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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 000-33231

CARBONMETA TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		95-4868120
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

13110 NE 177^th Place, Suite 145
Woodinville, WA		98072
(Address of Principal Executive Offices)		(Zip Code)

(844) 698-3777

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		COWI		OTC Markets “PINK”

As of May 19, 2023, there were 19,172,538,816 shares of the registrant’s common stock outstanding.

CARBONMETA TECHNOLOGIES, INC.

TABLE OF CONTENTS

		Page Number

PART I		5
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	5
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 (Unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) for the three months ended March 31, 2023 and 2022 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40

	Signatures	44

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the period ended March 31, 2023 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events including, without limitation, our ability to raise capital, our operational and strategic initiatives or our future financial performance. We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

	●	Our ability to effectively execute our business plans including transitioning from being focused on end-to-end consumer product innovation, development, and commercialization to being focused on digital media, advertising and content technologies innovation, development, and commercialization;
	●	Our ability to manage our expansion, growth and operating expenses;
	●	Our ability to protect our brands, reputation and intellectual property rights;
	●	Our ability to obtain adequate financing to support our development plans;
	●	Our ability to repay our debts;
	●	Our ability to rely on third-party suppliers, content contributors, developers, and other business partners;
	●	Our ability to evaluate and measure our business, prospects and performance metrics;
	●	Our ability to compete and succeed in a highly competitive and evolving industry;
	●	Our ability to respond and adapt to changes in technology and consumer behavior;
	●	Our dependence on information technology, and being subject to potential cyberattacks, security problems, network disruptions, and other incidents;
	●	Our ability to comply with complex and evolving laws and regulations including those relating to privacy, data use and data protection, content, competition, safety and consumer protection, e-commerce, digital assets and other matters, many of which are subject to change and uncertain interpretation;
	●	Our ability to enhance disclosure and financial reporting controls and procedures and remedy the existing weakness;
	●	Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;
	●	Taxes;
	●	The stability of the governments and political and business conditions in certain foreign countries in which we or certain of our business partners may operate now or in the future;
	●	Costs and results of potential litigation;
	●	Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;
	●	The use of social or digital media to disseminate false, misleading and/or unreliable or inaccurate information regarding our products, services or the industry in which we operate;
	●	Other risk factors discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 20, 2023.

These and other factors discussed above could cause results to differ materially from those expressed in the estimates made by any independent parties and by us.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

Solely for convenience, we refer to trademarks in this Quarterly Report without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.

OTHER PERTINENT INFORMATION

Unless the context otherwise indicates, when used in this Annual Report, the terms “CarbonMeta,” “COWI,” “we,” “us,” “our,” the “Company” and similar terms refer to CarbonMeta Technologies, Inc., a Delaware corporation, and all of our consolidated subsidiaries and variable interest entities.

PART I - FINANCIAL INFORMATION

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2023			2022
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash	$	5,096		$	379
Accounts receivable		-			20,525
Inventory		3,157			3,157
Total Current Assets		8,253			24,061

Property and equipment, net of accumulated depreciation of $22,065 and $18,235 at March 31, 2023 and December 31, 2022, respectively		25,059			28,889
Licenses, net of accumulated amortization of $38,683 and $32,229 at March 31, 2023 and December 31, 2022, respectively		131,820			138,274
TOTAL ASSETS	$	165,132		$	191,224

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	11,777,941		$	11,457,444
Obligations collateralized by receivables		206,236			206,236
Convertible debt, net		2,164,529			2,160,034
Notes payable		154,873			154,873
Notes payable - related parties		199,415			199,415
Small Business Administration loan		979,950			979,950
Derivative liability		18,009,660			9,652,846
Total Current Liabilities		33,492,604			24,810,798
TOTAL LIABILITIES	$	33,492,604		$	24,810,798

Commitments and contingencies		-			-

STOCKHOLDERS’ DEFICIT:
Redeemable convertible preferred stock, Series A, $0.001 par value, 125,000 shares authorized, 0 shares issued and outstanding		-			-
Redeemable convertible preferred stock, Series B, $0.001 par value, 525,000 shares authorized, 159,666 and 159,666 shares issued and outstanding		160			160
Redeemable convertible preferred stock, Series C, $0.001 par value, 500,000 shares authorized, 0 and 0 shares issued and outstanding		-			-
Redeemable convertible preferred stock, Series D, $0.001 par value, 500,000 shares authorized, 100,000 and 100,000 shares issued and outstanding		100			100
Redeemable convertible preferred stock, Series E, $0.001 par value, 1,000,000 shares authorized, 821,377 and 821,377 shares issued and outstanding, respectively		821			821
Redeemable convertible preferred stock, Series F, $0.001 par value, 500,000 shares authorized, 190,000 and 190,000 shares issued and outstanding		190			190
Redeemable convertible preferred stock, Series G, $0.001 par value, 500,000 shares authorized, 25,000 and 25,000 shares issued and outstanding		25			25
Redeemable convertible preferred stock, Series value		25			25
Common stock; 35,000,000,000 and 35,000,000,000 shares authorized at $0.0001 par value, 19,360,719,816 and 18,831,386,254 shares issued, respectively; 19,245,422,812 and 18,643,205,254 shares outstanding, respectively		1,936,072			1,883,139
Additional paid-in capital		37,558,582			37,515,219
Treasury stock – 115,297,004 and 188,181,000 shares of common stock		(14,230	)		(18,997	)
Accumulated other comprehensive income		2,670			3,725
Accumulated deficit		(72,811,862	)		(64,003,956	)
TOTAL STOCKHOLDERS’ DEFICIT		(33,327,472	)		(24,619,574	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	165,132		$	191,224

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

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the three months ended March 31, 2023 and 2022

	March 31, 2023			March 31, 2022
	(Unaudited)			(Unaudited)
Contract services revenue	$	10,376		$	-

Operating expenses:
Executive compensation		37,500			37,500
Legal and professional fees		23,161			44,056
Investor relations		4,090			20,664
Consulting fees		1,288			15,221
Sales and marketing		20,000			14,183
Research and development		9,330			4,099
Amortization of licenses		6,454			7,904
Depreciation of equipment		3,830			3,830
Other operating expenses		26,372			110,057
Total operating expenses		132,025			257,514

Operating (loss)		(121,649	)		(257,514	)

Other income (expenses):
Gain (loss) from derivative liability		(8,356,814	)		(571,095	)
Interest expense		(329,443	)		(220,928	)
Total other income (expenses) - net		(8,686,257	)		(792,023	)

Income (loss) before income taxes		(8,807,906	)		(1,049,537	)
Income tax provision		-			-
Net income (loss)	$	(8,807,906	)	$	(1,049,537	)

Net income per common share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)
Weighted-average common shares outstanding:
Basic		19,110,654,882			18,285,313,740
Diluted		19,110,654,882			18,285,313,740
Comprehensive income (loss):
Net income (loss)	$	(8,807,906	)	$	(1,049,537	)
Foreign currency translation adjustments		(1,055	)		-
Comprehensive income (loss)	$	(8,808,961	)	$	(1,049,537	)

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

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT)

For the three months ended March 31, 2023 and 2022

(Unaudited)

	Series B		Series D		Series E		Series F		Series G		Amount		Shares		Amount		Paid-In Capital		Stock			Deficit			Comprehensive Income			Total
	Preferred Stock												Common Stock				Additional								Accumulated Other
	Series B		Series D		Series E		Series F		Series G		Amount		Shares		Amount		Paid-In Capital		Treasury Stock			Accumulated Deficit			Comprehensive Income			Total

Balances, December 31, 2021		159,666		100,000		791,567		180,000		25,000	$	1,256		17,592,057,165	$	1,759,206	$	36,775,736	$	(18,997	)	$	(64,404,388	)		-		$	(25,887,187	)
Common stock issued for license		-		-		-		-		-		-		160,000,000		16,000		48,000		-			-			-			64,000
Common stock issued for services		-		-		-		-		-		-		203,333,334		20,333		52,667		-			-			-			73,000
Common stock and warrants issued in connection with convertible notes financings, net of placement agent fee of $1,350		-		-		-		-		-		-		60,500,000		6,050		102,600		-			-			-			108,650
Common stock issued for accrued executive compensation		-		-		-		-		-		-		428,571,428		42,857		107,143		-			-			-			150,000
Common stock issued for accrued consulting fees		-		-		-		-		-		-		206,896,552		20,690		279,310		-			-			-			300,000
Net loss for three months ended March 31, 2022		-		-		-		-		-		-		-		-		-		-			(1,049,537	)		-			(1,049,537	)
Balances, March 31, 2022		159,666		100,000		741,567		180,000		25,000	$	1,256		18,651,358,479	$	1,865,136	$	37,365,456	$	(18,997	)	$	(65,453,925	)	$	-		$	(26,241,074	)

Balances, December 31, 2022		159,666		100,000		821,377		190,000		25,000	$	1,296		18,831,386,254	$	1,883,139	$	37,515,219	$	(18,997	)	$	(64,003,956	)	$	3,725		$	(24,619,574	)
Beginning balance		159,666		100,000		821,377		190,000		25,000	$	1,296		18,831,386,254	$	1,883,139	$	37,515,219	$	(18,997	)	$	(64,003,956	)	$	3,725		$	(24,619,574	)
Common stock issued in connection with conversion of convertible notes		-		-		-		-		-		-		329,333,562		32,933		32,933		-			-			-			65,866
Common stock issued for services		-		-		-		-		-		-		200,000,000		20,000		-		-			-			-			20,000
Sale of Treasury stock		-		-		-		-		-		-		-		-		10,430		4,767			-			-			15,197
Foreign currency translation adjustments		-		-		-		-		-		-		-		-		-		-			-			(1,055	)		(1,055	)
Net loss for three months ended March 31, 2023		-		-		-		-		-		-		-		-		-		-			(8,807,906	)		-			(8,807,906	)
Balances, March 31, 2023		159,666		100,000		821,377		190,000		25,000	$	1,296		19,360,719,816	$	1,936,072	$	37,558,582	$	(14,230	)	$	(72,811,862	)	$	2,670		$	(33,327,472	)
Ending balance		159,666		100,000		821,377		190,000		25,000	$	1,296		19,360,719,816	$	1,936,072	$	37,558,582	$	(14,230	)	$	(72,811,862	)	$	2,670		$	(33,327,472	)

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

CARBONMETA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2023 and 2022

	March 31, 2023			March 31, 2022
	(Unaudited)			(Unaudited)
OPERATING ACTIVITIES:
Net income (loss) for the period	$	(8,807,906	)	$	(1,049,537	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of equipment		3,830			3,830
Amortization of licenses		6,454			7,904
Amortization of debt discounts		64,195			8,313
Stock based compensation		24,249			48,000
Loss (gain) from derivative liability		8,356,814			571,095
Changes in operating assets and liabilities:
Accounts receivable		20,525			-
Prepaid expenses		-			33,611
Accounts payable and accrued expenses		322,414			312,759
NET CASH (USED IN) OPERATING ACTIVITIES		(9,425	)		(64,025	)

INVESTING ACTIVITIES:
Purchase of equipment		-			-
NET CASH USED IN INVESTING ACTIVITIES		-			-

FINANCING ACTIVITIES:
Proceeds from convertible debt financings		-			108,650
Proceeds from sales of treasury stock		15,197			-
Payments towards notes payable		-			(3,000	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		15,197			105,650

EXCHANGE RATE EFFECT ON CASH		(1,055	)		-

NET INCREASE (DECREASE) IN CASH		4,717			41,625
CASH, BEGINNING OF PERIOD		379			10,573
CASH, END OF PERIOD	$	5,096		$	51,198

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	-		$	-
Income taxes	$	-		$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Common Stock issued in satisfaction of accrued executive compensation	$	-		$	150,000
Common Stock issued for accrued consulting fees	$	-		$	300,000
Common stock issued for prepaid marketing fees	$	-		$	25,000
Common stock issued for license	$	-		$	64,000
Common stock and warrants issued in connection with new convertible notes	$	-		$	110,000

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

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE A – ORGANIZATION

CarbonMeta Technologies, Inc. (f/k/a CoroWare, Inc.) (“CarbonMeta”, the “Company”, “we”, “us”, or “our”) is a publicly quoted environmental research and development company that is commercializing technologies for processing organic wastes into hydrogen and high-value carbon products economically and sustainably.

