company’s common stock.
As of September 30, 2024,
the note had an outstanding balance of $0 and an interest of $0.
Outstanding Notes
Glen Eagle
The Company entered into a series of loan arrangements
with Glen Eagles Acquisition LP pursuant to which it received $512,500 in loans (the “Debt”) from August 2021 up to September
2022. The original funded amount of $457,500 included convertible feature into shares of the Company’s common stock at a conversion
price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion.
In order to include a convertible feature for the
$55,000 which was not covered by convertible feature, on January 24, 2023, the Company issued a consolidated convertible promissory note
to Glen Eagles Acquisition LP in the principal amount of $512,500, which include all prior convertible notes with addition of the $55,000
straight note. The convertible promissory note bears interest of 10% and is payable at maturity on December 31, 2023. Glen Eagles Acquisition
LP may convert the consolidated convertible Note into shares of the Company’s common stock at a conversion price equal to 85% of
the lowest trading price during the 20-day period preceding the date of conversion. The Company recorded a loss on debt extinguishment
of $92,737 at the issuance date.
During the period ended September
30, 2024, Glen Eagle converted $170,000 of the convertible note into 2,000,000,000 shares of the Company’s common stock.
As of September 30, 2024,
the consolidated convertible note had an outstanding balance of $292,500 and an accrued interest of $128,029.
1800 Diagonal Lending LLC Convertible Note
$50,580 - On April 24, 2023, the Company entered into a Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor
(“DL”) pursuant to which the Company issued to DL a Convertible Promissory Note (the “DL Note”) in the aggregate
principal amount of $50,580 for a purchase price of $42,150. The DL Note has a maturity date of July 24, 2024 and the Company has agreed
to pay interest on the unpaid principal balance of the DL Note at the rate of six percent (6.0%) per annum from the date on which the
DL Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by
prepayment or otherwise. The Company shall have the right to prepay the DL Note, provided it makes a payment including a prepayment to
DL as set forth in the DL Note.
The outstanding principal amount of the DL Note may
not be converted prior to the period beginning on the date that is 180 days following the Issue Date. Following the 180th day,
DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest
trading price with a 20-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation
of an Event of Default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to
DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed
to effect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates
would exceed 4.99% of the outstanding shares of the common stock of the Company.
As of September 30, 2024,
the note had an outstanding balance of $20,580 and an accrued interest of $6,244.
Convertible notes payable – related parties at September 30, 2024
and December 31, 2023 consist of the following:
Schedule of convertible note payable – related parties | |
| |
|
| |
September 30, | |
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 $1,214,900 may
be converted into shares of common stock of the Company at a conversion price equal to 85% multiplied by the lowest one trading price
for the common stock during the 20-trading day period ending on the latest complete trading day prior to the conversion date. Since the
conversion price will vary based on the Company’s stock price, the beneficial conversion feature associated with this note is accounted
for as a derivative liability. Stanley had agreed to restrict its ability to convert the Debt and receive shares of common stock
such that the number of shares of common stock held by it and its affiliates after such conversion or exercise
does not exceed 4.99% of the then issued and outstanding shares of common stock. During the year ended December 31, 2021, Stanley converted
$1,231,466 of its convertible note plus interest into 4,420,758 shares of the Company’s common stock, and during
the year ended December 31, 2021, Stanley loaned the Company an additional $325,000. Also, during the year ended December 31, 2021, the
Company transferred the SURG shares received as repayment of $800,000 of this convertible note and also converted $126,003 of accrued
interest into the principal balance. During the year ended December 31, 2021, Gonzalez assigned all his accrued balances of $424,731 to
Stanley in a private transaction that the Company is not part to (See Note 10). On January 2, 2023, the Company issued a convertible promissory
note to Stanley for its credit balances in the principal amount of $750,000. The convertible promissory note bears interest of 10% and
is payable at maturity on September 30, 2024. Stanley may convert the consolidated convertible Note into shares of the Company’s
common stock at a conversion price equal to 85% of the lowest trading price during the 20-day period preceding the date of conversion.
The Company recorded a gain on debt extinguishment of $408,034 at the issuance date.
