GBLT Corp. — Management Reports 2023

May 4, 2023

GBLT CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2022

General

This Management’s Discussion and Analysis (“MD&A”) of GBLT Corp. (the “Company” or “GBLT”) is dated May 3, 2023 and provides an analysis of the GBLT’s financial results for the years ended December 31, 2022 and 2021. The following information should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2022, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions, including statements regarding developments in the Company’s operations in future periods, adequacy of financial resources and future plans and objectives of Company. Actual results could differ materially from those discussed in these forward-looking statements due to a number of factors. There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on this forward-looking information.

All amounts are expressed in Euros unless otherwise stated.

Cautionary Statement Regarding Forward-Looking Statements

This report includes forward-looking statements about our activities, events and developments that we expect to, or anticipate may occur in the future including, for example, statements about our business outlook, assessment of market conditions, strategies, future plans and future sales. Forward-looking statements normally contain words like believe, expect, anticipate, plan, intend, continue, estimate, may, will, should and similar expressions. Such statements are not guarantees of future performance. They are based on management’s expectations and assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate in the circumstances.

We have based these statements on estimates and assumptions that we believed were reasonable when the statements were prepared. Our actual results could be substantially different because of the risks and uncertainties associated with our business. Important risks that could cause such differences include, but are not limited to, the length of sales cycles, rapid technological advancement, competition, the availability of critical inputs, foreign exchange rate occurrences and doing business in foreign countries. Additionally, differences could arise because of events that are announced or completed after the date of this report, including mergers, acquisitions, other business combinations and divestitures.

Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.

Description of Business

GBLT Corp. (the “Company” or “GBLT”) was incorporated under the Business Corporation Act (Ontario) on December 19, 2014. The registered office is located at 4100-66 Wellington Street West, Toronto, Ontario, M5K 1B7, Canada.

Through its subsidiaries, GBLT s business is based on 4 columns.

As the global licensee for the traditional, famous German brand AGFAPHOTO. GBLT manufactures and distributes worldwide a unique range of mobile energy products as AGFAPHOTO starting from consumable batteries up to highly advanced lithium-based storage systems. The covering of nearly the whole mobile energy demand under one brand gives GBT a clear usp.

Under the brand Dr.Senst they manufacturer and distribute healthcare electronics and step by step more healthcare consumables. Mainly for the European market, is a worldwide expansion the goal for the upcoming years.

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GBT has a well-established consumable private label business. All Dr. Senst and Agfaphoto products are offered as white label products for the biggest retailers worldwide.

The fourth column is the solar business. Through the acquisition of Gebäude Technologie Center GmbH (“Getec”) a subsidiary acquired in 2022 the Company offering full service solar installation solutions, including engineering support, tailor made solutions and construction. Under the own brand “EXTRAVOLT” GBT will start with the manufacturing and distribution of solar panels in 2023.

Overview and products

GBLT Corp. (the “Company” or “GBLT”), is a leading Manufacturer AND LICENSEE of high-quality mobile energy, consumable batteries and electronics and light, including LED products, under the brand “AGFAPHOTO”. Additionally, GBT increased its medical consumable range under the brand “DR:SENST”. All brands offer excellent brand recognition amongst retail and commercial customers. Its products can be found in supermarkets, department stores, drugstores, convenience stores, petrol stations etc. Governments, public services or big industrial customers are supplied by GBLT as well.

Avide / ENTAC

Together with a partner GBT created the brand of Avide / ENTAC lighting products, these brands are expanding steadily and are already represented in Europe, Africa and Australia. Since the ban on the sale of light bulbs and the disadvantages of the energy saving lamp (for example, delay in switching on, harmful substances), the sale of LED lamps has been rising steadily. Avide / ENTAC LED Lighting is established in this billion-dollar market with innovative products and promotes continuous development.

Dr Senst

The Dr. Senst brand was developed 5 years ago for the supply of personal protection consumables into the professional, medical sector. The brand hosts a wide range of articles for personal health protection available to professional users and private households. From face masks to disinfectants, from insect repellants to protective gloves. In addition to be a unique brand Dr. Senst offers electronical PPE products like fever thermometer, blood pressure oximeter etc. To keep up with the growth of this category, the Company continuously launches new products. With unique selling points while especially for PPE liquids we have a access to a patented technology. Focus is to enter globally fragmented product categories where we see a huge demand for a “new” German brand.