The Company was incorporated on June 8, 2001 under the laws of the State of Nevada as SRM Networks, Inc. In connection with the acquisition of Hy-Tech Computer Systems, Inc. on January 31, 2003, the Company changed its name to Hy-Tech Technology Group, Inc. In connection with the Agreement and Plan of Merger of Robotics Workspace Technology, Inc., Innova Holdings, Inc. and the Company’s wholly owned subsidiary, RWT Acquisition, Inc., dated July 21, 2004, the Company’s name changed to Innova Holdings, Inc. Subsequently, the Company redomiciled in the State of Delaware and on November 20, 2006, the Company changed its name to Innova Robotics and Automation, Inc. and then on April 23, 2008, the Company changed its name to CoroWare, Inc. On or about July 28, 2021, the Company filed Articles of Amendment to its Amended and Restated Certificate of Incorporation with the State of Delaware to reflect a name change from CoroWare, Inc. to CarbonMeta Technologies, Inc.

The Company has six wholly-owned subsidiaries: CoroWare Technologies, Inc. (“CTI”), CoroWare Robotics Solutions, Inc. (“CRS”), Robotic Workspace Technologies, Inc. (“RWT”), Carbon Source, Inc. (“CS”), CoroWare Treasury, Inc. (“CWT”), and CarbonMeta Research Ltd. (“CMR”). The Company has two majority owned subsidiaries: a 50.1% interest in CarbonMeta Green Building Materials, LLC (joint venture with Salvum Corporation)(“CMGBM”) and a 51% interest in AriCon, LLC (“AriCon”).

CoroWare Technologies, Inc. (“CTI”) was incorporated in the State of Florida on May 16, 2006, was administratively dissolved on November 19, 2016, and its principal business was a software professional services company with a strong focus on information technology integration and robotics integration, business automation solutions, and unmanned systems solutions to its customers in North America and Europe.

CoroWare Robotics Solutions, Inc. (“CRS”) was incorporated in the State of Texas on February 27, 2015, and its principal business was as a technology incubation company whose focus was on the delivery of mobile robotics and IOT products, solutions and services for university, government and corporate researchers, and enterprise customers. CRS’s business operations were discontinued in October 2016 when the Company’s gross margins and financing costs became unsustainable.

Robotic Workspace Technologies, Inc. (“RWT”) was incorporated in the State of Florida on July 1, 1994, was administratively dissolved on September 25, 2009, and its principal business was developing and marketing open-architecture PC controls and related products that could improve the performance, applicability, and productivity of robots and other automated equipment. RWT’s business operations were discontinued in September 2007 when the Company’s losses became unsustainable.

Carbon Source, Inc. (“CS”) was incorporated in the State of Wyoming on June 14, 2021 and its principal business is waste reclamation technologies and processing.

CoroWare Treasury, Inc. (“CWT”) was incorporated in the State of Wyoming on July 8, 2021 and its principal business is acquisitions related to acquiring technologies and subsidiary businesses related to waste processing.

CarbonMeta Research Ltd. (‘CMR”) was incorporated in England and Wales on August 12, 2021 and its principal business is the development of technologies and solutions for processing organic wastes and generating economically sustainable hydrogen and high-value carbon products. Using proprietary and patented technologies, it plans to implement new industrial methods using inexpensive, environmentally friendly catalysts that process collected plastic waste material into high value products such as hydrogen gas, graphene and carbon nanotubes.

CarbonMeta Green Building Materials, LLC (“CMGBM”) is a joint venture with Salvum Corporation organized on August 30, 2022 to develop and market construction mix products that are carbon negative (see Production Agreement below).

AriCon, LLC (“AriCon”) was a joint venture that was intended to develop mobile robot platforms, applications, and solutions for the construction industry. In October 2016, AriCon ceased operations of all subsidiary business operations when the Company’s losses became unsustainable, and the Company was not able to obtain investment financing.

In 2021, the Company began investigating emerging technologies, strategic intellectual property partnerships, and sustainable growth business opportunities related to the production of hydrogen and high value carbon products from organic waste streams. Working cooperatively with Oxford University Innovation, CarbonMeta plans to implement proven and patented technologies to add value to organic waste streams. By utilizing these proven proprietary technologies, collected and captured plastic waste material can be upcycled to high value products such as carbon nanotubes (“CNTs”) and hydrogen gas.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE A – ORGANIZATION (continued)

CNTs can be used for improved electrical conduction and reinforcing materials that are used in a wide variety of industries including the automotive industry, aviation industry, medical industry, and construction. The number one growth driver is the increasing need for high performance batteries for the electric vehicle market.

Plastic waste is a cheap and abundant feedstock that will allow the Company to scale quickly and produce hydrogen gas for a competitive price.

License Agreements

Oxford University Innovation Limited

On June 2, 2021, the Company (the “Licensee”) entered into a License Agreement (the “Agreement”) with Oxford University Innovation Limited (the “Licensor”). Under the terms of the Agreement, the Licensee will license the licensed technology (OUI Project- Hydrogen from plastics via microwave-initiated catalytic dehydrogenation). The Agreement is non-exclusive and includes the United States and European Union. Signing fees for the Agreement were £54,807 and have been paid in full by the Company. The Royalty Rate is 5% of net sales. The Agreement comprises milestone fees as: (i) £20,000 upon the first commercial sale of a licensed product; (ii) £50,000 upon generating $1,000,000 in sales; (iii) £10,000 upon the successful grant of the US patent; and (iv) £10,000 upon the successful grant of the EU patent. Whether the company realizes product sales or not, the Company is subject to a minimum payment to Oxford University Innovation of £10,000 for license year 3 and £20,000 for license year 4 and each license year thereafter.

The process that the Company licensed from Licensor for producing hydrogen and carbon products from waste plastics has not been demonstrated on a larger scale. It is not yet known whether the process will be cost-effective or profitable to implement on a larger scale. The Company has conducted tests to prove the percentage of carbon nanotubes up to 10 grams. The Company is working with a microwave reactor company to help demonstrate this process at a scale of 100 kilograms and 1,000 kilograms per day.

The Company has met the following milestones of its development plan set forth in the license agreement with Oxford University Innovation:

	●	September 2021: established subsidiary in Oxford, United Kingdom
	●	March 2022: produced 0.025 kilograms per day of marketable carbon nanotubes

Oxford University Innovation may terminate the license due to the company not using commercially reasonable efforts to develop, exploit and market the licensed technology in accordance with the development plan.

From July 2022 to present (see Service Award below), CarbonMeta Technologies has been working with University of Oxford on a project with a global multi-energy provider based in Europe to assess the feasibility of processing mixed plastic waste into clean hydrogen fuel and value-added carbon products using microwave catalysis on a large commercial scale.

Ecomena Limited

On December 2, 2021, the Company (“Licensee”) entered into a License of Agreement (the “Agreement”) with Ecomena Limited (an entity located in the United Kingdom) (“Licensor”). Under the terms of the Agreement, the Licensee will license the Licensed Technology to recycle industrial byproduct into cement free pavers and mortars that are environmentally friendly and continuously absorb carbon dioxide. The signing fees payable to the Licensor under the Agreement are £20,000 cash (approximately $27,247 at February 17, 2022), of which £10,000 has been paid by the Licensee, and 160,000,000 shares of the Company’s common stock, which was delivered to the Licensor on February 17, 2022. The royalty rate payable to the Licensor is 5% of net sales, subject to a minimum of £5,000 per year for license years 1 and 2, £3,000 for license year 3 and £1,000 for license year 4 and each license year thereafter. The term of the Agreement is five years from December 2, 2021 to December 2, 2026. The Licensee may terminate the Agreement for any reason at any time provided it gives Licensor six (6) months written notice to terminate expiring after December 2, 2024. If requested by the Licensee, the Licensor shall agree to the Agreement continuing in force after December 2, 2026. As of the date of this filing, the Agreement is still in effect.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE A – ORGANIZATION (continued)

Production Agreement

On January 11, 2022, the Company entered into an Interim Joint Product Development and Sales Representation Agreement (the “Agreement”) with Salvum Corporation. Under the terms of the Agreement, the parties agree to work together to develop both CarbonMeta’s proprietary cementless paver products known as “Cementless Paver” and Salvum’s proprietary concrete alternative products known as “EarthCrete.” During the Term, Salvum agrees to manufacture CarbonMeta’s proprietary cementless paver products known as “Cementless Paver”. CarbonMeta reserves the right to appoint other manufacturers of the products and/or to engage other sales representatives for CarbonMeta’s proprietary cementless paver products known as “Cementless Paver” outside the United States of America. Although the Interim Joint Product Development and Sales Representation Agreement with Salvum Corporation had a term of 180 days and expired on July 11, 2022, the companies continued to work together, and the companies formed CarbonMeta Green Building Materials, LLC (“CMGBM”) and signed an Operating Agreement for Management of CMGBM on August 28, 2022 that supersedes the Interim Joint Product Development and Sales Representation Agreement.

The Operating Agreement for Management of CMGBM (the “CMGBM Agreement”) provides for (1) the allocation of 501 Managing Membership units (50.1%) to CarbonMeta Technologies, Inc. (“COWI”) and 499 Managing Membership units (49.9%) to Salvum Corporation, (2) COWI capital contributions to CMGBM of (a) 250,000,000 shares of COWI common stock and (b) the assignment of the Ecomena Limited license agreement, and (3) Salvum Corporation capital contributions to CMGBM of (a) existing EarthCrete customer list and sales pipeline, and (b) license to use EarthCrete trademark worldwide. The CMGBM Agreement also provides that profits and losses (and distributions) of CMGBM shall be allocated on the basis of each Managing Member’s relative capital accounts and that a Managing Member may withdraw from CMGBM upon not less than six months prior written notice to each non-withdrawing Managing Member. As of March 31, 2023, the above capital contributions provided for in the CMGBM Agreement had not occurred and no significant operations of CMGBM had commenced.

Service Award

On June 10, 2022, our subsidiary, CarbonMeta Research Ltd. (“CMR”), was granted a Service Award (entitled “Waste Plastic Catalysis Proof of Concept”) from a business company located in Spain. The award provided for CMR to provide the customer with an initial prototype process for converting mixed waste plastic to hydrogen and solid carbon and for the customer to pay CMR a total of 50,000 Euros in four installments as certain milestones are met. As of March 31, 2023, all of the milestones had been met by CMR and CMR had invoiced the customer the full 50,000 Euros ($49,542), of which $40,103 was collected in the third quarter 2022 and $9,439 was collected in the fourth quarter 2022.

In October 2022, CMR was granted a second Service Award for 50,000 Euros to provide the customer with further details on the composition of the carbon products resulting from the microwave catalysis of waste plastics. In December 2022, CMR invoiced the customer for 20,000 Euros, which was collected in January 2023. The project is expected to reach completion in June 2023.