During the period ended September
30, 2024, Stanley Hills converted $170,000 of the convertible note into 2,000,000,000 shares of the Company’s common stock.
As of September 30, 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 September30, 2024 and December 31, 2023 was $86,370 and $49,482, respectively.
Discounts on convertible notes
The Company recognized debt discount of $50,873 and
$268,423 during the nine months ended September 30, 2024 and year ended December 31, 2023, respectively, related to the amortization of
the debt discount on convertible notes. The unamortized debt discount at September 30, 2024 and 2023 was $0 and $46,003, respectively.
A roll-forward of the convertible notes payable from
December 31, 2023 to September 30, 2024 is below:
Schedule of roll-forward of the convertible notes payable | |
| | |
Convertible notes payable, December 31, 2023, Net | |
$ | 6,324,148 | |
Conversion to common stock | |
| (555,680 | ) |
Repayments | |
| (161,585 | ) |
Amortization of debt discounts | |
| (46,003 | ) |
Convertible notes payable, September 30, 2024, Net | |
$ | 5,652,886 | |
Note 9 – Notes Payable, Non-related Parties
and Related Party
Notes payable, non-related parties at September 30,
2024 and December 31, 2023 consist of the following:
Schedule of notes payable, non-related parties | |
| |
|
| |
September 30, | |
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 | |
| (21,252 | ) | |
| (46,533 | ) |
Notes payable, long-term portion | |
$ | 328,748 | | |
$ | 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 $1,771 after 24 months
from the Original Note commencing on or around June 22, 2022. On March 17, 2022 the SBA notified it deferred the payments to
all COVID-19 EIDL loans will have the first payment due extended from 24-months to 30-months from the date of the note. The Modified
Note will continue to bear interest at 3.75% and is due 30 years from the date of issuance of the Original Note. The Modified Note
is guaranteed by Douglas Davis, the former CEO of the Company and current consultant, as well as by GBT Tokenize Corp. The additional
funding of $200,000 was received by the Company on October 5, 2021. The current portion of principal balance of the note at September
30, 2024 and December 31, 2023 was $21,252 and $21,252 plus accrued interest of $43,377 and $36,832, respectively. The noncurrent portion
of principal balance of the note at September 30, 2024 and December 31, 2023 was $328,748 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.
The outstanding principal
amount of the DL Note may not be converted into the Company common shares except in the event of default. In the event of default on the
DL Note, DL may convert the DL Note into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading
price during the 10 day period immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation
of an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to
DL, in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed
to affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates
would exceed 4.99% of the outstanding shares of the common stock of the Company.
During the nine months ended
September 30, 2024, the note has been fully repaid.
As of September 30, 2024 and December 31, 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 of the Company’s common stock at a conversion price equal to 75% of the lowest trading price
with a 10-day look back immediately preceding the date of conversion. In addition, upon the occurrence and during the continuation of
an event of default (as defined in the DL Note), the DL Note shall become immediately due and payable and the Company shall pay to DL,
in full satisfaction of its obligations hereunder, additional amounts as set forth in the DL Note. In no event shall DL be allowed to
affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by DL and its affiliates
would exceed 4.99% of the outstanding shares of the common stock of the Company.
During the nine months ended
September 30, 2024, the note has been fully repaid.
As of September 30, 2024
and December 31, 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 September 30, 2024
and December 31, 2023 consist of the following:
Schedule of notes payable, related parties | |
| |
|
| |
September 30, | |
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 | |
$ | — | | |
$ | — | |
Alpha Eda
On November 15, 2020, the Company issued a promissory
note to Alpha Eda, LLC (“Alpha”), a related party for $140,000. The note accrues interest at 10%, is unsecured and was
due on September 30, 2021. On March 31, 2023 Alpha and the Company extended the note maturity to December 31, 2023. The balance
of the note at September 30, 2024 and December 31, 2023 was $140,000 and $140,000 plus accrued interest of $57,143 and $46,633, respectively.