Private Label

GBLT is the manufacturer for a range of “private label” products that can be found on the shelves of leading supermarkets and do-it-yourself chains or e-commerce etc. under the customers own branding with competitive pricing. The Company uses state-of-the-art production facilities in Asia that are equally used by its competitors Philips, Osram, Panasonic and Varta, offering the same product quality as these brands. Whether chip-on-glass technology, the latest LED tubes, new battery chemical systems, or medical products (including hearing aid batteries and high quality latex gloves) – the innovations and trends come from factories of GBLT Corp.

AGFAPHOTO

As a global licensee of the brand name AGFAPHOTO, GBLT manufactures and distributes a wide range of mobile energy products worldwide, such as batteries, rechargeable batteries and chargers, at the same time increasing brand awareness throughout the world. Products can be found in supermarkets, department stores, drugstores, convenience stores, petrol stations etc. Governments, public services or big industrial customers are supplied by GBLT as well. With the change of ownership of Duracell, Varta, Panasonic there will be massively more growth possibilities for our Agfaphoto brand activities, we see lower competition in an increasing market.

The Company continues to expand its product offerings of mobile storage and battery solutions while continuously striving to add new products to its portfolio. This includes the launch of multimedia products not previously offered by GBLT and in partnership with a global brand.

Highlights for the year ended December 31, 2022 to the date of this MD&A

Financial highlights:

• Revenues of €39,711,821 in 2022 compared to €31,112,337 in 2021. An increase of 27%.

• • Gross margins of €4,011,438 in 2022 compared to €2,544,427 in 2021. An increase of 58%.

• EBITDA of €593,831 in 2022 compared to €32,556 in 2021. An increase of 1724%.

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Operational Highlights for the quarter ended December 31, 2022 and to the date of this MD&A

November 8, 2022 – The Company announced that it is continuing to receive orders for their Dr. Senst personal healthcare product line from major European retailers. This current order amounts to €825,223 for the 2023 pipeline. This order is in addition to an already received order of €809,162 from earlier this year making the cumulative amount to €1,644,385 to be delivered to the client starting January 2023.

November 17, 2022 – The Company announced that it has received over 200 orders for its Solar Energy solutions with retail household clients for a total value of over €4,000,000. The individual contracts are an indication of the abundance of demand for GBLT’s full buildout of solar powered solutions to household and residential buildings.

January 16, 2023 – The Company announced that a major International Retailer has increased its order with GBLT for the third time this year for the 2023 pipeline. The order is an addition to the already standing €1,644, for the Company Dr. Senst consumer healthcare line and will add another €843,071 to a cumulative order of €2,487,456 for the year 2023.

January 31, 2023 – The Company announced that its solar energy business has established its own supply of solar panels under the EXTRAVOLT® brand. GBLT will be distributing its solar panels alongside its GBT Solar Green Energy business, where the company currently delivers solar panel engineering, design, installation, and maintenance services to residential and commercial properties across Germany.

March 7, 2023 – The Company announced that the Company has received an order for a total of €575,000 from one of the largest Drugstore retail chains in Europe to deliver an array of the personal healthcare products and consumables. This major European retailer has been the Company longest stranding customer and has continuously increased its product purchases from GBLT since 2005.

March 23, 2023 – The Company announced that the Company has signed a distribution agreement with a major consumer imaging distributor in the Nordic region for a minimum expected order volume of €4.5 million ($6.6 million CAD) to provide AFGAPHOTO portable energy solutions over 4 years and will cover locations in 8 countries including Sweden, Denmark, Finland and more.

Outlook

Moving forward, the Company has been addressing the higher logistics cost and inflation while focusing on the higher margin product commitments in place. The Company continues to focus on growing stable and high margin healthcare and solar energy business with the goal to drive GBLT’s future revenue and margins higher in 2023 and beyond.

