GBLT Corp. — Audit Report / Information 2022

May 4, 2023

GBLT CORP.

Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

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Independent Auditor's Report

To the Shareholders of GBLT Corp.

Opinion

We have audited the consolidated financial statements of GBLT Corp. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2022 and 2021, and the consolidated statements of comprehensive income (loss), cash flows and changes in equity for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements, which describes events or conditions that indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters, that in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of the audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

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Other Information

Management is responsible for the other information. The other information comprises the information included in Management’s Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial

Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Otto Ehinger.

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DALE MATHESON CARR-HILTON LABONTE LLP CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, BC

May 3, 2023

GBLT CORP. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2022 AND 2021

(Expressed in Euros)

		December 31,	December 31,
		2022	2021
Assets
Current assets:
Cash (Note 18)	€	97,875 €	580,253
Prepaid expenses		6,296	3,994
Deposits on inventory		326,666	927,736
Accounts receivable (Notes 6,14 and 18)		2,566,701	2,728,790
Inventories		4,197,636	2,468,668
Loans receivable (Note 7)		28,636	12,500
Total current assets		7,223,810	6,721,941
Related party loans receivable (Notes 7, 14 and 18)		152,272	149,011
Equipment (Note 8)		222,793	25,039
Right of use assets (Note 9)		161,979	188,677
Goodwill and intangible (Note 5)		159,706	-
Investment in GBT Africa (Note 18)		-	44,770
Total Assets	€	7,920,560 €	7,129,438
Liabilities
Current liabilities:
Bank indebtedness (Notes 10 and 18)	€	961,608 €	959,290
Accounts payable and accrued liabilities (Notes 11 and 18)		3,702,357	4,463,799
Sales taxes payable		465,360	318,870
Customer deposits received on sales orders		1,477,748	49,993
Loans payable – current (Notes 12 and 18)		792,017	1,096,535
Lease liability (Note 13)		49,792	49,369
Debentures (Notes 17 and 18)		181,560	177,188
Due to related parties (Notes 14 and 18)		-	355,482
Total current liabilities		7,630,442	7,470,526
Loans payable (Notes 12 and 18)		564,151	50,000
Lease liability (Note 13)		111,877	137,748
Due to related parties (Notes 14 and 18)		126,992	47,044
Total Liabilities		8,433,462	7,705,318
Shareholders’ Equity
Share capital (Note 15)		7,705,691	7,705,691
Share-based payment reserve (Note 15)		4,744,776	4,744,776
Accumulated other comprehensive income		(226,436)	(180,721)
Accumulated deficit		(12,672,411)	(12,845,626)
Total Shareholders’ Deficit to Equity Holders of the Company		(448,380)	(575,880)
Non-controlling interest		(64,522)	-
Total Shareholders’ Deficit		(512,902)	(575,880)
Total Liabilities and Shareholders’ Deficit	€	7,920,560 €	7,129,438

The accompanying notes are an integral part of these consolidated financial statements. Going Concern (Note 1) Commitments (Note 22) Subsequent events (Note 23)

Approved by the Directors:

(s) John Denham

John Denham, Director

(s) Joachim Thilo Senst Joachim Thilo Senst, Director

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GBLT CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

		December 31,	December 31,
		2022	2021
Revenue (Notes 14 and 20)	€	39,711,821€	31,112,337
Cost of Sales		35,700,383	28,567,910
Gross Margin		4,011,438	2,544,427
Expenses
Marketing and travel		213,112	164,055
Wages (Note 14)		1,370,435	732,859
Professional fees (Note 14)		256,360	142,961
Interest and bank charges (Note 12,13,14 &17)		322,904	156,124
General and administrative		1,075,495	665,981
Bad debt expense and factoring fees (Note 14)		359,603	419,370
Rent expense		43,830	13,917
Consulting fees (Note 14)		331,119	122,523
Depreciation (Notes 8 and 9)		106,231	50,207
Foreign exchange (gain) loss		(223,037)	100,652
Listing and filing fees		8,405	30,983
Share based payments		-	118,570
Total expenses		3,864,457	2,718,202
Income (Loss) before Other Items		146,981	(173,775)
Other Items
Gain on accounts payable settlement		20,155	-
Net Income (Loss)		167,136	(173,775)
Items that will not be reclassified to profit and loss
Impairment loss (Note 18)		(44,770)	-
Foreign exchange gain (loss)		(946)	(144,721)
Net and Comprehensive Income(Loss)	€	121,420 €	(318,496)
Basic and Diluted Income(Loss)Per Share	€	0.00 €	0.00
Weighted Average Number of Shares Outstanding		113,617,612	113,062,319
Net income (loss) attributed to:
Shareholder to GBLT	€	173,216€	(318,496)
Non-controlling interest		(6,080)	-
Net Income(Loss)	€	167,136 €	(318,496)

The accompanying notes are an integral part of these consolidated financial statements.

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GBLT CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

	December 31, 2022 December 31, 2021
Cash Flows used in Operating Activities Net Income (loss) for the year Items not affecting cash from operations: Share based payments Depreciation Debenture interest and accretion Finance fees – lease liability Provision for receivable balances Gain on accounts payable settlement Foreign exchange Changes in non-cash working capital items: Prepaid expenses Accounts receivable Inventories Sales tax payable Accounts payable and accrued liabilities Deposits	€ 167,136 € (173,775) - 118,570 106,231 50,207 18,271 16,860 8,188 10,407 131,510 - (20,155) - (1,157) (129,425) 600,981 (868,696) 300,055 126,206 (1,152,370) (196,071) 145,663 138,338 (746,734) 300,516 470,133 (204,034)
Net Cash from (used in) by Operating Activities	(103,757) 17,684
Cash Flows from (used in) Investing Activities Acquisition of equipment Loan advances Cash acquired on acquisition of Getec	(174,854) (14,883) (16,136) (12,500) 15,775 -
Net Cash from (used in) Investing Activities	(175,215) (27,383)
Cash Flows from Financing Activities Bank indebtedness Loans payable (net) Lease liability payments Due to related parties Proceeds from exercise of stock options Repayment of debentures–interest	2,318 9,879 145,653 1,009,863 (58,894) (57,023) (278,795) 78,384 - 5,243 (13,687) (15,141)
Net Cash from (used in) Financing Activities	(203,405) 1,031,205
Change in cash for the year Cash, beginning of year	(482,378) 332,828 580,253 387,327
Cash, End of Year	€ 97,875 € 580,253

The accompanying notes are an integral part of these consolidated financial statements.