In order to further grow its business, the Company plans to:

	●	Develop and patent new microwave catalysis processes that can yield high value hydrogen and carbon products;

	●	Work closely with commercial building and solar farm general contractors that want to purchase “carbon negative” construction materials that can generate carbon credits;

	●	Acquire or develop patents that will help the Company generate royalty revenues with potential customers and partners, and protect the Company’s competitive position against potential competitors;

	●	Develop new proprietary and patented technologies to implement new industrial methods that can use inexpensive, environmentally friendly catalysts to process collected plastic waste material into high value products such as hydrogen gas, graphene and carbon nanotubes;

	●	seek out government programs in the United Kingdom, European Union and United States that encourage the development of high value production of hydrogen and high value carbon products from organic waste streams; and

	●	Attract investment funds who will actively work with the Company to achieve these goals and help the Company grow rapidly during the next 3 years.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE A – ORGANIZATION (continued)

Some potential joint venture candidates have been identified and discussions initiated. These candidates are within the Company’s core business model, serving commercial properties, accretive to cash flow, and geographically favorable. One of these joint ventures, CarbonMeta Green Building Materials LLC will be focused on the development at marketing of construction mix products that are carbon negative. Two other joint ventures under discussion are focused on processing waste plastics into hydrogen and high value carbon products. We plan to fund these joint ventures with customer purchase orders and invoice payments, federal loans, federal grants, and commercial loans.

We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.

The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management’s best business judgment.

Our activities are subject to several significant risks, which arise primarily as a result of the fact that we have no specific business and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of our lack of resources and our inability to provide a prospective business opportunity with significant capital.

Principal Products or Services and Markets

The Company is in the business of developing and marketing technologies and solutions that can process organic and construction wastes into economically high-value and ecologically sustainable products.

The Company is partnering with a microwave reactor manufacturer in the United States to “scale up” the patented waste plastics microwave processes that the Company licensed from Oxford University Innovation, and with a university partner in the United States to separate, purify and characterize carbon nanotubes that the UK and US developers shall produce.

The principal products that the Company intends to market comprise:

	●	amorphous carbon, graphite, nano-graphite, graphene, carbon nanotubes, and hydrogen; and
	●	carbon-negative building products that help alleviate climate change by capturing carbon dioxide (CO2) for renewable energy projects.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying unaudited financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of results that may be expected for the year ending December 31, 2023. The balance sheet information as of December 31, 2022 was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 20, 2023. These financial statements should be read in conjunction with that report.

Principles of Consolidation

The consolidated financial statements include the accounts of CarbonMeta Technologies, Inc. and its six wholly-owned subsidiaries, CoroWare Technologies, Inc., CoroWare Robotics Solutions, Inc., Robotic Workspace Technologies, Inc., Carbon Source, Inc., CoroWare Treasury, Inc., and CarbonMeta Research Ltd., and its two majority owned subsidiaries CarbonMeta Green Building Materials, LLC and ARiCon, LLC (collectively, the “Company”). All significant inter-company balances and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company uses all available information and appropriate techniques to develop its estimates. However, actual results could differ from its estimates.

Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States dollars (“$”), which is the reporting currency of the Company. The functional currency of CarbonMeta Research Ltd. (“CMR”) is the Great Britain pound (“GBP”); the functional currency of the Company and its other subsidiaries is the United States dollar. The assets and liabilities of CMR are translated at the GBR currency exchange rate at the end of the period ($1.236823 at March 31, 2023), the revenues and expenses of CMR are translated at the GBP average exchange rates during the period ($1.223491 for the three months ended March 31, 2023), and stockholders’ equity (deficit) of CMR is translated at the historical exchange rates. The resulting translation adjustments are included in determining other comprehensive income (loss). Transaction gains and losses, which were not significant for the periods presented, are reflected in the consolidated statements of operations.

Cash and Cash Equivalents

The Company considers highly liquid investments with original maturities of three months or less when purchased as cash equivalents. The Company had no cash equivalents as of March 31, 2023 and December 31, 2022. At times throughout the year, the Company might maintain bank balances that may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. Periodically, the Company evaluates the credit worthiness of the financial institutions and has not experienced any losses in such accounts. As of March 31, 2023 and December 31, 2022, the Company did not have bank balances that exceeded the FDIC insured limits.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major renewals and improvements are capitalized while expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss, if any, is reflected in loss on disposal of assets in the consolidated statement of income and comprehensive income.

At least annually, the Company evaluates, and adjusts when necessary, the estimated useful lives. There were no changes in estimated useful lives for the periods presented. The estimated useful lives are:

SUMMARY OF ESTIMATED USEFUL LIVES

Computer equipment and software			5 years
Filament production equipment			3 years

Licenses

The licenses acquired from Oxford University Innovation Limited and Ecomena Limited (see Note A) are stated at cost less accumulated amortization. For the Oxford license, amortization is calculated using the straight-line method over the 10-year estimated life of the license. For the Ecomena license, amortization is calculated using the straight-line method over the 5-year term of the license.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long-lived Assets

The Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by applying the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-35, Property, Plant and Equipment, Subsequent Measurement (“ASC 360-35”). ASC 360-35 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Additionally, taxes are calculated and expensed in accordance with applicable tax code.

Segment Reporting

FASB ASC 280-10, Segment Reporting, defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief decision maker in deciding how to allocate resources and in assessing performance. The Company reports according to one main segment.

Fair Value of Financial Instruments

The Company follows FASB ASC 820-10-35-37 (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments and paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3	Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts reported in the Company’s consolidated financial statements for cash, accounts receivable and accounts payable and accrued expenses approximate their fair value because of the immediate or short-term nature of these financial instruments. The carrying amounts reported in the balance sheet for its notes and loans payable approximates fair value as the contractual interest rate and features are consistent with similar instruments of similar risk in the marketplace.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (continued)

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature.

The following table presents assets and liabilities that are measured and recognized at fair value as of March 31, 2023 and December 31, 2022, on a recurring basis:

SUMMARY OF ASSETS AND LIABILITIES MEASURED AND RECOGNIZED AT FAIR VALUE:

Assets and liabilities measured at fair value on a recurring basis at March 31, 2023	Level 1		Level 2			Level 3		Total Carrying Value

Derivative liabilities	$	-	$	(18,009,660	)	$	-	$	(18,009,660	)

Assets and liabilities measured at fair value on a recurring basis at December 31, 2022	Level 1		Level 2			Level 3		Total Carrying Value

Derivative liabilities	$	-	$	(9,652,846	)	$	-	$	(9,652,846	)

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for FASB ASC 815, Derivatives and Hedging (“ASC 815”).

Professional standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards under “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the preferred stock transaction and the effective conversion price embedded in the preferred stock. ASC 815 provides that, among other things, generally, if an event is not within the entity’s control, could or require net cash settlement, then the contract shall be classified as an asset or a liability.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock Based Compensation

The Company follows FASB ASC 718, Compensation – Stock Compensation, which prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity–based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Through newly issued restricted common stock, the Company pays qualified contractors and advisors common shares in lieu of compensation for services provided including business development, management, technology development, consulting, legal services and accounting services.

Revenue Recognition

The Company will recognize revenue for its sales of energy products pursuant to the License Agreements with Oxford University Innovation Limited and Ecomena Limited (see Note A) when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is probable. Product sales will be recognized by us generally at the time product is shipped. Shipping and handling costs will be included in cost of goods sold.

Research and Development

Research and development costs relate to the development of new products, including significant improvements and refinements to existing products, and are expensed as incurred. Research and development expenses for the three months ended March 31, 2023 and 2022 were $9,330 and $4,099, respectively.

Basic and Diluted Loss per Common Share

The Company computes basic and diluted earnings per common share amounts in accordance with FASB ASC 260, Earnings per Share. Basic earnings per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share reflects the potential dilution that could occur if stock options, convertible securities and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

The Company currently has convertible debt and preferred stock, which, if converted, as of March 31, 2023 and 2022, would have caused the Company to issue diluted shares totaling 39,570,016,202 and 36,345,298,945, respectively.

Dividend Policy

The Company has never declared or paid any cash dividends on its common stock. The Company anticipates that any earnings will be retained for development and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future. Additionally, as of March 31, 2023 and December 31, 2022, the Company has issued, and has outstanding, shares of Series B Preferred Stock which are entitled, prior to the declaration of any dividends on common stock, to earn a 5% dividend, payable in either cash or common stock of the Company. The Board of Directors has sole discretion to declare dividends based on the Company’s financial condition, results of operations, capital requirements, contractual obligations and other relevant factors. At March 31, 2023 and December 31, 2022, there were cumulative undeclared dividends to Preferred Series B shareholders of $129,724 and $127,728, respectively, the obligation for which is contingent on declaration by the board of directors. At March 31, 2023 and December 31, 2022 there were accrued unpaid declared dividends of $15,969 and $15,969, respectively (which are included in accounts payable and accrued expenses).

Recent Accounting Pronouncements

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE C – GOING CONCERN

The Company has a working capital deficit of $33,484,351 and $24,786,737 as of March 31, 2023 and December 31, 2022, respectively. The Company has accumulated deficits of $72,811,862 and $64,003,956 as of March 31, 2023 and December 31, 2022, respectively. Additionally, the Company is in default of substantially all of its debt and other obligations (see Notes F, H, I and K). Because of these and other factors, the Company will require additional working capital to develop its business operations. The Company intends to raise additional working capital through the use of private placements, public offerings and/or bank financing.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from operations, any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE D – PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consists of the following at March 31, 2023 and December 31, 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

	March 31,			December 31,
	2023			2022
Computer equipment and software	$	1,325		$	1,325
Filament production equipment		45,799			45,799
Subtotal		47,124			47,124
Less: accumulated depreciation		(22,065	)		(18,235	)
Property and equipment, net	$	25,059		$	28,889

Depreciation of equipment expense for the three months ended March 31, 2023 and 2022 was $3,830 and $3,830, respectively.

NOTE E – LICENSES, NET

The licenses, net, consist of the following at March 31, 2023 and December 31, 2022:

SCHEDULE OF LICENSES, NET

	March 31,			December 31,
	2023			2022
License acquired from Oxford University Innovation Limited on June 2, 2021 (see Note A)	$	79,256		$	79,256
License acquired from Ecomena Limited effective February 17, 2022 (see Note A)		91,247			91,247
Subtotal		170,503			170,503
Accumulated amortization		(38,683	)		(32,229	)
License, net	$	131,820		$	138,274

Amortization of licenses expense for the three months ended March 31, 2023 and 2022 was $6,454 and $7,904, respectively.

At March 31, 2023, the expected future amortization of licenses expense was:

Fiscal year ending December 31:
2023 (excluding the three months ended March 31, 2023)	$	19,721
2024		26,175
2025		26,175
2026		26,175
2027		10,327
Thereafter		23,247
Total	$	131,820

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE F – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consists of the following at March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
Accounts payable	$	1,434,772	$	1,434,142
Accrued interest		6,621,051		6,362,570
Accrued CEO compensation		912,000		874,500
Accrued CarbonMeta Research, Ltd. Board of Directors fees		78,403		63,314
Accrued payroll		110,335		110,335
Deferred compensation to Chief Technology Officer of Company subsidiary, CoroWare Technologies, Inc.		230,993		230,993
Payroll taxes payable		1,998,735		1,998,735
Commissions payable		221,188		221,188
Accrued consulting fees relating to the Mutual Release and Settlement Agreement dated July 19, 2021 with Y.A. Global Investments, LP (Note H)		50,000		50,000
Accrued dividends on Series B Preferred Stock		15,969		15,969
License fee and minimum royalty payable to Ecomena Limited		13,624		13,624
Other		90,871		82,074
Total	$	11,777,941	$	11,457,444

The accounts payable of $1,434,772 at March 31, 2023, which substantially all relate to year 2016 and prior, are liabilities of:

	March 31,
	2023
CarbonMeta Technologies, Inc.	$	230,303
CoroWare Technologies, Inc.		1,157,662
CoroWare Robotics Solutions, Inc.		34,353
Carbon Source, Inc.		3,197
AriCon, LLC		9,257
Total	$	1,434,772

The payroll taxes payable of $1,998,735 and commissions payable of $221,188 at March 31, 2023, which also substantially all relate to year 2016 and prior, are all liabilities of CoroWare Technologies, Inc. On October 28, 2021, the Company CEO submitted an Offer in Compromise with the Internal Revenue Service to satisfy the trust fund portion (approximately $1,400,000) of the liability for $534,457 and paid $106,891 to the Internal Revenue Service with the offer. To date, the Internal Revenue Service has not yet accepted or declined this Offer in Compromise.