Annual Information

For the years ended	2022	2021	2020
	€	€	€
Revenue	39,711,821	31,112,337	23,796,735
Expenses	3,864,457	2,718,202	2,344,631
Net income (loss)	167,136	(173,775)	527,478
Basic and fully diluted loss per share	(0.00)	(0.00)	(0.00)
Cash flows from (used in) operating activities	(103,757)	17,684	39,444
Cash flows from (used in) investing activities	(175,215)	(27,383)	62,917
Cash flows from (used in) financing activities	(203,405)	1,031,205	(252,599)
Increase (decrease) in cash in year	(482,378)	332,828	(150,238)
**As at December 31 **	2022	2021	2020
Total Assets	7,920,560	7,129,438	6,015,169
Total long-term financial liabilities	803,020	234,792	572,714
Cash dividends declared for all classes of shares	Nil	Nil	Nil

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Results of Operations

For the year ended December 31, 2022, the Company recorded a net income of €167,136 compared to a net loss of €173,775 for the year ended December 31, 2021.

Financial summary of the years ended December 31, 2022 and 2021 is as follows:

		December 31,		December 31,
		2022		2021
Revenue	€	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		1,370,435		732,859
Professional fees		256,360		142,961
Interest and bank charges		322,904		156,124
General and administrative		1,075,495		665,981
Bad debt expense and factoring fees		359,603		419,370
Rent expense		43,830		13,917
Consulting fees		331,119		122,523
Depreciation		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
Loss 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		(44,770)		-
Foreign exchange gain (loss)		(946)		(144,721)
Net and Comprehensive Income(Loss)	€	121,420	€	(318,496)

Revenue

The increase in revenue was due increase in customer demand, addition of new customers and orders, and the expansion into solar products through the acquisition of Getec, as well as more flexibility on pricing.

The Company continued to focus on selling its existing product line, and with the acquisition of Getec, added the solar technology to its suite of products, contributing € 1,484,711 to the total revenue.

Gross Margin

The gross margin was 10% for the year ended December 31, 2022 compared to 8% for the year ended December 31, 2021. The Company continues to focus on increasing margins through pricing flexibility and a focus on selling higher margin products.

Expenses

Operating expenses have stayed within management’s expectations and operating budgets. Marketing and travel, comprised of advertising and vehicle expenses, increased as the effects of COVID eased and as the Company works to build out the GBLT brand and awareness of it to increase sales. Wages increased due to additional staff hired to support the increased level of activity, as well as from the acquisition of Getec and the additional personnel used to manage those operations. Professional fees are mainly comprised on legal and other fees for public company disclosure obligations. The increase in general and administrative is additional expenses needed to support the daytoday administrative operations, as well as the additional expenses related to Getec. Consulting fees included, investor relations, director fees and management fees, and are line with the prior period. Share based payment expense (representing the value of stock options that vested) was nil in 2022, as no options were issued during 2022.

Comprehensive income was €121,420 for the year ended December 31, 2022 compared to a comprehensive loss of €318,496. The difference between the net income and comprehensive income, is due to the impact of a foreign exchange gain/loss, and the impairment of the Company’s investment in GBT Africa in 2022.

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Reconciliation of Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure that we calculate as income (loss) before income taxes excluding depreciation and amortization, bad debt provision, non- recurring non-operating expenses, interest expense, and share based payments. Adjusted EBITDA is a measure used by management and the Board to understand and evaluate our core operating performance and trends. This measure differs from contribution in that adjusted EBITDA includes additional operating costs, such as general and administration expenses and marketing, but excludes funding interest costs.

The following table presents a reconciliation of adjusted EBITDA to loss before income taxes, the most comparable IFRS financial measure for each of the periods indicated:

EBITDA		2022		2021
Net Income (loss) for the year	€	167,136	€	(173,775)
Depreciation		106,231		50,207
Interest and financing fees		322,904		156,124
EBITDA		596,271		32,556
Bad debt expense		359,603		419,370
Foreign exchange (gain) loss		(223,037)		100,652
Share basedpayments		-		118,570
Adjusted EBITDA	€	732,837	€	671,148

Summary of Quarterly Results

The table below presents selected financial data for the Company’s four most recently completed quarters, all prepared in accordance with IFRS.