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GBLT CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

	Capital	Stock		Accumulated
			Share-based	other	Non-
			payment	comprehensive	controlling		Total
	Shares	Amount	reserve	income	interests	Deficit	Equity
	#	€	€	€	€	€	€
Balance - December 31, 2020	113,047,838	7,649,592	4,656,663	(36,000)	-	(12,671,851)	(401,596)
Share based payments	-	-	118,570	-	-	-	118,570
Exercise of stock options	150,000	35,700	30,457	-	-	-	5,243
Shares issued to settle debt	130,252	20,399	-	-	-	-	20,399
Net and comprehensive income for the year	-	-	-	(144,721)	-	(173,775)	(318,496)
Balance - December 31, 2021	113,328,090	7,705,691	4,744,776	(180,721)	-	(12,845,626)	(575,880)
Non-controlling interest - acquisition	-	-	-	-	(58,442)	-	(58,442)
Net and comprehensive income for the year	-	-	-	(45,715)	(6,080)	173,216	121,420
Balance - December 31, 2022	113,328,090	7,705,691	4,744,776	(226,436)	(64,522)	(12,672,411)	(512,902)

The accompanying notes are an integral part of these consolidated financial statements.

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

1. Description of Business and Going Concern

GBLT Corp. (the “Company” or “GBLT”) was incorporated under the Business Corporation Act (Ontario) on December 19, 2014. The registered office is located at Suite 6000, 1 First Canadian Place, PO Box 367, 100 King St W, Toronto, Ontario, M5X 1E2, Canada. The Company’s common shares are traded on the Toronto Venture Stock Exchange (“TSX-V”).

The Company’s majority shareholder is GBT Asia Ltd. (“GBT Asia”) through its subsidiary SWT Beteiligungs AG (“SWT”).

Through its subsidiaries, GBLT manufactures and distributes a wide range of proprietary mobile power products including batteries, mobile storage systems, digital displays and LED lighting products, solar panels as well as a line of medical supplies. GBLT has brought to market mobile storage solutions that use lithium battery technology through world class brand names such as Polaroid, Kodak, and legacy brands GBT and AGFAPHOTO. Through Gebäude Technologie Center GmbH (“Getec”) a subsidiary acquired in 2022 the Company installs solar panels.

During the year ended December 31, 2022, the Company generated income from operations of €121,420 (2021 loss of €318,496) and as at December 31, 2022 its current liabilities exceeds its current assets by of €406,632 (2021 – current liabilities exceeds current assets by €748,585). The Company's ability to continue as a going concern is dependent upon raising additional funds and on achieving profitable operations. Although the Company has been successful in raising funds in the past, and generating net income there is no guarantee it will be able to do so in the future. These conditions raise significant doubt regarding the Company's ability to continue as a going concern.

These consolidated financial statements have been prepared on a going concern basis which presumes the realization of assets and discharge of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements and the balance sheet classification have not been adjusted as would be required, if the going concern assumption was not appropriate. Such adjustments could be material.

2. Basis of Preparation and Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These consolidated financial statements were approved by the Board of Directors on May 3, 2023.

3. Significant Accounting Policies

The significant accounting policies used in the preparation of these consolidated financial statements are summarized below.

a) Basis of Consolidation

Subsidiaries are entities that the Company controls, either directly or indirectly. Control is defined as the exposure, or rights, to variable returns from involvement with an investee and the ability to affect those returns through power over the investee. Power over an investee exists when the Company has existing rights that give the Company the ability to direct the activities that significantly affect the investee’s returns. This control is generally evidenced through owning more than 50% of the voting rights or currently exercisable potential voting rights of a company’s share capital. All inter-company balances and transactions, including unrealized profits and losses arising from intra-group transactions, have been eliminated upon consolidation. Where necessary, adjustments are made to the results of the subsidiaries and entities to align their accounting policies with those used by the Company.

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

The following subsidiaries have been consolidated for all dates presented within these financial statements:

	Country of	Percentage
	incorporation	owned
German Battery Trading GMBH (“GBT”)	Germany	100%
Gebäude Technologie Center GmbH (“Getec”) – acquired	Germany	50% plus
2022		one share

The Company also owns a 25% interest in GBLT Africa (Pty) Ltd. (“GBT Africa”) which is accounted for at FVTOCI as the Company has no voting rights (Note 18).

b) Basis of Measurement

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value (Note 18). In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

• c) Cash and Cash Equivalents

Cash and cash equivalents comprise cash at banks and short-term money market instruments with an original maturity of three months or less that are readily convertible into a known amount of cash. The Company does not have any cash equivalents as of December 31, 2022 and 2021.

• d) Financial Instruments

Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-byinstrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

The following table shows the classification of financial assets and liabilities under IFRS 9:

Cash amortized cost Accounts receivable amortized cost / FVTOCI Related party loans receivable amortized cost Loans receivable Amortized cost Investment in GBT Africa FVTOCI Bank indebtedness Amortized cost Accounts payable amortized cost Loans payable amortized cost Debentures amortized cost Due to related parties amortized cost

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

Measurement

Financial assets at FVTOCI

Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income (loss).