NOTE G –OBLIGATIONS COLLATERALIZED BY RECEIVABLES, NET

Obligations collateralized by receivables consist of:

	March 31,		December 31,
	2023		2022
Knight Capital July 16, 2015 arrangement	$	-	$	-
Quick Fix Capital August 17, 2015 arrangement		48,907		48,907
Power Up January 8, 2016 arrangement		14,232		14,232
Power Up April 12, 2016 arrangement		67,645		67,645
Power Up April 28, 2016 arrangement		29,696		29,696
Power Up June 2, 2016 arrangement		45,756		45,756
Total	$	206,236	$	206,236

The financing arrangements relating to the above liabilities were entered into between CoroWare Technologies, Inc. (“CTI”), a subsidiary of the Company, and lenders in 2015 and 2016. The agreements provided for financing plus debt discounts for CTI to repay to the lenders. The terms of repayment require CTI to remit to the lenders certain percentages of future receivables collections until such time as the balances are paid in full.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE H – CONVERTIBLE DEBT, NET

Convertible debt, net, consists of:

SCHEDULE OF CONVERTIBLE DEBT, NET

										Principal Balance at						Accrued Interest Balance at
Lender	Interest Rate			Default Rate			Conversion Price			March 31, 2023			December 31, 2022			March 31, 2023		December 31, 2022

Westmount Holdings International, Ltd – loan date January 12, 2010 due on demand		14.00	%		14.00	%		(1	)	$	537,317		$	537,317		$	986,817	$	968,268
Tangiers Investment Group, LLC – loan date March 9, 2013 and due date of March 9, 2014, in technical default		10.00	%		20.00	%		(2	)		-			-			891		891
Tangiers Investment Group, LLC – loan date March 27, 2014 and due date of March 27, 2015, in technical default		10.00	%		20.00	%		(2	)		75,000			75,000			125,918		122,219
Tangiers Investment Group, LLC – due on demand		0.00	%		15.00	%	$	0.0006			47,000			47,000			62,892		62,892
Tangiers Investment Group, LLC – loan date October 11, 2016 and due date of October 20, 2017, in technical default		0.00	%		20.00	%	$	0.0006			10,000			10,000			6,663		6,663
Tangiers Investment Group, LLC – loan date January 30, 2017 and due date of January 30, 2018, in technical default		10.00	%		20.00	%	$	0.0006			30,910			30,910			18,445		18,445
Tangiers Investment Group, LLC – loan date July 19, 2021 and due date of July 19, 2022, in technical default		10.00	%		20.00	%	$	0.001			105,000			105,000			17,864		15,275
Tangiers Investment Group, LLC – loan date September 8, 2021 and due date of September 8, 2022, in technical default		10.00	%		20.00	%	$	0.001			105,000			105,000			16,368		13,779
Tangiers Investment Group, LLC – loan date March 21, 2022 and due date of March 21, 2023, in technical default		12.00	%		16.00	%	$	0.0002			55,000			55,000			6,781		5,153
Lloyd T. Spencer (the Company’s sole officer and director) – loan date March 7, 2022 and due date of March 7, 2023, in technical default		12.00	%		16.00	%	$	0.0002			31,300			66,000			7,699		6,488
Dakota Capital Pty, Ltd – loan date April 8, 2014 and due date of December 31, 2014, in technical default		14.00	%		14.00	%		(3	)		200,000			200,000			251,386		244,482
Zoom Marketing – loan date August 23, 2013 and due date of January 23, 2014, in technical default		5.00	%		10.00	%		(8	)		65,000			65,000			63,921		62,319
Burrington Capital, LLC – loan date April 2, 2014 and due date of October 1, 2014, in technical default		10.00	%		15.00	%		(12	)		25,000			25,000			68,263		64,897
Patrick Ferro – loan date April 3, 2014 and due date of December 31, 2014, in technical default		14.00	%		14.00	%		(13	)		26,825			26,825			39,630		38,704
Barry Liben – loan date April 3, 2014 and due date of December 31, 2014, in technical default		0.00	%		0.00	%		(13	)		52,800			52,800			-		-
Jared Robert – loan date December 10, 2014 and due date of June 10, 2015, in technical default		10.00	%		15.00	%		(12	)		20,000			20,000			47,295		44,867
Raphael Cariou – loan date August 3, 2012 and due date of February 3, 2013, in technical default		10.00	%		15.00	%		(4	)		7,000			7,000			25,433		25,227
Raphael Cariou – loan date March 12, 2015 and due date of September 12, 2015, in technical default		24.00	%		29.00	%		(4	)		82,178			82,178			740,187		684,080
Raphael Cariou - loan date March 12, 2015 and due date of September 12, 2015, in technical default		24.00	%		29.00	%		(4	)		94,178			94,178			829,777		766,739
Redwood Management, LLC – loan date of March 21, 2011 and due date of March 18, 2013, in technical default		14.00	%		14.00	%		(1	)		123,936			123,936			174,959		170,680
AGS Capital Group, LLC – loan date of February 25, 2013 and due date of February 25, 2014, in technical default		14.00	%		14.00	%		(9	)		8,640			8,640			122,351		117,931
AGS Capital Group, LLC – loan date of February 25, 2013 and due date of February 25, 2014, in technical default		14.00	%		14.00	%		(9	)		42,000			42,000			129,214		123,437
Tim Burgess – loan date of July 8, 2003 and due date of January 8, 2004, in technical default		8.00	%		15.00	%	$	1.00			50,000			50,000			146,263		144,414
Azriel Nagar – loan date of July 8, 2003 and due date of January 8, 2004, in technical default		8.00	%		15.00	%	$	1.00			50,000			50,000			146,263		144,414
Kelburgh, Ltd – loan date of February 12, 2012 and due date of March 22, 2012, in technical default		10.00	%		15.00	%		(8	)		13,000			13,000			54,810		52,363
Premier IT Solutions – loan date of October 5, 2011 and due date of March 5, 2012, in technical default		10.00	%		15.00	%		(7	)		21,962			21,962			97,298		92,994
LG Capital Funding, LLC – loan date of March 11, 2014 and due date of March 11, 2015, in technical default		12.00	%		24.00	%		(11	)		32,000			32,000			65,711		63,817
LG Capital Funding, LLC – loan date of January 7, 2015 and due date of January 7, 2016, in technical default		12.00	%		24.00	%		(11	)		20,625			20,625			38,264		37,044
LG Capital Funding, LLC – loan date of March 11, 2014 and due date of March 11, 2015, in technical default		12.00	%		24.00	%		(11	)		24,000			24,000			49,284		47,863
Barclay Lyons – loan date of January 28, 2011 and due date of July 28, 2011, in technical default		21.00	%		36.00	%		(6	)		10,750			10,750			46,308		45,354
Blackridge Capital, LLC – loan date of April 2, 2011 and due date of July 28, 2011, in technical default		10.00	%		15.00	%		(7	)		6,985			6,985			130,182		125,231
Blackridge Capital, LLC – loan date of February 21, 2014 and due date of September 21, 2014, in technical default		8.00	%		8.00	%		(10	)		5,000			5,000			5,109		4,912
Julian Herskowitz – loan date of July 8, 2003 and due date of January 8, 2004, in technical default		8.00	%		15.00	%		(15	)		-			-			16,287		16,287
Patrick Tuohy – loan date of April 1, 2014 and due date of December 31, 2014, in technical default		14.00	%		14.00	%		(12	)		-			-			153		153
Richard Wynns – loan date July 22, 2005 and due date of December 31, 2006, in technical default		5.00	%		5.00	%	$	0.15			7,500			7,500			7,595		7,502
Richard Wynns - loan date July 26, 2010 and due date of December 31, 2011, in technical default		10.00	%		10.00	%		(5	)		93,997			93,997			119,821		117,472
MacRab LLC – loan date May 10, 2022 and due date of May 10, 2023		12.00	%		16.00	%	$	0.0002			33,056			33,056			3,532		2,554
BHP Capital NY Inc. - loan date July 14, 2022 and due date of July 14, 2023		12.00	%		12.00	%	$	0.0002			-			25,000			1,917		1,397
Quick Capital LLC - loan date July 14, 2022 and due date of July 14, 2023		12.00	%		12.00	%	$	0.0002			25,000			25,000			2,137		1,397
Quick Capital LLC - loan date November 1, 2022 and due date of November 1, 2023		12.00	%		16.00	%	$	0.0002			10,000			10,000			496		201
Robert Papiri Defined Benefit Plan - loan date July 15, 2022 and due date of July 15, 2023		12.00	%		12.00	%	$	0.0002			10,000			10,000			851		556
Robert Papiri Defined Benefit Plan - loan date November 16, 2022 and due date of November 16, 2023		12.00	%		16.00	%	$	0.0002			10,000			10,000			444		148
Robert Papiri Defined Benefit Plan - loan date December 11, 2022 and due date of December 11, 2023		12.00	%		16.00	%		0.0002			5,000			5,000			181		33
Robert Papiri Defined Contribution Plan - loan date July 15, 2022 and due date of July 15, 2023		12.00	%		16.00	%	$	0.0002			2,500			2,500			213		139
RPG Capital Partners, Inc - loan date July 15, 2022 and due date of July 15, 2023		12.00	%		16.00	%	$	0.0002			2,500			2,500			213		139
RPG Capital Partners, Inc - loan date August 4, 2022 and due date of August 4, 2023		12.00	%		16.00	%	$	0.0002			25,000			25,000			1,964		1,225
RPG Capital Partners, Inc - loan date September 12, 2022 and due date of September 12, 2023		12.00	%		16.00	%	$	0.0002			15,000			15,000			986		542
Total											2,217,959			2,277,659			4,680,036		4,471,583
Less debt discounts											(53,430	)		(117,625	)		-		-
Net										$	2,164,529		$	2,160,034		$	4,680,036	$	4,471,583

(1)	Lesser of (a) $0.02 or (b) 85% of the lowest closing price during the 30-day trading period prior to conversion.
(2)	50% of the lowest closing price during the 20-day trading period prior to conversion.
(3)	Lesser of (a) $0.02 or (b) 50% of the lowest volume weighted average price during the 30-day trading period prior to conversion.
(4)	86.9565% of the average prices of the five trading days prior to the conversion date.
(5)	75% of the average of the three lowest closing prices during the 10-day trading period prior to conversion.
(6)	50% of the lesser of (i) the closing price on the day prior to conversion, or (ii) the volume-weighted-average closing price of the five-day trading period prior to conversion, though in no instance shall the conversion price be less than $0.0001.
(7)	Average of the five trading days prior to the applicable conversion date, with the number of conversion shares multiplied by 115%.
(8)	85% of the average of the five trading days prior to the applicable conversion date.
(9)	35% of the lowest closing price during the 20-day trading period prior to conversion.
(10)	60% of the lowest closing price during the 30-day trading period prior to conversion
(11)	50% of the lowest closing price during the 10-day trading period prior to, and including the date of, conversion
(12)	60% of the lowest closing price during the 20-day trading period prior to conversion, or $0.01, whichever is lower.
(13)	50% of the average of the three lowest closing prices during the 30-day trading period prior to conversion, or $0.02, whichever is lower, with the conversion rate being rounded to $0.0001 or whole share.
(15)	65% of the lowest closing price during the 7-day trading period prior to conversion

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE H – CONVERTIBLE DEBT, NET (continued)

In the Company’s evaluation of each convertible debt instrument in accordance with FASB ASC 815, Derivatives and Hedging, based on the variable conversion price, it was determined that the conversion features were not afforded the exemption as a conventional convertible instrument and did not otherwise meet the conditions for equity classification. As such, the conversion and other features were compounded into one instrument, bifurcated from the debt instrument and carried as a derivative liability, at fair value (Please see NOTE L – DERIVATIVE LIABILITY for further information). As of March 31, 2023 and December 31, 2022, debt discounts related to convertible notes payable totaled $53,430 and $117,625, respectively.