	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
	2022	2022	2022	2022	2021	2021	2021	2021
	€	€	€	€	€	€	€	€
Financial Results
Revenue	7,961,039	13,649,518	10,062,586	8,038,678	7,956,477	7,842,562	6,497,773	8,815,525
Gross Profit	681,601	854,834	1,827,499	647,504	312,570	569,694	803,203	858,960
Total Expenses	-1,317,058	-833,668	-1,048,419	-665,312	-991,139	-531,861	-737,973	-457,229
Net Income (Loss)	-615,302	21,166	779,080	-17,808	-703,239	37,833	65,230	401,731
Basic and diluted income (loss) per share	-0.00	-0.00	0.01	0.00	0.00	0.00	0.00	0.00
Financial Position
Total Assets	7,920,560	13,722,742	9,384,864	9,562,148	7,129,438	8,649,298	4,845,651	6,078,320
Total Liabilities	8,433,462	13,538,572	9,208,174	10,147,23 1	7,705,318	8,544,143	4,771,293	6,095,439
Shareholders’ Equity	-512,902	184,170	176,690	-585,083	-575,880	105,155	74,358	-17,119

Discussion of Quarterly Results (all accounted for in accordance with IFRS)

Revenue

Revenue typically shows a certain seasonality with the quarter ended March 31 showing the lowest revenue in a given cycle. The Company expects to receive increased purchase orders from all existent costumers. Q1 2021 and Q3 2022, had a large one-time order increasing sales, beyond normal levels for those quarters. Furthermore, with the addition of

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new customers and continued introduction of new product categories the Company revenue will typically increase for these additional sales (as seen in Q2-Q3 2022).

Gross Profit and Margins

Gross margin for Q1 2021 were impacted by COVID-19, and then increased in Q2 and Q3 with higher margin sales (ie Dr. Senst product line of COVID masks). Q1 2021 had a one-time high margin order, with the balance of 2021, returning to more expected levels. Increase pricing, and sales of higher margin products, increased gross margins in 2022. Margins in Q3 2022 were affected by some large low margin sales.

Liquidity and Capital Resources

As at December 31, 2022, the Company had cash of €97,875 (December 31, 2021 - €580,253) and a working capital deficit of €406,632 (December 31, 2021 – working capital deficit €748,585).

Cash used in operating activities in 2022 was €(103,757) compared to cash from operating activities of €17,684 in 2021. The main items that caused the increase was more cash was required for working capital items. The Company grew its inventory by €1,152,370 to support the large volume of orders coming in.

Cash from used in investing activities was €(175,215) and mostly related to the investment in Getec, offset by the purchase of equipment.

Cash used in financing activities was €203,405 in 2022 due to related party loan repayments and lease payments. These were offset by loan proceeds.

Management cannot provide any assurance that the Company will achieve continuous profitable operations, continued to be cash flow positive or will be able to raise additional debt and/or equity capital. Management intends to continue to support the operations as needed with financing initiatives primarily through, but not limited to, operating cash flow, and short-term loans from third parties, related party advances and the issuance of equity, which the Company was successful in completing in the past. Alternative financing options may include obtaining bank credit facilities. If the Company is unable to raise additional capital in the future, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Commitments and Contingencies

The Company has entered into key licensing contracts on its products. Under these arrangements, the Company is required to pay sale-based royalties, with a minimum annual payment of €100,000 until December 31, 2026.

As of the date of this MD&A, the Company is in the process of renegotiating some of its licensing agreements, and some commitments may decrease or increase in the near term as a result.

Capital Structure

As at the date of this MD&A, the Company has 113,328,090 common shares issued and outstanding.

Stock Options

The following table summarizes the options outstanding at the date of this MD&A:

Number of options	Exercise price	Expiry date
450,000	0.0325	August 7,2025

Warrants

No warrants are outstanding at the date of this MD&A.

Use of Financial Instruments

The Company classifies all financial instruments as either financial assets or liabilities at fair value through profit or loss

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(“FVTPL”), loans and receivables or other financial liabilities. Loans and receivables and other financial instruments are measured at amortized cost.

The Company has designated its cash as FVTPL, which is measured at fair value. Trade receivables and other receivables are classified as loans and receivables, which are measured at amortized cost. Trade and other payables are classified as other financial liabilities which are measured at amortized cost.

Financial Risk Management

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.

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.

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 of the financial statements for the year ended December 31, 2022. The Company’s financial liabilities are comprised of its trade payables, loans payable and amounts due to related parties.

Liquidity risk is assessed as high.

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 the Company has no significant exposure at December 31, 2022 or December 31, 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. Its currency risk, has not changed from the year ended December 31, 2022.

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Off-Balance Sheet Arrangements

The Corporation has no off-balance sheet arrangements.