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the consolidated statements of comprehensive income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the consolidated statements of comprehensive income (loss) in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognized in the consolidated statements of comprehensive income (loss).

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the consolidated statements of comprehensive income (loss), as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the consolidated statements of comprehensive income (loss). However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

Financial liabilities

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the consolidated statements of comprehensive income (loss).

e) Inventories

Inventories consists of finished goods. Inventories are stated at lower of historical cost and net realizable value. Cost for all inventory is determined using the weighted average method. Net realizable value represents the estimated selling price for inventories less all estimated costs necessary to make the sale.

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

f) Equipment

Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property and equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The assets’ residual value, depreciation methods and useful lives are reviewed and adjusted, if appropriate, at each reporting date. Depreciation is provided for over the estimated lives of the related assets, being 4 years, on a straight line basis.

Gains and losses on disposals of equipment are determined by comparing the proceeds with the carrying amount and are recognized within other gains or losses in earnings.

g) Investment in GBT Africa

The Company acquired 25% of the common shares of GBT Africa for €110,413; the remaining 75% interest is held equally by two other investors to whom the Company has yielded all voting rights. Accordingly, the Company does not hold significant influence over this entity and accounts for the investment as a FVTOCI financial instrument. Because GBT Africa is privately owned, the Company will adjust the fair value when events or circumstances indicate that this value has changed.

h) Provisions

Provisions are recorded when a present legal or constructive obligation exists as a result of past events, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

The expense relating to any provision is presented in profit or loss net of any reimbursement. Provisions are discounted using a current risk-free pre-tax rate that reflects where appropriate the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

i) Revenue Recognition

Sales revenues are recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods or service, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold or services rendered, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. The Company recognizes revenue upon shipment of goods or receipt of goods by the customer, depending on the terms of sale, or when the service has been completed or installed and the customer has accepted the installation.

• j) Current and Deferred Income Taxes

Income tax expense comprises current and deferred income taxes. Current and deferred income taxes are recognized in profit or loss except to the extent that they relate to a business combination or to items recognized directly in equity or in other comprehensive income.

Current income taxes are the expected taxes payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous periods.

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

Deferred income taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted, at the end of each reporting period. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits, and deductible temporary differences to the extent that it is probably that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that the related tax benefit will be realized.

k) Foreign Currencies

The Company’s presentation currency and the functional currency of all its subsidiaries is the European Euro as this is the principal currency of the economic environment in which they operate. The functional currency of the Company is the Canadian Dollar.

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the period in which they arise.

The financial position and results of operations whose functional currency is different from the Company’s presentation currency are translated as follows: assets and liabilities are translated at period-end exchange rates prevailing at the reporting date; and income and expenses are translated at average exchange rates for the period.

Exchange differences arising on translation of foreign operations are recorded in accumulated other comprehensive income in the consolidated statements of comprehensive income (loss). These differences are recognized in profit or loss in the period in which the operation is disposed.

l) Stock Options and Share-Based Payments

The Company’s Stock Option Plan allows directors, officers, employees, and consultants to acquire common shares of the Company. The fair value of stock options granted to employees is measured at fair value at the grant date based on the market value of the Company’s common shares on that date. Where equity instruments are granted to parties other than employees, they are recorded by reference to the fair value of the services received. If the fair value of the services received cannot be reliably estimated, the Company measures the services received by reference to the fair value of the equity instruments granted, measured at the date the counterparty renders services. All stock based compensation is recognized in the consolidated statements of comprehensive income or (loss) over the vesting period.

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

m) Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated using the treasury share method whereby all “in the money” options, warrants and equivalents are assumed to have been exercised at the beginning of the period and the proceeds from the exercise are assumed to have been used to purchase common shares at the average market price during the period.

n) Leases (“IFRS 16”)

The Company assesses new contracts at inception to determine whether a lease is present. This assessment involves significant judgement about whether an asset is specified for the Company, whether the Company obtains substantially all the economic benefits from use of that asset, and whether the Company has the right to control the use of the asset.

Leases are recognised as right of use (“ROU”) assets with a corresponding liability at the date the leased asset becomes available for use by the Company. Each lease payment is allocated between the lease liability and finance expense. The finance expense is charged to the consolidated statements of comprehensive income (loss) over the lease term to present a constant periodic rate of interest on the remaining balance of the liability for each reporting period. ROU assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Assets and liabilities arising from leases are initially measured at present value. Lease liabilities include the net present value of fixed payments less any lease incentives receivable, variable lease payments that are based on an index or a rate, amounts expected to be payable by the Company under residual value guarantees, the exercise price of a purchase option, if the Company is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option. It is remeasured when there is change in the future lease payments arising from a change in an index or rate, if there is a change in the amount expected to be payable under a residual value guarantee, or if there is a change in the assessment of whether the Company will exercise a purchase, extension, or termination option that is within the control of the Company. Lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or at the Company’s incremental borrowing rate.

ROU assets are measured at cost comprising of the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date, or any initial direct costs and restoration costs.

Payments associated with short-term leases (term of 12 months or less) of low-value assets are recognised on a straight -line basis as an expense in the consolidated statements of comprehensive income (loss). The Company applies a single discount rate to portfolios of leases with similar characteristics.

Lease modifications will be accounted for as a separate lease, if the modification increases the scope of the lease, and if the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope. For modifications that don’t justify a separate lease, or where the increase in consideration is not commensurate, at the effective date of the lease modification, the Company will remeasure the lease liability with a corresponding adjustment to the ROU asset using the rate implicit to the lease, if that rate can be determined, or the Company’s incremental borrowing rate. A modification that decreases the scope of the lease will be accounted for by decreasing the carrying amount of the ROU asset, and recognising a gain or loss in the net loss and comprehensive loss that reflects the proportionate decrease in scope.