NOTE I – NOTES PAYABLE

Notes payable consist of:

SCHEDULE OF NOTES PAYABLE

	Principal Balance				Accrued Interest Balance
Description (i)	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022

Total	$	154,873	$	154,873	$	722,544	$	689,927
Gary Sumner June 29, 2017 note, interest at 5% compounded (default simple interest at 18%), due March 31, 2018	$	45,000	$	45,000	$	116,253	$	114,255
LTC International Corp July 3, 2018 note, interest at 20.8% (default interest at 41.6%), due December 17, 2018		4,732		4,732		31,192		30,707
Richard Wynns July 27, 2010 note, interest at 18% compounded (default compounded interest at 21%), due January 23, 2011		25,000		25,000		317,692		300,313
Barclay Lyons March 15, 2011 note, interest at 18.99% (default interest at 28.99%), due March 25, 2011		15,000		15,000		52,343		51,271
John Kroon March 17, 2010 note, interest at 18% compounded (default compounded interest at 21%), due September 13, 2010		10,000		10,000		137,843		130,345
Walter Jay Bell October 18, 2013 note, interest at 10%, due November 29, 2013		10,000		10,000		9,504		9,257
Walter Jay Bell April 24, 2016 note, interest at 10%, due September 30, 2016		8,641		8,641		3,021		2,915
George Ferch March 29, 2011 note, interest at 0% (default compounded interest at 21%), due June 27, 2011		5,000		5,000		52,450		49,536
Blackridge, LLC April 11, 2012 note, interest at 5% (default interest at 5%), due May 25, 2012		1,500		1,500		1,046		1,027
Michael Sobeck August 16, 2022 note, interest at 12%, due August 16, 2023		30,000		30,000		1,200		300
Total	$	154,873	$	154,873	$	722,544	$	689,927

(i)

Unless otherwise noted, interest is simple interest.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE J – NOTES PAYABLE, RELATED PARTIES

As of March 31, 2023 and December 31, 2022, the Company had an aggregate total of $199,415 and $199,415, respectively, in related party notes payable. These notes bear simple interest at rates ranging from 10% to 18% per annum, with default simple interest at rates ranging from 10% to 24% per annum. Accrued interest on related party notes payable totaled $478,825 and $468,562 at March 31, 2023 and December 31, 2022, respectively.

NOTE K – SMALL BUSINESS ADMINISTRATION LOAN

On April 17, 2002, the Company borrowed $989,100 under a note agreement with the Small Business Administration. The note bears interest at 4% and is secured by the equipment and machinery assets of the Company. The balance outstanding at March 31, 2023 and December 31, 2022 was $979,950 and $979,950, respectively. The note calls for monthly installments of principal and interest of $4,813 beginning September 17, 2002 and continuing until April 17, 2032.

The Company and the Small Business Administration reached an agreement in November 2010, whereby the Small Business Administration would accept $500 per month for 12 months with payment reverting back to $4,813 in November 2011. The Company only made four payments under the modification agreement. The Company continues to carry the loan as a current term liability because current payments are not being made, resulting in a default. Accrued interest payable on the note totaled $742,388 and $732,497 as of March 31, 2023 and December 31, 2022, respectively.

NOTE L – DERIVATIVE LIABILITY

Effective July 31, 2009, the Company adopted ASC 815, which defines determining whether an instrument (or embedded feature) is solely indexed to an entity’s own stock. The conversion price of certain convertible notes and convertible preferred stock are variable and subject to the fair value of the Company’s common stock on the date of conversion. As a result, the Company has determined that the conversion features are not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with ASC 815, the Company has bifurcated the conversion features of the instruments to be recorded as a derivative liability.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE L – DERIVATIVE LIABILITY (continued)

ASC 815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value as items of other income or expense. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with convertible notes payable and preferred stock.

At origination and subsequent revaluations, the Company valued the derivative liabilities using the Black-Scholes options pricing model under the following assumptions as of March 31, 2023 and December 31, 2022:

SUMMARY OF DERIVATIVE LIABILITIES

	March 31, 2023			December 31, 2022

Risk-free interest rate		4.72	%		4.41	%
Expected options life		1 - 2 yrs			1-2 yrs
Expected dividend yield		-			-
Expected price volatility		289	%		341	%

For the three months ended March 31, 2023, the Company’s derivative liability increased from $9,652,846 at December 31, 2022 to $18,009,660 at March 31, 2023, and the Company recognized a loss from derivative liability of $8,356,814. For the three months ended March 31, 2022, the Company’s derivative liability increased from $11,904,070 at December 31, 2021 to $12,475,165 at March 31, 2022, and the Company recognized a loss from derivative liability of $571,095.

NOTE M – PREFERRED STOCK

a) Series A Preferred Stock

The Company has authorized 125,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock (i) pays a dividend of 5%, payable at the discretion of the Company in cash or common stock, (ii) is convertible immediately after issuance into the Company’s common stock at the lesser of $3,000 per share (as adjusted for the November 20, 2006 1 for 10, the April 8, 2009 1 for 300 and the July 12, 2012 1 for 200 reverse stock splits) or 75% of the average closing bid prices over the 20 trading days immediately preceding the date of conversion, (iii) has a liquidation preference of $1.00 per share, (iv) may be redeemed by the Company at any time up to five years after the issuance date for $1.30 per share plus accrued and unpaid dividends, and (v) has no voting rights except as provided by Delaware law.

There were no issuances, conversions or redemptions of Series A Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 0 and 0 shares of Series A Preferred Stock issued and outstanding, respectively.

b) Series B Preferred Stock

The Company has authorized 525,000 shares of Series B Preferred Stock. Each share of Series B Preferred Stock (i) pays a dividend of 5%, payable at the discretion of the Company in cash or common stock, (ii) is convertible immediately after issuance into the Company’s common stock at the lesser of $3,000 per share (as adjusted for the November 20, 2006 1 for 10, the April 8, 2009 1 for 300 and the July 12, 2012 1 for 200 reverse stock splits) or 75% of the average closing bid prices over the 20 trading days immediately preceding the date of conversion, (iii) has a liquidation preference of $1.00 per share, (iv) may be redeemed by the Company at any time up to five years after the issuance date for $1.30 per share plus accrued and unpaid dividends, and (v) has no voting rights except as provided by Delaware law.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE M – PREFERRED STOCK (continued)

There were no issuances, conversions or redemptions of Series B Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 159,666 and 159,666 shares of Series B Preferred Stock issued and outstanding, respectively.

Based upon the Company’s evaluation of the terms and conditions of the Series B Preferred Stock, the embedded conversion feature related to the Series B Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion feature and carry it as a derivative liability.

The Company estimated the fair value of the compound derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate, the Company’s valuation model resulted in a compound derivative balance associated with the Series B Preferred Stock of $265,467 and $145,763 as of March 31, 2023 and December 31, 2022, respectively. These amounts are included as a derivative liability on the Company’s consolidated balance sheet. Fair value adjustments of ($119,704) and ($19,434) were credited (charged) to derivative income (expense) for the three months ended March 31, 2023 and 2022, respectively.

c) Series C Preferred Stock

The Company has authorized 500,000 shares of Series C Preferred Stock. During 2007, the Company initiated a private offering under Regulation D of the Securities Act of 1933 (the “Private Offering”), of an aggregate 500,000 units (collectively referred to as the “Units”) at a price of $1.00 per Unit, with each Unit consisting of one share of Series C Preferred Stock convertible at the lesser of 85% of the average closing bid price of the common stock over the 20 trading days immediately preceding the date of conversion, or $0.04 per share and stock purchase warrants equal to the number of shares of common stock converted from the Series C Preferred Stock, exercisable at $0.06 per share and which expire five years from the conversion date.

There were no issuances, conversions or redemptions of Series C Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 0 and 0 shares of Series C Preferred Stock issued and outstanding, respectively.

d) Series D Preferred Stock

On November 10, 2011, the Board approved by unanimous written consent an amendment to the Company’s Certificate of Incorporation to designate the rights and preferences of Series D Preferred Stock. There are 500,000 shares of Series D Preferred Stock authorized with a par value of $0.001. Each share of Series D Preferred Stock has a stated value equal to $1.00. These preferred shares rank higher than all other securities. Each outstanding share of Series D Preferred Stock shall be convertible into the number of shares of the Company’s common stock determined by dividing the stated value by the conversion price which is defined as 85% of the average closing bid price of the common stock over the twenty trading days immediately preceding the date of conversion, but no less than par value of the common stock. Mandatory conversion can be demanded by the Company prior to October 1, 2013. Each share of the Series D Preferred Stock shall have voting rights equal to 100,000 votes of common stock.

There were no issuances, conversions or redemptions of Series D Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 100,000 and 100,000 shares of Series D Preferred Stock issued and outstanding, respectively.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE M – PREFERRED STOCK (continued)

Based upon the Company’s evaluation of the terms and conditions of the Series D Preferred Stock, the embedded conversion feature related to the Series D Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion feature and carry it as a derivative liability.

The Company estimated the fair value of the compound derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate, the Company’s valuation model resulted in a compound derivative balance associated with the Series D Preferred Stock of $241,836 and $197,877 as of March 31, 2023 and December 31, 2022, respectively. These amounts are included as a derivative liability on the Company’s consolidated balance sheet. Fair value adjustments of ($43,959) and $49,861 were credited (charged) to derivative income (expense) for the three months ended March 31, 2023 and 2022, respectively.

e) Series E Preferred Stock

On March 9, 2012, the Company filed the Certificate of Designation of the Rights and Preferences of Series E Preferred Stock of the Company with the Delaware Secretary of the State pursuant to which the Company set forth the designation, powers, rights, privileges, preferences and restrictions of 1,000,000 authorized shares of Series E Preferred Stock, par value $0.001 per share. The Series E Preferred Stock is convertible into common stock at 50% of the lowest closing bid price of the common stock over the 20 days immediately prior to the date of conversion, but no less than the par value of the common stock.

There were no issuances, conversions or redemptions of Series E Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 821,377 and 821,377 shares of Series E Preferred Stock issued and outstanding, respectively.

Based upon the Company’s evaluation of the terms and conditions of the Series E Preferred Stock, the embedded conversion feature related to the Series E Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion feature and carry it as a derivative liability.