Related Party Transactions

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:

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
		126,992		402,526
Less: current portion		-		355,482
	€	126,992	€	47,044

• (i) Loan agreement with Dr. Peter Wolfram Senst, a former director of the Company and a relative of a current 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.

• (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
	€	10,677,537	€	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).

During the year ended December 31, 2022, the Company had revenue from GBT Africa in the amount of €nil (2021 - €nil). Included in accounts receivable as at December 31, 2022 is a net amount after a provision of €200,000 (2021 -

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€200,000) (Note 18). As at December 31, 2022, the Company had recorded a total cumulative impairment of €655,139 on these receivables, an increase in the provision of €131,502 over the prior year.

Critical Accounting 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 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.

The critical judgments and estimates applied in the preparation of the Company’s annual audited financial statements for the year ended December 31, 2022, are disclosed in Note 4 to the Company’s financial statements.

New accounting standards

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

Risk Factors

The following are major risk factors management has identified which relate to the Company’s business activities. Such risk factors could materially affect the Company's future financial results and could cause events to differ materially from those described in forward-looking statements relating to the Company. Though the following are major risk factors identified by management, they do not comprise a definitive list of all risk factors related to the Company's business and operations. Other specific risk factors are discussed elsewhere in this MD&A.

Capitalization and Commercial Viability

The Company will require additional funds to continue operations. The Company has limited financial resources, and there is no assurance that additional funding will be available to the Company to carry out the completion of all proposed activities. Although the Company has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favorable. Failure to obtain such additional financing could result in the curtailment of operations, liquidation of assets, seeking additional capital on less favorable terms and/or other remedial measures.

History of Operating Losses

The Company has an accumulated deficit since its incorporation through December 31, 2022 of €12,672,535. The deficit may increase in the near term, as the Company continues its product development and establishes sales channels for its new products and business expansion.

General Economic Conditions

The Company currently operates worldwide and, like all global businesses, it has been subject to the impact of the current global credit and financial crisis on consumers in its areas of operations and the discretionary spending available to them. General economic conditions have resulted in reduced consumer and government spending and have impacted the Company’s financial results. Should these conditions continue to prevail, there will be further pressure on the Company’s financial results.

Key Employees

The success of the Company is largely dependent on the performance of its key employees and directors. The failure to retain key employees and directors and to attract and retain additional key employees with necessary skills could have a material adverse impact upon the Company's growth and profitability. Competition for highly skilled

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management, technical and other employees is intense. There can be no assurance that the Company will be successful in attracting and retaining such personnel and the departure of any of the members of the Company's executive team or key directors could have a material adverse effect on the Company's business, results of operations and financial condition.

Supply Chain

The Company relies on major components to be manufactured on an Original Equipment Manufacturer (OEM) basis. Reliance on OEMs, as well as industry supply conditions generally involves several risks, including the possibility of defective products (which can adversely affect the Company’s reputation for reliability), a shortage of components and delays in delivery schedules (which can adversely affect the Company’s distribution schedules), and increases in component costs (which can adversely affect the Company’s profitability). The Company has single-sourced manufacturer relationships, either because alternative sources are not readily or economically available or because the relationship is advantageous due to performance, quality, support, delivery, capacity, or price considerations. If these sources are unable or unwilling to manufacture our products in a timely and reliable manner, the Company could experience temporary distribution interruptions, delays, or inefficiencies, adversely affecting our results of operations. Even where alternative OEMs are available, qualification of the alternative manufacturers and establishment of reliable suppliers could result in delays affecting operating results adversely. Overall GBT tries to reduce their risks by a strong mix of Asian and European production.

New Products and Technology Change Risk

The Company operates in a competitive marketplace; there are no guarantees that the Company can maintain or expand its advantages. The Company invests significant resources in the development of products and continually seeks to improve its current product offerings. The success of the Company continues to depend upon market acceptance of its new products, its existing products and its ability to refine and enhance current product lines. In some situations, new legislation is driving requirements for various subsets of the Company’s products particularly in the area of recording license plates of vehicles illegally passing a school bus. Should legislation change or public opinion change relating to various issues surrounding right of privacy, there would be no guarantee that the Company would maintain sales of these products.

New Market Risk

The ability of the Company to successfully enter new markets is subject to uncertainties. We have been successful in the past, and we continue to develop important alliances in new markets to ensure future success. However, there are no guarantees that we can establish new distribution channels or continue to develop new strategic partnerships.