13

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

o) Business combinations

A business combination is a transaction or event in which an acquirer obtains control of one or more businesses and is accounted for using the acquisition method. The total consideration paid for the acquisition is the aggregate of the fair values of assets given, liabilities incurred or assumed, and equity instruments issued in exchange for control of the acquiree at the acquisition date. The acquisition date is the date where the Company obtains control of the acquiree. The identifiable assets acquired, and liabilities assumed are recognized at their acquisition date fair values, except for deferred taxes and share based payment awards where IFRS provides exceptions to recording the amounts at fair value. Acquisition costs are expensed to profit or loss.

Judgement is required to determine if the acquisition represented either a business combination or an asset purchase. A key determining factor of the acquisition of a business is evidence of an integrated set of activities with inputs and processes capable of producing outputs. For acquisitions where it is concluded that the acquisitions are the purchase of assets, there is no goodwill recognized on the transaction and acquisition costs are capitalized to the assets purchased rather than expensed. The fair values of the net assets acquired are determined using estimates and judgment.

Contingent consideration, if any, is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. The subsequent accounting for changes in fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates with the corresponding gain or loss being recognized in profit or loss. Judgement is required to determine whether contingent consideration will be paid, and in order to estimate the fair value of contingent consideration upon acquisition and subsequent reporting dates.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets, determined on an acquisition-by-acquisition basis. The choice of measurement basis is made on a transaction-by-transaction basis.

For each acquisition, the excess of total consideration, the fair value of previously held equity interest prior to obtaining control and the non-controlling interest in the acquiree, over the fair value of the identifiable net assets acquired, is recorded as goodwill.

Certain fair values may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they may be adjusted retrospectively in subsequent periods. The measurement period is the period from the acquisition date to the date complete information about facts and circumstances that existed as of the acquisition date is received. However, the measurement period does not exceed one year from the acquisition date.

p) Intangible assets

Intangible assets identified in a business acquisition are stated initially at fair value. Intangible assets are then measured net of accumulated amortization and any impairment losses.

14

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

3. Significant Accounting Policies (continued)

q) Goodwill

Goodwill represents the excess of the consideration paid over the fair value of the net identifiable assets acquired. Goodwill is not amortized.

Goodwill is tested for impairment at least annually. An impairment loss is recognized in the consolidated statement of comprehensive income (loss) whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

• r) Impairment of long-lived assets

At each reporting date, the Company reviews the carrying amounts of its long-lived assets to determine whether there are any indications of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows of other assets or groups of assets (the “cashgenerating unit” or “CGU”).

If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognized as an expense in the consolidated statement of comprehensive income (loss).

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reduced if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of amortization, if no impairment loss had been recognized.

• s) Accounting standards and amendments issued but not yet effective

There are no other pending IFRSs or IFRIC interpretations that are expected to have a material impact on the Company’s consolidated financial statements.

4. Significant Accounting Judgments and Estimates

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Areas requiring a significant degree of estimation and judgment relate to the recoverability of the cash generating units, the fair value measurements for financial instruments and share-based payments, the recoverability and measurement of deferred tax assets and liabilities, inventory valuation and the ability to continue as a going concern. Actual results may differ from those estimates and judgments.

15

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

4. Significant Accounting Judgments and Estimates (continued)

• a) Allowances for Doubtful Accounts

The Company must make an assessment of whether trade receivables are collectible from customers. Accordingly, management establishes an allowance for estimated losses arising from non-payment, taking into consideration customer credit, current economic trends and past experience. If future collections differ from estimates, future earnings would be affected.

b) Valuation and Obsolescence of Inventory

The Company’s inventory is valued at the lower of average cost or net realizable value and management makes an estimate for any item that cannot be sold. If realization of inventory values differ from estimates, future earnings would be affected.

c) Determination of Functional Currency

The functional currency of the Company and each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

d) Valuation of Share-Based Payments and Warrants

The Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments and warrants. Option pricing models require the input of subjective assumptions, including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect fair value estimates and the Company’s net income or net loss and its equity reserves.

e) Recognition and Measurement of Deferred Tax Assets and Liabilities

Actual amounts of income tax expense are not final until tax returns are filed and accepted by the relevant authorities. This occurs subsequent to the issuance of the consolidated financial statements. The final determination of actual amounts may not be completed for a number of years. Therefore, tax assets and liabilities and net income in subsequent periods will be affected by the amount that estimates differ from the final tax return.

f) Goodwill

Goodwill testing requires management to estimate the recoverable amount of the Cash Generating Unit to which the goodwill asset has been allocated. On an annual basis, the Company tests whether goodwill is impaired, based on an estimate of its recoverable amount.

g) Lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. The assessment is reviewed if a significant event or a significant change in circumstances occurs, which affects this assessment.

16

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

5. Acquisition of Getec

On January 1, 2022, the Company completed the acquisition of Gebäude Technologie Center GmbH (“Getec”), a corporation existing under the laws of Germany. Getec offers private installations of solar panels for residential homes, and is currently expanding into industrial and commercial projects. The acquisition was completed pursuant to a purchase agreement whereby the Company acquired 25,001 of the total 50,000 registered capital of Getec, at a cost of €25,001 resulting in the Company owing the controlling interest of Getec.

The acquisition was accounted for accordance with IFRS 3 Business Combinations as the operations of Getec meet the definition of a business. Accordingly, the acquisition is accounted at the fair value of the consideration given up. The net assets acquired and liabilities assumed are recorded at fair value.

The assessment of the purchase price allocation on the date of acquisition has been determined as follows:

Assets Acquired	€
Cash	7,888
Net working capital (liabilities)	(93,988)
Work in process construction contracts	288,299
Property and equipment	38,589
Other assets	32,633
Bank loans	(31,460)
Advance payments received on orders	(376,666)
**Net liabilities assumed –50% of total **	(134,705)
Consideration	€
Cash	25,001
	**25,001 **
Purchase price allocation	€
Net liabilities assumed	(134,705)
Backlog of orders	329
Goodwill	159,377
	**25,001 **

The goodwill generated as a result of this acquisition relates to other intangible assets that do not qualify for separate recognition such as assembled workforce and synergies that do not qualify for separate recognition.

The results of operations of Getec are included in the consolidated financial statements of the Company from January 1, 2022, that date being the date on which the Company’s control of Getec commenced. Getec generated revenues of €1,444,467 and a loss of €12,159 in the period January 1, 2022 to December 31, 2022.

17

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

6. Accounts Receivable

Accounts receivable consist of the following:

		December 31,		December 31,
		2022		2021
Trade receivables (i) (ii)	€	2,511,290	€	2,727,515
Other receivables		55,411		1,276
	€	2,566,701	€	2,728,790

• (i) As at December 31, 2022, €280,757 (2021 - €1,567,531) was due from GBT Asia (Note 14).

• (ii) As at December 31, 2022, €359,641 (2021 - €819,373) of trade receivables were past due (Note 18).

• (iii) As at December 31, 2022, approximately 17% (2021 - 10%) of accounts receivable is subject to factoring and is classified at FVTOCI. The remaining balance is classified at amortized cost.

7. Related Party Loans Receivable

		December 31,	December 31,
		2022	2021
Due from GBT Asia (i)	€	152,272 €	149,011
Due from Director (ii)		28,636	-
Other		-	12,500
	€	180,908 €	161,511

• (i) The loan is unsecured, non-interest bearing and due on demand with no set terms of repayment. As the timing of repayment is not expected within the next year, the loans have been shown as a long-term asset.

• (ii) Represents short term advances to director.

8. Equipment

The changes in the Company’s property and equipment for the years ended December 31, 2022 and 2021 is as follows:

	Equipment	Furniture Vehicles	Intangible	Total
Estimated Useful life	4-13years	3-5years 6years	Indefinite
Cost
At December 31, 2020	€ 69,959	€ 9,763 € -	€ 1,555	€ 81,277
Additions	11,362	3,521-	-	14,883
At December 31, 2021	81,321	13,284 -	1,555	96,160
Acquisition of Getec	2,785	17 74,373	-	77,175
Additions	2,194	2,637 167,681	2,342	174,854
At December 31,2022	€ 86,300	€ 15,938 € 242,054	€ 3,897	€ 348,189
Accumulated Depreciation:
At December 31, 2020	€ 61,601	€ 7,460 € -	€ 1,229	€ 70,290
Additions	717	- -	114	831
At December 31, 2021	62,318	7,460 -	1,343	71,121
Additions	18,548	460 34,204	1,064	54,275
At December 31,2022	€ 80,866	€ 7,920 € 34,204	€ 2,407	€ 125,396
Net Book Value
At December 31, 2021	€ 19,003	€ 5,824 € -	€ 212	€ 25,039
At December 31,2022	€ 5,435	€ 8,018 € 207,850	€ 1,490	€ 222,793

18

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

9. Right-Of-Use Assets

The changes in the Company’s right-of-use assets for the year ended December 31, 2022 and 2021 are as follows:

Balance at December 31, 2020	€	238,053
Depreciation for the year		(49,376)
Balance at December 31, 2021		188,677
Addition of vehicles		25,258
Depreciation for the year		(51,956)
Balance at December 31,2022	€	161,979

10. Bank Indebtedness

As at December 31, 2022, bank indebtedness is comprised of amounts owed to Euram Bank of €961,608 (2021 - €959,290). Interest for the Euram Bank line of credit is payable every three months based on the current 3-month Euribor plus 400 basis points. The Company’s maximum facility under the Euram Bank is €950,000. The Company had exceeded its maximum facility, and the overdrawn amount was repaid subsequent to year end. This facility is guaranteed by a director of the Company up to €950,000 and a pledge of 38,000,000 shares of GBT.

11. Accounts Payables and Accrued Liabilities

		December 31,		December 31,
		2022		2021
Trade payables	€	3,656,464	€	4,379,165
Accrued liabilities		35,625		75,359
Wages payable		10,269		9,275
	€	3,702,357	€	4,463,799

12. Loans Payable

		December 31,	December 31,
		2022	2021
Loan payable to Dr. Flossdorf (i)	€	86,672 €	86,672
Loan payable to Dr. Flossdorf (ii)		50,000	50,000
Loan payable (iii)		508,500	-
Loan payable – Seat bank (iv)		27,993	-
Vehicle loans (v)		181,932	-
Loan payable (vi)		500,000	1,009,863
Other loan		1,070	-
		1,356,168	1,146,535
Less: current portion		792,017	1,096,535
	€	564,151 €	50,000

(i) Loan due on November 12, 2022 and bearing annual interest of 4.8%. The Company is currently in discussions to determine the updated terms of the loan, therefore currently the loan is due on demand.

(ii) Loan due on June 10, 2025 and bearing annual interest of 4.8%.

(iii) The 36-month loan of €508,500 bears an annual interest rate of 6.5%, maturing March 2025. Quarterly interest payments made quarterly commencing March 2022, followed by quarterly interest and principal payments of €68,298 commencing June 2023.

(iv) Loan carries a term of 48 months maturing June 8, 2025, and bears an annual interest rate of 1.48%. Monthly principal and interest payments of €300 with a final payment on the maturity date of €19,875.

(v) The Company is party to various vehicle loans that carry monthly principal and interest payments, interest rates between 0% - 3.99%, and terms between 48 – 72 months.