The Company estimated the fair value of the compound derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate, the Company’s valuation model resulted in a compound derivative balance associated with the Series E Preferred Stock of $1,986,389 and $1,625,314 as of March 31, 2023 and December 31, 2022, respectively. These amounts are included as a derivative liability on the Company’s consolidated balance sheet. Fair value adjustments of ($361,075) and ($381,614) were credited (charged) to derivative income (expense) for the three months ended March 31, 2023 and 2022, respectively.

f) Series F Preferred Stock

On October 4, 2013, the Company filed the certificate of designation pursuant to which the Company set forth the designation, powers, rights, privileges, preferences and restrictions of 500,000 authorized shares of Series F Preferred Stock, par value $0.001 per share.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE M – PREFERRED STOCK (continued)

The shares of Series F Preferred Stock have a stated value of $1.00, have no voting rights, are entitled to no dividends due or payable and are convertible into the number of shares of the Company’s common stock determined by dividing the stated value by the conversion price, which is defined as 85% of the average closing bid price of the common stock over the five trading days immediately preceding the date of conversion, but no less than the par value of the common stock. At any time after the issuance date through the fifth anniversary of the issuance of the Series F Preferred Stock, the Company shall have the option to redeem any unconverted shares at an amount equal to 130% of the stated value of the Series F Preferred Stock plus accrued and unpaid dividends, if any. Redemption shall be established by the Company in its sole and absolute discretion and no holder of Series F Preferred Stock may demand that the Series F Preferred Stock be redeemed.

There were no issuances, conversions or redemptions of Series F Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 190,000 and 190,000 shares of Series F Preferred Stock issued and outstanding, respectively.

Based upon the Company’s evaluation of the terms and conditions of the Series F Preferred Stock, the embedded conversion feature related to the Series F Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion feature and carry it as a derivative liability.

The Company estimated the fair value of the compound derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate, the Company’s valuation model resulted in a compound derivative balance associated with the Series F Preferred Stock of $459,489 and $375,966 as of March 31, 2023 and December 31, 2022, respectively. These amounts are included as a derivative liability on the Company’s consolidated balance sheet. Fair value adjustments of ($83,523) and $94,736 were credited (charged) to derivative income (expense) for the three months ended March 31, 2023 and 2022, respectively.

g) Series G Preferred Stock

On April 17, 2014, the Company filed the certificate of designation pursuant to which the Company set forth the designation, powers, rights, privileges, preferences and restrictions of 500,000 authorized shares of Series G Preferred Stock, par value $0.001 per share.

The shares of Series G Preferred Stock have a stated value of $1.00, have voting rights equal to 5,000,000 votes of common stock, are entitled to no dividends due or payable, are non-redeemable, and are convertible into the number of shares of the Company’s common stock determined by dividing the stated value by the conversion price, which is defined as 85% of the average closing bid price of the common stock over the twenty trading days immediately preceding the date of conversion, but no less than par value of the common stock.

There were no issuances, conversions or redemptions of Series G Preferred Stock during the three months ended March 31, 2023 and year ended December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had 25,000 and 25,000 shares of Series G Preferred Stock issued and outstanding, respectively.

Based upon the Company’s evaluation of the terms and conditions of the Series G Preferred Stock, the embedded conversion feature related to the Series G Preferred Stock was afforded the exemption as a conventional convertible instrument due to certain variabilities in the conversion price and met the conditions for equity classification. However, the Company is required to bifurcate the embedded conversion feature and carry it as a derivative liability.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE M – PREFERRED STOCK (continued)

The Company estimated the fair value of the compound derivative using a common stock equivalent and the current share price of the Company’s common stock. As a result of this estimate, the Company’s valuation model resulted in a compound derivative balance associated with the Series G Preferred Stock of $60,459 and $49,469 as of March 31, 2023 and December 31, 2022, respectively. These amounts are included as a derivative liability on the Company’s consolidated balance sheet. Fair value adjustments of ($10,990) and $12,465 were credited (charged) to derivative income (expense) for the three months ended March 31, 2023 and 2022, respectively.

NOTE N – COMMON STOCK AND TREASURY STOCK

Common Stock

The Company is authorized to issue up to 35,000,000,000 shares of $0.0001 par value common stock, of which 19,245,422,812 and 18,643,205,254 shares were outstanding as of March 31, 2023 and December 31, 2022, respectively.

Issuances during the three months ended March 31, 2023:

On January 25, 2023, the Company issued 173,500,000 shares of its common stock to Lloyd Spencer in satisfaction of $34,700 principal against the convertible note dated May 7, 2022.

On February 15, 2023, the Company issued 155,833,562 shares of its common stock to BHP Capital NY, Inc. in satisfaction of $25,000 principal, $2,500 accrued fees, $1,750 deposit fees and $1,917 interest against the convertible note dated October 15, 2021.

On March 3, 2023, the Company issued 200,000,000 shares of its common stock to New to The Street Group, LLC as per the terms of the Production & Broadcasting Agreement dated February 24, 2022.

Issuances during the year ended December 31, 2022:

On January 21, 2022, the Company issued 206,896,552 shares of common stock to a consultant for accrued consulting fees in connection with negotiating and arranging for the entry by the Company into a Mutual Release and Settlement Agreement with Y.A. Global Investments, LP dated July 19, 2021.

On January 21, 2022, the Company issued its sole officer and director, Lloyd Spencer, 428,571,428 shares of common stock for past due compensation in the amount of $150,000.

On February 14, 2022, the Company issued 83,333,334 shares of common stock to Salvum Corporation as per the terms of the Memorandum of Understanding to an Interim Joint Product Development and Sales Representation Agreement dated January 11, 2022 (see Note A, Production Agreement).

On February 14, 2022, the Company issued its sole officer and director, Lloyd Spencer, 30,000,000 shares of common stock as compensation for serving on the Board of Directors of CarbonMeta Research Ltd.

On February 14, 2022, the Company issued a total of 90,000,000 shares (30,000,000 shares each) of common stock to three other individuals as compensation for serving on the Board of Directors of CarbonMeta Research Ltd.

On February 17, 2022, the Company issued 160,000,000 shares of its common stock to Ecomena Limited (an entity located in the United Kingdom) pursuant to a License of Agreement dated December 2, 2021 between Ecomena Limited and CarbonMeta Technologies, Inc. (see Note A, License Agreements).

On March 7, 2022, the Company issued 33,000,000 shares of its common stock to Lloyd Spencer in connection with a $66,000 convertible note financing.

On March 21, 2022, the Company issued 27,500,000 shares of its common stock to Tangiers Investment Group, LLC in connection with a $55,000 convertible note financing.

On April 4, 2022, the Company issued 20,000,000 shares of its common stock to Bill Elder, a third-party contractor, as compensation for his business development services.

On May 10, 2022, the Company issued 16,527,775 shares of its common stock to MacRab, LLC in connection with a $33,056 convertible note financing.

On July 14, 2022, the Company issued 25,000,000 shares of its common stock to BHP Capital NY, Inc. in connection with a $25,000 convertible note financing.

On July 14, 2022, the Company issued 25,000,000 shares of its common stock to Quick Capital, LLC in connection with a $25,000 convertible note financing.

On August 4, 2022, the Company issued 25,000,000 shares of its common stock to RPG Capital Partners, Inc. in connection with a $25,000 convertible note financing.

On September 12, 2022, the Company issued 15,000,000 shares of its common stock to RPG Capital Partners, Inc. in connection with a $15,000 convertible note financing.

On November 7, 2022, the Company issued 2,500,000 shares of its common stock to RPG Capital Partners, Inc. in connection with a $2,500 convertible note financing.

On November 16, 2022, the Company issued 17,000,000 shares of its common stock to the Robert Papiri Defined Benefit Plan in connection with a $10,000 convertible note financing.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE N – COMMON STOCK AND TREASURY STOCK (continued)

Treasury Stock

As of March 31, 2023 and December 31, 2022, the Company held 115,297,004 and 188,181,000, respectively, shares of common stock in treasury.

NOTE O – STOCK OPTIONS AND WARRANTS

At March 31, 2023, the Company has outstanding a total of 1,146,000,000 warrants/options to the persons and upon the terms below:

Name	Date of Issuance	Shares upon Exercise of warrants or options		Exercise Price		Expiration Date
Lloyd Spencer (i)	March 7, 2022		165,000,000	$	0.0002	March 7, 2027
Tangiers Investment Group, LLC (ii)	March 21, 2022		125,000,000	$	0.0004	March 21, 2027
J.H. Darbie & Co., Inc. (iii)	March 28, 2022		19,125,000	$	0.0004	March 28, 2027
MacRab LLC (iv)	April 14, 2022		500,000,000	$	0.0004	April 14, 2027
MacRab LLC (v)	May 10, 2022		74,375,000	$	0.0004	May 10, 2027
BHP Capital NY Inc. (vi)	July 14, 2022		62,500,000	$	0.0004	July 14, 2027
Quick Capital LLC (vii)	July 14, 2022		62,500,000	$	0.0004	July 14, 2027
Robert Papiri Defined Benefit Plan (viii)	July 15, 2022		25,000,000	$	0.0004	July 15, 2027
Robert Papiri Defined Contribution Plan(ix)	July 15, 2022		6,250,000	$	0.0004	July 15, 2027
RPG Capital Partners Inc. (x)	July 15, 2022		6,250,000	$	0.0004	July 15, 2027
RPG Capital Partners Inc. (xi)	August 4, 2022		62,500,000	$	0.0004	August 4, 2027
RPG Capital Partners Inc. (xii)	Sept 12, 2022		37,500,000	$	0.0004	Sept 12, 2027
Total			1,146,000,000

(i)	On March 7, 2022, the Company issued Lloyd Spencer (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the amount of $66,000. The Note has a term of one (1) year (Maturity date of March 7, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. The transaction closed on March 7, 2022. In connection with this note, the Holder was issued warrants to purchase 165,000,000 shares of the Company’s Common Stock at $0.0004 per share.

(ii)	On March 21, 2022, the Company issued Tangiers Investment Group, LLC (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the amount of $55,000. The Note has a term of one (1) year (Maturity date of March 21, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. The transaction closed on March 21, 2022. In connection with this note, the Holder was issued warrants to purchase 125,000,000 shares of the Company’s Common Stock at $0.0004 per share.

(iii)	On February 23, 2022, the Company and J.H. Darbie & Co., Inc. (“Darbie”) entered into a Placement Agent Agreement (the “Agreement”). Under the terms of the Agreement, Darbie was issued warrants to purchase 19,125,000 shares of the Company’s common stock at $0.0004 per share.

(iv)	On April 14, 2022, the Company and MacRab, LLC (the “Investor”) entered into a Standby Equity Commitment Agreement (the “Agreement”) whereby the Company shall issue and sell to the Investor, from time to time, up to $5,000,000 of the Company’s common stock. Under the terms of the Agreement, the Purchase Price of the Company’s common stock shall be 88% of the Market Price on the date the Purchase Price is calculated. The Market Price shall mean the average of the two lowest volume weighted average prices of the Company’s common stock during the Valuation Period. The transaction closed on April 14, 2022. In connection with this note, the Holder was issued warrants to purchase 500,000,000 shares of the Company’s Common Stock at $0.0004 per share.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE O – STOCK OPTIONS AND WARRANTS (continued)

(v)

On May 10, 2022, the Company issued MacRab, LLC (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the amount of $33,056. The Note has a term of one (1) year (Maturity date of May 10, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. The transaction closed on May 10, 2022. In connection with this Note, the Holder was issued five-year warrants to purchase 74,375,000 shares of common stock at an exercise price of $0.0004 per share and 16,527,775 shares of common stock as commitment shares.

(vi)	On July 14, 2022, the Company issued BHP Capital NY Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $25,000. The Note has a term of one (1) year (Maturity date of July 14, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 62,500,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

(vii)	On July 14, 2022, the Company issued Quick Capital, LLC (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $25,000. The Note has a term of one (1) year (Maturity date of July 14, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 62,500,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

(viii)	On July 15, 2022, the Company issued the Robert Papiri Defined Benefit Plan (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $10,000. The Note has a term of one (1) year (Maturity date of July 15, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 25,000,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 85,000,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

(ix)	On July 15, 2022, the Company issued the Robert Papiri Defined Contribution Plan (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $2,500. The Note has a term of one (1) year (Maturity date of July 15, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 6,250,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 21,250,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

(x)	On July 15, 2022, the Company issued the RGP Capital Partners, Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $2,500. The Note has a term of one (1) year (Maturity date of July 15, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 6,250,000 shares of the Company’s stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 21,250,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE O – STOCK OPTIONS AND WARRANTS (continued)

(xi)	On August 4, 2022, the Company issued the RGP Capital Partners, Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $25,000. The Note has a term of one (1) year (Maturity date of July 27, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 62,500,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

(xii)	On September 12, 2022, the Company issued the RGP Capital Partners, Inc. (the “Holder”) a Fixed Convertible Promissory Note (the “Note”) in the principal amount of $15,000. The Note has a term of one (1) year (Maturity date of September 12, 2023) and bears interest at 12% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the Holder at the Fixed Conversion Price of $0.0002 per share. Upon the event of default, the Note shall accrue interest at the rate equal to the lower of 16% per annum or the highest rate permitted by law. In connection with this note, the Holder was issued five-year warrants to purchase 37,500,000 shares of the Company’s common stock at an exercise price of $0.0004 per share. In addition, the Holder and the Company entered into a Registration Rights Agreement (“RRA”) whereby the Company agreed to register 212,500,000 shares of its common stock within 30 days of entry into the RRA for the benefit of the Holder.

NOTE P – COMMITMENTS AND CONTINGENCIES

Employment Agreement with Chief Executive Officer

On May 13, 2006, the Company executed an Employment Agreement (the “Agreement”) with Lloyd Spencer for Spencer to serve as the Company’s Chief Executive Officer. The Agreement provides for a 5-year term of employment to May 15, 2011 and the automatic renewal of successive one year periods unless terminated and provides for compensation to Spencer of $12,500 per month. Either party may terminate the Agreement provided more than 60 days prior written notice is given the other party. If the Company terminates Spencer without Just Cause or Spencer terminates employment with Good Reason, Spencer will be entitled to accrued but unpaid salary and benefits through the date of termination and shall receive a severance payment equal to one month’s current salary for each full year of employment, with a minimum severance payment of three months and a maximum of six months’ pay. If Spencer is terminated for Just Cause or resigns without Good Reason, Spencer will be entitled only to salary and benefits accrued but unpaid through the date of termination and shall receive no amount for severance.

For the three months ended March 31, 2023 and 2022, chief executive officer compensation expense was $37,500 and $37,500, respectively. As of March 31, 2023 and December 31, 2022, the accrued chief executive officer compensation liability was $912,000 and $874,500, respectively.

Major Customer

For the three months ended March 31, 2023, one customer (located in Spain) accounted for 100% of contract services revenue.

CARBONMETA TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023 and 2022

(Unaudited)

NOTE Q – SUBSEQUENT EVENTS

On April 8, 2023, CarbonMeta Technologies, Inc. (the “Company”) and Fermion Electric Private Limited (“Fermion”) signed a Memorandum of Understanding (MOU) to create a subsidiary corporation called CarbonMeta Research India as a Private Limited Company that shall be jointly owned and managed by the Company and Fermion, and whose initial objective shall be processing natural gas into hydrogen and high value carbon products.

Under the terms of the MOU:

CarbonMeta Research India will be a Private Limited Company in Kerala, India with initial equity ownership as follows:

	●	80% of the equity will be owned by CarbonMeta Technologies, Inc.; and
	●	20% of the equity will be owned by Fermion Electric Private Limited.

CarbonMeta Research India will be a research and development center whose focus will be on:

	●	Microwave catalysis of waste plastics, natural gas, and other organic waste materials;
	●	Carbon dioxide (CO2) capture technologies using novel technologies and adsorbents;
	●	Development of new catalysts for catalysis, pyrolysis, and electrolysis; and
	●	Commercialize and patent technologies that were developed and licensed by CarbonMeta Technologies, Inc. or its subsidiaries.

On April 21, 2023, CarbonMeta Technologies, Inc. (the “Company”) and North Bay Resources, Inc. (“NBRI”) signed a Memorandum of Understanding (MOU) to create a subsidiary corporation called CarbonMeta Green Resources Canada as a Limited Liability Company in British Columbia that shall be jointly owned and managed by NBRI and the Company, and whose objective shall be production of carbon-negative cementless concrete using olivine.

Under the terms of the MOU:

CarbonMeta Green Resources Canada will be a Limited Liability Company in British Columbia, Canada with initial equity ownership as follows:

	●	51% of the equity will be owned by CarbonMeta Technologies, Inc.

	●	49% of the equity will be owned by North Bay Resources, Inc.

CarbonMeta Green Resources Canada will be a research and development center whose focus will be on:

	●	Establish CarbonMeta Green Resources Canada as a mining and processing center for the production of carbon-negative cementless concrete using olivine

	●	Build and operate a production facility and demonstration program for the production of carbon-negative cementless concrete that can be distributed in North America.

	●	Establish an agreed upon transfer price from NBRI to CarbonMeta Green Resources Canada for purchasing olivine that shall be updated quarterly.

	●	Develop and establish supply chain relationships with potential North American distributors of carbon-negative cementless concrete, including but not limited to CarbonMeta Green Building Materials, Inc. in the United States

	●	Establish technology licensing relationships, industry partnerships, and marketing sponsorships related to the production of carbon-negative cementless concrete using olivine

The MOU is effective from the date executed by the parties and shall continue in force until terminated by either party giving the other party at least 30 business days prior written notice. The parties agree to execute definitive agreements within 30 days, at which time those agreements will supersede this MOU as of the effective date of the executed definitive agreements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

As explained above, unless otherwise indicated, the terms “we,” “us,” “our,” “our Company,” “COWI” and “the Company” refer to CarbonMeta Technologies, Inc., together with its consolidated subsidiaries. The following discussion and analysis of the Company’s financial condition and results of operations should be read together with the Company’s financial statements and related notes appearing elsewhere in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to the Company’s plans and strategy for the Company’s business and related financing, includes forward-looking statements involving risks and uncertainties and should be read together with the “Cautionary Note Regarding Forwarding- Looking Statements” section of this Quarterly Report. Such risks and uncertainties could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

The Company was incorporated on July 8, 2001, under the laws of the State of Delaware, as SRM Networks, Inc. In connection with the acquisition of Hy-Tech Computer Systems, Inc. on January 31, 2003, the Company changed its name to Hy-Tech Technology Group, Inc. In connection with the Agreement and Plan of Merger Robotics Workspace Technology, Inc., Innova Holdings, Inc. and the Company’s wholly owned subsidiary, RWT Acquisition, Inc., dated July 21, 2004, the Company’s name changed to Innova Holdings, Inc. Subsequently, on November 20, 2006, the Company changed its name to Innova Robotics and Automation, Inc. and then on April 23, 2008, the Company changed its name to CoroWare, Inc. On or about July 28, 2021, the Company filed Articles of Amendment to its Amended and Restated Certificate of Incorporation with the State of Delaware to reflect a name change from CoroWare, Inc. to CarbonMeta Technologies, Inc.

The Company was a reporting company with the Securities and Exchange Commission until October 2016, when the Company’s gross margins and financing costs became unsustainable. In 2020, the Company began investigating emerging technologies and sustainable growth business opportunities related to the production of hydrogen and high value carbon products from organic waste streams. After careful consideration of the potential market opportunities and the partnership with Oxford University, the Company took the decision to raise capital in the public market and therefore become an SEC reporting company again.

CoroWare Technologies (“CTI”) was incorporated in the State of Florida on May 16, 2006 and its principal business was a software professional services company with a strong focus on information technology integration and robotics integration, business automation solutions, and unmanned systems solutions to its customers in North America and Europe.

Robotic Workspace Technologies, Inc. (“RWT”) was incorporated in the State of Florida on July 1, 1994, and its principal business was developing and marketing open-architecture PC controls and related products that could improve the performance, applicability, and productivity of robots and other automated equipment. RWT’s business operations were discontinued in September 2007 when the Company’s losses became unsustainable.

Carbon Source, Inc. (“CS”) was incorporated in the State of Wyoming on June 14, 2021 and its principal business is waste reclamation technologies and processing.

CoroWare Treasury, Inc. (“CWT”) was incorporated in the State of Wyoming on July 6, 2021 and its principal business is acquisitions related to acquiring technologies and subsidiary businesses related to waste processing.

CarbonMeta Research Ltd. (‘CMR”) was incorporated in England and Wales on August 12, 2021 and its principal business will focus on the development of technologies and solutions for processing organic wastes and generating economically sustainable hydrogen and high-value carbon products. Using proprietary and patented technologies, it plans to implement new industrial methods using inexpensive, environmentally friendly catalysts that process collected plastic waste material into high value products such as hydrogen gas, graphene and carbon nanotubes.

AriCon, LLC (“AriCon) was a joint venture that was intended to develop mobile robot platforms, applications, and solutions for the construction industry. In October 2016, AriCon ceased operations of all subsidiary business operations when the Company’s losses became unsustainable, and the Company was not able to obtain investment financing.

Plastic waste is a cheap and abundant feedstock that will allow the Company to scale quickly and produce hydrogen gas for a competitive price.

License Agreements

Oxford University Innovation Limited

The Company has met the following milestones of its development plan set forth in the license agreement with Oxford University Innovation:

	●	September 2021: established subsidiary in Oxford, United Kingdom
	●	March 2022: produced 0.025 kilograms per day of marketable carbon nanotubes

Ecomena Limited

On December 2, 2021, the Company (“Licensee”) entered into a License of Agreement (the “Agreement”) with Ecomena Limited (an entity located in the United Kingdom) (“Licensor”). Under the terms of the Agreement, the Licensee will license the Licensed Technology to recycle industrial byproduct into cement free pavers and mortars that are environmentally friendly and continuously absorb carbon dioxide. The signing fees payable to the Licensor under the Agreement are £20,000 cash (approximately $27,247 at February 17, 2022) of which £10,000 has been paid by the Licensee, and 160,000,000 shares of the Company’s common stock, which was delivered to the Licensor on February 17, 2022. The royalty rate payable to the Licensor is 5% of net sales, subject to a minimum of £5,000 per year for license years 1 and 2, £3,000 for license year 3 and £1,000 for license year 4 and each license year thereafter. The term of the Agreement is five years from December 2, 2021 to December 2, 2026. The Licensee may terminate the Agreement for any reason at any time provided it gives Licensor six (6) months written notice to terminate expiring after December 2, 2024. If requested by the Licensee, the Licensor shall agree to the Agreement continuing in force after December 2, 2026. As of the date of this filing, the Agreement is still in effect.

Production Agreement

The Operating Agreement for Management of CMGBM (the “CMGBM Agreement”) provides for (1) the allocation of 501 Managing Membership units (50.1%) to CarbonMeta Technologies, Inc. (“COWI”) and 499 Managing Membership units (49.9%) to Salvum Corporation, (2) COWI capital contributions to CMGBM of (a) 250,000,000 shares of COWI common stock and (b) the assignment of the Ecomena Limited license agreement, and (3) Salvum Corporation capital contributions to CMGBM of (a) existing EarthCrete customer list and sales pipeline, and (b) license to use EarthCrete trademark worldwide. The CMGBM Agreement also provides that profits and losses (and distributions) of CMGBM shall be allocated on the basis of each Managing Member’s relative capital accounts and that a Managing Member may withdraw from CMGBM upon not less than six months prior written notice to each non-withdrawing Managing Member. As of December 31, 2022, the above capital contributions provided for in the CMGBM Agreement had not occurred and no significant operations of CMGBM had commenced.

Service Award

On June 10, 2022, our subsidiary, CarbonMeta Research Ltd. (“CMR”), was granted a Service Award (entitled “Waste Plastic Catalysis Proof of Concept”) from a European global energy supplier. The award provides for CMR to provide the customer with an initial prototype process for converting mixed waste plastic to hydrogen and solid carbon and for the customer to pay CMR a total of 50,000 Euros in four installments as certain milestones are met. As of September 30, 2022, all of the milestones had been met by CMR and CMR had invoiced the customer the full 50,000 Euros ($49,542), of which $40,103 was collected in the third quarter 2022 and $9,439 has been collected in the fourth quarter 2022.

The below discussions are as of the date stated (unless specifically noted otherwise) and should be read in conjunction with financial statements and notes thereto for the applicable period referenced. These discussions may include information that has since changed and may not be consistent with other sections of this Annual Report.

Results of Operations:

For the three months ended March 31, 2023 versus March 31, 2022:

	March 31, 2023			March 31, 2022			$ Change
Gross revenue	$	10,376		$	-		$	10,376
Operating expenses		132,025			257,514			(125,489	)
Loss from operations		(121,649	)		(257,514	)		135,865
Other income (expense)		(8,686,257	)		(792,023	)		(7,894,234	)
Net loss		(8,807,906	)		(1,049,537	)		(7,758,369	)
Net loss per share - basic and diluted	$	(0.00	)	$	(0.00	)	$	0.00

Revenues

For the three months ended March 31, 2023, revenues were $10,376 compared to revenues of $- during the three months ended March 31, 2022. For the three months ended March 31, 2023, the Company had two customers. The first is a European global energy industry for whom we are in a technology assessment project to evaluate our microwave catalysis process for mixed waste plastics. The Company has a contractual agreement with this customer for the technology assessment project. The second is a construction contractor with expertise in the deployment of solar farm systems. The Company has a Interim Joint Product Development and Sales Representation Agreement with this customer, and the companies subsequently signed a Joint Venture Agreement on August 28, 2022 that supersedes the Interim Joint Product Development and Sales Representation Agreement. For the three months ended March 31, 2022, the Company had no customers.

Operating Expenses

For the three months ended March 31, 2023 and 2022, operating expenses were $132,025 and $257,514, respectively. For the three months ended March 31, 2023, operating expenses were largely attributable to legal and professional fees of $23,161, executive compensation of $37,500 and sales and marketing of $20,000.

We anticipate that our cost of revenues will increase in 2023 and for the foreseeable future as we continue to identify potential acquisitions, joint ventures and licensing opportunities.

We incurred $9,330 and $4,099 in research and development expenses during the three months ended March 31, 2023 and 2022, respectively.

We incurred $37,500 and $37,500 in compensation expenses during the three months ended March 31, 2023 and 2022, respectively. The Company anticipates that it will need to expand its management team with future acquisitions or joint ventures.

Loss from Operations

For the three months ended March 31, 2023 and 2022, loss from operations was $121,469 and $257,514, respectively.

Other Income (Expenses)

For the three months ended March 31, 2023 and 2022, other income (expenses) was ($8,686,257) and ($792,023), respectively. During the three months ended March 31, 2023, other income (expenses) were largely attributable to a loss on derivative liability of ($8,356,814).

Net Income (Loss)

For the three months ended March 31, 2023 and 2022, net loss was $8,807,906 and $1,049,537, respectively. The increase in net loss for the three months ended March 31, 2023 was largely attributable to a loss on derivative liability of $8,356,814.

Liquidity and Capital Resources

	For the Three Months Ended March 31,
	2023			2022
Cash (used in) provided by:
Operating Activities	$	(9,425	)	$	(64,025	)
Investing Activities		-			-
Financing Activities		15,197			105,650
Net increase in cash and restricted cash	$	4,717		$	41,625

For the three months ended March 31, 2023 and 2022, net cash (used in) operating activities was ($9,425) and ($64,025), respectively. The decrease in net cash (used in) operating activities for the three months ended March 31, 2023 was largely attributable to a change from derivative liabilities of $8,356,814.

For the three months ended March 31, 2023 and 2022, net cash (used in) investing activities was $- and $-, respectively.

For the three months ended March 31, 2023 and 2022, cash provided by financing activities was $15,197 and $105,650, respectively. The decrease in net cash provided by financing activities for the three months ended March 31, 2023 was largely attributable to a decrease in convertible debt financings as compared to the three months ended March 31, 2022.

At March 31, 2023, we had current assets of $8,253, current liabilities of $33,492,604, a working capital deficit of $33,484,351 and an accumulated deficit of $72,811,862.

At December 31, 2022, we had current assets of $24,061, current liabilities of $24,810,798, a working capital deficit of $24,786,737 and an accumulated deficit of $64,003,956.

Financing Needs

In order to fund our operations, we rely upon direct investments with accredited investors, joint ventures, and customer revenues. Once the Company becomes profitable, we intend to fund our operations from free cash flow.

At present, the Company only has sufficient funds to conduct its operations for three to six months. There can be no assurance that additional financing will be available in amounts or on terms acceptable to the Company, if at all.

If we are not successful in generating sufficient liquidity from Company operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on the Company’s business, results of operations liquidity and financial condition.

The Company presently does not have any available credit, bank financing or other external sources of liquidity. Due to its brief history and historical operating losses, the Company’s operations have not been a source of liquidity. The Company will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, the Company may need to sell additional shares of its common stock or borrow funds from private lenders. There can be no assurance that the Company will be successful in obtaining additional funding.

The Company will need additional investments in order to continue operations. Additional investments are being sought, but the Company cannot guarantee that it will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. In the event there is a downturn in the U.S. stock and debt markets, this could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if the Company is able to raise the funds required, it is possible that it could incur unexpected costs and expenses, fail to collect significant amounts owed to it, or experience unexpected cash requirements that would force it to seek alternative financing. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders.

Satisfaction of Outstanding Liabilities

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources to satisfy these outstanding liabilities. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business.

We currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

We are dependent on the sale of our securities to fund our operations and will remain so until we generate sufficient revenues to pay for our operating costs. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the form of cash advances, loans and/or financial guarantees.

If we are unable to raise the funds, we will seek alternative financing through means such as borrowings from institutions or private individuals. There can be no assurance that we will be able to raise the capital we need for our operations from the sale of our securities. We have not located any sources for these funds and may not be able to do so in the future. We expect that we will seek additional financing in the future. However, we may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to cease operations. If we fail to raise funds, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws.

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. Please see NOTE C - GOING CONCERN for further information.

Convertible Notes

At March 31, 2023 and December 31, 2022, the Company had $2,164,529 and $2,160,034 in outstanding convertible debt, net, respectively. At March 31, 2023 and December 31, 2022, the Company had $1,495,586 and $1,781,104 of outstanding default principal, respectively. If all Convertible Notes were converted, shareholders would undergo significant dilution to their holdings.

The Company’s legacy financing contains unfavorable terms that contributed to dilution and negatively impacted the Company’s market price, and therefore posed a challenge to attracting investment under more favorable. During the year ended December 31, 2021, the Company began the process of extinguishing or renegotiating the terms of this unfavorable legacy debt. During the year ended December 31, 2022, the Company began realizing revenues, and intends to grow its business with key customers directly and through joint venture companies. As a result, the Company has been able to attract investments with third parties that are more favorable to the company, thereby reducing potential dilution.

Please see NOTE H – CONVERTIBLE DEBT, NET for further information.

Debt

At March 31, 2023 and December 31, 2022, the Company had $15,482,944 and $15,157,952 in total debt, exclusive of derivative liabilities, respectively. Please see NOTES F, G, H, I, J and K for further information.

Required Capital Over the Next Twelve Months

We expect to incur losses from operations for the near future. We believe we will have to raise an additional $2,500,000 to fund our operations over the next twelve months, including roughly $50,000 to remain current in our filings with the SEC. The additional funds will be utilized for hiring ancillary staff and key personnel, corporate website and SEO development, acquisition(s) in the waste and recycling management sector and day-to-day operations.

Future financing may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, existing holders of our securities may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our securities.

If additional financing is not available or is not available on acceptable terms, we may be required to delay or alter our business plan based on available financing.

Contractual Obligations and Commitments

The Company has no debt covenants that require certain financial information to be met.

Off-Balance Sheet Arrangements

The Company did not have any off-balance sheet arrangements as of March 31, 2023.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of the Company’s financial condition and results of operations is based on the Company’s combined financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

For information on the Company’s significant accounting policies please refer to NOTE B – SIGNIFICANT ACCOUNTING POLICIES to the Company’s Financial Statements included in this Quarterly Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Due to being a Smaller Reporting Company, the Company is not required to provide information under this Item 3.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of such period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information that it is required to disclose in reports that the Company files with the SEC is recorded, processed, summarized and reported within the time periods specified by the Exchange Act rules and regulations due to the reasons set forth below.

As of December 31, 2022, management identified the following material weakness in our internal control over financial reporting: the Company was unable to provide a timely financial reporting package in connection with the year end audit. This was primarily the result of the Company’s limited accounting personnel. This also limits the extent to which the Company can segregate incompatible duties and has a lack of controls in place to ensure that all material transactions and developments impacting the financial statements are reflected. There is a risk under the current circumstances that intentional or unintentional errors could occur and not be detected.

Management has concluded that the material weakness described above currently exists as of March 31, 2023. The Company plans to engage with outside consultants to strengthen its capabilities and help the Company in the design and assessment of its internal controls over financial reporting to further reduce and remediate existing control deficiencies during 2023.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2023, there were no changes in our internal control over financial reporting that materially affected our internal control over financial reporting as of March 31, 2023.

PART II

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is party to legal actions that are routine and incidental to its business. However, based upon available information and in consultation with legal counsel, management does not expect the ultimate disposition of any or a combination of these actions to have a material adverse effect on the Company’s assets, business, cash flow, condition (financial or otherwise), liquidity, prospects and\or results of operations.

ITEM 1A. RISK FACTORS

Our business and common stock are subject to a number of risks and uncertainties The discussion of such risks and uncertainties may be found under “Risk Factors” in the Company’s Annual report on Form 10-K filed with the Securities and Exchange Commission on April 20, 2023, which is supplemented by the risk factor set forth below.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities; Uses of Proceeds from Registered Securities

On January 25, 2023, the Company issued 173,500,000 shares of its common stock to Lloyd Spencer in satisfaction of $34,700 principal against the convertible note dated May 7, 2022.

On March 3, 2023, the Company issued 200,000,000 shares of its common stock to New to The Street Group, LLC as per the terms of the Production & Broadcasting Agreement dated February 24, 2022.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

(b) Exhibits

The following documents are filed as exhibits hereto:

Exhibit		Description

2.4		Certificate of Merger of Sanjay Haryma and Hy-Tech Technology Group, Inc. (previously filed on Form 1-A with the Securities and exchange Commission on August 31, 2021)
2.5		Certificate of Merger of SRM Networks, Inc. and Hy-Tech Technology Group, Inc. (previously filed on Form 1-A with the Securities and exchange Commission on August 31, 2021)
2.6		Agreement and Plan of Merger among the Company, RWT Acquisition, Inc and Robotic Workspace Technologies, Inc. dated July 21, 2004. (previously filed on Form 8-K with the Securities and Exchange on August 8, 2004.)

CarbonMeta Technologies, Inc. 10-Q