Competition

The Company’s markets are competitive and rapidly changing. Many competitors have substantially greater financial, technical, sales, marketing and other resources, as well as greater name recognition and a larger installed customer base. As this market develops, a number of companies with greater resources could attempt to increase their presence in this market by acquiring or forming strategic alliances with our competitors or business partners.

Many competitors are also divisions or subsidiaries of larger enterprises, many of which also focus on the manufacture and sale of components or mass-market products. Many competitors also offer a broader line of energy product solutions that may include high-quality mobile energy and light products. Even though our products may offer a competitive advantage, some competitors have the ability to provide a solution to an end-user at a price that may render our products uncompetitive.

The Company’s success will depend significantly on management’s ability to adapt to these competing forces, to develop more advanced products more rapidly and less expensively than our competitors, and to educate potential customers as to the benefits of using the Company’s services. The Company’s future and existing competitors could introduce products with superior features, scalability and functionality at lower prices than our products and could bundle existing or new products with other more established products in order to compete with the Company. The Company expects additional competition from other established and emerging companies. Increased competition may result in price reductions, reduced gross margin and loss of market share, any of which could materially and adversely affect the Company’s business. The Company may not be able to compete successfully against current and future competitors, and failure to do so would harm the business.

Ability to Maintain Profitability and Manage Growth

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There can be no assurance that the Company’s business and growth strategy will enable the Company to be profitable in the future. The Company’s future operating results will depend on a number of factors, including (i) the efficiency and effectiveness of the Company’s marketing and advertising programs, (ii) the Company’s ability to continuously improve its service to achieve new and enhanced customer benefits, better quality service and reduced costs, (iii) the Company’s ability to successfully identify and respond to emerging trends in the battery and lighting as well in the energy storage industry, (iv) the level of competition in the battery and lighting/energy storage industry and (v) the ability to manage attrition level and subscriber replacement costs. There can be no assurance that the Company will be able to effectively manage its growth, and any failure to do so could have a material adverse effect on the Company’s business, financial condition, liquidity and results of operations.

Intellectual Property Risks

The Company has taken steps to protect its proprietary technology. The Company relies on a combination of trademark, trade secrets, laws and other intellectual property protection methods to protect its proprietary technology. These steps may not completely protect the Company’s proprietary technology, nor give it a competitive edge. Others may independently develop substantially equivalent technology or gain access to our trade secrets. If the Company is unable to protect its intellectual property, the business over time could be materially affected. The Company will pursue all avenues available to it, if necessary, to enforce its patents, and to protect its trademarks and other intellectual property rights owned by the Company.

Technological Change, New Products and Standards

The technology industry is characterized by rapid technological change, changes in user and customer requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new industry standards and practices that could render the Company’s existing products and systems obsolete. The Company’s products employ complex technology and may not always be compatible with current and evolving technical standards and products developed by others. Failure or delays by the Company to meet or comply with the requisite and evolving industry or user standards could have a material adverse effect on the Company’s business, results of operations and financial condition.

Intellectual Property Risks

Because much of the Company's potential success and value lies in its ownership and use of intellectual property, its failure to protect its intellectual property may negatively affect its business and value. The Company typically enters into confidentiality or license agreements with its employees, consultants, customers, strategic partners and vendors in an effort to control access to and distribution of its products, documentation and other proprietary information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use the Company's proprietary technology without authorization.

Reliance on Information Systems and Technology

The Company’s business relies upon information technology systems to effectively service its customers at the point of sale. Its information technology systems may be vulnerable to unauthorized access, computer viruses, system failures, other malicious acts or acts of nature. Should a significant disruption to its information technology to occur, the Company’s earnings could be adversely affected through loss of revenue and the costs to rectify the disruption. The Company is in an industry with many competitors that lay claim to intellectual property. The Company may receive notice from a third party asserting the Company has infringed on their intellectual property rights. As a result of such claims the Company’s earnings could be adversely affected by costly litigation, product injunctions or consumption of management attention.

Reliance on Third Party Licenses

The Company relies on certain software that it licenses from third parties, including a software program that is integrated with internally developed software and used in the Company’s products to perform key functions. There can be no assurance that these third-party licenses will continue to be available to the Company on commercially reasonable terms. The loss of, or inability to maintain, any of these licenses, could result in delays or reductions in product and service deployment until equivalent software can be developed, identified, licensed and integrated, which could materially adversely affect the Company's business, results of operations and financial condition.

Effectiveness and Efficiency of Sales and Marketing Expenditures

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The Company’s future growth and profitability will be dependent in part on the effectiveness and efficiency of the Company’s sales and marketing expenditures, including the ability of the Company to (i) create greater awareness of the Company’s products and services, (ii) determine the appropriate messaging and media mix for future sales and marketing expenditures, and (iii) effectively manage sales and marketing costs in order to maintain acceptable operating margins. There can be no assurance that the Company will experience benefits from sales and marketing expenditures in the future. In addition, no assurance can be given that the Company’s planned sales and marketing expenditures will result in increased sales, will generate sufficient levels of product and service awareness or that the Company will be able to manage such sales and marketing expenditures on a cost-effective basis.

Product Liability

We face the inherent risk of exposure to product liability claims in the use of our products. While we will continue to attempt to take appropriate precautions including the purchase of product liability insurance, there can be no assurance that we will avoid significant product liability exposure. There can be no assurance that adequate insurance coverage for future coverage for future commercial activities will be available at all, or at acceptable cost, or that a product liability claim would not materially adversely affect our business or financial condition.

Risk Associated with International Operations

Management of the Company believes that its future growth and profitability opportunities will require expansion of its sales further in the Middle East and especially in the US; Canada; Australia and Mexico and into other foreign markets and into other foreign markets. This expansion will require significant management attention and financial resources and could adversely affect the Company's operating margins. In order to increase international sales in subsequent periods, the Company may establish additional foreign operations, incur substantial infrastructure costs, hire additional personnel and recruit international resellers. To the extent that the Company is unable to expand international sales in a timely and cost-effective manner, the Company's business, results of operations and financial condition could be materially adversely affected. In addition, even with the possible recruitment of additional personnel and international resellers, there can be no assurance that the Company will be successful in maintaining or increasing international market demand for the Company's products and services. The risk associated with currency fluctuations comprise mainly of the Company’s United States denominated sales, component purchases and other expenses. In the future, it is expected that a portion of revenues may be realized in other foreign currencies as a result of international sales fluctuations in the exchange rate between the Euro and other currencies, particularly the US dollar, may have a material adverse effect on the Company's results of operations, financial condition and any business prospects. The Company may use hedges to mitigate the risk of foreign currency exposure.

Key Employees

The success of the Company is largely dependent on the performance of its key employees and directors. Failure to retain key employees and directors and to attract and retain additional key employees with necessary skills could have a material adverse impact upon the Company's growth and profitability. Competition for highly skilled management, technical and other employees is intense. There can be no assurance that the Company will be successful in attracting and retaining such personnel and the departure of any of the members of the Company's executive team or key directors could have a material adverse effect on the Company's business, results of operations and financial condition.

Expansion

The success of the Company’s continued expansion will depend upon many factors, including the ability of the Company to maintain acceptable attrition rates and control of operating costs and generate positive cash flow over an extended period. There can be no assurance that the Company will be able to grow or achieve its continued expansion. Such risks, if they materialize, could have a material adverse effect on the Company’s business, financial condition, liquidity and results of operations.

Available Workforce

Our continued success will depend on the performance and continued service of the Company’s employees. We rely on the ability to attract new engineers, research and development staff, production personnel and key sales and marketing employees. During the coming year, we will continue to develop our employees and search for key new hires, however there is no assurance that the Company will be able to retain existing personnel or attract, hire and retain additional qualified personnel.

Possible Adverse Effect of Future Government Regulations

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The Company’s operations are subject to a variety of laws, regulations and licensing requirements of federal, state, provincial, county, and municipal authorities. The loss of such licenses, or the imposition of conditions to the granting or retention of such licenses, could have a material adverse effect on the Company. The Company believes that it is in material compliance with applicable laws and regulatory requirements.

Internal control over financial reporting

Management has established processes to provide them with sufficient knowledge to support representations that they have exercised reasonable diligence to ensure that (i) the financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the financial statements; and (ii) the financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date at and for the periods presented.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”), the Company uses the Venture Issuer Basic Certificate, which does not include representations relating to the establishment and maintenance of disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of:

1. controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

2. a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s generally accepted accounting principles (IFRS). The Company’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

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