19

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

12. Loans Payable (continued)

• (vi) The loan was used in order to finance a large inventory purchase. The loan principal and interest were due on December 6, 2022, bearing an interest rate of 15%. The loan is secured by 10,000,000 shares of GBLT, held by SWT AG, a Company controlled by a director of the Company. On the maturity date, €500,000 of the loan was repaid, and the remainder was extended to December 6, 2023 bearing an interest rate of 12.5% (with quarterly interest payment of €15,625).

13. Lease Liability

The Company identified its office rental agreement as right-of-use asset, and has recognized a corresponding lease liability. During the year ended December 31, 2022 a vehicle lease was acquired.

The changes in the Company’s lease liability for the year ended December 31, 2022 and 2021 are as follows:

Balance at December 31, 2020	€	233,732
Lease payments		(57,022)
Finance charges		10,407
Balance at December 31, 2021		187,117
Additions		25,258
Lease payments		(58,894)
Finance charges		8,188
Balance at December 31, 2022		161,669
Less: current portion		(49,972)
	€	111,697

14. Related Party Transactions and Key Management Compensation

Parties are considered to be related, if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control, related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

Due to Related Parties:

		December 31,	December 31,
		2022	2021
Dr. Peter Wolfram Senst (i)	€	- €	111,143
SWT (ii)		93,277	102,296
Dr. Thilo Senst (iii)		-	124,058
Accrued interest and other		33,715	65,029
		126,932	402,526
Less: current portion		-	355,482
	€	126,992 €	47,044

(i) Loan agreement with Dr. Peter Wolfram Senst, a relative of a director, originally dated December 31, 2011 for €330,000. Of that amount, €320,000 bore annual interest at 3.25% and €10,000 bore no interest. The total amount was repayable in 132 monthly payments of €2,500 plus interest commencing October 2011. During 2021 an additional €100,000 was advanced. The loan was fully repaid in 2022.

20

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

14. Related Party Transactions and Key Management Compensation (continued)

• (ii) Loan agreements with SWT dated April 6, 2016 for €50,000, May 3, 2016 for €75,000, and July 12, 2019 for €62,000 bearing interest at 2% per annum. Principal and interest are repayable at the end of the two-year term of the loan. During the year ended December 31, 2020, these loans were all extended to December 31, 2025.

• (iii) During the year ended December 31, 2021, €150,000 was advanced as a short term loan, and was fully repaid in 2022.

During the year ended December 31, 2022 and 2021, the Company entered into the following transactions with related parties and key management:

		2022		2021
Management fees included in wages	€	208,568	€	193,250
Director fees included in consulting		21,899		20,232
Professional fees		29,695		27,435
Interest		24,333		18,315
Sales to GBT Asia*		10,393,042		10,017,860
	€	10,676,537	€	10,277,092

*GBT Asia is used as a vehicle to place sales with end customers that are required by law to source products from Asia. As at December 31, 2022, the Company had trade receivables from GBT Asia of €280,757 (2021 - €1,567,531) (Note 6).

Included in accounts receivable as at December 31, 2022 is a net amount after a provision of €0 (2021 - €131,502) (Note 18). As at December 31, 2022, the Company had recorded a total cumulative impairment of €655,139 on these receivables, of which €131,502 was recorded in the year ended December 31, 2022.

15. Share Capital

Authorized: Unlimited number of shares

Issued: 113,328,090

• (i) On April 23, 2021, 150,000 options were exercised for proceeds of €5,243. The fair value related to these options exercised was transferred from stock-based compensation reserve to share capital of €30,457.

• (ii) On May 13, 2021, 58,824 common shares were issued to settle debt (directors fees). On the date of issuance, the shares had a fair market value of €10,227. On October 18, 2021, 71,428 common shares were issued to settle debt (directors fees). On the date of issuance, the shares had a fair market value of €10,172.

Stock Options

The Company may award stock options from time to time, exercisable into common shares on terms determined by the directors at the time of each award.

The changes in options during the years ended December 31, 2022 and December 31, 2021 are as follows:

as follows:
			Weighted Average
	Number of Options		Exercise Price
Balance, December 31, 2020	6,184,713	€	0.0340
Options exercised	(150,000)		0.0325
Balance,December 31,2021 and 2022	6,034,713	€	0.0340

21

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

15. Share Capital (continued)

The following table summarizes the options outstanding at December 31, 2022 and December 31, 2021:

2021:
Outstanding	Exercisable	Exercise price	Expiry date
5,584,713	5,584,713	€ 0.0343	March 22, 2023*
450,000	450,000	0.0325	August 7, 2025
6,034,713	6,034,713	€0.0340

*expired unexercised subsequent to the year end.

The remaining contractual life of the outstanding options at December 31, 2022 is 0.40 years. The market price on the date the options were exercised in 2021 was €0.25.

Share-based payment reserve:

The share-based payment reserve records items recognized as share-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital.

16. Basic and Diluted Earnings (Loss) per Share

The calculation of basic earnings (loss) per share is based on the income (loss) for the period divided by the weighted average number of shares outstanding during the period. In calculating the diluted earnings (loss) per share, potentially dilutive potential ordinary shares such as warrants and stock options have not been included as they would have the effect of decreasing the loss per share.

17. Debentures

In May 2017, GBLT PLC, the UK subsidiary of the Company issued €329,750 (C$500,000) through the issuance of a non-convertible, subordinated debenture bearing interest at 10% per annum and 435,000 warrants. A total of €26,380 (C$40,000) was withheld from the proceeds as a finder’s fee. The debenture was valued at €230,074, net of its share of issue costs, resulting in an effective interest rate of 18%. The debentures were due on May 19, 2019 or an earlier date as the principal amount may become due and payable with such terms, conditions and provisions laid out as per agreement.

As a result of the RTO transaction, the warrants were converted to 830,880 warrants of the Company. Each warrant has an exercise price of €0.397 (C$0.60) and is exercisable within two years after issuance until March 22, 2020. Because the exercise price is denominated in a foreign currency, the warrants are classified as a derivative liability and are remeasured at the end of each reporting period.

The warrants expired unexercised on March 22, 2020 and accordingly the derivative liability was derecognized.

On September 14, 2020, the Company entered into an agreement with the debenture holder whereby the Company repaid €160,175 (C$250,000) of the Debenture plus accrued interest, and the remaining €160,173 (C$250,000) was rolled over into a new debenture bearing interest at 10% per annum (paid quarterly) and with the principal due on September 22, 2022.

22

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

17. Debentures (continued)

	Debenture
Balance, December 31, 2020	€ 160,173
Foreign currency adjustment	15,296
Interest for the year	16,860
Interest paid in the year	(15,141)
Balance, December 31, 2021	177,188
Foreign currency adjustment	(212)
Interest for the year	18,271
Interest paid in the year	(13,687)
Balance,December 31,2022	€ 181,560
Principal	€ 172,915
Accrued interest	8,645
	€ 181,560

18. Financial Instruments

Financial Assets and Liabilities

		December 31,	December 31,
		2022	2021
Financial Assets:
Fair value through other comprehensive income
Investment in GBT Africa	€	- €	44,770
Accounts receivable (which are factored)		483,017	90,765
Amortized cost
Cash		97,875	580,253
Accounts receivable (which are not factored)		2,083,684	2,728,790
Loan receivable		-	12,500
Related party loans receivable		180,908	149,011
Total Financial Assets	€	2,845,484 €	3,606,089
Financial Liabilities:
Amortized cost
Bank indebtedness	€	961,608€	959,290
Accounts payable		3,702,357	4,463,799
Loans payable		1,356,168	1,146,535
Debentures		181,560	177,188
Due to related parties		126,992	402,526
Total Financial Liabilities	€	6,328,685 €	7,149,338

The fair value of financial assets and financial liabilities at amortized cost is determined in accordance with generally accepted pricing models based on discounted cash flow analysis or using prices from observable current market transactions. The Company considers that the carrying amount of all its financial assets and financial liabilities recognized at amortized cost in the financial statements approximates their fair value due the demand nature or short-term maturity of these instruments.

The following table provides an analysis of the Company’s financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to 3 based on the degree to which the inputs used to determine the fair value are observable.

23

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

18. Financial Instruments (continued)

• Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1, that are observable either directly or indirectly.

• Level 3 fair value measurements are those derived from valuation techniques that include inputs that are not based on observable market data.

The carrying values of cash, accounts receivable, loan receivable, related party accounts and loans receivable, accounts and loans payable, bank indebtedness, due to related parties and debentures approximated their fair values because of the short-term nature of these financial instruments. These financial instruments are classified as financial assets and liabilities at amortized cost and are reported at amortized cost.

The Company acquired 25% of the common shares of GBT Africa for €110,413; the remaining 75% interest is held equally by two other investors to whom the Company has yielded all voting rights. Accordingly, the Company does not hold significant influence over this entity and accounts for it as a FVTOCI financial instrument. Because GBT Africa is privately owned, the Company will adjust the fair value when events or circumstances indicate that this value has changed.

		December 31,		December 31,
Financial instruments at fair value		2022		2021
Level 3
Investment in GBT Africa	€	-	€	44,770

There were no reclassifications between levels 1, 2, and 3 during the years ended December 31, 2022 and 2021. In 2022, the Company recorded an impairment on the investment in GBT Africa of €44,770 (2021 - €65,643) due to the uncertainty of recovery which was recorded within comprehensive income.

The Company’s activities expose it to a variety of financial risks: market risk (including price risk, currency risk and interest rate risk), credit risk and liquidity risk. These risks arise from the normal course of operations and all transactions are undertaken to support the Company’s ability to continue as a going concern. Risk management is carried out by management under policies approved by the Board of Directors. Management identifies and evaluates the financial risks in cooperation with the Company’s operating units. The Company’s overall risk management program seeks to minimize potential adverse effects on the Company’s financial performance, in the context of its general capital management objectives as further described in Note 19.

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is in its cash accounts, accounts receivable and loans receivable. This risk related to cash is managed through the use of a major financial institution which has high credit quality as determined by the rating agencies. Accounts receivable mainly consists of receivables from its customers.

In order to reduce its credit risk related to accounts receivable, the Company has adopted credit policies which include the analysis of the financial position of its customers and the regular review of their credit limits. In some cases, the Company requires bank letters of credit or subscribes to credit insurance.

As at December 31, 2022, 10% of the Company’s trade receivable balance, amounts fully impaired, is over 90 days past due (2021 - 21%). The carrying amounts of accounts receivable and loans receivable as at December 31, 2022 is €2,595,337 (2021 - €2,741,290).

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

18. Financial Instruments (continued)

As at December 31, 2022, three of the Company's customers individually constituted more than 10% of the total trade receivable balance (2021 - three customers). Credit risk associated with accounts receivable is considered medium.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company has a planning and budgeting process in place by which it anticipates and determines the funds required to support its normal operating requirements.

The Company’s ongoing liquidity is impacted by various external events and conditions. The Company expects to repay its financial liabilities in the normal course of operations and to fund future operational and capital requirements through operating cash flows, as well as future equity and debt financing.

The Company coordinates this planning and budgeting process with its financing activities through the capital management process described in Note 19. The Company’s financial liabilities are comprised of its bank indebtedness, trade payables, loans payable, debenture, and amounts due to related parties.

Liquidity risk is assessed as high.

The following table presents the Company’s contractual obligations at December 31, 2022:

	1	2	3	4	4+
Contractual obligations	Year	Years	Years	Years	Years
	€	€	€	€	€
Loans payable:	792,017	347,939	108,085	71,306	36,821
Leases payable	49,792	39,006	40,896	31,975
Bank indebtedness: Euram Bank	961,608	-	-	-	-
Account payable and other liabilities	3,702,357	-	-	-	-
Debentures (i)	181,560	-	-	-	-
Related party note payable	-	-	93,277	-	-
Accrued interest	33,715	-	-	-	-
Total	5,721,054	386,945	242,258	103,281	36,821

(i) Face value of the debentures is C$250,000 recorded at fair value and translated to Euros at the reporting date.

The following table presents the Company’s contractual obligations at December 31, 2021:

	1	2	3	4	4+
Contractual obligations	Year	Years	Years	Years	Years
	€	€	€	€	€
Loan payable	1,096,672	-	-	50,000		-
Office and car lease payable	49,369	44,146	32,854	60,748		-
Bank indebtedness: Euram Bank	959,290	-	-	-		-
Account payable and other liabilities	4,463,799	-	-	-		-
Debentures (i)	177,188	-	-	-		-
Related party note payable:
Dr. Peter Wolfram Senst	111,143	-	-	-		-
Thilo Senst	124,058	-	-	-		-
SWT	-	-	102,296	-		-
Accrued interest	65,028	-	-	-		-
Total	7,036,547	44,146	135,149	110,748		-

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

18. Financial Instruments (continued)

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flow of a financial instrument will fluctuate because of changes in market interest rate.

Although the Company has bank indebtedness subject to a variable interest rate (Note 10) the Company has no significant exposure at December 31, 2022 or 2021 to interest rate risk through its financial instruments.

Currency Risk

Currency risk is the risk that the Company will be subject to foreign currency fluctuations in satisfying obligations related to its foreign activities.

The Company’s manages its foreign currency risk by holding a portion of its cash and cash

equivalents in US dollars.

The following is an analysis of the Euro equivalent of financial assets and liabilities that are denominated in US and CAD dollars as at December 31, 2022 and 2021:

		December 31,		December 31,
		2022		2021
Cash	€	159,881	€	3,747
Accounts receivable		1,306,148		2,361,665
Accounts payable		(2,526,496)		(3,327,932)
Debentures		(181,560)		(177,188)
	€	(878,907)	€	(1,139,708)

Based on the above net exposure at December 31, 2022, a 10% depreciation or appreciation of the US and Canadian dollar against the Euro would result in approximately a €88,000, decrease or increase respectively in both net and comprehensive loss (2021 – €216,815).

19. Management of Capital

The capital managed by the Company includes the components of shareholders’ equity as described in the consolidated statements of shareholders’ equity. The Company is not subject to externally imposed capital requirements.

The Company’s objectives of capital management are to create long-term value and economic returns for its shareholders. It does this by seeking to maximize its resources to fund the growth and development of its business, and to support the working capital required to maintain its ability to continue as a going concern. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of its assets by seeking to limit shareholder dilution and optimize its cost of capital while maintaining an acceptable level of risk. In order to maintain or adjust its capital structure, the Company considers all sources of financing reasonably available to it, including but not limited to the issuance of new capital, the issuance of new debt and the sale of assets in whole or in part.

20. Segmented Information

The Company operates in several segments in which it develops, markets, and sells batteries, solar products and health care products. The information is evaluated regularly by the Company’s President and Chief Executive Officer, being the chief operating decision makers of the Company. The following is a breakdown of revenue by geographic area based on the customers’ location:

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GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

20. Segmented Information (continued)

For the years ended		December 31,		December 31,
		2022		2021
Revenue
Germany	€	28,725,435	€	26,711,235
European Union (excl. Germany)		10,584,138		3,737,837
Worldwide		402,248		663,265
	€	39,711,821	€	31,112,337

All non-current assets are held in Germany.

During the year ended December 31, 2022, the Company’s three (2021 – three) largest customers represented 26%, 21%, and 13% of the Company’s total sales (2021 – 32%, 15%, and 11%).

21. Income Taxes

The reconciliation of the combined German statutory income tax rate of approximately 31% and the Canadian statutory income tax rate of 27% for the years ended December 31, 2022 and 2021 to the effective tax rate is as follows:

		December 31,		December 31,
		2022		2021
Net income (loss) before income taxes	€	167,136	€	(173,774)
Expected income tax	€	71,132	€	(45,225)
Permanent differences and other adjustments		(720,263)		478,619
Change in tax benefits not recognized		649,131		(433,394)
Income tax recovery	€	-	€	-

The Company has deductible temporary differences for which deferred tax assets have not been recognized due to the uncertainty of recovery. The significant components of unrecognized deferred income tax assets at December 31, 2022 and 2021 are as follows:

		December 31,		December 31,
		2022		2021
Net operating losses carried forward	€	586,087	€	1,223,817
Share issuance costs		-		11,894
Right-of-use asset / lease liability		-		(493)
Valuation allowance		(586,087)		(1,235,218)
Total deferred income tax assets	€	-	€	-

As at December 31, 2022, the Company has approximately €2,174,000 (2021 - €5,515,000) of tax losses which may be carried forward indefinitely but may be forfeited under a direct or indirect change in ownership. During the year ended December 31, 2022, approximately €1,940,000 was forfeited upon windup of an inactive subsidiary.

22. Commitments and Contingencies

As at December 31, 2022, the Company is required to make future minimum royalty payments of €100,000 per year until December 31, 2026.

Due to the nature of the Company’s operations, various legal, tax, environmental and regulatory matters are outstanding from time to time. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events.

27

GBLT CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (Expressed in Euros)

22. Commitments and Contingencies (continued)

Where the Company is subject to legal claims, management intends to vigorously defend itself against any such claims that may be outstanding.

While the outcomes of these matters are uncertain, based upon the information currently available, the Company does not believe that these matters in aggregate will have a material adverse effect on its financial statements. In the event that management’s estimate of the future resolution of these matters changes, the Company will recognize the effects of these changes in its consolidated financial statements in the period in which such changes occur.

See also Note 18.

28