Note 10 – Accrued Settlement
Schedule of accrued settlement | |
| |
|
| |
September 30, 2024 | |
December 31, 2023 |
Accrued Settlement Payable | |
| 4,090,057 | | |
| 4,090,057 | |
Total | |
$ | 4,090,057 | | |
$ | 4,090,057 | |
In connection with a legal matter filed by the Investor
of the $8,340,000 Senior Secured Redeemable Convertible Debenture, on December 23, 2019, in the pending arbitration between the Company
and the Investor, an Interim Award was entered in favor of the Investor. On January 31, 2020, the Company was informed that a final award
was entered (the “Final Award”). The Final Award affirms that certain sections of the Senior Secured Redeemable Convertible
Debenture (the “Debenture”) constitute unenforceable liquidated damages penalties and were stricken. Further, it was
determined that the Investor was entitled to recovery of their attorney’s fees. Consequently, the arbitrator awarded Investor an
award of $4,034,444 plus interest of 7.25% accrued from May 15, 2019 (presented separately in accounts payable and accrued expenses)
and costs of $55,613. In connection with this settlement, the Company recognized a gain on the settlement of debt of $1,375,556 in
2019 as the difference between the carrying amount of the debt and the amount awarded by the arbitrator. The Company recorded accrued
settlement of $4,090,057 and $4,090,057 at September 30, 2024 and December 31, 2023, respectively.
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 Company’s stock price which results in the conversion feature
being recorded as a derivative liability.
The FV of the derivative liability is recorded and
shown separately under current liabilities. Changes in the FV of the derivative liability is recorded in the statement of operations under
other income (expense).
The Company uses a weighted average Black-Scholes
option pricing model with the following assumptions to measure the FV of derivative liability at September 30, 2024 and December 31, 2023:
Schedule of assumptions | |
| |
|
| |
September 30, | |
December 31, |
| |
2024 | |
2023 |
Stock price | |
$ | 0.0001 | | |
$ | 0.0002 | |
| |
| | | |
| | |
Risk free rate | |
| 4.38 – 5.46 | % | |
| 5.26 – 5.60 | % |
Volatility | |
| 265 – 509 | % | |
| 427 – 502 | % |
Conversion/ Exercise price | |
$ | 0.000085 | | |
$ | 0.000075 – 0.000085 | |
Dividend rate | |
| 0 | % | |
| 0 | % |
The following table represents the Company’s
derivative liability activity for the period ended September 30, 2024:
Schedule of derivative liability activity | |
| | |
Derivative liability balance, December 31, 2023 | |
$ | 14,116,062 | |
Issuance of derivative liability during the period | |
| — | |
Fair value of beneficial conversion feature of debt converted | |
| (694,919 | ) |
Change in derivative liability during the period | |
| (12,755,202 | ) |
Derivative liability balance, September 30, 2024 | |
$ | 665,941 | |
The significant decrease in the fair value of derivative
liability was mainly due to the decrease in the stock prices from $0.0002 to $0.0001 from Q4 2023 to Q3 2024, as well as the conversions
during the nine months ended September 30, 2024, and the decrease in remaining convertible principal balances lower the derivative liabilities.
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.
|
● |
To amend the Company’s Articles of Incorporation, (the “Articles of Incorporation”) to increase the number of authorized shares of common stock, par value $0.00001 per share (the “Common Stock”), of the Company from 2,000,000,000 shares to 10,000,000,000 shares. This action concluded on August 11, 2022. |
|
● |
(i) authorize the Company’s Board of Directors to effect, in its sole discretion, a reverse stock split of the Common Stock in a ratio of up to 1-for-500 (the “Reverse Stock Split”), and (ii) authorize the filing of an amendment to the Company’s Articles of Incorporation to implement the Reverse Stock Split and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time prior to December 31, 2023. This action was not commenced yet by the Company’s board. |
On October 12, 2023, the Company amended its articles
of incorporation to increase its authorized shares of common stock to 30,000,000,000 (the “Increase Amendment”). The Increase
Amendment was approved by the board of directors as well as the shareholders holding in excess of a majority of the issued and outstanding
voting shares of the Company.
During the period ended September 30, 2024, the Company
had the following transactions in its common stock: