CitroTech Inc 10-K for FY2025
CitroTech Inc. (CITR)
About this 10-K
CitroTech Inc filed this 10-K on March 30, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.38M
- up 194.6% from $808.37K a year earlier
- Net loss
- $36.84M
- compared with a net loss of $6.88M a year earlier
- Diluted EPS
- -$2.96
- compared with -$0.82 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the “Annual Report”) contains forward-looking statements. The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Annual Report and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results.
We caution that the factors described herein, and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” section of this Annual Report on Form 10-K, which include, but are not limited to, risks related to the following:
| · | We have incurred losses since inception and cannot assure that we will ever achieve or sustain profitability; | |
| · | Due to limited operating history, it may be difficult for potential investors to evaluate our business; | |
| · | Our stock price has fluctuated in the past, has recently been volatile and may be affected by limited trading volume and price fluctuations; | |
| · | Upon exercise of our outstanding options or warrants and upon conversion of our Series C Convertible Preferred Stock, we will be obligated to issue a substantial number of additional shares of Common Stock which will dilute our present stockholders and may cause our stock price to decline; | |
| · | We may issue preferred stock without approval of our stockholders and have other antitakeover defenses which may make it more difficult for a third party to acquire us and could depress our stock price; | |
| · | We do not intend to pay cash dividends for the foreseeable future; | |
| · | Our ability to raise the necessary financing for the development of our business and the terms of any financing which we are able to raise; | |
| · | Our ability to obtain and enforce any United States and foreign intellectual property we may seek; | |
| · | Our ability to generate sufficient revenue from our contract services to cover our operating expenses; | |
| · | Our ability to establish a distribution network for the marketing and sale of any of our products; | |
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| · | Our ability to establish manufacturing facilities in compliance with EPA manufacturing practices or to enter into manufacturing agreements for the manufacture of our product in an EPA approved manufacturing facility; | |
| · | Our ability to pass USFS testing to be listed on the Qualified Products List (QPL); | |
| · | Our ability to enter into a joint venture or other strategic relationship with respect to any of our proposed product; | |
| · | The ability of the other party to any joint venture or strategic relationship to implement successfully any plans for the development, manufacturing and marketing of our product subject to the joint venture or strategic relationship; | |
| · | Our ability to evaluate potential acquisitions, and the consequences of our failure to accurately evaluate the acquisitions; | |
| · | Our ability to integrate any business we acquire with our business; | |
| · | Changes in national, regional and local government regulations, taxation, controls and political and economic developments in the market for our product; | |
| · | Our ability to obtain and maintain any permits or licenses necessary for our business; | |
| · | Our ability to identify, hire and retain qualified executive, administrative, regulatory, research and development, and other personnel; | |
| · | Our ability to negotiate distribution on favorable terms with companies that have experience in marketing product such as ours; | |
| · | The costs associated with defending and resolving pending and potential legal claims, even if such claims are without merit; | |
| · | Litigation related to our product not able to prevent a wildfire or protect an asset, even if such claims are without merit; | |
| · | The effects of competition on our product and our ability to price, market and sell our product; | |
| · | Our ability to achieve favorable pricing for our product with third party material suppliers; | |
| · | Our ability to accurately estimate anticipated expenses, capital requirements and needs for additional financing; | |
| · | Our ability to accurately estimate the timing, cost or other aspects of the commercialization of our product candidates; | |
| · | Actions by third parties to either sell or purchase our Common Stock in quantities that would have a significant effect on our stock price; | |
| · | Risks generally associated with development stage companies; | |
| · | Current and future economic and political conditions; | |
| · | The impact of changes in accounting rules on our financial statements; and | |
| · | Other factors described in the “Risk Factors” section of this Annual Report. |
These factors should not be construed as exhaustive and should be read with the other cautionary statements in this Annual Report. For further information regarding risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors listed and described in this Annual Report and in our other SEC filings.
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Risk Factor Summary
The following is a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in the section entitled “Item 1A. Risk Factors” in this Annual Report.
Risks Relating to Our Business
| · | We have incurred losses since inception and cannot assure that we will ever achieve or sustain profitability. | |
| · | We are controlled by one principal stockholder who serves as our Chairman of the Board. Because the principal stockholder controls the outcome of all stockholder votes, the vote of other stockholders is less valuable. | |
| · | If we are unable to expand our base of customers, our future growth and operating results could be adversely affected. | |
| · | If we are unable to expand our base of raw material suppliers, our future growth and operating results could be adversely affected. | |
| · | Various factors outside our direct control may adversely affect manufacturing and distribution of our product. | |
| · | Interruption of our supply chain could affect our ability to produce or deliver our product and could negatively impact our business and profitability. | |
| · | We are subject to the seasonality of wildfires that may occur by acts of God that are inconsistent and unpredictable. | |
| · | We may not be able to sell product onto U.S. federal lands until a product is listed on the USFS Qualified Products List (QPL). | |
| · | We may be prevented from putting our product onto state roadside rights-of-way until approved by state agencies. | |
| · | We are relying exclusively on the skills and expertise of a five-person management team: Wesley Bolsen, our Chief Executive Officer and board member, Andrew Hotsko, our Chief Operating Officer, Nanuk Warman, our Chief Financial Officer, Stephen Conboy, our Chief Technology Officer, and Anthony Newton, our General Counsel. Only two of our executive officers are full-time employees, Mr. Bolsen and Mr. Hotsko, which may impede our ability to carry on our business. | |
| · | Since we have a limited operating history, it is difficult for potential investors to evaluate our business. | |
| · | We do not currently have sufficient cash flow to maintain our business. | |
| · | Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our raw materials and support services contracts may constrain our ability to make a profit. | |
| · | Changes in consumer preferences or discretionary consumer spending could harm our performance. | |
| · | We may become subject to potential claims for product liability. | |
| · | If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth. |
Risks Related to Regulatory and Legal Matters
| · | Our product is provided to emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability and reputational risks if our product fails to provide such protection as intended. | |
| · | Our product is subject to extensive government scrutiny and regulations, including the EPA and USDA Forest Service. There can be no assurance that such regulations will not change and that our product will continue to be approved for usage. | |
| · | Our product or facility could have environmental impacts and side effects. |
Risks Relating to our Indebtedness
| · | We are highly leveraged. | |
| · | We could incur additional indebtedness in the future. If new indebtedness is added to our current debt levels, the related risks we now face could increase. |
Risks Relating to our Common Stock and Securities
| · | Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our Common Stock could incur substantial losses. | |
| · | We do not expect to declare any Common Stock cash dividends in the foreseeable future. |
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PART I
Item 1. Business.
Our Company
CitroTech Inc. (“CITR,” “we,” “us,” or the “Company”) is an environmentally sustainable specialty chemical company focused on fire inhibitor products serving the wildland fire, residential home protection, and wood products industries across the United States and Canada. Our fire inhibitor formulations are also sold into the lumber and building materials industry for fire retardant treatment applications. CitroTech Inc. was originally incorporated under the laws of the State of Nevada on March 14, 1990 and on June 3, 2021 was redomiciled to the State of Wyoming. Our principal offices are located at 6400 S. Fiddlers Green Circle, Suite 300, Greenwood Village, Colorado 80111. Our telephone number is (800) 401-4535, and our email address is info@citrotech.com. Our website address is www.citrotech.com. Information contained on, or accessible through, our website is not incorporated by reference into this annual report and should not be considered part of this annual report.
Since Mighty Fire Breaker LLC (“MFB Ohio”) acquired from Mighty Fire Breaker LLC (“MFB California”) the MFB portfolio of intellectual property on April 13, 2022, our management team has continued to develop and refine our product formulations. The Company has received significant third-party recognition for these efforts, including twice receiving the EPA Safer Choice designation, being the first and only fire inhibitor recognized by the EPA as safe for the environment, and receiving UL GREENGUARD Gold certification, which reflects minimal impact on indoor air quality from toxic smoke over extended exposure. Our products have been adopted by fire departments throughout the State of California.
We are expanding our patent portfolio and technology platform into additional markets that can benefit from environmentally safe alternatives to legacy fire retardant and fire retardant-treated wood products. CitroTech has developed wood coating products utilizing this technology and is in the initial phases of commercialization.
The Company is also actively deploying proactive wildfire defense systems on residential and commercial properties under the CitroSafe Systems brand. CitroSafe Systems are self-contained sprinkler installations that utilize our patented CitroTech product and are deployed in advance of wildfires to reduce structural risk. This offering addresses a significant and growing insurance market disruption across eleven western states, where carriers have curtailed or declined to write wildfire coverage on new construction and existing policies in the Wildland-Urban Interface, the transitional zone between undeveloped land and built environments that is at elevated risk of catastrophic wildfire loss. The Company is working with a large insurance broker to offer insurance coverage to customers who install a CitroSafe proactive wildfire system, with policies underwritten by established insurance carriers. This program is currently in the proof-of-concept phase.
Our management team consists of five individuals: Wesley J. Bolsen, Chief Executive Officer; Andrew Hotsko, Chief Operating Officer; Nanuk Warman, Secretary and Chief Financial Officer; Steve Conboy, Chief Technical Officer and Anthony Newton, General Counsel.
Financial Performance to Date
During the years ended December 31, 2025 and 2024, we had revenue of $2,381,407 and $808,372, respectively. We believe that revenues will increase starting in the summer of 2026 as wildfire season in the Western United States generally accelerates during dry or drought conditions. In addition, in early 2026 we began establishing relationships with lumber and building material companies that are using CitroTech to treat wood products to be Class A rated lumber under an issued Technical Evaluation Report (TER). We anticipate a moderate increase to our sales, general and administrative expense during 2026 as we approach new markets.
Business Model
Principal product, services and markets
We hold various intellectual property in the form of patents and trademarks related to our CitroTech specialty chemical for fire suppression, mapping and tracking of fire-retardant dispersion and fire inhibition chemistry and technology. We have obtained multiple certifications and accreditations in this industry for our CitroTech product. We have received the EPA Safer Choice award twice and have been awarded the UL GreenGuard Gold status (demonstrates minimal impact on the indoor toxic smoke environment in over extended periods).
Future Markets Insights, a market researcher in Pimpri-Chinchwad, India, projects that the fire-retardant market is forecast to be $13.6 billion dollars globally by 2034. CitroTech markets its product primarily to lumber and wood product companies, home, industrial and commercial users, as well as fire departments.
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Distribution methods
CitroTech is blended in Oceanside, California under the supervision of Andrew Hotsko, the company’s Chief Operating Officer, after which the product is shipped directly to customers.
Competitive business conditions and the Company’s competitive position in the industry
The fire retardant market has been status quo for many years without significant innovation. A study at the University of Southern California published in Environmental Science and Technology explained that the fire retardant industry is known for having products containing toxic metals that are not environmentally safe, and are considered not friendly toward humans, wildlife, fish, water, and plants. CitroTech is the first and currently only EPA Safer Choice recognized fire inhibitor. We believe that our product will be sold in amounts that can be competitive in many markets, including Western States where wildfires occur, and areas of the United States where there is new home construction relating to population growth, such as Florida and Texas. Our industry is evolving rapidly and is becoming increasingly competitive. Competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. Competitors have adopted, and may continue to adopt, aggressive pricing policies and devote substantially more resources to marketing, website and systems development than we do.
The lumber and wood products industry has long used expensive pressure treatment to make Class A-Rated lumber and building materials. This includes companies selling into the pressure treated lumber industry. We anticipate significant competition from incumbent industry participants as the new CitroTech treated lumber and building materials are introduced into the market.
Patents, trademarks and licenses and their duration
Intellectual Property
Our intellectual property portfolio is central to our competitive position and encompasses the proprietary chemistry, application methods, integrated defense systems, communications technology, and wood product manufacturing processes that underpin our entire product and services offering. The portfolio is owned by our wholly-owned subsidiary, Mighty Fire Breaker LLC (“MFB”) and made available to CitroTech Inc. for commercialization across our product lines. The following summarizes the material patents, trademarks, and licenses that support our business operations.
Patents
We hold a portfolio of 37 issued U.S. patents organized across five technology families. We have 45 filed or pending patent applications. All are utility patents and, under U.S. law, carry a term of 20 years from their earliest effective filing date. The portfolio's earliest priority dates trace to approximately 2017–2018 and its most recently issued patents were granted through 2026, meaning the patent estate as a whole remains in force and is expected to provide protection well into the late 2030s and early-to-mid 2040s. We are also pursuing additional patent protection through applications currently pending before the United States Patent and Trademark Office (“USPTO”).
Fire Inhibitor Biochemical Composition (U.S. Patent Nos. 11,865,390; 11,911,643; 11,865,394).
These three patents cover our core fire inhibitor chemistry, a family of water-based, biochemical liquid and dry powder compositions that use alkali metal salts of non-polymeric saturated carboxylic acids (principally tripotassium citrate, or “TPC”) as the active fire-inhibiting agent. When sprayed onto combustible surfaces and allowed to dry, these compositions form thin, optically transparent, gas-permeable crystalline coatings that interrupt the free-radical chain reaction of combustion, inhibiting ignition and slowing flame spread. Our proprietary formulation is the only fire inhibitor of its kind to receive EPA Safer Choice Program recognition, and it also holds UL Greenguard Gold certification. Patent No. 11,911,643 specifically covers dry powder compositions capable of absorbing flammable hydrocarbon liquids while simultaneously extinguishing or inhibiting fire, broadening the technology's applicability to Class B fires. Together, these composition patents provide foundational protection over our flagship CitroTech® fire inhibitor chemistry, which forms the active ingredient in substantially all of our current and planned products. The competitive significance of these patents is substantial: they protect a non-toxic, environmentally clean formulation that distinguishes our products from legacy fire retardants, enabling us to operate in jurisdictions and applications where traditional chemistries face regulatory or environmental constraints.
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Methods for Applying Fire Inhibitor (U.S. Patent Nos. 10,653,904; 11,400,324; 11,638,844; 11,654,314; 11,697,041; 11,794,044; 10,695,597; 11,395,931; 11,826,592; 10,814,150).
These ten patents cover the methods and apparatus by which our fire inhibitor chemistry is applied to property, ground surfaces, structures, and vegetation in advance of wildfire. The claims encompass spray application using mobile backpack atomizers, stationary property sprinkler systems, mobile spray tankers, atomizing cannons, and GPS-tracked stationary and mobile spraying systems. Several patents in this family specifically cover the management of application operations via wireless information networks, including GPS-coordinate and time/date-stamped data records of spray coverage, which enables us to document, map, and maintain fire protection zones at scale. Patent No. 11,395,931 additionally covers slurry-based application methods for ground surface fire breaks, and the family broadly protects the operational practices and system configurations that differentiate our proactive, pre-event wildfire defense approach from reactive fire suppression. These method patents are material to our service delivery model, providing legal protection over the processes by which our licensed contractors and fire department partners deploy our technology.
Wildfire Defense Systems (U.S. Patent Nos. 11,642,555; 11,633,636).
These two patents cover the architecture of our integrated wildfire defense system networks, including our CitroSafe™ systems: self-contained, remotely activated sprinkler systems installed on residential and commercial properties. The systems are designed around a command-and-control framework in which GPS-tracked spraying equipment assigned to homes, structures, and ground cover in a defined geographic region can be dispatched, monitored, and coordinated to create and maintain chemical fire protection zones ahead of approaching wildfires. The networks also incorporate automated ember detection and artificial intelligence-based control strategies that respond to real-time wildfire conditions without requiring homeowner action. These patents protect the system design that enables property owners to evacuate and remotely activate their defense systems, a critical differentiator in markets where insurance carriers and homeowners require demonstrated, auditable protection.
Wireless Communication Networks and GPS for Wildfire Defense (U.S. Patent Nos. 11,654,313; 11,697,039; 11,707,639; 11,730,987; 11,697,040).
These five patents cover the wireless communication network infrastructure and GPS tracking and mapping technologies that coordinate our wildfire defense operations. Claims include methods and systems for wirelessly managing GPS-tracked spray systems, generating GPS-coordinate-stamped application records, transmitting proactive wildfire defense maps to fire departments and property owners, tracking approaching wildfires, and maintaining cloud-based databases of fire protection zone status. These patents protect the information infrastructure that enables us to offer defensible, documented fire protection services at a neighborhood and community scale, and they support our business model of providing subscription-based wildfire defense network services to fire departments and municipalities across the Western United States.
Class A Fire-Protected Wood Products and Wood Product Manufacturing (U.S. Patent Nos. 10,899,038; 10,919,178; 10,332,222; 10,430,757; 10,290,004; 11,836,807).
These six patents cover the application of our fire inhibitor chemistry to wood and engineered wood products in manufacturing settings, as well as the resulting fire-protected wood products. The claims include factory-applied spray-coating processes in which dimensional lumber, mass timber panels, and prefabricated wood building assemblies are treated with our CitroTech® (MFB-34) liquid fire inhibitor under a controlled, audited, and electronically documented production process, yielding Class A fire-rated lumber. Patent No. 11,836,807 additionally covers the tracking and recording of embodied carbon mass in fire-protected prefabricated wood assemblies, a feature increasingly relevant to sustainability reporting requirements in the construction industry. This patent family supports our fire-protected lumber business, including our recently announced commercial partnership with a national lumber distributor to produce Class A fire-rated dimensional lumber at scale, and underpins the licensing program through which third-party lumber manufacturers may produce fire-rated wood products using our chemistry and documented process controls.
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Trademarks
We own 21 federally registered trademarks, which are registered in the USPTO and are being registered in additional jurisdictions internationally: MIGHTY FIRE BREAKER®, CITROTECH®, and WE TAME THE FLAMES® are just a few of the trademarks. We also have marks WILDFIRE DEPOT and BIGWOOD AND LITTLEWOOD. The marks LOCKED-N-LOADED, GET PROACTIVE, and PRO-ENVIRONMENT are exclusively licensed to Mighty Fire Breaker LLC for use in our operations. Our registered trademarks protect our brand identities in the wildfire defense and fire-protected building materials markets in which customer recognition of the safety and environmental credentials associated with the CitroTech® name is a material competitive asset. U.S. trademark registrations are renewable indefinitely, provided the marks remain in use in commerce and renewal filings are timely made.
Competitive Significance
Our patent portfolio collectively creates meaningful barriers to imitation across each aspect of our core business: the chemistry, the application methods, the integrated defense systems, the network infrastructure, and the manufacturing processes. The intersection of our composition patents, which protect the only EPA Safer Choice-recognized fire inhibitor formulation, as well as our method and system patents, creates a legally and commercially reinforced market position that we believe would be difficult for competitors to replicate without infringing one or more of our patents or without using inferior chemistry that does not carry the same regulatory and environmental credentials. The expiration of individual patents over the 2037–2044 timeframe will reduce certain specific protections, but the ongoing development of additional innovations and continuation applications is expected to extend portfolio coverage as the technology evolves.
We cannot guarantee that pending patent applications will be granted, that existing patents will not be challenged or invalidated, or that our intellectual property rights will be sufficient to prevent competitors from developing equivalent products or methods. Any significant impairment of our intellectual property rights could adversely affect our competitive position and results of operations.
Competition
The Company operates within the broader fire safety and specialty chemicals landscape, where certain participants may have partial market overlap. However, the Company is not aware of any offerings in this space that combine fire inhibition performance with recognition under the U.S. EPA Safer Choice program. More broadly, the Company believes there is a limited presence of solutions that deliver environmentally sustainable fire-retardant treatments specifically for lumber, wood products, and building materials. While conventional pressure-treated wood products exist, these approaches typically rely on less environmentally favorable chemistries and do not align with the same sustainability standards.
The fire inhibitor markets in North America are rapidly expanding. Growing population density and the need for fire protection materials in structures and products fuels the market’s growth, specifically in the United States and Canada. The United States specialty chemical market for fire inhibitors is in gradual expansion due to increasing compliance standards. Changes in demographics, especially the urbanization process and infrastructural improvements, have made wildfire prevention and asset protection more crucial. Therefore, we believe that the fire inhibitor markets in the United States and Canada are open to new non-toxic products and participants, and thus those markets are positive for entry by us.
Governmental Regulation
Our business is subject to regulations by the EPA, including standards for product descriptions, efficacy claims and label format. Our product will likely need to go through the USFS Qualified Product List (QPL) testing to be able to be applied onto federal lands. The QPL list is also recognized by the California Department of Forestry and Fire Protection (CAL FIRE) as well as other countries who look to the QPL for products that are approved to apply.
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Our product contains materials from multiple suppliers. Some of these entities must comply with federal and local environmental laws and regulations. The EPA regulates finished products by requiring disclosure of components and hazardous materials. The EPA can inspect our product and our producer’s facility to determine the accuracy of the disclosures. State laws may also impose additional regulations on the use, preparation and storage of our products. We believe that our component providers are in compliance in all material respects with governmental regulations regarding our current product and have obtained governmental permits, licenses, qualifications and approvals required for our operations. Our supplier’s compliance with federal, state and local environmental laws has not materially affected us either economically or in the manner in which we conduct our business.
However, there can be no assurance that our current or any future supplier will be able to comply with such laws and regulations in the future or that new governmental laws and regulations will not be introduced that could prevent or temporarily inhibit the development, distribution and sale of our product to end users.
Our lumber and wood product markets are subject to code compliance for the wildland urban interface (WUI) as well as testing and certifications that must be met for fire ratings to be adopted within the industry both inside and outside the United States. The specifications and codes often change, and additional testing and certifications may be required to be able to effectively sell into the industry.
New government laws and regulations may be introduced in the future that could result in additional compliance costs, seizures, confiscations, recalls or monetary fines, any of which could prevent or inhibit the development, distribution and sale of our product. If our supplier fails to comply with applicable laws and regulations, we may be subject to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, which could have a material adverse effect on our business, results of operations and financial condition.
Facilities
Our Company owns no real property. Our principal executive office is a commercial space at 6400 S. Fiddlers Green Cir, Suite 300, Greenwood Village, CO 80111, that is under a month-to-month lease at an average cost of less than $500 per month. The Company leased commercial space for office, retail and warehousing at 3230 Production Avenue, Suite B, Oceanside, CA 92058, which was under a one year lease agreement at $6,225 per month and expired on March 31, 2025. Commencing April 1, 2025, the Company leases commercial space for office, retail and warehousing at 3230 Production Avenue, Suite C & D, Oceanside, CA 92058 (10,000 square feet of warehouse and office space and 17,000 square feet of yard space), which is under a five year lease at $15,810 per month. The Oceanside property and warehousing is managed by Mr. Hotsko. Our primary phone number is (800) 401-4535.
Human Capital Management
As of December 31, 2025, we had 14 full-time employees. We intend to grow our employee base in response to the demands and requirements of the business. We believe that the employer-employee relationships in our Company are positive. We have no labor union contracts.
Legal Proceedings
From time to time, we may be involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in the opinion of management, would have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputation harm, and other factors.
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Item 1A. Risk Factors.
An investment in our Common Stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Forward-Looking Statements.”
Risks Relating to Our Business
We have incurred losses since inception and cannot assure that we will ever achieve or sustain profitability.
The Company has incurred losses since inception and has been dependent on related parties to fund operations. The Company incurred a net loss of $36.8 million during the year ended December 31, 2025, resulting in an accumulated deficit of $113.2 million. In September and October 2025, the Company completed an equity offering which generated net proceeds of $8.1 million.
The Company’s existing cash resources are expected to be sufficient to fund its planned operations through fiscal year 2026. To support operations beyond such time frame, the Company may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
There can be no assurance that funds will be available from external sources, such as debt or equity financings or other potential sources. 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. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.
Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of the Company’s Common Stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights.
We are controlled by one principal stockholder who serves as our Chairman of the Board.
As of the date of this Annual Report, Mr. Theodore Ralston holds 1,364,141 shares of the Series A Preferred Stock. Each share of the Series A Preferred Stock is entitled to vote 1,000 votes per share, and as such Mr. Ralston controls approximately 81% of the vote, and the ability to control all other matters requiring the approval of our stockholders, including the election of all of our directors.
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If we are unable to expand our base of customers, our future growth and operating results could be adversely affected.
We have committed and continue to commit resources to the expansion and increased marketing of our CitroTech™ product. If we are unable to market and sell our product to new customers, our ability to grow revenue and achieve profitability could be negatively impacted.
If we are unable to expand our base of materials suppliers, our future growth and operating results could be adversely affected.
We currently compound our product in-house with materials supplied from manufacturers. There are no contracts in place with the suppliers. We have committed resources to expanding our supplier base. If we are unable to obtain additional sources for our materials, it could limit our ability to grow revenue and achieve profitability.
Various factors outside our direct control may adversely affect suppliers and distribution of our product.
Changes that our suppliers may make outside the purview of our direct control can have an impact on our processes, quality of our product, and the successful delivery of our product to our customers. Mistakes and mishandling are not uncommon and can affect supply and delivery. Some of these risks include:
| · | compliance with the required regulatory standards; | |
| · | transportation risk; | |
| · | the cost and availability of components and supplies; | |
| · | delays in analytical results or failure of analytical techniques that we will depend on for quality control and release of product; and | |
| · | natural disasters, labor disputes, financial distress, raw material availability, issues with facilities and equipment, or other forms of disruption to business operations affecting our suppliers. |
If any of these risks were to materialize, our ability to provide our product to customers on a timely basis would be adversely impacted.
We are subject to the seasonality of wildfires that may occur and acts of God that are inconsistent and unpredictable.
Our business is highly dependent on the needs of commercial property owners, residential homeowners and government agencies to prevent fires and protect assets. As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Historically, sales of our product have been higher in the summer season of each calendar year due to weather patterns which we believe are generally correlated to a higher prevalence of wildfires; however, one example of an exception to this seasonality is the wildfires in Los Angeles, California during January 2025.
We rely on a small management team, and the loss of key personnel or their limited availability could materially and adversely affect our business
We rely heavily on the skills, experience, and continued services of a five-person management team to conduct and manage our business operations. Our management team consists of Wesley Bolsen, a member of our board of directors and our Chief Executive Officer, Andrew Hotsko, our Chief Operating Officer, Nanuk Warman, our Chief Financial Officer, Stephen Conboy, our Chief Technology Officer, and Anthony Newton, our General Counsel. Of these individuals, only Mr. Bolsen and Mr. Hotsko devote substantially all of their working time to the Company.
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Our Chief Financial Officer, Chief Technology Officer, and General Counsel are not full-time employees and devote only a portion of their professional time to managing the Company’s affairs. As a result, we are particularly dependent on the continued availability and performance of a limited number of individuals, and we may experience difficulties in executing our business strategy, maintaining operational continuity, or responding effectively to unexpected challenges.
The loss of any member of our management team, the inability to attract and retain qualified replacement personnel on acceptable terms, or a reduction in the time commitment of any of our key personnel could materially and adversely affect our business, financial condition, and results of operations. In addition, our limited management resources may constrain our ability to scale our operations, implement internal controls and compliance functions, or pursue strategic opportunities. We do not maintain “key person” insurance for any member of our management team, and there can be no assurance that we will be able to mitigate the impact of any such loss or unavailability in a timely manner.
Since we have a limited operating history, it is difficult for potential investors to evaluate our business.
Our limited operating history makes it difficult for potential investors to evaluate our business or prospective operations. Since our formation in March of 1990, we have not generated enough revenues to exceed our expenses. MFB Ohio acquired MFB California’s portfolio of intellectual property in April 2022 and entered the fire retardant and fire suppression industry as of that date. As a result, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications, and delays inherent in new business lines. Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. Our business is dependent upon the implementation of our business plan. We may not be successful in implementing such a plan and cannot guarantee that, if implemented, we will ultimately be able to attain profitability.
Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our raw materials and support services contracts may constrain our ability to make a profit.
Our profitability can be adversely affected to the extent we are faced with cost increases for raw materials, wages, or other labor-related expenses, especially when we cannot recover such increased costs through increases in the prices for our product and services. In some cases, we will have to absorb any cost increases, which may adversely impact our operating results.
If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.
The Company currently has product liability insurance. However, in the event of major claims from the use of our product, it is possible that our product liability insurance will not be sufficient to cover claims against us. We cannot assure you that we will not face liability arising out of the use of our product which is significantly in excess of the limits of our product liability insurance. In such event, if we do not have the funds or access to the funds necessary to satisfy such liability, we may be unable to continue in business.
Our failure to maintain effective internal controls over financial reporting could have an adverse impact on us.
We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition, or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.
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A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Presently, we have identified financial reporting internal control weaknesses relating to segregation of duties and various accounting processes. While we have improved our organizational capabilities, we still may not have a sufficient number of employees to segregate responsibilities and may be unable to afford further enhancements to our staff or engaging outside consultants or professionals further to fully mitigate these internal control deficiencies. During the course of our testing, we may identify other deficiencies that we may not be able to timely remediate. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Changes in consumer preferences or discretionary consumer spending could harm our performance.
The success of our business depends, in part, upon the continued popularity of our product, and shifts in these consumer preferences could negatively affect our future profitability.
Negative publicity over certain environmental products may adversely affect demand for our product and could result in a decrease in our revenues, which could materially harm our business. Additionally, our success depends, in part, on a builder preference for our product and, to an extent, on numerous factors affecting operational budgeting, including economic conditions and customer confidence.
A decline in operational budgeting or economic conditions could reduce guest traffic or impose practical limits on pricing, either of which could harm our business, financial condition, operating results, or cash flow.
We may become subject to potential claims for product liability.
Our business could expose us to claims for personal injury from contamination of our product. We believe that our product’s quality is carefully monitored through regular product testing, but we may be subject to liability as a result of customer or distributor misuse or storage. The Company maintains product liability insurance against certain types of claims in amounts which it believes to be adequate. The Company also maintains an umbrella insurance policy that it considers to be sufficient to cover claims made above its product liability insurance limits. Although no claims have been made against the Company or its distributors to date and the Company believes its current level of insurance to be adequate for its current business operations, it is possible that such claims will arise in the future, and the Company’s policies may not be sufficient to pay for such claims.
Increases in prices of commodities needed to manufacture our product could adversely affect profitability.
The ingredients and materials needed to manufacture and package our product are subject to the commodities markets’ normal price fluctuations. Any increase in the price of those ingredients and materials that cannot be passed along to the consumer will adversely affect our profitability. Any prolonged or permanent increase in the cost of the raw ingredients to manufacture our product may in the long term make it more difficult for us to earn a profit.
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Risks Related to Regulatory and Legal Matters
Our product is provided to emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability and reputational risks if our product fails to provide such protection as intended.
Our fire retardant product is provided to, among other customers, emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability risks if our product fails to provide such protection. While our product is effective in retarding fires, there is no guarantee such product will be able to stop all fires due to their unpredictability and variation in size and/or speed in which a fire is burning. In addition, fires need to be fought with the cooperation and assistance of local fire authorities as well as the additional tools and resources that they bring. Therefore, while we recognize the importance of the role our product plays in these critical efforts, our product is not the only factor in fighting fires and therefore we cannot guarantee that our product will always be able to protect life and property. Any failure to do so could have an adverse effect on our business.
We manufacture a product used to help prevent fires from starting and protect assets. The product we manufacture may be used in applications and situations that involve high levels of risk of personal injury. Failure to use our product for its intended purpose, failure to use our product properly or the malfunction of our product could result in serious bodily injury or death of the user. In such cases, we may be subject to product liability claims arising from the design, manufacture or sale of our product. If these claims are decided against us, and we are found to be liable, we may be required to pay substantial damages, and our insurance costs may increase significantly as a result. We cannot assure you that our indemnity and insurance coverage would be sufficient to cover the payment of any potential claim. In addition, we cannot assure you that this or any other indemnity or insurance coverage will continue to be available or, if available, that we will be able to obtain insurance at a reasonable cost. Any material uninsured loss could have a material adverse effect on our business, financial condition and results of operations.
Our product is subject to extensive government scrutiny and regulations, including the EPA and USDA Forest Service. There can be no assurance that such regulations will not change and that our product will continue to be approved for usage.
We are subject to regulations by federal government authorities. We need to pass the EPA audit process every three years, which is a rigorous process. In addition, we have to get listed on the USFS QPL list, which requires the product passing several tests and standards, including toxicity, corrosion and stability. We are also subject to ongoing reviews of our product, manufacturing processes and facilities by government authorities, and such agencies may at times be involved in challenges by outside groups, and as a result, the Company may be required to produce product data and comply with detailed regulatory requirements.
The Frank R. Lautenberg Chemical Safety for the 21st Century Act modified the Toxic Control Substances Act (“TSCA”), by requiring the EPA, to prioritize and evaluate the environmental and health risks of existing chemicals and provided the EPA with greater authority to regulate chemicals posing unreasonable risks. According to this statute, the EPA is required to make an affirmative finding that a new chemical will not pose an unreasonable risk before such chemical can go into production. These laws and regulations increase the complexity and costs of transporting our product to our customers. Further changes to these and similar regulations could restrict our ability to expand, build or acquire new facilities, require us to acquire costly control equipment, cause us to incur expenses associated with remediation of contamination, cause us to modify our manufacturing or shipping processes or otherwise increase our cost of doing business and have a negative impact on our business, financial condition and results of operations. In addition, the adoption of new laws, rules or regulations related to climate change poses risks that could harm our results of operations or affect the way we conduct our businesses. For example, new or modified regulations could require us to make substantial expenditures to enhance our environmental compliance efforts. New or stricter laws and regulations may be introduced that could result in additional compliance costs and prevent or inhibit the development, manufacture, distribution and sale of our product. Such outcomes could adversely impact our business, financial condition and results of operations.
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Our product or facility could have environmental impacts and side effects.
If the product we sell does not have the intended effects, our business may suffer and it may be subject to product liability or other legal actions. Our product contains innovative combinations of materials. We have received third-party testing demonstrating the reduced toxicity and flammability of our product, however, this is limited in scope and therefore, does not present all the potential side effects and/or the product’s interaction with animal biochemistry. In a UL GreenGuard Certification Program Profile Study Test Report dated June 21, 2022, UL determined that our product contained less than 0.001 parts per million of formaldehyde and total aldehydes. As a result, while our product could have minimal impact on the environment, the scope of that impact is currently unknown.
Legal and regulatory claims, investigations and proceedings may be initiated against us in the ordinary course of business. The outcomes and the amounts of any damages awarded, or fines or penalties assessed, cannot be predicted, and could have a material adverse effect on our reputation as well as our business, financial condition and results of operations.
We may be the subject of litigation by customers, suppliers and other third parties. A significant judgment against us, the loss of a significant permit, license or other approval, or a significant fine, penalty or contractual dispute could have a material adverse effect on our business, financial condition and results of operations. Litigation is expensive, time consuming and may divert management’s attention away from the operation of the business. The outcome of litigation can never be predicted with certainty and an adverse outcome in any of these matters could have a material adverse effect on our reputation as well as our business, financial condition and results of operations.
Risks Relating to Our Indebtedness
We are highly leveraged.
As of December 31, 2025, our outstanding indebtedness was $3,022,673. This indebtedness includes: (i) principal amount of $375,000 ($219,321, net of discount of $155,679) incurred in connection with convertible notes issued during July 2024 to February 2025; (ii) a $2,000,000 ($1,285,400, net of discount of $714,600) convertible note issued to a related party; (iii) $163,281 incurred in connection with financing loans for the purchase of work vehicles; (iv) $167,971 for accrued interest related party; and (v) $316,321 recorded as accounts payable and accrued liabilities.
The material terms of the convertible notes issued during July 2024 to February 2025: (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, divided by a fixed conversion rate of 2.40; and (iv) warrant coverage at the rate of 0.20834 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
The convertible note to a related party was issued in February 2025 to BoltRock Holdings, LLC. The convertible note was amended in February 2026 and extended to April 28, 2026, including an amendment fee of 1% added to principal and accrued interest, and the termination of the pledge agreement on certain intellectual property held by the Company. The material terms of this convertible note are: (i) April 28, 2026 maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, divided by a fixed conversion rate of 2.40; and (iv) warrant coverage at the rate of 0.20834 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industries, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations. This degree of leverage could have significant consequences, including:
| · | requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, and future business opportunities; | |
| · | limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, and general corporate or other purposes; and | |
| · | limiting our ability to adjust to changing market conditions and placing us at a disadvantage compared to our nearest market competitor. |
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We could incur additional indebtedness in the future. If new indebtedness is added to our current debt levels, the related risks we now face could increase.
If due to such a deterioration in our financial performance, our cash flows and capital resources were to be insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In addition, if we were required to raise additional capital in the current financial markets, the terms of such financing, if available, could result in higher costs and greater restrictions on our business. If we were to need to refinance our existing indebtedness, the conditions in the financial markets at that time could make it difficult to refinance our existing indebtedness on acceptable terms or at all. If such alternative measures proved unsuccessful, we could face substantial liquidity problems.
Risks Relating to our Common Stock and Securities
Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our Common Stock could incur substantial losses.
Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future. We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance or prospects. The market price for our Common Stock may be influenced by many factors, including the following:
| · | investor reaction to our business strategy; | |
| · | the success of competitive products or technologies; | |
| · | regulatory or legal developments in the United States, especially changes in laws or regulations applicable to our product; | |
| · | variations in our financial results or those of companies that are perceived to be similar to us; | |
| · | our ability or inability to raise additional capital and the terms on which we raise it; | |
| · | declines in the market prices of stocks generally; | |
| · | our public disclosure of the terms of any financing which we consummate in the future; | |
| · | our failure to become profitable; | |
| · | our failure to raise working capital; | |
| · | cancellation of key contracts; | |
| · | our failure to meet financial forecasts we publicly disclose; | |
| · | trading volume of our Common Stock; | |
| · | sales of our Common Stock by us or our stockholders; and | |
| · | general economic, industry and market conditions. |
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These broad market and industry factors may seriously harm the market price of our Common Stock, regardless of our operating performance. Since the stock price of our Common Stock has fluctuated in the past, has been recently volatile and may be volatile in the future, investors in our Common Stock could incur substantial losses. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects. There can be no guarantee that our stock price will remain at current prices or that future sales of our Common Stock will not be at prices lower than those sold to investors.
Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of Common Stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily as interest in those stocks have abated. While we have no reason to believe our shares would be the target of a short squeeze, there can be no assurance that we won’t be in the future, and you may lose a significant portion or all of your investment if you purchase our shares at a rate that is significantly disconnected from our underlying value.
Market prices for our Common Stock will be influenced by a number of factors, including:
| · | the issuance of new equity securities of the Company pursuant to a future offering, including issuances of preferred stock; | |
| · | the introduction of new products or services by us or our nearest market competitor; | |
| · | changes in interest rates; | |
| · | competitive developments, including announcements by our nearest market competitor of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; | |
| · | variations in our quarterly operating results; | |
| · | change in financial estimates by securities analysts; | |
| · | a limited amount of news and analyst coverage for our Company; | |
| · | the depth and liquidity of the market for our shares of Common Stock; | |
| · | sales of large blocks of our Common Stock, including sales by our major stockholders, any executive officers or directors appointed in the future, or by other significant stockholders; | |
| · | investor perceptions of our Company; and | |
| · | market price fluctuations may negatively affect the ability of investors to sell our shares at consistent prices. |
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General Business Risks
We will be increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.
Significant disruptions to our information technology systems or breaches of information security could adversely affect our business. In the ordinary course of business, we will collect, store and transmit confidential information, and it is critical that we do so in a secure manner to maintain the confidentiality and integrity of such information. The size and complexity of our information technology systems, and those of third-party vendors, make such systems potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners or vendors. These systems are also vulnerable to attacks by malicious third parties and may be susceptible to intentional or accidental physical damage to the infrastructure maintained by us or by third parties. Maintaining the secrecy of confidential, proprietary and/or trade secret information is important to our competitive business position. While we have taken steps to protect such information and have invested in systems and infrastructures to do so, there can be no guarantee that our efforts will prevent service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential information that could adversely affect our business operations or result in the loss, dissemination or misuse of critical or sensitive information. The increasing sophistication and frequency of cybersecurity threats, including targeted data breaches, ransomware attacks designed to encrypt our data for ransom and other malicious cyber activities, pose a significant risk to the integrity and confidentiality of our data systems. A breach of our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology or information, and/or adversely affect our business position. Further, any such interruption, security breach, loss or disclosure of confidential information could result in financial, legal, business and reputational harm to us and could have a material adverse effect on our business, financial position, results of operations and/or cash flow.
We could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products.
Our commercial success will depend in part on not having any adverse environmental claims, whether relating to product failure, violating the rights of third parties or violating applicable law. Any litigation or claim against us, even those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business, and harm our reputation. Further, as the number of participants in the environmental industry grows, the possibility of claims against us increases. If we are found to violate applicable law or the rights of third parties, we could be required to pay substantial damages, including treble, or triple, damages if an infringement is found to be willful, and/or royalties and could be prevented from selling our product.
We could become subject to patent litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products.
Our commercial success will depend in part on not infringing the patents or violating the other proprietary rights of third parties. Any litigation or claim against us, even those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business, and harm our reputation. Further, as the number of participants in the environmental industry grows, the possibility of intellectual property infringement claims against us increases. If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages, including treble, or triple, damages if an infringement is found to be willful, and/or royalties and could be prevented from selling our product unless we obtain a license or are able to redesign our product to avoid infringement. Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our product in a way that would not infringe the intellectual property rights of others. If we fail to obtain any required licenses or make any necessary changes to our product or technologies, we may have to withdraw our existing product from the market or may be unable to commercialize one or more of our future products, all of which could have a material adverse effect on our business, results of operations, and financial condition. If passed into law, patent reform legislation currently pending in the U.S. Congress could significantly change the risks associated with bringing or defending a patent infringement lawsuit. For example, fee shifting legislation could require a non-prevailing party to pay the attorney fees of the prevailing party in some circumstances.
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Our operating results and stock price may be volatile, and the market price of our Common Stock may decline.
Our quarterly operating results are likely to fluctuate in the future. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance. Our operating results and the trading price of our shares may fluctuate in response to various factors, including:
| · | market conditions in our industry or the broader stock market; | |
| · | actual or anticipated fluctuations in our quarterly financial and operating results; | |
| · | issuance of new or changed securities analysts’ reports or recommendations; | |
| · | sales, or anticipated sales, of large blocks of our stock; | |
| · | additions or departures of key personnel; | |
| · | regulatory or political developments; | |
| · | litigation, litigation-related indemnification and governmental investigations; | |
| · | investors’ perception of us; | |
| · | events beyond our control, such as weather and war; and | |
| · | any default on our indebtedness. |
These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for our shares to fluctuate substantially. Fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management away from our business, which could significantly harm our profitability and reputation.
The availability of shares for sale in the future could reduce the market price of our Common Stock.
In the future, we may issue securities to raise cash for acquisitions or otherwise. We may also acquire interests in other companies by using a combination of cash and Common Stock or just Common Stock. We may also issue securities convertible into our Common Stock. Any of these events may dilute your ownership interest in our Company and adversely impact our Common Stock’s price.
Also, sales of a substantial amount of our Common Stock in the public market or the perception that these sales may occur could reduce our Common Stock’s market price and impair our ability to raise additional capital through the sale of our securities.
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The indemnification provisions in our Articles of Incorporation and bylaws under Wyoming law may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers, and employees.
As permitted by Wyoming law, our Articles of Incorporation provide that we will indemnify our directors and officers against expenses and liabilities they incur to defend, settle or satisfy any civil or criminal action brought against them on account of their being or having been directors or officers of us, unless, in any such action, they are adjudged to have acted with gross negligence or willful misconduct. We may also have contractual indemnification obligations under our agreements with our directors, officers, and employees. These indemnification obligations could result in our Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers, and employees that we may not recoup.
Pursuant to the laws of the State of Wyoming, our Articles of Incorporation exclude personal liability for its directors for monetary damages based upon any violation of their fiduciary duties as directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, acts in violation of the Wyoming Business Corporation Act, or any transaction from which a director receives an improper personal benefit.
This exclusion of liability does not limit any right, which a director may have to be indemnified, and does not affect any director’s liability under federal or applicable state securities laws.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to provisions of the State of Wyoming, the Company has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
We are classified as a “smaller reporting company,” and we cannot be sure if the reduced disclosure requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors.
We are currently a “smaller reporting company.” Specifically, smaller reporting companies may provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting, and have certain other decreased disclosure obligations in their SEC filings. Reduced disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Because directors and officers currently and for the foreseeable future will continue to control the Company, you will not likely be able to elect directors or have any say in the Company’s policies.
Our stockholders are not entitled to cumulative voting rights. Consequently, a majority vote will decide the election of directors and all other matters requiring stockholder approval. As long as the Series A Preferred Stock is outstanding, the preferred stock will have voting rights representing 1,000 votes for each share of Series A Preferred Stock issued and outstanding. Theodore Ralston, who is our Chairman of the Board of Directors, holds 1,364,141 shares of our Series A Preferred Stock and has voting control of the Company. Mr. Theodore Ralston holds 1,364,141 shares of the Series A Preferred Stock, and as such Mr. Ralston controls approximately 81.4% of the vote and the ability to control all other matters requiring the approval of our stockholders, including the election of all of our directors.
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We are a “controlled company” within the meaning of the NYSE American listing standards and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements. As a result, you do not and may not in the future have the same protections afforded to shareholders of companies that are subject to such requirements.
We have share structure which allows our Chairman of the Board, Theodore Ralston, to control a majority of the voting power of our common equity. As a result, we qualify as a “controlled company” within the meaning of the corporate governance standards of the NYSE American. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company.” As a controlled company, we elect not to comply with certain corporate governance requirements, specifically (i) that a majority of our Board consist of independent directors and (ii) that director nominees be selected or recommended to the Board by independent directors. Although we do not expect to rely on the “controlled company” exemptions, we may at any time after the date of this report elect to avail ourselves of one or more additional controlled company exemptions provided that we continue to qualify as a controlled company. To the extent we rely on any of these exemptions, holders of our Common Stock will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE American and we cannot predict the impact this may have on the price of our Common Stock.
We do not expect to pay dividends in the future; any return on investment may be limited to our Common Stock’s value.
We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our Common Stock will depend on earnings, financial condition, and other business and economic factors affecting it at such time as the Board of Directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increase our capital base and development and marketing efforts.
There can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of our Common Stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our Board of Directors. If we do not pay dividends, our Common Stock may be less valuable because a return on your investment will only occur if our stock price appreciates.
Because our Company has anti-takeover mechanisms through the issuance of our Series A Preferred Stock, which votes with the Common Stock together as a single class, this preference could have a negative impact on other stockholders in voting on matters of the Company.
Our stockholders are not entitled to cumulative voting rights. Consequently, a majority vote will decide the election of directors and all other matters requiring stockholder approval. As long as the Series A Preferred Stock is outstanding, the preferred stock will have voting rights representing 1,000 votes for each share of Series A Preferred Stock issued and outstanding. Theodore Ralston, who is our Chairman of the Board of Directors, controls a super-majority of the outstanding shares of our Series A Preferred Stock and will continue to have, voting control of the Company. Mr. Ralston has the ability to influence significantly all matters requiring approval by our stockholders. Mr. Ralston may have interests that differ from other stockholders, and they may vote in a way with which other stockholders disagree and either or both may be adverse in the future to the interests of other stockholders. The concentration of ownership of our voting securities may have the effect of delaying, preventing or deterring a change of control of our Company, could deprive our stockholders of an opportunity to receive a premium for their securities as part of a sale of our Company.
Our Series A Preferred Stock may lead to conflicts of interest and could negatively impact the price of our securities.
Except as otherwise required by law or by the Articles of Incorporation and except as set forth below, the outstanding shares of Series A Preferred Stock are entitled to vote together with the shares of Common Stock and other voting securities of the Company as a single class. Mr. Ralston, our Chairman of the Board of Directors, owns 1,364,141 shares of our Series A Preferred Stock and will continue to have voting control of the Company and the ability to influence significantly all matters requiring approval by our stockholders. Mr. Ralston may have interests that differ from other stockholders, and may vote in a way with which other stockholders disagree and either or both may be adverse in the future to the interests of other stockholders. The concentration of ownership of our voting securities may have the effect of delaying, preventing or deterring a change of control of our Company, could deprive our stockholders of an opportunity to receive a premium for their securities as part of a sale of our Company, and consequently may affect the market price of our Common Stock. This concentration of ownership of our voting securities may also have the effect of influencing the completion of a change in control that may not necessarily be in the best interests of all of our stockholders. Also, the voting power of our Series A Preferred Stock means that Mr. Ralston will continue to control who is elected to serve on the Board of Directors, and other stockholders will have no say in the Company’s policies.
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Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Cybersecurity Risk Management and Strategy
Governance
The Board of Directors oversees risks from
cybersecurity threats and receives periodic reporting from management regarding the Company’s cybersecurity risk profile and
information security program.
Item 2. Properties.
The information required by Item 2 of Form 10-K regarding the Company’s physical properties is incorporated herein by reference to Item 1 of Part I of this Annual Report under the section entitled “Facilities.”
Item 3. Legal Proceedings.
We are not presently party to any pending or other threatened legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results, although from time to time, we may become involved in legal proceedings in the ordinary course of business.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our Common Stock began trading on the NYSE American on December 4, 2025, under the trading symbol “CITR”.
Security Holders
As of March 30, 2026, we estimate there were approximately 745 holders of record and 19,150,234 shares of our Common Stock were issued and outstanding.
Dividend Policy
We have not paid any dividends on our common stock since inception and we currently expect that, in the foreseeable future, all earnings (if any) will be retained for the development of our business and no dividends will be declared or paid on our common stock. Any future dividends on our common stock will be subject to the discretion of our board of directors and will depend upon, among other things, our earnings (if any), operating results, financial condition and capital requirements, general business conditions and other pertinent facts.
Securities Authorized for Issuance under Equity Compensation Plans
The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Recent Sales of Unregistered Securities
During the period covered by this Annual Report, we completed the following transactions in reliance upon exemptions from registration under the Securities Act:
Between October 1, 2025, and March 30, 2026, we issued 193,968 shares of Series C Convertible Preferred Stock and 371,767 warrants, pursuant to a PIPE offering, for proceeds of $2,676,754. The proceeds were used for general working capital and operational purposes, including Legal Fees, Accounting and Audit Fees, testing and certification, and preparation to launch product offerings.
Between October 1, 2025, and March 30, 2026, we issued 1,563,989 shares of Common Stock, as follows:
| · | 220,000 shares pursuant to the acquisition of intellectual property from Breakthrough Chemistry, Inc., valued at $1,775,400. | |
| · | 346,127 shares for the cashless conversion of 359,375 warrants. | |
| · | 500,000 shares for conversion of 150,000 shares of Series C Convertible Preferred Stock. | |
| · | 475,862 shares for conversion of debt and accrued interest of $1,071,821. | |
| · | 55,333 shares for services valued at $443,377. |
Item 6. Reserved.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See the section titled “Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this Annual Report.
Overview
We are a specialty chemical company that manufactures environmentally sustainable fire inhibitors and fire retardants as well as home systems for their deployment. Management is highly experienced at building and running companies, as well as commercializing and executing on strategic partnerships for the sale of products and services.
Since MFB Ohio acquired the MFB portfolio of intellectual property on April 13, 2022, our management team has continued to develop and refine our product formulations. The Company has received significant third-party recognition for these efforts, including twice receiving the EPA Safer Choice designation, being the first and only fire inhibitor recognized by the EPA as safe for the environment, and receiving UL GREENGUARD Gold certification, which reflects minimal impact on indoor air quality from toxic smoke over extended exposure. Our products have been adopted by fire departments throughout the State of California.
We are expanding our patent portfolio and technology platform into additional markets that can benefit from environmentally safe alternatives to legacy fire retardant and fire retardant-treated wood products. CitroTech has developed wood coating products utilizing this technology and is in the initial phases of commercialization.
The Company is also actively deploying proactive wildfire defense systems on residential and commercial properties under the CitroSafe Systems brand. CitroSafe Systems are self-contained sprinkler installations that utilize our patented CitroTech product and are deployed in advance of wildfires to reduce structural risk. This offering addresses a significant and growing insurance market disruption across eleven western states, where carriers have curtailed or declined to write wildfire coverage on new construction and existing policies in the Wildland-Urban Interface, the transitional zone between undeveloped land and built environments that is at elevated risk of catastrophic wildfire loss. The Company is working with a large insurance broker to offer insurance coverage to customers who install a CitroSafe proactive wildfire system, with policies underwritten by established insurance carriers. This program is currently in the proof-of-concept phase.
Our management team consists of five individuals: Wesley J. Bolsen, Chief Executive Officer; Andrew Hotsko, Chief Operating Officer; Nanuk Warman, Secretary and Chief Financial Officer; Steve Conboy, Chief Technical Officer and Anthony Newton, General Counsel.
Known Trends and Uncertainties
Growth in Fire Safety
We believe that fire safety benefits from several growth drivers, including increasing fire severity, as measured by higher acres burned, longer fire seasons and a growing urban component moving into the Wildland Urban Interface (WUI), resulting in a need for higher quantity of specialty chemical fire inhibitors, thereby increasing production. We believe these trends are prevalent in North America, as well as globally, and we expect these trends to continue driving growth in demand for fire retardants and fire-retardant-treated lumber products.
We are working to grow our fire prevention and protection business, which is primarily focused on expanding use of ground-applications for long-term fire retardants. This growth includes use of ground assets in response to active fires (protection), as well as proactive treatments around critical infrastructure and known high-risk areas (prevention). Fire prevention products can be used to help prevent fire ignitions and protect property from potential fire danger by providing proactive retardant treatment in high-risk areas such as along roadsides, under power lines, along railroad rights-of-way, and around residential neighborhoods and commercial infrastructure. Treating these areas ahead of the fire season can help to prevent ignitions from equipment failures or sparks until a significant rainfall occurs. Although there is no certainty in wildfire defense, when our CitroSafe system is installed, we fill it with our CitroTech product. Thereafter, we will conduct an annual inspection of the system to help ensure it is ready to help defend against a wildfire. While there is no specific useful life for our product, if the system has not been deployed since the third anniversary of the initial installation, or three years following an annual inspection, in an abundance of caution we will remove and replace the CitroTech. In addition, we suggest spraying CitroTech in areas surrounding the property that pose the greatest risk to help reduce the risk posed by dry vegetation, decks, garden bark, and fences.
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We have invested and intend to continue investing in the expansion of our fire retardant and lumber treatment business through product development and business development to grow our customer base.
Weather Conditions and Climate Trends
Our business is highly dependent on the needs of commercial entities, residential homeowners and fire departments to prevent fires and protect assets, as well as the use and expansion of Class A Fire Retardant Treated lumber and wood products. As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Typically, sales of our product is higher during the summer months in the United States of America due to weather patterns that are generally correlated to a higher prevalence of wildfires. We believe orders will generally peak during the summer months, but with expanded fire seasons in the United States, ignitions may start in the late Spring and continue through late Fall of calendar year 2026.
Results of Operations
We are developing and commercializing our product lines. We have been focused historically on obtaining patents and various accreditations. To date, we do not have a large customer base, having relied heavily on a few customers, for the commercialization and testing of our CitroTech product and delivery system. We currently do not have an established retail product line nor recurring significant customer base. Therefore, period over period comparisons of our results of operations are not indicative of future results.
The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended December 31, 2025 and 2024, which are included herein.
Our results of operations for the years ended December 31, 2025 and 2024 are summarized below:
| Years ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| 2025 | 2024 | Change | % | |||||||||||||
| Revenue | $ | 2,381,407 | $ | 808,372 | 1,573,035 | 195% | ||||||||||
| Operating expenses | 18,877,398 | 6,113,050 | 12,764,348 | 209% | ||||||||||||
| Other expenses | 20,341,652 | 1,577,044 | 18,764,608 | 1,190% | ||||||||||||
| Net loss | $ | (36,837,643 | ) | $ | (6,881,722 | ) | (29,955,921 | ) | 435% | |||||||
Revenue
Our revenue is associated with revenue from Mighty Fire Breaker LLC (“MFB Ohio”) which acquired intellectual property to fire suppression in April 2022. During the year ended December 31, 2025, revenue increased $1.6 million, or 195%, over the year ended December 31, 2024. This growth was driven by broader market adoption of our CitroTech product line, including sales of residential CitroSafe systems, commercial and fire department specialty chemical sales into municipalities such as San Diego, and direct spray application services for residential properties in response to heightened wildfire concerns following the January 2025 Los Angeles wildfires. Notably, customer concentration improved significantly, with no single customer representing more than 10% of revenue in 2025 compared to four customers exceeding that threshold in 2024, and our top five customers declining from 79.5% to 32.0% of total revenue. This diversification reflects our transition from early-stage project-based sales toward broader market penetration.
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Our revenues consisted of the following:
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Product sales | $ | 1,349,257 | $ | 626,389 | ||||
| Product installation service | 1,032,150 | 181,983 | ||||||
| $ | 2,381,407 | $ | 808,372 | |||||
Product installation services commenced in the second quarter of 2024.
Our revenues from significant customers for the years ended December 31, 2025 and 2024, are as follows:
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Number of customers (more than 10% of revenue) | 0 | 4 | ||||||
| Total revenue of top 5 customers | 32.0% | 79.5% | ||||||
We do not have major sales from recurring customers for the years ended December 31, 2025 and 2024.
Operating Expenses
| Years ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| 2025 | 2024 | Change | % | |||||||||||||
| Cost of revenue | $ | 1,850,682 | $ | 655,499 | 1,195,183 | 182% | ||||||||||
| Amortization and depreciation | 329,334 | 264,696 | 64,638 | 24% | ||||||||||||
| General and administration | 1,593,640 | 498,445 | 1,095,195 | 220% | ||||||||||||
| Advertising and marketing | 673,636 | 1,005,504 | (331,868 | ) | (33% | ) | ||||||||||
| Payroll and management compensation | 9,851,419 | 75,000 | 9,776,419 | 13,035% | ||||||||||||
| Professional fees | 4,380,182 | 3,599,904 | 780,278 | 22% | ||||||||||||
| Research and development expense | 198,505 | 14,002 | 184,503 | 1,318% | ||||||||||||
| Total operating expenses | $ | 18,877,398 | $ | 6,113,050 | 12,764,348 | 209% | ||||||||||
The increase in operating expenses was primarily attributed to increases in cost of revenue and payroll and management compensation.
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Cost of revenue
| Years ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| 2025 | 2024 | Change | % | |||||||||||||
| Cost of inventory | $ | 1,545,072 | $ | 407,334 | 1,137,738 | 279% | ||||||||||
| Freight and shipping | 22,778 | 9,321 | 13,457 | 144% | ||||||||||||
| Consulting and advisory-related party | 4,000 | 19,400 | (15,400 | ) | (79% | ) | ||||||||||
| Royalty and sales commission-related party | 56,290 | 81,917 | (25,627 | ) | (31% | ) | ||||||||||
| Rent expense | 222,542 | 137,527 | 85,015 | 62% | ||||||||||||
| Total cost of revenue | $ | 1,850,682 | $ | 655,499 | 1,195,183 | 182% | ||||||||||
During the year ended December 31, 2025, the cost of revenue increased over the year ended December 31, 2024, primarily due to an increase in cost of inventory and rent.
Cost of inventory consists of product costs, direct labor, related supplies and direct testing of our CitroTech product and various components required for installation of CitroSafe(TM) systems. Cost of inventory increased during the year ended December 31, 2025, primarily due to an increase in product sales and supplies from increased sales.
Freight and shipping relate to costs for shipping products to customers.
Consulting and advisory services are to a related party company for services related to product installations.
Royalty and sales commissions increased in the year ended December 31, 2025, from more revenue. We recognized an allocated portion of consulting and direct labor costs associated with our revenue as royalty and sales cost of revenue in 2024 and during the first quarter of 2025. In March 2025, we entered into a new contract and there is no longer consulting and advisory royalty.
Rent expenses are warehouse and facility rent expenses. The increase in rent expense is primarily attributable to our relocation to a larger commercial facility for operations, warehousing, and customer-facing activities beginning in April 2025, along with the cancellation of a prior warehouse lease in May 2025.
Amortization and depreciation
Amortization and depreciation expenses are an amortization of patents and a depreciation of vehicle, and furniture and equipment.
General and administrative
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the year ended December 31, 2025, we incurred increased expenditures on consulting and payroll fees, bad debt expenses, our website and IT development and travel as well as general office and insurance expenses from expansion of operations.
Advertising and marketing
The decrease in advertising and marketing during the year ended December 31, 2025, over the year ended December 31, 2024, is primarily due to 83,333 shares of Series C Convertible Preferred Stock, valued at $500,000 for a NASCAR sponsorship in 2024. Other than this NASCAR expense, the advertising and marketing increased to support revenue growth.
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Professional fees
The professional fees during the year ended December 31, 2025, primarily included stock-based compensation to consultants of $2.6 million, of which $2.1 million was to a related party consultant (TC Special Investments, LLC (“TCSI”)), and various professional fees for accounting and audit related to SEC filings, legal on patents and other consulting services in 2025. The professional fees during the year ended December 31, 2024, primarily included stock-based management compensation of $1.4 million to advisors to our subsidiary MFB and stock-based compensation of $1.0 million to various consultants for IT service for software development, legal related to patents and other consulting services in 2024.
TCSI’s consulting services to us include sales and business development, customer relationship management, strategy optimization, investor relations, underwriter interface, coordinating outside counsel and other business aspects at the request of the Board of Directors. In addition to TCSI, stock-based compensation was remitted to certain individuals with fire retardant and industry experience, who provided guidance and insight to our management and Board of Directors with respect to the fire retardant and fire inhibitor industry, business development connections, and oversight during the testing and recognition processes.
Payroll and management compensation
During the year ended December 31, 2025, management compensation increased to $9.9 million from $75,000 in the prior year. This increase was primarily attributable to the buildout of a full executive management team during 2025, including the appointment of a Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel. Compensation primarily included stock-based management compensation of $7.8 million, cash payments of $1.3 million to management, and payroll to employees of $745,000. The significant increase in stock-based compensation reflects the transition from a single-executive structure in 2024, when management compensation consisted solely of a $75,000 cash payment to our former CEO, to a fully staffed leadership team necessary to support our growth and commercialization objectives.
Research and development costs
We continue to invest heavily in the testing and certifications of CitroTech treated products as well as in advance of submitting formulas
for approval to apply product onto federal lands. We expect to continue growing R&D spend over historical spend as we add additional
product lines and invests in the future of the company.
Other Expenses
For the years ended December 31, 2025 and 2024, the other expenses consisted of interest expense related to convertible notes payable issued in 2025 and 2024 of $2.8 million and convertible notes payable issued in 2024 of $258,000, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $2.0 million and $410,000, respectively, financing expense of $8.7 million and $0, respectively, and loss on settlement of debt of $6.8 million and $909,000, respectively. Settlement of debt in 2025 is the conversion of convertible notes issued in 2024 and 2025. The settlement of debt in 2024 is settlement of notes payable and convertible note issued in 2022. Financing expense is from 4 million warrants granted to a financial advisor and 69,007 shares of Series C Convertible Preferred stock issued to a Series A Preferred shareholder in 2025.
Net loss
The net loss for the year ended December 31, 2025, increased by approximately $30.0 million as compared to the year ended December 31, 2024 primarily due to the increase in operating expenses and other expense offset by the increase in revenue.
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Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was $36.8 and $6.9 million for the years ended December 31, 2025 and 2024, respectively. During fiscal year 2025, we completed a debt offering in February and an equity offering in September and October which generated net proceeds of approximately $3.7 million and $8.1 million, respectively.
Working capital
| December 31, | December 31, | |||||||||||
| 2025 | 2024 | Change | ||||||||||
| Current assets | $ | 7,415,426 | $ | 1,617,478 | $ | 5,797,948 | ||||||
| Current liabilities | $ | 2,169,626 | $ | 2,161,883 | $ | 7,743 | ||||||
| Working capital (deficiency) | $ | 5,245,800 | $ | (544,405 | ) | $ | 5,790,205 | |||||
As of December 31, 2025 and 2024, the current assets consisted of cash of $6.3 million and $775,000, respectively, inventory of $621,000 and $325,000, respectively, accounts receivable of $209,000 and $317,000, respectively, prepaid expenses and other current assets of $317,000 and $74,000, respectively, and deferred offering costs of $0 and $126,000, respectively.
As of December 31, 2025 and 2024, the current liabilities consisted of accounts payable and accrued liabilities of $316,000 and $187,000, respectively, due to related parties of $168,000 and $0, respectively, convertible notes net of discount of $219,000 and $196,000, respectively, convertible note – related party of $1.3 million and $577,000, respectively, current portion of financing loan of $30,000 and $97,000, respectively, derivative liability of $0 and $1.1 million, respectively, and current portion of operating lease liability of $148,000 and $50,000, respectively.
The increase in working capital in 2025 was primarily due to an increase in cash from equity and debt offering offset by an increase in convertible notes.
Cash Flows
For the years ended December 31, 2025 and 2024
| Years ended | ||||||||||||
| December 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Cash used in operating activities | $ | (5,868,915 | ) | $ | (1,937,651 | ) | $ | (3,931,264 | ) | |||
| Cash provided by (used in) investing activities | $ | (293,953 | ) | $ | – | $ | (293,953 | ) | ||||
| Cash provided by financing activities | $ | 11,656,326 | $ | 2,163,029 | $ | 9,493,297 | ||||||
| Net Change in cash | $ | 5,493,458 | $ | 225,378 | $ | 5,268,080 | ||||||
| 25 |
Operating Activities
We have not generated positive cash flows from operating activities.
For the year ended December 31, 2025, net cash flows used in operating activities consisted of a net loss of $36.8 million, reduced by stock-based compensation of $19.1 million, non-cash lease expenses of $161,000, amortization and depreciation of $329,000, bad debt expense of $346,000, amortization of debt discount of $2.4 million, loss on settlement of debt of $6.8 million, write-off of deferred offering costs of $197,000 and changes in derivative liability of $2.0 million, and increased by net changes in operating assets and liabilities of $464,000.
For the year ended December 31, 2024, net cash flows used in operating activities consisted of a net loss of $6.9 million, reduced by stock-based compensation of $3.1 million, non-cash lease expenses of $80,000, bad debt expense of $23,000, amortization and depreciation of $265,000, amortization of debt discount of $196,000, loss on settlement of debt of $909,000, and changes in derivative liability of $410,000, which were increased by net changes in operating assets and liabilities of $3,000.
Investing Activities
For the year ended December 31, 2025, the cash flows used in investing activities consisted of the purchase of property and equipment of $194,000 and acquisition of intangible assets of $100,000.
We did not use any funds for investing activities during the year ended December 31, 2024.
Financing Activities
For the year ended December 31, 2025, net cash provided by financing activities consisted of $8.3 million from the issuance of Series C Convertible Preferred Stock and warrants, $3.7 million from the issuance of convertible promissory notes and associated warrants, $71,000 deferred offering cost payment, repayment of a financing loan of $265,000 and repayments to related party of $25,000.
For the year ended December 31, 2024, net cash provided by financing activities consisted of $1.8 million in proceeds from the issuance of Series C Convertible Preferred Stock, $1.2 million from the issuance of convertible promissory notes and associated warrants in fourth quarter of 2024, $2,000 received from a related party, $126,000 deferred offering cost payment, repayment of a financing loan of $23,000, and $741,000 from a repayment of loan from a related party.
Contractual Obligations
Convertible notes
In first quarter 2025, we entered into eleven (11) subscription agreements for convertible notes ($2,075,000) and warrants (432,296 shares of common stock). The material terms of this convertible note indebtedness are, (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, either (x) divided by 2.40 or (y) a 30% discount to the sale price of its Common Stock pursuant to a registration statement filed with the SEC and listing of the Common Stock on national securities exchange; and (iv) warrant coverage for five years at the rate of 1.25 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
Subsequent to December 31, 2025 and through the date of this annual report, the note holders have converted all of their notes into shares of common stock.
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Convertible notes – related party
In February 2025, we entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. Our obligations under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, the related party could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns our intellectual property portfolio.
Financing loan
We had a financing loan for the purchase of vehicle in September 2025. The loan repayment is $2,021 per month for 60 months, beginning October 2025, with an interest rate of 11.33%.
We had a financing loan for the purchase of vehicle in September 2025. The loan repayment is $2,083 per month for 48 months, beginning October 2025, with an interest rate of 11.90%.
Lease Agreements
We have one lease classified as an operating lease for an office and warehouse purpose. The following table outlines maturities of our lease liabilities as of December 31, 2025:
| Year ending December 31, | ||||
| 2026 | $ | 195,412 | ||
| 2027 | 203,228 | |||
| 2028 | 211,357 | |||
| 2029 | 219,812 | |||
| Thereafter | 55,486 | |||
| 885,295 | ||||
| Less: Imputed interest | (120,084 | ) | ||
| Operating lease liabilities | $ | 765,211 | ||
Liquidity
We have incurred losses since inception and incurred a net loss of $36.8 million during the year ended December 31, 2025. However, in September 2025, we completed an equity offering which generated net proceeds of $5.4 million. Additionally, in October 2025, we completed an equity offering which generated net proceeds of $2.7 million.
Our existing cash resources are expected to provide sufficient funds to carry out our planned operations through fiscal year 2026. To more rapidly grow, our revenue and continue operations beyond such time frame, we may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. We have had multiple conversations with banks who are willing to assist us with additional capital raises if necessary, which helps to minimize the risk. There can be no assurance that we will be successful in acquiring additional funding, that our projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
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Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. In consultation with its legal counsel as appropriate, our management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluate the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is likely, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which require management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We believe our most critical accounting estimates relate to the following:
| · | Incremental borrowing rate for Right of Use Assets | |
| · | Fair Value of Convertible Notes | |
| · | Fair Value of Warrant to Purchase Common Stock |
While our estimates and assumptions are based on our knowledge of current events and on actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company’s significant accounting policies, refer to Note 2 of Notes to Consolidated Financial Statements.
Incremental borrowing rate for Right of Use Assets
As the Company’s operating leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate. The assessment of the Company’s incremental borrowing rate involves judgment regarding the cost of borrowing funds on a collateralized basis over a similar term and in a similar economic environment.
Fair Value of Convertible Notes
The Company determined that the conversion feature, embedded in convertible notes, met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity’s Own Stock and therefore bifurcated the embedded conversion option once the note become convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note.
For the conversion feature classified as a liability, the Company uses a Binomial Lattice valuation model to value the derivative instrument at inception and on subsequent valuation dates. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
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The underlying assumptions of Binomial Lattice model are as follows:
| 1. | The short-term interest rates, including risk-free rate, are known and remain constant over time. | |
| 2. | The absence of any arbitrage opportunities is assumed. | |
| 3. | The stock price follows a continuous-time random walk, with the rate of variance proportional to the square of the stock price. | |
| 4. | The distribution of possible stock prices at the end of any given finite interval is assumed to be lognormal. | |
| 5. | The variance of the rate of return on the stock is constant. | |
| 6. | No commissions or transaction costs are incurred when buying or selling the stock or option. | |
| 7. | The option’s early exercise value is evaluated at each node of the lattice. | |
| 8. | If applicable, the tax rate remains consistent for all transactions and market participants. |
Fair Value of Warrant to Purchase Common Stock
The Company has issued warrants to investors in our debt offerings.
We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815. In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative.
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
The warrants are valued using a Black Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
Off-balance sheet arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data.
Reference is made to pages F-1 through F-31 comprising a portion of this Annual Report on Form 10-K, which are incorporated by reference under this Item.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
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Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Controls Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. With the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) 2013 Framework in Internal Control – Integrated Framework. Based upon such evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2025. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following material weaknesses as of December 31, 2025:
| 1. | Inadequate Segregation of Duties. Due to the limited size of our accounting and finance department, we do not maintain adequate segregation of duties across key financial reporting processes, including cash disbursements, revenue recognition, journal entry preparation and review, and financial statement close procedures. Specifically, there was the ability to initiate, authorize, and record transactions without independent review or approval. This deficiency creates a risk that material misstatements to our consolidated financial statements — particularly within cash, accounts receivable, revenue, and general and administrative expenses — could occur and not be detected in a timely manner. | |
| 2. | Insufficient Accounting Policies and Procedures. We have not established and maintained sufficiently comprehensive written accounting policies and procedures to ensure the consistent and accurate application of U.S. GAAP and compliance with SEC reporting requirements. This deficiency creates a risk that transactions may be recorded inconsistently or incorrectly, resulting in material misstatements to our consolidated financial statements. |
These material weaknesses did not result in any identified misstatements to our consolidated financial statements for the year ended December 31, 2025. However, each of these material weaknesses creates a reasonable possibility that a material misstatement to our annual or interim consolidated financial statements could occur and not be prevented or detected on a timely basis.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2026: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The successful implementation of these remediation measures is substantially dependent upon our ability to secure additional financing. There can be no assurance that these remediation efforts will be completed during the fiscal year ended December 31, 2026, or that the measures, once implemented, will be sufficient to remediate the identified material weaknesses or prevent future material weaknesses from occurring.
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Inherent Limitations in the Effectiveness of Controls
Management recognizes that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected.
Attestation Report of the Independent Registered Public Accounting Firm
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.
Changes in Internal Controls over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
(a) None.
(b) None of our directors or officers, as defined
in Rule 16a-1(f) under the Exchange Act
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
The following table sets forth the names, ages, and positions of the Company’s executive officers and directors. Executive officers are elected annually by the Board of Directors. Each executive officer holds his office until he resigns, is removed by the Board of Directors, or his successor is elected and qualified. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.
| Name | Age | Title | ||
| Theodore Ralston | 63 | Chairman of the Board | ||
| Wesley Bolsen | 48 | Chief Executive Officer, Director | ||
| Nanuk Warman | 53 | Secretary and Chief Financial Officer | ||
| Andrew Hotsko | 36 | Chief Operating Officer | ||
| Stephen Conboy | 71 | Chief Technology Officer | ||
| Anthony Newton | 56 | General Counsel | ||
| Jeffery Pomerantz | 79 | Director | ||
| Lorenzo Calinawan | 38 | Director | ||
| Craig Huff | 61 | Director |
Set forth below is a description of the background and business experience of our directors and executive officers.
Professional Experience
Executive Officers
Wesley Bolsen – Chief Executive Officer and Director
Wesley Bolsen was appointed as the Chief Executive Officer and as a member of the Board of Directors effective as of September 15, 2025. Mr. Bolsen obtained a degree in electrical engineering with a minor in economics from the Rose-Hulman Institute of Technology, and thereafter obtained a masters’ degree in business administration from Stanford’s Graduate School of Business. In 2018, Mr. Bolsen was the founding executive and chief executive officer of LaderaTech Inc., which sold in 2020 to a public company at a time when LaderaTech Inc. distributed the world’s leading wildfire prevention and protection product. Following the transaction involving LaderaTech Inc., Mr. Bolsen was employed by Perimeter Solutions, Inc. to lead global wildfire prevention and protection until September 2022. He became an advisor to startup executives until April of 2024, when Mr. Bolsen was named chief executive officer of Imidex Inc., an FDA cleared AI solution for the early detection of lung cancer, which sold in April of 2025 to a public healthcare company.
We believe that Mr. Bolsen is qualified to serve as a member of our Board of Directors due to his past executive leadership and company board of director roles.
Nanuk Warman – Secretary and Chief Financial Officer
Nanuk Warman, CPA, CFA, was appointed Chief Financial Officer and Secretary of our Company effective on April 1, 2025. Prior to his appointment Mr. Warman spent four years working with the Company as an independent consultant and has in-depth knowledge of the Company’s business and financial history. Mr. Warman has spent the last 20 years working in public company finance, advising clients on financial reporting, SOX compliance, and SEC filing requirements. For the past 10 years, Mr. Warman has served as Managing Partner of PubCo Reporting Solutions, Inc., a boutique accounting and reporting firm primarily focused on helping emerging companies on accounting and compliance matters. Mr. Warman has extensive experience with securities offerings, mergers and acquisitions, securities exchange listing compliance. He is well-versed in GAAP, with particular expertise in complex equity structures, debt financing, reverse acquisitions, and transactional accounting. Mr. Warman is a CFA® Charterholder and a member of the Chartered Professional Accountants of British Columbia.
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Andrew Hotsko – Chief Operating Officer
Andrew Hotsko has served as Chief Operating Officer of our Company since July 2025, where he leads day-to-day operations and growth initiatives across the Company’s platform. Prior to joining the Company, he served as Regional President of an Alpine Investors-backed services business, overseeing operational performance and expansion across multiple markets from 2023 to 2025. Earlier in his career, from 2021 to 2023, Mr. Hotsko worked in technology investment banking at Bank of America, supporting strategic and financing transactions for growth-stage companies. He previously served as an infantry officer in the U.S. Marine Corps and holds a Bachelor of Science in Economics from the United States Naval Academy and an MBA from The Wharton School of the University of Pennsylvania.
Stephen Conboy – Chief Technology Officer
Stephen Conboy was appointed as Chief Technology Officer effective March 1, 2025. Mr. Conboy is the founder of MFB CA. Previously from the building and lumber industries, he has pursued fire science for the last 16 years to invent CitroTech. Mr. Conboy has worked in the lumber and building industry for more than 45 years, starting as a union carpenter in New York. He was nominated and assigned to the District Export Council Division of the U.S. Department of Trade and Commerce and the International Trade Association. As a respected authority for carbon sequestration, he has spoken at the United Nations and World Trade Conference. Mr. Conboy helped draft a Carbon Tax Credit Bill for fire treated lumber and portions of the Wildfire Defense Act to reward property owners who implement proactive wildfire defense programs.
Anthony Newton – General Counsel
Anthony Newton was appointed as general counsel to the Company effective April 1, 2025. Mr. Newton has practiced law for 25 years and is a member of the State Bar of Texas. He has a BBA from Texas A&M University, a J.D. from the University of Houston Law Center, and an LL.M in Taxation from Georgetown University Law Center. Mr. Newton has focused his practice on transactions and infrastructure projects, primarily general corporate, mergers and acquisitions, commercial agreements, finance and capital markets, primarily for middle-market energy and oil and gas companies. Mr. Newton has 16 years of big-firm experience, including as equity partner with multi-national law firms such as DLA Piper. In addition, Mr. Newton has two years of experience as General Counsel with West Edge Energy LLC, a private-equity backed, mid-stream oil and gas company, during which time he was the only in-house attorney and responsible for establishing and managing the legal department of the company. Mr. Newton does not have any experience in the fire retardant or fire suppression industry.
Non-Employee Directors
Theodore Ralston – Chairman of the Board
Theodore Ralston has served as a member of the Board of Directors since March 31, 2025 and as Chairman of the Board since October 1, 2025. Mr. Ralston previously served as the Company’s Chief Executive Officer from March 31, 2025 to October 1, 2025. Mr. Ralston obtained an Electronics degree from IT&T in 1984. He has 34 years of independent business, sales and investment experience. For the past five years, Mr. Ralston has managed investments through his investment vehicle, TC Special Investments, LLC. In addition, Mr. Ralston has acted as a consultant, and is currently an executive officer and director to the Company. Mr. Ralston does not have any experience in the fire retardant or fire suppression industry.
We believe that Mr. Ralston is qualified to serve as a member of our Board of Directors due to his leadership and management expertise.
Jeffery Pomerantz – Director
On April 25, 2022, the Board of Directors appointed Jeffery Pomerantz as a member of the Board of Directors. Mr. Pomerantz has over 50 years of experience in Consulting, Promotional Marketing, Manufacturing, Sales, and Distribution. Mr. Pomerantz has provided invaluable assistance with many IPOs and corporate up-listings; additionally, he has a variety of international connections to resources and networks that create product distribution channels throughout the world. From 2019 to the present, Mr. Pomerantz has been in the Promotional Products Industry, in which he has owned and operated a business supervising manufacturing (including China), sales and distribution of hundreds of products. Mr. Pomerantz received a degree in accounting in 1967 from Temple University. Mr. Pomerantz does not have any experience in the fire retardant or fire suppression industry.
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We believe that Mr. Pomerantz is qualified to serve as a member of our Board of Directors due to his ability to strengthen and improve operations of the companies of which he has been a part, and his experience in domestic and international manufacturing, sales and distribution.
Lorenzo Calinawan – Director
On October 15, 2025, the Board of Directors appointed Lorenzo Calinawan as a member of the Board of Directors. Mr. Calinawan is the co-founder and managing director of Chemlink Partners, a boutique M&A advisory firm focused exclusively on the global chemicals, specialty materials and adjacent industrial sectors. Over his career, Mr. Calinawan has advised on more than $90 billion of completed transactions, including landmark deals, transformative carve-outs, platform builds and cross-border transactions for leading strategics and private equity sponsors. Prior to founding Chemlink, he held senior investment banking roles at Citibank and Piper Sandler and also served as an investment professional at SK Capital Partners, where he focused on building and growing specialty chemicals and materials platforms. Mr. Calinawan brings deep sector knowledge, a global network and proven transaction execution and investment expertise to the company’s board.
We believe that Mr. Calinawan is qualified to serve as a member of our Board of Directors due to his expertise in the chemicals industry.
Craig Huff – Director
On October 15, 2025, the Board of Directors appointed Craig Huff as a member of the Board of Directors. Mr. Huff is the founder and managing member of BoltRock Holdings, LLC, a family investment firm and significant shareholder in the Company. Prior to founding BoltRock, Mr. Huff co-founded and served as co-chief executive officer of Reservoir Capital, a multi-billion dollar opportunistic investment firm, for over two decades. He also served in the U.S. Navy as a nuclear engineer and nuclear submarine officer. Mr. Huff has extensive board experience in both private and public companies across a wide range of sectors, including the insurance industry. He holds a bachelor’s degree in engineering physics, magna cum laude, from Abilene Christian University, and an MBA with high distinction from Harvard Business School where he was recognized as a Baker Scholar.
We believe that Mr. Huff is qualified to serve as a member of our Board of Directors due to his decades of investment and business management expertise.
Family Relationships
Mr. Theodore Ralston has a family relationship with Joshua Ralston, his son, who previously served in the role of Chief Executive Officer of the Company. There are no other familial relationships among any of our directors or officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our executive officers or directors were involved in any legal proceedings described in Item 401(f) of Regulation S-K in the past ten years.
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms furnished to us and written representations by our officers and directors regarding their compliance with applicable reporting requirements under Section 16(a) of the Exchange Act, we believe that all Section 16(a) filing requirements for our executive officers, directors and 10% stockholders were met during the year ended December 31, 2025, except as follows: 737 transactions reportable on Form 4 for Theodore Ralston, which were reported late on a Form 5 filed on February 17, 2026; a Form 3 filing for Wesley Bolsen that was due on September 25, 2025 and was filed on February 17, 2026, and three transactions reportable on Form 4 for Wesley Bolsen that were reported late on a Form 5 filed on February 17, 2026; a Form 3 filing for Nanuk Warman that was due on April 11, 2025 and was filed on April 16, 2025; a Form 3 filing for Andrew Hotsko that was due on July 31, 2025 and was filed on February 24, 2026, and three transactions reportable on Form 4 for Andrew Hotsko that were reported late on a Form 5 filed on February 24, 2026; four transactions reportable on Form 4 for Stephen Conboy that were reported late on a Form 5 filed on February 18, 2026; a Form 3 filing for Anthony Newton that was due on April 11, 2025 and was filed on March 18, 2026, and one transaction reportable on Form 4 for Anthony Newton that was reported late on a Form 5 filed on March 18, 2026; a Form 3 filing for Jeffery Pomerantz that was due on April 11, 2025 and was filed on March 3, 2026; a Form 3 filing for Lorenzo Calinawan that was due on October 27, 2025 and was filed on March 2, 2026; a Form 3 filing for Craig Huff that was due on October 27, 2025 and was filed on February 17, 2026; two transactions reportable on Form 4 for Joshua Ralston that were reported late on a Form 5 filed on March 16, 2026; and a Form 3 filing for John Costa that was due on May 4, 2022 but was not filed, as well as one transaction reportable on Form 4 for John Costa that was not filed.
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Code of Ethics
The Company adopted a code of business conduct and ethics that applies to our principal executive officer, principal financial officer and principal accounting officer or controller (the “Code”). The full text of the Code is available on our website at www.citrotech.com. We will provide to any person without charge, upon request, a copy of the Code. Such requests should be made in writing to the following address: c/o CitroTech Inc., 6400 S. Fiddlers Green Cir., Suite 300, Greenwood Village, Colorado 80111. We intend to satisfy the SEC’s requirements regarding amendments to, or waivers from, the Code by posting such information on our website.
Procedures for Stockholders to Recommend Director Nominees
There have been no material changes to the procedures by which security holders may recommend nominees to our Board.
Audit Committee Information
The Company’s Board has a standing Audit Committee. Our Audit Committee is composed of Lorenzo Calinawan and Jeffery Pomerantz, with Lorenzo Calinawan serving as chair of the committee. Our Board has determined that each of these directors is “independent” as defined by the rules of the SEC and the NYSE American. The Board has determined that Mr. Calinawan is an “audit committee financial expert” as that term is defined in Item 407(d)(5)(ii) of Regulation S-K and applicable listing standards of NYSE American.
Insider Trading Policy
The Company has an insider trading policy (the “Insider
Trading Policy”) which prohibits our employees, officers and directors from buying or selling the Company’s securities while
the individuals are aware of
Item 11. Executive Compensation.
Summary Compensation Table
The following discussion contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. The actual amount and form of compensation and the compensation policies and practices that we adopt in the future may differ materially from currently planned programs as summarized in this discussion.
We are currently considered a “smaller reporting company” within the meaning of the Securities Act for purposes of the SEC’s executive compensation disclosure rules. Accordingly, we are required to provide a Summary Compensation Table, as well as limited narrative disclosures regarding executive compensation for our last two completed fiscal years and an Outstanding Equity Awards at Fiscal Year End Table for our last completed fiscal year. These reporting obligations extend only to “named executive officers.” Our “named executive officers” include (i) all individuals serving as our principal executive officer during the fiscal year ended December 31, 2025 and (ii) our two most highly compensated executive officers, as defined in Exchange Act Rule 3b-7, other than our principal executive officer, who were serving as executive officers at the end of the fiscal year ended December 31, 2025, whose salary and bonus for services rendered in all capacities exceeded $100,000 during the fiscal year ended December 31, 2025.
This section discusses material components of the executive compensation programs for our “named executive officers” who are named in the “Summary Compensation Table” below. In 2025, our “named executive officers” were (i) Wesley Bolsen, our Chief Executive Officer; (ii) Joshua Ralston, our former Chief Executive Officer, (iii) Theodore Ralston, our former Chief Executive Officer and our Chairman of the Board of Directors, (iv) Andrew Hotsko, our Chief Operating Officer, and (v) Anthony Newton, our General Counsel.
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The following table summarizes the compensation of our named executive officers during the fiscal years ended December 31, 2025 and 2024.
| Name and Principal Position | Year Ended December 31, | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2) | All Other Compensation ($) | Total ($) | ||||||||||||
| Wesley Bolsen | 2025 | 89,999 | – | 3,278,000 | – | 3,367,999 | ||||||||||||
| Chief Executive Officer | 2024 | – | – | – | – | – | ||||||||||||
| Theodore Ralston | 2025 | – | – | 1,932,000 | – | 1,932,000 | ||||||||||||
| Chairman of the Board | 2024 | – | – | – | – | – | ||||||||||||
| Andrew Hotsko | 2025 | 100,962 | – | 3,539,970 | – | 3,640,932 | ||||||||||||
| Chief Operating Officer | 2024 | – | – | – | – | – | ||||||||||||
| Anthony Newton | 2025 | 275,000 | – | 550,000 | – | 825,000 | ||||||||||||
| General Counsel | 2024 | – | – | – | – | – | ||||||||||||
| Joshua Ralston | 2025 | 290,000 | – | – | – | 290,000 | ||||||||||||
| Former President, Secretary, CEO, CFO and Chairman | 2024 | 75,000 | – | – | – | 75,000 |
| (1) | The amounts reported in this column represent the aggregate grant date fair value of restricted stock units awarded, computed in accordance with FASB ASC Topic 718. | |
| (2) | The material terms of the restricted stock units granted in 2025 are as follows: |
| Name | Grant Date | Stock Award (#) | Vesting Date | ||||
| Wesley Bolsen | September 22, 2025 | 900,000(1) | (1) | ||||
| Theodore Ralston | April 30, 2025 | 280,000(2) | (2) | ||||
| Andrew Hotsko | June 27, 2025 | 450,000(3) | (3) | ||||
| Anthony Newton | – | – | – | ||||
| Joshua Ralston | – | – | – |
| ____________ |
| 1. | Consists of: (i) 300,000 restricted stock units (RSUs) granted on October 1, 2025 (the “Effective Date”), with one-fourth of the RSUs vesting on the first anniversary of the Effective Date and the remaining three-fourths vesting in equal monthly installments over the following 36 months; (ii) 300,000 performance stock units (PSUs), with 75,000 PSUs vesting upon the Company’s market capitalization reaching and sustaining, for 30 consecutive days, thresholds of $150,000,000, $200,000,000, $250,000,000 and $300,000,000, respectively; and (iii) 300,000 additional RSUs granted to the employee, which shall vest, provided the employee’s employment has not terminated for any reason, upon the achievement of annual key performance indicators mutually agreed upon by the Company and the employee. | |
| 2. | Consists of 280,000 shares of restricted stock, with 70,000 shares of the Company’s Series C Convertible Preferred Stock vesting when the Company’s market capitalization reaches and sustains, for 30 consecutive days, thresholds of $120,000,000,$150,000,000, $200,000,000 and $250,000,000, respectively | |
| 3. | Consists of 150,000 shares of restricted stock granted on June 27, 2025 (the “Effective Date”), with one-fourth of the shares vesting each anniversary of the Effective Date; (ii) 150,000 shares of restricted stock, with 37,500 shares of the Company’s Common Stock vesting when the Company’s market capitalization reaches and sustains, for 30 consecutive days, thresholds of $150,000,000, $200,000,000, $250,000,000 and $300,000,000, respectively; and (iii) 300,000 additional shares of restricted stock granted to the employee, which shall vest, provided the employee’s employment has not terminated for any reason, upon the achievement of annual key performance indicators mutually agreed upon by the Company and the employee. |
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Executive Compensation Arrangements
Wesley Bolsen
On September 22, 2025, the Company entered into an employment agreement with Wesley J. Bolsen, pursuant to which Mr. Bolsen serves as the Company’s Chief Executive Officer, effective October 1, 2025. The employment agreement has a term commencing October 1, 2025 and ending September 30, 2029, unless earlier terminated in accordance with its terms.
Under the employment agreement, Mr. Bolsen is entitled to an annual base salary of $300,000, payable in accordance with the Company’s standard payroll practices, and a signing bonus of 6,250 shares of the Company’s Series C Convertible Preferred Stock, issued as soon as reasonably practicable following execution of the agreement. Mr. Bolsen is also eligible to receive an annual cash performance bonus with a target of $200,000, with the opportunity to earn up to two times the target amount based on the achievement of mutually agreed key performance indicators (“KPIs”). Mr. Bolsen is eligible to participate in the Company’s employee benefit plans made generally available to other senior executives.
In addition, pursuant to Exhibit A to the employment agreement, Mr. Bolsen is eligible to receive equity-based incentive compensation in the form of restricted stock units (“RSUs”) of the Company’s common stock, which may be earned based on a combination of time-based vesting, achievement of KPIs, and the attainment of specified market capitalization thresholds. The equity awards include up to an aggregate of 900,000 RSUs, consisting of (i) time-based RSUs that vest over a four-year period, (ii) KPI-based RSUs that vest annually upon achievement of mutually agreed performance objectives, and (iii) market capitalization-based RSUs that vest upon the Company achieving and sustaining specified fully diluted market capitalization targets for 30 consecutive days. The employment agreement further provides for accelerated vesting of any unvested RSUs upon a change in control, as defined therein.
The employment agreement may be terminated by the Company for cause, including for material breach, misconduct, dishonesty, or failure to perform duties, subject in certain cases to notice and cure rights, or without cause upon written notice. Mr. Bolsen may also terminate his employment for any reason. Upon termination by the Company without cause, Mr. Bolsen is entitled to continued base salary for up to twelve months or the remainder of the then-existing term, if shorter, and payment of any earned but unpaid bonus amounts, subject to the terms of the agreement. Upon termination for cause or voluntary resignation, Mr. Bolsen is generally entitled only to accrued compensation and earned bonuses, if any.
Mr. Bolsen is subject to customary confidentiality, non-competition, non-solicitation, and intellectual property assignment provisions during and following the term of employment. The employment agreement also provides for reimbursement of business expenses, directors’ and officers’ insurance coverage, and other customary executive employment terms.
Theodore Ralston – Consulting Agreement
On April 1, 2025, the Company entered into a consulting agreement with Theodore Ralston, pursuant to which Mr. Ralston provides outside services to the Company at the direction of the Company’s Board of Directors. The consulting agreement has an initial term of twelve (12) months, commencing April 1, 2025 (the “Initial Term”). Following the Initial Term, the agreement automatically renews for successive six-month periods unless either party provides at least 30 days’ written notice of non-renewal.
Mr. Ralston is eligible to receive up to an aggregate of 280,000 shares of the Company’s Series C Convertible Preferred Stock, payable in four separate tranches of 70,000 shares each, upon the Company achieving and sustaining for 30 consecutive days specified market capitalization thresholds of more than $120 million, $150 million, $200 million, and $250 million, respectively. So long as Mr. Ralston provides services to the Company for the full Initial Term, Mr. Ralston’s right to receive the foregoing share awards will vest, regardless of whether the consulting agreement is subsequently terminated.
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If the consulting agreement is terminated by the Company within six (6) months following Mr. Ralston: (i) no longer owning Series A Preferred Stock, or (ii) owning (or having the right to convert to) on a fully diluted basis less than five percent (5%) of the common stock of the Company, then within 30 days thereafter the Company shall remit to Mr. Ralston or his designee the amount of 100,000 shares of Series C Convertible Preferred stock in book entry form as soon as reasonably possible for the transfer agent to make the book entry on behalf of Consultant or his designee.
The consulting agreement may be terminated immediately by written notice to Mr. Ralston upon the occurrence of any of the following: (i) a material breach of the agreement that remains uncured following 30 days’ notice thereof; (ii) making disparaging statements (whether written or verbal) about the Company, or its subsidiaries, affiliates, officers, employees, or Board of Directors; or (iii) engaging in any activity that reflects negatively on the Company’s reputation or standing in its business community. Mr. Ralston is subject to customary confidentiality obligations during and after the term of the agreement and must return Company property and confidential materials upon termination.
Andrew Hotsko – Employment Agreement
On June 27, 2025, the Company entered into an employment agreement with Andrew Hotsko, pursuant to which Mr. Hotsko serves as the Company’s Chief Operating Officer, effective July 21, 2025. The employment agreement has a term commencing July 21, 2025 and ending July 21, 2029, unless earlier terminated in accordance with its terms.
Under the employment agreement, Mr. Hotsko is entitled to an annual base salary of $250,000, payable in accordance with the Company’s standard payroll practices. Mr. Hotsko is also eligible to receive an annual cash performance bonus of up to $150,000, based on the achievement of mutually agreed key performance indicators (“KPIs”), with the bonus prorated for calendar year 2025 and subject to adjustment in subsequent years at the Company’s discretion. Mr. Hotsko is eligible to participate in the Company’s employee benefit plans made generally available to other senior executives.
In addition, pursuant to Exhibit A to the employment agreement, Mr. Hotsko is eligible to receive equity-based incentive compensation in the form of restricted shares of the Company’s common stock, which may be earned based on a combination of time-based vesting, achievement of KPIs, and the attainment of specified market capitalization thresholds. The equity incentives provide for up to an aggregate of 450,000 shares of common stock, consisting of (i) time-based restricted shares that vest annually over a four-year period, (ii) KPI-based shares that may be issued annually upon achievement of mutually agreed performance objectives, and (iii) market capitalization-based shares that may be issued upon the Company achieving and sustaining specified fully diluted market capitalization thresholds for 30 consecutive days. Unvested equity awards are generally forfeited upon termination for cause or voluntary resignation.
The employment agreement may be terminated by the Company for cause, including for material breach, misconduct, failure to perform duties, disability, or death, or without cause upon written notice. Mr. Hotsko may also terminate his employment for any reason. Upon termination by the Company without cause, Mr. Hotsko is entitled to continued base salary for up to six months or the remainder of the then-existing term, if shorter, and payment of any earned but unpaid bonus amounts, subject to the terms of the agreement. Upon termination for cause or voluntary resignation, Mr. Hotsko is generally entitled only to accrued compensation and earned bonuses, if any.
Mr. Hotsko is subject to customary confidentiality, non-competition, non-solicitation, and intellectual property assignment provisions during and following the term of employment. The employment agreement also provides for reimbursement of business expenses and other customary executive employment terms.
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Anthony Newton – Consulting Agreement
On April 1, 2025, the Company entered into a consulting agreement with Anthony Newton, pursuant to which Mr. Newton provides outside legal counsel services to the Company. The consulting agreement has an initial term of twelve (12) months, commencing April 1, 2025, and automatically renews for successive six-month periods unless either party provides at least 30 days’ written notice of non-renewal.
Under the consulting agreement, Mr. Newton is entitled to monthly cash compensation of $27,500. Mr. Newton is also eligible to participate in any executive compensation plan adopted by the Company from time to time, with any such awards subject to the discretion of the Company’s Board of Directors. The Company is required to reimburse Mr. Newton for pre-approved, documented business expenses incurred on behalf of the Company.
If the consulting agreement is terminated by the Company within six (6) months following Theodore Ralston (i) no longer serving as Chief Executive Officer of the Company, (ii) no longer owning Series A Preferred Stock, or (iii) owning (or having the right to convert into), on a fully diluted basis, less than five percent (5%) of the Company’s common stock, the Company is required to pay Mr. Newton an amount equal to twelve (12) months of consulting compensation within 30 days following such termination.
The consulting agreement may be terminated immediately by written notice to Mr. Newton upon the occurrence of any of the following: (i) a material breach of the agreement that remains uncured following 30 days’ notice thereof; (ii) making disparaging statements (whether written or verbal) about the Company, or its subsidiaries, affiliates, officers, employees, or Board of Directors; or (iii) engaging in any activity that reflects negatively on the Company’s reputation or standing in its business community. Mr. Newton is subject to customary confidentiality obligations during and following the term of the consulting agreement and is required to return Company property and confidential materials upon termination. The agreement provides that Mr. Newton serves as an independent contractor, not an employee of the Company.
Joshua Ralston – Employment Agreement
On March 1, 2025, the Company entered into an employment agreement with Joshua Ralston, pursuant to which Mr. Ralston initially served as President and Chief Executive Officer through April 1, 2025, and thereafter served as Vice President of Operations, reporting to the Company’s Chief Executive Officer. The employment agreement had an initial term of three (3) years, commencing March 1, 2025, and would automatically renew for successive one-year periods unless either party provided at least 90 days’ written notice of non-renewal.
Under the employment agreement, Mr. Ralston was entitled to a monthly salary of $16,500, payable in accordance with the Company’s customary payroll practices. Mr. Ralston was eligible to participate in the Company’s employee benefit plans made generally available to other employees and executives, including health and accident insurance and other customary benefits, subject to the terms of such plans.
Mr. Ralston signed a Separation Agreement on December 31, 2025, that terminated his employment with the company. He received one month of severance pay and agreed not to sell any unrestricted shares for 90 days following his separation.
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Outstanding Equity Awards At Fiscal Year-End
The following table lists all of the outstanding equity awards held on December 31, 2025 by each of the Company’s named executive officers.
| Stock Awards | ||||||||||||
| Number of shares or units of stock that have not vested | Market value of shares of units of stock that have not vested | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested | |||||||||
| Name | (#) | ($)(1) | (#) | ($) | ||||||||
| Wesley Bolsen | 900,000 | (1) | 7,272,000 | – | – | |||||||
| Theodore Ralston | 280,000 | (2) | 7,541,333 | – | – | |||||||
| Andrew Hotsko | 450,000 | (3) | 3,636,000 | – | – | |||||||
| Anthony Newton | – | – | – | – | ||||||||
| Joshua Ralston | – | – | – | – | ||||||||
| (1) | Consists of: (i) 300,000 restricted stock units (RSUs) granted on October 1, 2025 (the “Effective Date”), with one-fourth of the RSUs vesting on the first anniversary of the Effective Date and the remaining three-fourths vesting in equal monthly installments over the following 36 months; (ii) 300,000 performance stock units (PSUs), with 75,000 PSUs vesting upon the Company’s market capitalization reaching and sustaining, for 30 consecutive days, thresholds of $150,000,000, $200,000,000, $250,000,000 and $300,000,000, respectively; and (iii) 300,000 additional RSUs granted to the employee, which shall vest, provided the employee’s employment has not terminated for any reason, upon the achievement of annual key performance indicators mutually agreed upon by the Company and the employee. | |
| (2) | Consists of 280,000 shares of restricted stock, with 70,000 shares of the Company’s Series C Convertible Preferred Stock vesting when the Company’s market capitalization reaches and sustains, for 30 consecutive days, thresholds of $120,000,000,$150,000,000, $200,000,000 and $250,000,000, respectively. | |
| (3) | Consists of 150,000 shares of restricted stock granted on June 27, 2025 (the “Effective Date”), with one-fourth of the shares vesting each anniversary of the Effective Date; (ii) 150,000 shares of restricted stock, with 37,500 shares of the Company’s Common Stock vesting when the Company’s market capitalization reaches and sustains, for 30 consecutive days, thresholds of $150,000,000, $200,000,000, $250,000,000 and $300,000,000, respectively; and (iii) 300,000 additional shares of restricted stock granted to the employee, which shall vest, provided the employee’s employment has not terminated for any reason, upon the achievement of annual key performance indicators mutually agreed upon by the Company and the employee. |
Equity Compensation Plan Information
On March 16, 2026, a majority of the voting stockholders and the Board of Directors of the Company approved the adoption of the CitroTech Inc. 2026 Equity and Incentive Plan (the “Plan”). The following is a brief summary of the Plan.
Types of Awards; Shares Available for Awards; Share Counting Rules
The Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Code, nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), stock bonus awards and performance compensation awards, as described below (collectively, “awards”).
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Awards (other than substitute awards granted in connection with a corporate transaction) may be made under the Plan for up to 1,000,000 shares of common stock, all of which may be issued as incentive stock options.
In addition, in no event shall the fair market value of awards made under the Plan to any one non-employee director of the Company or its affiliates exceed $100,000, in the aggregate, in any one fiscal year.
Shares covered by awards under the Plan that expire or are terminated, surrendered, or cancelled without having been fully exercised or are forfeited, in whole or in part, or that result in any shares not being issued (including as a result of an award being settled in cash rather than stock) will be added back to the shares reserved for issuance and again be available for the grant of awards under the Plan (subject, in the case of incentive stock options, to any limitations under the Code).
Shares of common stock that are delivered (by actual delivery, attestation, or net exercise) to the Company by a participant to purchase shares of common stock upon exercise of an award or to satisfy tax withholding obligations (including shares retained from the award creating the tax obligation) will be added back to the shares reserved for issuance and again be available for the future grant of awards under the Plan.
In connection with a merger or consolidation of an entity with the Company or the Company’s acquisition of property or stock of an entity, the Plan Committee (as defined below) may grant awards under the Plan in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof on such terms as the Plan Committee determines appropriate in the circumstances, notwithstanding any limitation on awards contained in the Plan. No such substitute awards shall count against the Share Reserve, except as required by reason of Section 422 and related provisions of the Code.
Descriptions of Awards
Options. A participant who is awarded an option receives the right to purchase a specified number of shares of common stock at a specified exercise price and subject to the other terms and conditions that are specified in connection with the award agreement. An option that is not designated by the Plan Committee and/or does not qualify as an “incentive stock option” is a “nonqualified stock option.” Except with respect to substitute awards granted in connection with a corporate transaction, options may not be granted at an exercise price that is less than 100% of the fair market value of a share of common stock on the date of grant. If the Plan Committee approves the grant of an option with an exercise price to be determined on a future date, the exercise price may not be less than 100% of the fair market value of the common stock on that future date. Under present law, incentive stock options may not be granted at an exercise price less than 110% of the fair market value in the case of stock options granted to participants who hold more than 10% of the total combined voting power of all classes of the Company’s stock or the stock of any parent or any of its subsidiaries. Under the terms of the Plan, options may not be granted for a term in excess of ten years (and, under present law, five years in the case of incentive stock options granted to participants who hold greater than 10% of the total combined voting power of all classes of the Company’s stock or stock of any parent or any of its subsidiaries).
The Plan permits participants to pay the exercise price of options using one or more of the following manners of payment: (i) in cash, check, cash equivalent and/or common stock valued at the fair market value at the time the option is exercised (including, pursuant to procedures approved by the Plan Committee, by means of attestation of ownership of a sufficient number of shares of common stock in lieu of actual delivery of such shares to the company); provided that such common stock are not subject to any pledge or other security interest and are mature shares; and (ii) by such other method as the Plan Committee may permit in accordance with applicable law, in its sole discretion, on a case by case basis, including without limitation: (A) in other property having a fair market value on the date of exercise equal to the exercise price; (B) if there is a public market for the common stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the company is delivered a copy of irrevocable instructions to a stockbroker to sell the common stock otherwise deliverable upon the exercise of the option and to deliver promptly to the company an amount equal to the exercise price; or (C) by a “net exercise” method whereby the company withholds from the delivery of the common stock for which the option was exercised that number of common stock having a fair market value equal to the aggregate exercise price for the common stock for which the option was exercised.
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Stock Appreciation Rights (“SARs”). A participant who is awarded a SAR receives, upon exercise, a number of shares of common stock, or cash (or a combination of shares of common stock and cash) determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of common stock over the strike price. The Plan provides that the strike price of a SAR may not be less than 100% of the fair market value of a share of common stock on the date the SAR is granted (provided, however, that if the Plan Committee approves the grant of a SAR effective as of a future date, the strike price shall not be less than 100% of the fair market value on such future date) and that SARs may not be granted with a term in excess of 10 years.
Limitation on Repricing of Options or SARs. With respect to options and SARs, unless such action is approved by stockholders or otherwise permitted under the terms of the Plan in connection with certain changes in capitalization and reorganization events, the Company may not (i) amend any outstanding option or SAR granted under the Plan to provide an exercise price or strike price per share that is lower than the then-current exercise price or strike price per share of such outstanding option or SAR, (ii) cancel any outstanding option or SAR where the fair market value of the shares of the Company underlying such option or SAR is less than its exercise price or strike price and replace it with a new option or SAR, another award or cash, or (iii) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the applicable securities exchange or inter-dealer quotation system on which the shares of the Company’s common stock are listed or quoted.
Restricted Stock Awards. A participant who is granted a restricted stock award is entitled to acquire shares of common stock, subject to the Company’s right to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) in the event that the conditions specified in the applicable award are not satisfied prior to the end of the applicable restriction period established for such award. Any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of restricted stock will be paid to the participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares.
Restricted Stock Unit (“RSU”) Awards. A participant who is granted an RSU award is entitled to receive shares of common stock, or cash equal to the fair market value of such shares or a combination thereof, to be delivered at the time the award vests or on a deferred basis pursuant to the terms and conditions established by the Plan Committee. The Plan Committee may provide that the settlement of RSUs will be deferred, on a mandatory basis or at the election of the participant, in a manner that complies with Section 409A of the Code. A participant has no voting rights with respect to any RSU. An RSU award agreement may provide the applicable participant with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of common stock. Any such dividend equivalent may be settled in cash and/or shares of common stock and will be subject to the same restrictions on transfer and forfeitability as the RSUs with respect to which such dividend equivalents are awarded.
Stock Bonus Awards. Under the Plan, the Plan Committee may grant other awards of shares of common stock, and other awards that are valued in whole or in part by reference to, or are otherwise based on, shares of common stock or other property, having such terms and conditions as the Plan Committee may determine. Each stock bonus award is evidenced by an award agreement. These types of awards are referred to in this Annual Report as “other stock-based awards.”
Performance-Compensation Awards
The Plan Committee may designate any award as performance-based, in which case the award will vest based on achievement of performance goals. The Plan Committee will select the length of the performance period, the performance criteria that will be used to establish the performance goals, the kinds and/or levels of the performance goals that are to apply, and the performance formula. Such performance criteria may be based on the attainment of specific levels of performance of the Company and/or one or more of its affiliates, divisions, business segments or operational units, or any combination of the foregoing (including as compared to a selected group of comparison or peer companies, or a published or special index or stock market index), and may include, without limitation, net earnings or net income (before or after taxes), basic or diluted earnings per share (before or after taxes), revenue or revenue growth (measured on a net or gross basis), gross profit or gross profit growth, operating profit (before or after taxes), return measures, cash flow (including, but not limited to, operating cash flow, free cash flow, net cash provided by operations and cash flow return on capital), financing and other capital raising transactions (including, but not limited to, sales of the Company’s equity or debt securities), earnings before or after taxes, interest, depreciation and/or amortization, gross or operating margins, productivity ratios, share price, expense targets, margins, productivity and operating efficiencies, customer satisfaction, customer growth, working capital targets, measures of economic value added, inventory control, enterprise value, sales, debt levels and net debt, combined ratio, timely launch of new facilities, client or customer retention, employee retention, timely completion of new product rollouts, cost targets, reductions and savings, productivity and efficiencies, strategic partnerships or transactions, personal targets, goals or completion of projects, and any other goal selected by the Plan Committee, whether or not listed in the Plan. The Plan Committee may accelerate vesting awards based on the achievement of performance goals. Performance criteria that are financial metrics may be determined in accordance with GAAP, but may be adjusted by the Plan Committee to include or exclude items otherwise includable or excludable under GAAP. The Plan Committee may also adjust or modify performance goals for a performance period to appropriately reflect certain extraordinary events.
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Unless the Plan Committee specifies otherwise in the award agreement, a participant must be continuously employed or in service through the last day of the performance period to be eligible for payment in respect of a performance compensation award. Unless otherwise determined by the Plan Committee or as set forth in the Award agreement, payment in respect of a performance compensation award will only be made to the extent that the Plan Committee determines after the close of the performance period that the performance goals have been achieved at a level that triggers vesting or payment.
Eligibility to Receive Awards
Participants in the Plan will consist of individuals employed by the Company or an affiliate, directors of the Company or an affiliate; an individual consultant or advisor to the Company or an affiliate, or prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or its affiliates, in each case, as selected by the Plan Committee. As of December 31, 2025, approximately 14 employees, 5 officers, 4 directors and 0 consultants, advisors and other service providers would be eligible for awards if selected by the Plan Committee. Incentive stock options may only be granted to employees of the Company or of a present or future parent or subsidiary corporation as defined in Sections 424(e) or (f) of the Code.
Transferability of Awards
Awards may not be sold, assigned, transferred, pledged or otherwise encumbered by a participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an incentive stock option, pursuant to a qualified domestic relations order. During the life of the participant, awards are exercisable only by the participant. However, except with respect to awards that are subject to Section 409A of the Code and incentive stock options, the Plan Committee may permit or provide in an award for the gratuitous transfer of the award by the participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the participant and/or an immediate family member of the participant if the Company would be eligible to use a Form S-8 under the Securities Act of 1933, as amended for the registration of the sale of the common stock subject to such award to the proposed transferee. Further, the Company is not required to recognize any such permitted transfer until such time as the permitted transferee has, as a condition to the transfer, delivered to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee will be bound by all of the terms and conditions of the award. None of the restrictions described in this paragraph prohibit a transfer from the participant to the Company.
No Rights as a Stockholder; Clawback
No participant or designated beneficiary shall have any rights as a stockholder with respect to any shares of common stock to be distributed with respect to an award granted under the Plan until becoming a record holder of such shares, subject to the terms of an award agreement. In accepting an award under the Plan, a participant agrees to be bound by any clawback policy that the Company has in effect or may adopt in the future.
New Plan Benefits
No awards have been previously granted under the Plan as of the date hereof and no awards have been granted under the Plan subject to stockholder approval of the Plan. As the Plan is discretionary, it is not currently possible to determine the amount that may be received by the participants under the Plan at this time.
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Administration
The Plan will be administered by the compensation committee of the Board (the “Plan Committee”) or, if no such Plan Committee has been appointed by the Board or if the Board elects to act as the Plan Committee with respect to any action, the Board. The Plan Committee has the authority to grant awards and to adopt, amend and repeal the administrative rules, guidelines and practices relating to the Plan that it deems advisable and to construe and interpret the provisions of the Plan and any award agreements entered into under the Plan. The Plan Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any award. All actions and decisions by the Plan Committee with respect to the Plan and any awards made under the Plan will be made in the Plan Committee’s discretion and will be final and binding on all persons having or claiming any interest in the Plan or in any award.
Pursuant to the terms of the Plan, the Board and Plan Committee may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board. The Company expects that the Plan Committee will administer certain aspects of the Plan.
Subject to any requirements of applicable law, the Plan Committee may, by resolution, delegate to one or more persons (including officers) or bodies (such persons or bodies, the “Delegated Persons”) the power to grant awards (subject to any limitations under the Plan and applicable law) to eligible service providers of the Company and to exercise such other powers under the Plan as the Plan Committee may determine. No Delegated Person may be authorized to grant awards to anyone subject to Section 16 of the Exchange Act.
Subject to applicable limitations contained in the Plan and applicable law, the Board, the Plan Committee, or any other committee or subcommittee or Delegated Person to whom the Plan Committee has delegated authority pursuant to the Plan, as the case may be, selects the recipients of awards and determines (i) the number of shares of common stock, cash or other consideration covered by awards and the terms and conditions of such awards, including the dates upon which such awards become exercisable or otherwise vest, (ii) the exercise or strike price of awards, if any, and (iii) the duration of awards.
Except as otherwise provided in the Plan, each award under the Plan may be made alone or in addition or in relation to any other award. The terms of each award need not be identical, and the Plan Committee need not treat participants uniformly. The Plan Committee will determine the effect on an award of the disability, death, termination or other cessation of employment or service, authorized leave of absence or other change in the employment or other service status of a participant, and the extent to which, and the period during which, the participant (or the participant’s legal representative, conservator, guardian or designated beneficiary) may exercise rights or receive any benefits under an award.
The Plan Committee may at any time provide that any award will become immediately exercisable in whole or in part, free from some or all restrictions or conditions or otherwise realizable in whole or in part, as the case may be.
To the extent permitted by applicable law, the Company will indemnify and hold harmless each director, officer, employee or agent to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s bad faith, fraud or willful criminal act or omission.
Amendment of Awards. Except as otherwise provided under the Plan with respect to repricing outstanding stock options or SARs and with respect to actions requiring stockholder approval, the Plan Committee may amend, modify or terminate any outstanding award, including but not limited to, substituting for an award another award of the same or a different type, changing the date of exercise or realization, and converting an incentive stock option to a nonqualified stock option, provided that the participant’s consent to any such action will be required unless the Plan Committee determines that the action, taking into account any related action, does not materially and adversely affect the participant’s rights under the Plan or the change is otherwise permitted under the terms of the Plan in connection with certain corporate events.
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Changes in Capital Structure and Similar Events
Stock Split, Stock Dividend and Similar Events. In the event of (a) any dividend (other than ordinary cash dividends) or other distribution (whether in the form of cash, shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, amalgamation, consolidation, spin-off, split-up, split-off, combination, repurchase or exchange of shares of common stock or other securities of the Company, issuance of warrants or other rights to acquire shares of common stock or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a “change in control” as defined in the Plan) that affects the shares of common stock, or (b) unusual or infrequently occurring events affecting the Company or any of its affiliates, or their financial statements, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, to the extent that an adjustment is determined by the Plan Committee to be necessary or appropriate to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Plan Committee shall make any such adjustments in such manner as it may deem equitable, including without limitation any or all of the following: (i) adjusting the number of shares of common stock or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of awards or with respect to which awards may be granted and the terms of any outstanding award, including, without limitation, the number of shares subject to such award, the exercise price or strike price, or the applicable performance measures; (ii) providing for a substitution or assumption of awards in a manner that substantially preserves the applicable terms of such awards; (iii) accelerating the exercisability or vesting of, lapse of restrictions on, or termination of, awards or providing for a period of time for exercise prior to the occurrence of such event; (iv) modifying the terms of awards to add events, conditions or circumstances (including termination of employment within a specified period after a “change in control”) upon which the exercisability or vesting of or lapse of restrictions thereon will accelerate; (v) deeming any performance measures satisfied at target, maximum or actual performance through closing or such other level determined by the Plan Committee, or providing for the performance measures to continue (as is or as adjusted by the Plan Committee) after closing; (vi) providing that for a period prior to the “change in control” any unvested options or SARs will be vested and exercisable (contingent upon the occurrence of the change in control) and that any options or SARs not exercised prior to the consummation of the change in control will terminate as of the change in control; and (vii) canceling outstanding awards in return for cash, shares of common stock, other securities or other property, or any combination thereof, equal to the value of such awards, if any, as determined by the Plan Committee (with any underwater option or SAR canceled and terminated without any payment or consideration therefor); provided, however, that in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards Codification Topic 718), the Plan Committee shall make an equitable or proportionate adjustment to outstanding awards to reflect such equity restructuring.
Provisions for Foreign Participants
The Plan Committee may establish one or more sub-plans under the Plan to satisfy applicable securities, tax or other laws of various jurisdictions. The Plan Committee will establish such sub-plans by adopting supplements to the Plan containing any limitations on the Plan Committee’s discretion under the Plan and any additional terms and conditions not otherwise inconsistent with the Plan as the Plan Committee deems necessary or desirable. All supplements adopted by the Plan Committee will be deemed to be part of the Plan, but each supplement will only apply to participants within the affected jurisdiction.
Withholding
The participant shall be required to pay to the company or any affiliate, and the company or any affiliate shall have the right and is hereby authorized to deduct and withhold, from any cash, common stock, other securities or other property deliverable under any award or from any compensation or other amounts owing to a participant, the amount (in cash, common stock, other securities or other property) of any required taxes (up to the maximum statutory rate under applicable law as in effect from time to time as determined by the Plan Committee) and deduction in respect of an award, its grant, vesting or exercise, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Plan Committee or the company to satisfy all obligations for the payment of such taxes.
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Amendment or Termination
Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that (i) no amendment to the prohibition on repricing shall be made without stockholder approval and (ii) no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the common stock may be listed or quoted); provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any participant or any holder or beneficiary of any award theretofore granted shall not to that extent be effective without the consent of the affected participant, holder or beneficiary.
Amendment of Award Agreements. The Plan Committee may, to the extent consistent with the terms of any applicable award agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any award theretofore granted or the associated award agreement, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any participant with respect to any award theretofore granted shall not to that extent be effective without the consent of the affected participant; provided, further, that without stockholder approval, except as otherwise permitted under the Plan, (i) no amendment or modification may reduce the exercise price of any option or the strike price of any SAR, (ii) the Plan Committee may not cancel any outstanding option or SAR where the fair market value of the common stock underlying such option or SAR is less than its exercise price or strike price, as applicable, and replace it with a new option or SAR, another award or cash and (iii) the Plan Committee may not take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the common stock is listed or quoted.
Federal Income Tax Consequences
The following is a summary of the United States federal income tax consequences that generally will arise with respect to awards granted under the Plan. This summary is based on the federal tax laws in effect as of the date of this Annual Report. In addition, this summary assumes that all awards are exempt from, or comply with, the rules under Section 409A of the Code regarding nonqualified deferred compensation. Changes to these laws could alter the tax consequences described below.
Incentive Stock Options. A participant will not have income upon the grant of an incentive stock option. Also, except as described below, a participant will not have income upon exercise of an incentive stock option if the participant has been employed by the Company or its corporate parent or 50% or majority-owned corporate subsidiary at all times beginning with the option grant date and ending three months before the date the participant exercises the option. If the participant has not been so employed during that time, then the participant will be taxed as described below under “Nonqualified Stock Options.” The exercise of an incentive stock option may subject the participant to the alternative minimum tax.
A participant will have income upon the sale of the stock acquired under an incentive stock option at a profit (if sales proceeds exceed the exercise price). The type of income will depend on when the participant sells the stock. If a participant sells the stock more than two years after the option was granted and more than one year after the option was exercised, then all of the profit will be long-term capital gain. If a participant sells the stock prior to satisfying these waiting periods, then the participant will have engaged in a disqualifying disposition and a portion of the profit will be ordinary income and a portion may be capital gain. This capital gain will be long-term if the participant has held the stock for more than one year and otherwise will be short-term. If a participant sells the stock at a loss (sales proceeds are less than the exercise price), then the loss will be a capital loss. This capital loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
| 46 |
Nonqualified Stock Options. A participant will not have income upon the grant of a nonqualified stock option. A participant will have compensation income upon the exercise of a nonqualified stock option equal to the value of the stock on the day the participant exercised the option less the exercise price. Upon sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.
Stock Appreciation Rights. A participant will not have income upon the grant of a SAR. A participant generally will recognize compensation income upon the exercise of a SAR equal to the amount of the cash and the fair market value of any stock received. Upon the sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the SAR was exercised. This capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Restricted Stock Awards. A participant will not have income upon the grant of restricted stock unless an election under Section 83(b) of the Code is made within 30 days of the date of grant. If a timely 83(b) election is made, then a participant will have compensation income equal to the value of the stock as of the date of grant less the purchase price, if any. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the date of grant. If the participant does not make an 83(b) election, then when the stock ceases to be subject to a substantial risk of forfeiture the participant will have compensation income equal to the value of the stock on the date on which the substantial risk of forfeiture lapses (the “vesting date”) less the purchase price, if any. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Restricted Stock Units. A participant will not have income upon the grant of an RSU. A participant is not permitted to make a Section 83(b) election with respect to an RSU award. When the stock (or cash equal to the fair market value of any stock) is delivered with respect to the RSUs (which may be upon vesting or, if deferred, may be at a later date), the participant will have income on the date of delivery in an amount equal to the fair market value of the stock on such date less the purchase price, if any. When stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the delivery date. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.
Other Stock-Based Awards. The tax consequences associated with any other stock-based award granted under the Plan will vary depending on the specific terms of such award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award, and the participant’s holding period and tax basis for the award or underlying common stock.
Tax Consequences to the Company. There will be no tax consequences to the Company except that the Company (or, if applicable, the affiliate employer) will be entitled to a deduction when a participant has compensation income, subject to the limitations of Section 162(m) of the Code.
| 47 |
Director Compensation
The following table sets forth information regarding compensation earned during the fiscal year ended December 31, 2025 by each of our non-employee directors who served as a director of the Company during that time. The directors who also serve as employees of the Company do not receive additional compensation for their service as a director.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) | ||||||||||||||
| Jeffery Pomerantz | – | – | – | – | – | – | – | ||||||||||||||
| Lorenzo Calinawan | – | – | – | – | – | – | – | ||||||||||||||
| Craig Huff | – | – | – | – | – | 5,676,855 | (2) | 5,676,855 |
| (1) | The amounts reported in this column represent the aggregate grant date fair value of stock awarded, computed in accordance with FASB ASC Topic 718. | |
| (2) | This consists of stock awards that were issued to BoltRock Holdings, LLC pursuant to a consulting arrangement and 69,007 shares of Series C Convertible Preferred stock. Mr. Huff is the managing member of BoltRock Holdings, LLC. The Consulting arrangement consists of 280,000 PSU, to vest 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company’s market capitalization reaches and sustains a market capitalization for 30 consecutive days above $120,000,000, $150,000,000, $200,000,000 and $250,000,000, respectively. Please further refer to Item 13 for transactions with BoltRock Holdings, LLC during the year ended 2025 and period ended 2026. |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Securities Authorized for Issuance Under Equity Compensation Plans
Equity Compensation Plan Information
The following table sets forth, as of December 31, 2025, information regarding awards previously granted and outstanding, and securities authorized for future issuance, under the Company’s equity compensation plans.
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants or Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants or Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Outstanding Options, Warrants, or Rights) | |||||||||
| Equity compensation plans approved by shareholders | – | $ | – | – | ||||||||
| Equity compensation plans not approved by shareholders | – | – | 1,000,000 | |||||||||
The description of the Plan provided in Item 11 in the section entitled “Equity Compensation Plan Information” is incorporated herein by reference to this Item 12.
| 48 |
Security Ownership of Certain Beneficial Owners
The following table and footnotes to it sets forth information regarding the number of shares of Common Stock beneficially owned by (i) each director and named executive officer of our Company, (ii) executive officers and directors of the Company as a group, and (iii) each person known by us to be the beneficial owner of 5% or more of our issued and outstanding shares of Common Stock. In calculating any percentage in the following table of Common Stock beneficially owned by one or more persons named therein, the following table is based on 19,150,234 shares of Common Stock, 1,666,667 shares of Series A Preferred Stock, 807,668 shares of Series C Convertible Preferred Stock, 2,716,725 warrants, and $2,222,000 convertible debt outstanding as of March 30, 2026, and any shares of Common Stock, the person has the right to acquire within the 60 days following the filing date of this filing. Unless otherwise further indicated in the following table, the footnotes to it or elsewhere in this report, the persons and entities named in the following table have sole voting and sole investment power concerning the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable. Unless as otherwise indicated in the following table and the footnotes, our named executive officers and directors’ address in the following table is c/o CitroTech Inc., 6400 S. Fiddlers Green Cir., Suite 300, Greenwood Village, Colorado 80111.
| Shares Beneficially Owned | ||||||||||||||||||||||||||||||
| Number of shares | ||||||||||||||||||||||||||||||
| Series A Preferred | Series C Convertible Preferred Stock | Common | Subject to Series C Convertible Preferred Stock Convertible Debt and Warrants exercisable within | Total Common Stock Beneficially Owned | % of Total Voting | |||||||||||||||||||||||||
| Name of Beneficial Owner(1) | Shares | % | Shares | % | Shares | % | 60 days | Shares | % | Power (2) | ||||||||||||||||||||
| Named Executive Officers and Directors | ||||||||||||||||||||||||||||||
| Wesley Bolsen | – | – | 6,583 | * | – | * | 22,499 | 22,499 | * | * | ||||||||||||||||||||
| Theodore Ralston | 1,364,141 | 81.8% | 13,334 | 1.7% | 2,841,187 | 14.8% | 66,671 | 2,907,858 | 15.1% | 81.1% | ||||||||||||||||||||
| Anthony Newton | – | – | 50,000 | 6.2% | – | * | 166,667 | 166,667 | * | * | ||||||||||||||||||||
| Andrew Hotsko | – | – | 3,334 | * | – | * | 16,671 | 16,671 | * | * | ||||||||||||||||||||
| Craig Huff | 302,526 | 18.2% | 95,674 | 11.8% | 2,416,668 | 12.6% | 1,705,859 | 4,122,527 | 19.8% | 18.2% | ||||||||||||||||||||
| Joshua Ralston | – | – | – | * | 583,334 | 3.0% | – | 583,334 | 3.0% | * | ||||||||||||||||||||
| Jeffery Pomerantz | – | – | – | * | 41,667 | * | – | 41,667 | * | * | ||||||||||||||||||||
| Lorenzo Calinawan | – | – | – | * | – | * | – | – | * | * | ||||||||||||||||||||
| All Executive Officers and Directors as a group (9 persons) | 1,666,667 | 100.0% | 222,931 | 26.3% | 7,782,856 | 40.4% | 2,165,063 | 9,947,919 | 47.9% | 81.1% | ||||||||||||||||||||
| 5% or More Stockholders | ||||||||||||||||||||||||||||||
| Theodore Ralston(3) | 1,364,141 | 81.8% | 13,334 | 1.7% | 2,841,187 | 14.8% | 66,671 | 2,907,858 | 15.1% | 81.1% | ||||||||||||||||||||
| Stephen Conboy(4) | 0.0% | 0.0% | 667 | * | 2,483,334 | 13.0% | 3,336 | 2,486,670 | 13.0% | * | ||||||||||||||||||||
| BoltRock Holdings, LLC(5) | 302,526 | 18.2% | 95,674 | 11.8% | 2,416,668 | 12.6% | 1,705,859 | 4,122,527 | 19.8% | 18.2% | ||||||||||||||||||||
_____________
* Less than 1%
| 49 |
| (1) | Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) because of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power concerning the number of shares of Common Stock outstanding on the date of this filing. | |
| (2) | Percentage of total voting power with respect to all shares of our Series A preferred stock and common stock, as a single class. The holders of our Series A preferred stock are entitled to one thousand (1,000) votes per share and holders of our common stock are entitled to one (1) vote per share. | |
| (3) | TC Special Investments, LLC, through Mr. Theodore Ralston, has sole dispositive and voting power with respect to all shares. The address of TC Special Investments, LLC c/o CitroTech Inc., 6400 S. Fiddlers Green Cir., Suite 300, Greenwood Village, Colorado 80111. Total beneficial common share ownership consists of 2,841,187 common shares and 66,671 shares of common stock issuable pursuant to 13,334 shares of Series C Convertible Preferred Stock and 22,224 shares from warrants. | |
| (4) | Stephen Conboy has sole dispositive and voting power with respect to all shares. Total beneficial common share ownership consists of 2,483,334 common shares and 3,336 shares of common stock issuable pursuant to 667 shares from conversion of Series C Convertible Preferred Stock and 1,112 shares from warrants. | |
| (5) | Based on information reported on our transfer agent report for shareholder information, BoltRock Holdings, LLC stated address is 712 5th Ave 22nd FL New York, NY 10019. Total beneficial common share ownership consists of 2,416,668 common shares and 1,705,026 shares of common stock issuable pursuant to 95,674 shares from conversion of Series C Convertible Preferred Stock, 925,833 shares from conversion of $2,222,000 in debt and 461,112 shares from warrants. |
Change of Control
The Company is not aware of any arrangements which may at a subsequent date result in a change of control of the Company.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Related Party Transactions
Unless described below, during the last two fiscal years, there were no transactions or series of similar transactions to which we were a party or will be a party, in which:
| · | the amounts involved exceed or will exceed $120,000; and |
| · | any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of any of the foregoing had, or will have, a direct or indirect material interest. |
| 50 |
For the year ended December 31, 2024:
In March 2024, Ralston cancelled 10,833,334 of the 11,666,667 restricted stock awards issued in June 2022.
During the year ended December 31, 2024, the Company repaid $330,000 owing to the loan payable to TC Special Investments, LLC.
During the year ended December 31, 2024, TC Special Investments, LLC, paid operating expenses of $6,495 on behalf of the Company.
In November 2024, the Company repaid $410,880 owing to the loan payable to Theodore Ralston.
On December 31, 2024, the Company issued a convertible note of $576,693, to TC Special Investments, LLC, in exchange for the amount due to a related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.16.
For the year ended December 31, 2024, the Company paid commission fees of $245,571 to Stephen Conboy.
For the year ended December 31, 2024, the Company paid consulting and royalty fees of $97,000 to MFB Enterprises LLC.
During the year ended December 31, 2024, companies controlled by Nanuk Warman were paid accounting and consulting fees of $106,116.
During the year ended December 31, 2024, a company controlled by Anthony Newton was paid legal and consulting fees of $102,755.
For the year ended December 31, 2025:
In February 2025, the Company issued 150,000 shares of Series C Convertible Preferred Stock as consulting services to TC Special Investments, LLC, valued at $2,103,600.
In February 2025, the Company entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with BoltRock Holdings, LLC. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, BoltRock Holdings, LLC could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio.
In June 2025, the Company issued 69,007 shares of Series C Convertible Preferred Stock as a finance expense to BoltRock Holdings, LLC, valued at $2,511,855.
During the year ended December 31, 2025, the Company paid commission fees of $56,290 to Stephen Conboy.
During the year ended December 31, 2025, the Company paid consulting and royalty fees of $25,600 to MFB Enterprises LLC.
During the year ended December 31, 2025, companies controlled by Nanuk Warman were paid accounting and consulting fees of $194,880.
During the year ended December 31, 2025, a company controlled by Anthony Newton was paid legal and consulting fees of $75,970.
During the year ended December 31, 2025, a company controlled by Theodore Ralston was reimbursed $75,000 for expenses paid on behalf of the Company.
| 51 |
For the period from January 1, 2026 to March 30, 2026:
On February 27, 2026, the Company and BoltRock Holdings, LLC (“BRH”) entered into that certain First Amendment to 10% Senior Secured Convertible Promissory Note (the “Amendment”), pursuant to which BRH agreed to extend the maturity date of that certain 10% Senior Secured Convertible Promissory Note dated February 28, 2025 (the “Note”) until April 28, 2026. Pursuant to the Amendment, BRH charged a 1% amendment fee, and the Pledge and Security Agreement dated February 28, 2025, by and between the Company and BRH, entered into in connection with the Note, was terminated, thereby releasing any and all intangible assets of the Company that were collateral for the Note.
For the period from January 1, 2026 to March 30, 2026, companies controlled by Nanuk Warman were paid accounting and consulting fees of $21,590.
The Company and Wesley Bolsen entered into a Financial Commitment and Pledge Agreement dated March 28, 2026, pursuant to which Mr. Bolsen irrevocably committed to provide, upon written request of the Board and at least seven days’ prior notice, up to $2,000,000 of loans bearing interest at Prime + 1% with maturities of up to 24 months, with any advances to be secured by the Company’s intellectual property. The commitment automatically terminates upon, among other events, the Company raising at least $5,000,000 in aggregate new debt or equity financing.
Item 14. Principal Accountant Fees and Services.
The following table shows the fees that were billed for the audit and other services provided by our principal auditor, for the periods presented, as follows:
Fiscal Year Ended December 31, 2025 | Fiscal Year Ended December 31, 2024 | |||||||
| Audit Fees: | $ | 173,400 | $ | 125,000 | ||||
| Audit-Related Fees | 17,500 | – | ||||||
| Tax Fees: | 7,000 | – | ||||||
| All Other Fees | – | – | ||||||
| Total | $ | 197,900 | $ | 125,000 | ||||
Audit Fees
This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
Audit-Related Fees
This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC and other accounting consulting.
Tax Fees
This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees
This category consists of fees for other miscellaneous items.
Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting.
| 52 |
PART IV
Item 15. Exhibit and Financial Statement Schedules.
(a) 1. Financial Statements
The financial statements and Report of Independent Registered Public Accounting Firm are listed in Item 8.
2. Financial Statement Schedules
All schedules for which provision is made in the applicable accounting regulations of the SEC are either not required under the related instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the financial statements included herein.
3. Exhibits
| 53 |
________
* Filed or furnished herewith.
# Management contracts or compensatory plans, contracts or arrangements.
Item 16. Form 10-K Summary.
None.
| 54 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Index to Audited Consolidated Financial Statements
December 31, 2025 and 2024
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: The Board of Directors and Stockholders of
CitroTech Inc. (formerly General Enterprise Ventures, Inc.)
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of CitroTech Inc. (formerly General Enterprise Ventures, Inc.) (the “Company”), as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform audits of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal controls over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| F-2 |
Valuation of Intangible Assets
Description of the Matter
As described in Note 2 and 6 to the consolidated financial statements, the Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company’s intangible assets are comprised of patents, and the balance as of December 31, 2025, was $5,326,960. The $1,775,400 of intangible assets purchased in 2025 comprised of intellectual property and a non-compete agreement from the seller of the intangible assets. We identified the auditing of the valuation of intangible assets as a critical audit matter because it represents a significant portion of the Company’s total assets, and it requires a significant amount of judgment to evaluate the recoverability of the carrying amount of the intangible assets. Additionally, the allocation of the purchase price among the identifiable intangible assets requires significant judgment in determining the relative fair values of each component of the transaction, which involves the use of valuation methodologies and assumptions subject to estimation uncertainty. The primary procedures we performed to address this critical audit matter included the following, among others:
| · | We obtained an understanding of the process utilized by the Company's management to evaluate the recoverability of the carrying amount of the intangible assets and to allocate the cost of the purchased intangible assets between the intellectual property and non-compete agreement. | |
| · | We tested the Company's process and evaluated the reasonableness of the inputs that management used in its analysis, and examined the intangible asset valuation report provided by the Company to determine the reasonableness of the methodology used and the results of the intangible asset valuation. |
Reclassification of Embedded Derivative Liability to Equity
Description of the Matter
As described in Notes 2, 8, and 9 to the consolidated financial statements, the Company’s convertible notes included a conversion feature that was accounted for as a derivative liability at fair value under ASC 815. Following the withdrawal of its registration statement on August 19, 2025, the conversion price became fixed, and the conversion option no longer met the definition of a derivative. Consequently, the Company revalued the liability and reclassified the balance to additional paid-in capital, eliminating the derivative liability balance. We identified the valuation of the derivative liability, including its revaluation upon reclassification, as a critical audit matter due to the significant judgment required in determining fair value. Fair value was estimated using a binomial lattice model incorporating certain assumptions. The primary procedures we performed to address this critical audit matter included the following, among others:
| · | We obtained the Company's valuation model and understood the process used to determine the fair value of the derivative liability, including the valuation performed immediately prior to reclassification. | |
| · | We assessed the reasonableness of the inputs, assumptions, and methodology used in the fair value calculation at each measurement date, including the reclassification date. | |
| · | We evaluated the appropriateness of the Company's conclusion that the conversion option no longer qualified as a derivative under ASC 815 and verified that the reclassification to additional paid-in capital was recorded in the correct period and amount. |
/s/ WWC, P.C.
Certified Public Accountants
PCAOB ID: 1171
We have served as the Company’s auditor since 2024.
March 30, 2026
| F-3 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Balance Sheets
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Deferred offering costs | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use asset | ||||||||
| Equipment, net | ||||||||
| Security deposit | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Deferred revenue | ||||||||
| Convertibles notes, net of discount | ||||||||
| Convertibles notes, net of discount - related parties | ||||||||
| Due to related parties | ||||||||
| Financing loan - current portion | ||||||||
| Derivative liability | ||||||||
| Operating lease liability - current portion | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Financing loan | ||||||||
| Operating lease liability | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders' Equity | ||||||||
| Preferred Stock, par value $, authorized shares: | ||||||||
| Series A Preferred Stock, par value $, designated shares, shares issued and outstanding | ||||||||
| Series C Convertible Preferred Stock, par value $, designated shares, and shares issued and shares outstanding, respectively | ||||||||
| Common Stock, par value $, authorized shares, and issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders' Equity | ||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | ||||||
See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-4 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statements of Operations and Comprehensive Loss
| Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses | ||||||||
| Cost of revenue, exclusive of amortization and depreciation shown separately below | ||||||||
| Cost of revenue - related parties | ||||||||
| Amortization and depreciation | ||||||||
| General and administration | ||||||||
| Advertising and marketing | ||||||||
| Payroll and management compensation | ||||||||
| Professional fees | ||||||||
| Professional fees - related parties | ||||||||
| Research and development expense | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Other income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest expense - related parties | ( | ) | ||||||
| Interest income | ||||||||
| Financing expense | ( | ) | ||||||
| Financing expense - related party | ( | ) | ||||||
| Loss on fair value of derivative liability | ( | ) | ( | ) | ||||
| Loss on settlement of debt | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | ) | ||||
| Loss before taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per common share - basic and diluted | $ | ) | $ | ) | ||||
| Basic and diluted weighted average number of common shares outstanding | ||||||||
See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-5 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statements of Change in Stockholders’ Equity
Series A Preferred stock | Series C Convertible Preferred stock | Common Stock | Additional Paid-In | Preferred Stock to be | Common Stock to be | Accumulated | Total Stockholders' | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | issued | issued | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance - December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for preferred stock to be issued | – | – | ( | ) | |||||||||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for cash | – | – | |||||||||||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for services | – | – | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for stock to be issued - management | – | – | ( | ) | |||||||||||||||||||||||||||||||||||||
| Common stock issued for conversion and settlement of debt | – | – | |||||||||||||||||||||||||||||||||||||||
| Cancellation of common stock - related party | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Common stock issued for compensation | – | – | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for services | – | – | |||||||||||||||||||||||||||||||||||||||
| Common stock warrants issued | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for preferred stock to be issued | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for cash | – | – | |||||||||||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for services | – | – | |||||||||||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for compensation | – | – | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of Series C Preferred Stock | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for Service | – | – | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for cashless exercise of warrants | – | – | ( | ) | |||||||||||||||||||||||||||||||||||||
| Management stock compensation | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Reverse stock split | – | – | |||||||||||||||||||||||||||||||||||||||
| Reclassification of derivative liability to equity | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Stock payable for acquisition of intangible assets | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Common stock warrants issued | – | – | – | ||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance - December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-6 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statement of Cash Flows
| Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Stock-based compensation - related parties | ||||||||
| Bad debt expense | ||||||||
| Non-cash lease expenses | ||||||||
| Amortization and depreciation | ||||||||
| Amortization of debt discount | ||||||||
| Loss on settlement of debt | ||||||||
| Loss on fair value of derivative liability | ||||||||
| Write off of deferred offering costs | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Security deposit | ( | ) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| Related party advances funding operating expense | ||||||||
| Accrued interest - related parties | ||||||||
| Deferred revenue | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net Cash used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of equipment | ( | ) | ||||||
| Acquisition of intangible asset | ( | ) | ||||||
| Net Cash used in Investing Activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from convertible notes and warrants | ||||||||
| Proceeds from convertible note and warrants - related party | ||||||||
| Payments of deferred offering costs | ( | ) | ( | ) | ||||
| Proceeds from loan - related party | ||||||||
| Repayment of loan - related party | ( | ) | ( | ) | ||||
| Proceeds from issuance of Series C Convertible Preferred Stock and warrants | ||||||||
| Repayment of financing loan | ( | ) | ( | ) | ||||
| Net Cash provided by Financing Activities | ||||||||
| Change in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental Disclosure Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-Cash Financing Disclosure: | ||||||||
| Common stock issued for services | $ | $ | ||||||
| Series C Convertible Preferred stock issued for services | $ | $ | ||||||
| Common stock issued upon conversion of Series C Convertible Preferred stock | $ | $ | ||||||
| Common stock issued for conversion and settlement of debt | $ | $ | ||||||
| Common stock issued for stock to be issued - management | $ | $ | ||||||
| Stock payable for acquisition of intangible asset | $ | $ | ||||||
| Series C Convertible Preferred stock issued for subscription received | $ | $ | ||||||
| Cancellation of common stock - related party | $ | $ | ||||||
| Warrants issued in conjunction with convertible debts | $ | $ | ||||||
| Right -of-use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||
| Recognition of derivative liability as debt discount | $ | $ | ||||||
| Reclassification of derivative liability to additional paid-in capital | $ | $ | ||||||
| Transfer from inventory to property and equipment | $ | $ | ||||||
| Acquisition of property and equipment as financing loan | $ | $ | ||||||
See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-7 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
Note 1 – Organization, Business and Going Concern
CitroTech Inc. was originally incorporated under the laws of the State of Nevada on March 14, 1990 and on June 3, 2021 was redomiciled to the State of Wyoming. Effective on January 22, 2026, the Company changed its name form General Enterprise Ventures, Inc. to CitroTech Inc. When used in these notes, the terms “CITR,” “Company,” “we,” “us” and “our” mean CitroTech Inc. and all entities included in our consolidated financial statements.
Business
We develop and manufacture environmentally sustainable, non-toxic, long-term fire-inhibiting products for use in industrial and wildfire defense applications. The Company’s proprietary formulation, CitroTech®, is derived from food-grade, renewable materials and is designed to provide an alternative to legacy conventional chemical fire retardants. CitroTech™ is used in the manufacturing of fire-resilient lumber and building materials, enabling integration of flame-inhibiting properties during production or applied in the field to new homes. In addition, it is utilized by fire departments, municipalities, and other public and private sector entities in connection with ground-based wildfire defense and stationary application systems intended to help render vegetation non-flammable, reduce ignition risk and enhance structural protection.
The Company continues to evaluate and develop additional formulations and product treatments to expand the range of potential commercial applications for its technology.
Reverse stock split
On April 15, 2025, our Board of Directors and our stockholders that have a majority of our voting power approved an amendment to our articles of incorporation (as amended, the “Articles of Incorporation”) to effect the reverse stock split (which includes the outstanding Series A Preferred Stock and Common Stock of the Company at a 1-for-6 ratio). The reverse stock split was effective on August 27, 2025.
All share and per share information in these financial statements retroactively reflect this reverse stock split.
Liquidity
The Company has incurred losses since inception,
and incurred a net loss of $
million during the year ended December 31, 2025, resulting in an accumulated deficit of $
million. However, in September and October 2025, the Company completed an equity offering which generated net proceeds of $
The Company’s existing cash resources are expected to provide sufficient funds to carry out the Company’s planned operations through fiscal year 2026. To continue operations beyond such time frame, the Company may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
| F-8 |
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. The Company’s fiscal year is December 31.
Principles of Consolidation
The consolidated financial statements include the accounts of CitroTech Inc., and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.
Reclassification
Certain amounts have been reclassified to improve the clarity and comparability of the financial statements. These reclassifications had no impact on previously reported total assets, liabilities, equity, net income (loss), or cash flows for any periods presented.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Segment Information
Our Chief Executive Officer (“CEO”) is the chief operating decision maker who reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we determined we operate in a reporting segment - environmentally sustainable specialty chemicals for fire prevention and protection in the lumber and wood products, wildland fire and residential home industry.
Our CEO assesses performance and decides how to allocate resources primarily based on consolidated net income, which is reported on our Consolidated Statements of Operations. Total assets on the Consolidated Balance Sheets represent our segment assets.
Cash and Cash Equivalents
For purposes of balance sheet presentation and reporting
of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original
maturity of less than 90 days to be cash and cash equivalents. The Company did
Periodically, the Company may carry cash
balances at financial institutions more than the federally insured limit of $
| F-9 |
Inventory
Inventories consist of finished goods and raw materials which are stated at lower cost or net realizable value, with cost being determined on the weighted average method.
Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any expected loss on the trade accounts receivable balances and charged to the provision for credit loss. The Company maintains allowances for credit loss for estimated losses resulting from the inability of its customers to make the required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable that the receivable will not be recovered.
During the years ended December 31, 2025 and 2024,
the Company recorded bad debt expense of $
Intangible Assets
Intangible assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Acquired intangible assets from business combinations and asset acquisitions are recognized and measured at fair value at the time of acquisition. These assets are patents and represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of 20 years for these acquired patents.
Property and Equipment
Property and equipment are stated at cost.
Depreciation is computed on the straight-line method. Currently our assets consist of computer and software, furniture and
equipment, and vehicle which we amortize over a useful life of
Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in the income.
Impairment of Long-lived Assets Other Than Goodwill
Long-lived assets with finite lives, primarily property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.
Leases
ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.
| F-10 |
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances.
As of December 31, 2025 and 2024, the Company’s lease agreement is accounted for as an operating lease.
Fair Value of Financial Instruments
The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows:
| · | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; | |
| · | Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and | |
| · | Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.
Recurring Fair Value Measurements
The following table summarizes the liabilities measured at fair value on a recurring basis:
There were no liabilities measured at fair value on a recurring basis as of December 31, 2025.
| Schedule of liabilities measured at fair value on a recurring basis | ||||
| December 31, 2024 | Level 3 | |||
| Derivative Liability – conversion feature | $ | |||
| F-11 |
Nonrecurring Fair Value Measurements
The valuation of warrants and market based compensation awards, were derived using Level 2 inputs.
Other Fair Value Disclosures
The Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, deferred revenue and loans payable, are carried at historical cost. As of December 31, 2025 and 2024, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.
Convertible Notes
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The 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.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For our derivative financial instruments, the Company used a Binomial Lattice model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.
Warrants
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
Revenue
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
| F-12 |
Revenue related to contracts with customers is evaluated utilizing the following steps:
| i. | Identify the contract, or contracts, with a customer; | |
| ii. | Identify the performance obligations in the contract; | |
| iii. | Determine the transaction price; | |
| iv. | Allocate the transaction price to the performance obligations in the contract; | |
| v. | Recognize revenue when the Company satisfies a performance obligation. |
For the year ended December 31, 2025, our revenues currently consist of a sale of product used for lumber products for fire prevention and on installation of self-contained sprinkler systems. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the product transfer from the Company to the customer.
Deferred revenue
Deferred revenue consists of advanced payments
for our service that have not been rendered. Revenue is recognized when service is rendered. As of December 31, 2025 and 2024, total
deferred revenue was $
Cost of Revenue
For the years ended December 31, 2025 and 2024, cost of revenue consisted of:
| Schedule of cost of revenue | ||||||||
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cost of inventory | $ | $ | ||||||
| Freight and shipping | ||||||||
| Consulting and advisory-related party | ||||||||
| Royalty and sales commission-related party | ||||||||
| Rent expense | ||||||||
| Total cost of revenue | $ | $ | ||||||
Net loss per share of common stock requires presentation of basic and diluted earnings per common share on the face of the Statements of Operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation to diluted earnings per share. In the accompanying financial statements, basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements and warrants unless the result would be antidilutive.
The dilutive effect of share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of common stock are included in the denominator of the diluted calculation for the entire period being presented.
| F-13 |
For the years ended December 31, 2025 and 2024, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.
| Schedule of antidilutive securities | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Shares | Shares | |||||||
| Convertible notes | ||||||||
| Common Stock warrants | ||||||||
| Series C Convertible Preferred Stock | ||||||||
Deferred Offering Costs
Pursuant to ASC 340-10-S99-1, costs directly
attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the offering as a
reduction of additional paid-in capital. Deferred offering costs consist of underwriting, legal, accounting, and other expenses
incurred through the balance sheet date that are directly related to the proposed public offering. Should the proposed public
offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be expensed. On August
19, 2025, the Company withdrew the registration statement, and as a result, the Company wrote off total deferred offering costs of
$
As of December 31, 2025 and 2024, deferred offering costs consisted of the following:
| Schedule of deferred offering costs | ||||||||
| December 31, | December 31 | |||||||
| 2025 | 2024 | |||||||
| Legal fees | $ | $ | ||||||
| General and administrative expenses | ||||||||
| Total | $ | $ | ||||||
The Company accounts for employee and non-employee stock awards under ASC 718, Compensation – Stock Compensation, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service.
During the years ended December 31, 2025 and 2024, stock-based compensation was recognized as follows:
| Schedule of stock-based compensation | ||||||||
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Management compensation | $ | $ | ||||||
| Professional fees | ||||||||
| Professional fees - related party | ||||||||
| Advertising and marketing | ||||||||
| Financing expense | ||||||||
| Financing expense - related party | ||||||||
| Stock-based compensation | $ | $ | ||||||
| F-14 |
Compensation cost for stock awards, which include common shares, Series C Convertible Preferred Stock, warrants and performance stock units (“PSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. The fair value of stock awards is based on the quoted price of our common stock on the grant date and Series C Convertible Preferred stock as if converted to common stock. We measure the fair value of PSUs using a Monte Carlo valuation model and warrants using a Black Scholes valuation model. Compensation cost for PSUs are recognized using the derived service period and accelerated if the condition is satisfied at an earlier date.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.
| F-15 |
Recently adopted accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period.
Note 3 – Inventory
As of December 31, 2025 and 2024, inventory consisted of the following:
| Schedule of inventory | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Finished goods | $ | $ | ||||||
| Raw materials | ||||||||
| Inventory | $ | $ | ||||||
The Company did
Note 4 – Prepaid expenses
As of December 31, 2025 and 2024, prepaid expenses consisted of the following:
| Schedule of prepaid expenses | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Insurance | $ | $ | ||||||
| Legal retainer | ||||||||
| Security deposit | ||||||||
| Advertising and marketing | ||||||||
| Other prepaid operating expenses | ||||||||
| Deposit on purchase of inventories | ||||||||
| Prepaid expenses | $ | $ | ||||||
Note 5 – Equipment, net
As of December 31, 2025 and 2024, equipment consisted of the following:
| Schedule of property plant and equipment | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Cost: | ||||||||
| Equipment | $ | $ | ||||||
| Vehicles | ||||||||
| Equipment gross | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Equipment, net | $ | $ | ||||||
| F-16 |
During the years ended December 31, 2025 and 2024,
the Company recorded depreciation of $
During the year ended December 31, 2025 and 2024,
the Company purchased vehicles and equipment for $
Financing loan
The Company had a financing loan for the
purchase of vehicle in September 2025. The
loan repayment is $
The Company had a financing loan for the
purchase of vehicle in September 2025. The
loan repayment is $
The Company had a financing loan for the
purchase of vehicle in January 2025. The
loan repayment was $
The Company had financing loan for a purchase of vehicle for the year ended December 31, 2024. The loan repayment is $1,898 per month for the first 36 months and then $2,590 per months for 30 months with an interest rate of $11.54%. In March 2025, the Company fully repaid this financing loan.
During the years ended December 31, 2025 and
2024, the Company recorded interest expense of $
Note 6 – Intangible Assets, net
In 2022, the Company acquired the intellectual property of Mighty Fire Breaker LLC (“MFB California”), 19 patents centered around its MFB Technology for the prevention and spread of wildfires. The granted patents include MFB California’s main chemistry and applications. MFB California had 21 trademarks and various copyrights. Internally generated patents, trademarks and copyrights, are expensed as incurred.
In December 2025, the Company entered into
Intellectual Property Purchase Agreement to protect our existing patents. The purchase price is $
As of December 31, 2025 and 2024, finite lived intangible assets consisted of the following:
| Schedule of finite lived intangible assets | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Acquired patents (19) | $ | $ | ||||||
| Patent and technology assets | ||||||||
| Non-compete Agreement | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
| F-17 |
Estimated future amortization expense for finite lived intangibles are as follows:
December 31,
| Schedule of estimated future amortization expense | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Intangible assets, net | $ |
As of December 31, 2025, the weighted-average
useful life is
During the years ended December 31, 2025 and 2024,
the amortization expense was $
Note 7 – Lease
In March 2022, the Company entered into an operating lease for a warehouse, with a term of eighteen (18) months. In July 2023, the Company amended the contract and extended the lease term to July 2025. In May 2025, the Company terminated this lease and wrote off the right-of-use asset and lease liability.
In January 2025, the Company entered into an operating
lease for our office and warehouse. The commencement date is April 1, 2025, and the termination date is March 31, 2030. The Company
recorded a security deposit of $
For the years ended December 31, 2025 and 2024, right-of-use asset and lease information about the Company’s operating lease consists of:
| Schedule of right-of-use asset and lease information | ||||||||
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| The components of lease expense were as follows: | ||||||||
| Operating lease cost | $ | $ | ||||||
| Short-term lease cost | ||||||||
| Variable lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
Supplemental cash flow information related to leases was as follows:
| Schedule of supplemental cash flow information related to leases | ||||||||
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for operating cash flows from operating leases | $ | $ | ||||||
| Right-of-use asset obtained in exchange for new operating lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term - operating leases (year) | ||||||||
| Weighted-average discount rate — operating leases | ||||||||
| F-18 |
The following table outlines maturities of our lease liabilities as of December 31, 2025:
| Schedule of maturities of lease liabilities | ||||
| Year ending December 31, | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Operating leases, future minimum payments due | ||||
| Less: Imputed interest | ( | ) | ||
| Operating lease liabilities | $ | |||
Note 8 – Convertible Notes
The components of convertible notes as of December 31, 2025 and 2024, were as follows:
| Schedule of components of convertible notes | ||||||||||||||||||||||
| Effective | Stated | |||||||||||||||||||||
| Principal | Interest | Interest | December 31, | December 31, | ||||||||||||||||||
| Payment date | Amount | Maturity date | Rate | Rate | 2025 | 2024 | ||||||||||||||||
| July 15, 2024 | $ | $ | $ | |||||||||||||||||||
| August 15, 2024 | $ | |||||||||||||||||||||
| November 15, 2024 | $ | |||||||||||||||||||||
| December 15, 2024 | $ | |||||||||||||||||||||
| February 15, 2025 | $ | |||||||||||||||||||||
| Total Convertible notes | $ | $ | ||||||||||||||||||||
| Less: Unamortized debt discount | ( | ) | ( | ) | ||||||||||||||||||
| Less: Current portion | ( | ) | ( | ) | ||||||||||||||||||
| Long-term portion | $ | $ | ||||||||||||||||||||
During the years ended December 31, 2025 and
2024, the Company recognized interest expense of $
In February 2025, the Company entered into
eleven (11) convertible notes ($
| F-19 |
On July 15, 2024 and August 15, 2024, the
Company entered into seventeen (17) subscription agreements for convertible notes ($
On September 30, 2022, the Company entered into
a convertible note agreement for the amount of $
The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note.
On August 19, 2025, the Company withdrew its
registration statement and decided not to proceed with qualified offering. The Company determined that the bifurcated conversion
feature was no longer a liability and is now categorized as equity. As a result, the Company reclassified its derivative liability
of $
Conversion
In June 2025, seventeen (17) note holders
converted convertible notes issued in July and August 2024 of $
In July and September 2025, six (6) note holders
converted convertible notes issued in November and December 2024 and February 2025 of $
In December 2025, a note holder converted a convertible
note issued in February 2025 of $
Note 9 – Derivative Liability
Fair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Binomial Lattice model to calculate the fair value as of issuance, August 19, 2025 and December 31, 2024.
| F-20 |
The underlying assumptions of Binomial Lattice model are as follows:
| 1. | The short-term interest rates, including risk-free rate, are known and remain constant over time. | |
| 2. | The absence of any arbitrage opportunities is assumed. | |
| 3. | The stock price follows a continuous-time random walk, with the rate of variance proportional to the square of the stock price. | |
| 4. | The distribution of possible stock prices at the end of any given finite interval is assumed to be lognormal. | |
| 5. | The variance of the rate of return on the stock is constant. | |
| 6. | No commissions or transaction costs are incurred when buying or selling the stock or option. | |
| 7. | The option's early exercise value is evaluated at each node of the lattice. | |
| 8. | If applicable, the tax rate remains consistent for all transactions and market participants. |
During the years ended December 31, 2025 and 2024, the estimated fair values of the liabilities measured on a recurring basis are as follows:
| Schedule of assumptions used for fair value measurement of liabilities | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Expected term | ||||||||
| Risk-free interest rate | ||||||||
| Stock price at valuation date | $ | $ | ||||||
| Expected average volatility | ||||||||
| Expected dividend yield | ||||||||
The following table summarizes the changes in the derivative liabilities during the years ended December 31, 2025 and 2024:
| Schedule of changes in the derivative liabilities | ||||
| Fair Value Measurements Using Significant Observable Inputs (Level 3) | ||||
| Balance - December 31, 2023 | $ | |||
| Addition of new derivatives recognized as debt discounts | ||||
| Addition of new derivatives recognized as loss on derivatives | ||||
| Balance - December 31, 2024 | $ | |||
| Addition of new derivatives recognized as debt discounts | ||||
| Settled on issuance of common stock | ( | ) | ||
| Reclassification to additional paid in capital | ( | ) | ||
| Loss on change in fair value of the derivative liability | ||||
| Balance - December 31, 2025 | $ | |||
Note 10 – Promissory Note
On June 7, 2023, the Company entered into a
promissory note agreement for the amount of $
During the year ended December 31, 2024, the
Company settled the promissory note with principal amount of $
| F-21 |
Note 11 – Accounts payable and accrued liabilities
As of December 31, 2025 and 2024, accounts payable and accrued liabilities consisted of the following:
| Schedule of accounts payable and accrued liabilities | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Credit card | ||||||||
| Sales tax payable | ||||||||
| Other liabilities | ||||||||
| Payroll liability | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
Note 12 – Related Party Transactions
The related parties that had material transactions for the years ended December 31, 2025 and 2024, consist of the following:
| Related Party | Nature of Relationship to the Company | |
| A | An Ohio Corporation - a significant shareholder | |
| B | Owner of A and our Chief Executive Officer of the Company from April 1, 2025 through September 30, 2025 | |
| C | A California Corporation owned by a related party D | |
| D | Significant shareholder and our Chief Technology Officer | |
| E | Director and Chief Executive Officer of GEVI Insurance Holdings Inc. | |
| F | A Delaware limited liability company - Series A Preferred shareholder | |
| G | A company controlled by our Chief Financial Officer |
As of December 31, 2025 and 2024, amounts owing to related parties consists as follows:
| Schedule of expenses to related parties and their nature | ||||||||||
| December 31, | December 31, | |||||||||
| Related Party | 2025 | 2024 | Nature of transaction | |||||||
| A | $ | $ | Operating expense paid on behalf of the Company | |||||||
| F | Accrued interest related to convertible note related party | |||||||||
| $ | $ | |||||||||
During the years ended December 31, 2025 and
2024, related party A advanced to the Company an amount of $
| F-22 |
For the years ended December 31, 2025 and 2024, expenses to related parties and their nature consists of:
| Years Ended | ||||||||||||
| December 31, | ||||||||||||
| Related Party | 2025 | 2024 | Nature of transaction | Financial Statement Line Item | ||||||||
| A | $ | $ | 150,000 Series C Convertible Preferred Stock for consulting fee | Professional fees - related party | ||||||||
| C | $ | $ | Cash paid for consulting fees | Professional fees - related party | ||||||||
| C | $ | $ | Cash paid for consulting and advisory fees | Cost of revenue - related party | ||||||||
| D | $ | $ | Cash paid for management fee | Professional fees - related party | ||||||||
| D | $ | $ | Cash paid for royalty and sales commissions | Cost of revenue - related party | ||||||||
| E | $ | $ | 30,000 Series C Convertible Preferred Stock for management compensation | Management compensation | ||||||||
| E | $ | $ | 20,000 shares of Series C Convertible Preferred Stock for advisory fee | Professional fees - related party | ||||||||
| F | $ | $ | 69,007 Series C Convertible Preferred Stock for services | Financing expense | ||||||||
| G | $ | $ | Edgar filing expense | General and administrative | ||||||||
| G | $ | $ | Professional service - accounting | Professional fees - related party | ||||||||
Convertible note – related party
The components of convertible notes as of December 31, 2025 and 2024, were as follows:
| Schedule of convertible debt related party | ||||||||||||||||||||||
| Effective | Stated | |||||||||||||||||||||
| Principal | Interest | Interest | December 31, | December 31, | ||||||||||||||||||
| Payment date | Amount | Maturity date | Rate | Rate | 2025 | 2024 | ||||||||||||||||
| December 2024 | $ | $ | $ | |||||||||||||||||||
| February 2025 | $ | |||||||||||||||||||||
| Total Convertible notes | $ | $ | ||||||||||||||||||||
| Less: Unamortized debt discount | ( | ) | ||||||||||||||||||||
| Less: Current portion | ( | ) | ( | ) | ||||||||||||||||||
| Long-term portion | $ | $ | ||||||||||||||||||||
In February 2025, the Company entered into one
(1) subscription agreement for convertible notes ($
| F-23 |
On December 31, 2024, the Company issued a convertible
note of $
During the year ended December 31, 2025,
the Company recognized interest expenses of $
Conversion
In December 2025, a note holder converted convertible
note issued in December 2024 of $
Note 13 – Stockholders’ Equity
Amended Articles of Incorporation
Effective on March 17, 2025, the Company amended its Articles of Incorporation to increase the authorized shares to 1,030,000,000 shares, of which shares are common stock and shares are preferred stock.
Preferred Shares
Shares Outstanding
The Company is authorized to issue up to shares of Preferred Stock, par value $ per share.
Series A Preferred Stock
The Company originally designated 10,000,000 shares of its Preferred Stock as Series A Convertible Preferred Stock. On March 17, 2025, the Company amended and restated its Series A Convertible Preferred Stock to designate shares of its Preferred Stock as Series A Preferred Stock, par value $, with the following rights and privileges.
Dividends. Holders of shares of Series A Preferred Stock are not entitled to receive dividends.
Voting Rights. Each share of Series A Preferred Stock is entitled to 1,000 votes on all matters submitted to a vote of the holders of Common Stock, voting together with the holders of Common Stock as a single class. Holders of shares of Series A Preferred Stock do not have cumulative voting rights. This means a holder of a single share of Series A Preferred Stock cannot cast more than one vote for each position to be filled on the Board of Directors.
Other Rights. Shares of Series A Preferred Stock are not entitled to a liquidation preference. The holders of the Series A Preferred Stock may not be redeemed without the consent of the holders of the Series A Preferred Stock. The holder of the Series A Preferred Stock are not entitled to pre-emptive rights or subscription rights.
As of December 31, 2025 and 2024, there were shares of Series A Preferred stock issued and outstanding.
| F-24 |
Series C Convertible Preferred Stock
The Company has designated shares of its Preferred Stock as Series C Convertible Preferred Stock with the following rights and privileges.
Dividends. Holders of shares of Series C Convertible Preferred Stock are not entitled to receive dividends.
Voting Rights. The holders of the Series C Convertible Preferred Stock are not entitled to vote.
Conversion Rights. Each share of Series C Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into 3.3333 shares of the Common Stock of the Company (the “Conversion Ratio”). Such Conversion Ratio, and the rate at which shares of Series C Convertible Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment.
Other Rights. The holders of the Series C Convertible Preferred Stock are not entitled to a liquidation preference. The holders of the Series C Convertible Preferred Stock may not be redeemed without the consent of the holders of the Series C Convertible Preferred Stock. The holder of the Series C Convertible Preferred Stock are not entitled to pre-emptive rights or subscription rights.
In September 2025, the Company entered into
Securities Purchase Agreements with certain investors for the issuance and sale (the “PIPE Offering”) of (i)
shares of its Series C Convertible Preferred Stock for an aggregate purchase price of approximately $
In October 2025, the Company entered into 2nd
PIPE Offering of (i) shares of its Series C Convertible Preferred Stock for an aggregate purchase price of approximately
$
In addition, during the year ended December 31, 2025, the Company issued shares of Series C Convertible Preferred Stock as follows:
| · |
shares for purchase subscriptions of $ | |
| · |
shares for services, valued at $ | |
| · | shares for compensation, valued at $ at market price on issuance dates. |
During the year ended December 31, 2025, the holders of the Series C Convertible Preferred Stock converted shares of the Company’s Series C Convertible Preferred Stock into shares of the Company’s common stock.
During the year ended December 31, 2024, the Company issued shares of Series C Convertible Preferred Stock as follows:
| · |
shares issued for stock payable of $ | |
| · | shares for purchase subscriptions of $ | |
| · |
issued for services, valued at $ |
As of December 31, 2025 and 2024, there were and shares of the Company’s Series C Convertible Preferred Stock issued and outstanding, respectively.
| F-25 |
Subscription Received
During the year ended December 31, 2023, the
Company received $
Common Stock
The Company has authorized shares of common stock with a par value of $. Each share of common stock entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
During the year ended December 31, 2025, the Company issued shares of Common Stock as follows:
| · | shares for conversion of Series C Convertible Preferred Stock. | |
| · |
shares for conversion of debt of $ | |
| · |
shares for services, valued at $ | |
| · | shares for cashless exercise of warrants. | |
| · | shares for reverse stock split adjustment. |
During the year ended December 31, 2024, the Company issued shares of Common Stock and cancelled shares as follows:
| · | shares issued for compensation, valued at $ at market price on issuance date. | |
| · |
shares issued for services, valued at $ | |
| · |
shares for conversion and settlement of debt of $ | |
| · | shares issued for common stock to be issued from fiscal year ended 2023 – to two directors of the Company. | |
| · |
shares were cancelled by the former Company's President, valued at $ |
As of December 31, 2025 and 2024, there were and shares of the Company’s common stock issued and outstanding, respectively.
Common Stock to be Issued
On November 1, 2022, the Company’s Board
of Directors approved the issuance of 41,667
shares of common stock to each of the two independent directors for their board services in support of the Company. The Company
valued shares of common stock at the market value of the Company’s common stock at approval date for the amount of
$
On April 22, 2024, the Company entered into an advisory and consulting agreement for a period of twelve (12) months with share compensation of 41,667 shares of common stock upon signing the agreement. The Company valued 41,667 shares based on market value at signing of the agreement, in the amount of $200,000 and recorded as common stock to be issued as a component of stockholders’ equity. On July 1, 2024, the Company terminated the agreement due to a lack of service performance by a contractor and 41,667 shares to be issued were cancelled.
| F-26 |
Restricted stock units (RSU)
On June 27, 2025 (the “Effective
Date”), the Company entered into the employment agreement with our Chief Operating Officer (“COO”), commencing on
July 21, 2025. Under this agreement, the Company issued
restricted shares of the Common Stock as stock bonus. Shares shall vest one-fourth each anniversary of the Effective Date. The grant
date fair value of shares is $
On September 22, 2025, the Company entered into
the employment agreement with our new Chief Executive Officer (“CEO”), commencing on October 1, 2025 (the
“Effective Date”). Under this agreement, the Company issued restricted shares of the Common Stock as stock
bonus. Shares shall vest one-fourth on first anniversary of the Effective Date and the remaining three-fourths on monthly basis over
the following 36 months. The grant date fair value of shares is $
During the year ended December 31, 2025, the Company recorded compensation expense of $. As of December 31, 2025, unrecognized compensation cost for unvested equity awards was $.
Management stock compensation (PSU)
During 2025, the Company entered into employment and consulting agreements with our CEO, former CEO, COO and a Director. The stock compensation based on market capitalization condition is as follows:
Market capitalization for 30 consecutive days | Consulting agreement Former CEO and current Chairman | Consulting agreement Director | Employment agreement COO | Employment agreement CEO | |||||
| $ | 120,000,000 | 70,000 series C Convertible Preferred Stock | 70,000 series C Convertible Preferred Stock | – | – | ||||
| $ | 150,000,000 | 70,000 series C Convertible Preferred Stock | 70,000 series C Convertible Preferred Stock | 37,500 common stock | 75,000 common stock | ||||
| $ | 200,000,000 | 70,000 series C Convertible Preferred Stock | 70,000 series C Convertible Preferred Stock | 37,500 common stock | 75,000 common stock | ||||
| $ | 250,000,000 | 70,000 series C Convertible Preferred Stock | 70,000 series C Convertible Preferred Stock | 37,500 common stock | 75,000 common stock | ||||
| $ | 300,000,000 | – | – | 37,500 common stock | 75,000 common stock | ||||
| Fair value ($) | |||||||||
The Company used the Monte Carlo model to calculate the fair value of compensation and estimated a total of the grant date fair value of $. The Company records compensation expense over the term of a derived service period unless the condition is satisfied at an earlier date. During the year ended December 31, 2025, the Company recorded compensation expense of $. As of December 31, 2025, unrecognized compensation cost for unvested equity awards was $, which is expected to be recognized over a remaining weighted-average period of years. As of December 31, 2025, of the PSU’s have been achieved.
| F-27 |
For the year ended December 31, 2025, the estimated fair values of the compensation measured used the following significant assumptions:
| Schedule of estimated fair values of the compensation | ||||
| 2025 | ||||
| Derived service period | - year | |||
| Risk-free interest rate | - % | |||
| Stock price at valuation date | $ | - | ||
| Expected average volatility | - % | |||
| First Capitalization Thresholder per share price | $ | - | ||
| Second Capitalization Thresholder per share price | $ | - | ||
| Third Capitalization Thresholder per share price | $ | - | ||
| Fourth Capitalization Thresholder per share price | $ | - | ||
Warrants
The Company issued a total of
The Company issued a total of
The Company issued
The Company issued a total of
We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815. In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
The warrants are valued using a Black Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
| F-28 |
The Company utilized the following assumptions:
| December 31, | December 31, | |||
| 2025 | 2024 | |||
| Expected term | ||||
| Expected average volatility | ||||
| Risk-free interest rate | ||||
| Expected dividend yield |
A summary of activity of the warrants during the years ended December 31, 2025 and 2024 as follows:
| Schedule of activity of the warrants | ||||||||||||
| Warrants Outstanding | ||||||||||||
| Weighted Average | Weighted Average Remaining Contractual | |||||||||||
| Shares | Exercise Price | Life (in years) | ||||||||||
| Outstanding, December 31, 2023 | $ | – | ||||||||||
| Granted | ||||||||||||
| Exercised | – | |||||||||||
| Forfeited/canceled | – | |||||||||||
| Outstanding, December 31, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | – | |||||||||
| Canceled | – | |||||||||||
| Outstanding, December 31, 2025 | $ | |||||||||||
| Exercisable, December 31, 2025 | $ | |||||||||||
The intrinsic value of the warrants as of December 31, 2025 is $.
Note 14 - Income Taxes
Components of income tax expense (benefit) are as follows for the years ended December 31, 2025 and 2024:
| Schedule of income tax expense (benefit) | ||||||||
| 2025 | 2024 | |||||||
| Current | $ | $ | ||||||
| Deferred | ||||||||
| Income tax benefit | $ | $ | ||||||
| F-29 |
The tax effects of temporary differences which give rise to the significant portions of deferred tax assets or liabilities are as follows at December 31, 2025 and 2024:
| Schedule of deferred tax assets or liabilities | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Deferred tax assets and liabilities | ||||||||
| Net operating losses carried forward | $ | $ | ||||||
| Allowance for doubtful debt | ||||||||
| Intangibles | ( | ) | ( | ) | ||||
| Total deferred tax asset | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | $ | ||||||
The Company will have approximately $
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2025 and 2024, respectively, a full valuation allowance was recognized.
In addition, the Company performed a comprehensive review of its uncertain tax positions and determined that no adjustments were necessary relating to unrecognized tax benefits at December 31, 2025 and 2024. The Company’s federal and state income tax returns are subject to examination by taxing authorities for three years after the returns are filed, and as such the Company’s federal and state income tax returns remain open to examination.
The reconciliation of the income tax benefit is computed at the U.S. federal statutory rate as follows:
| Schedule of reconciliation of the income tax benefit | ||||||||||||||||
| For the Years Ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Statutory tax rate | $ | ( |
) | $ | ( |
) | ||||||||||
| State tax rate | ( |
) | ( |
) | ||||||||||||
| Effect of change in income tax rate for deferred tax assets | ||||||||||||||||
| Effect of expenses not deductible for tax purpose | ( | ) | ( | ) | ||||||||||||
| Amortization | ( |
) | ( |
) | ||||||||||||
| Allowance for doubtful debt | ||||||||||||||||
| Change in valuation allowance | ( | ) | ( | ) | ||||||||||||
| Effective income tax rate | $ | $ | ||||||||||||||
Note 15 – Commitments and Contingencies
As part of the intellectual asset purchase agreement with MFB California, the Company is subject to royalties of 10% derived from gross invoiced sales of the MFB product excluding funds received for sales and use tax (Note 12).
| F-30 |
Note 16 – Disaggregated revenue and Concentration
During years ended December 31, 2025 and 2024, disaggregated revenue was as follows:
| Schedule of disaggregated revenue | ||||||||
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Products sale | $ | $ | ||||||
| Product installation service | ||||||||
| $ | $ | |||||||
During years ended December 31, 2025 and 2024, customer and supplier concentrations (more than 10%) were as follows:
Revenue and accounts receivable
Recurring customers do not represent a material percentage of our revenue and accounts receivable for the years ended December 31, 2025 and 2024.
| Schedule of revenue and accounts receivable | ||||||||
| Years ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Number of customers (more than 10% of revenue) | ||||||||
| Total revenue of top 5 customers | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Number of customers (more than 10% of accounts receivable) | ||||||||
| Total % of accounts receivable balance (more than 10%) | ||||||||
Purchase and accounts payable
| Schedule of purchase and accounts payable | ||||||||||||||||
| Percentage of Purchases | Percentage of | |||||||||||||||
| For years ended | Accounts payable for purchase | |||||||||||||||
| December 31, | December 31, | December 31 | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Supplier A | % | % | % | |||||||||||||
| Supplier B | % | % | % | % | ||||||||||||
| Supplier C | % | |||||||||||||||
| Supplier D | % | % | % | |||||||||||||
| Supplier E | % | |||||||||||||||
| Total (as a group) | % | % | % | % | ||||||||||||
| F-31 |
To reduce risk, the Company closely monitors the amounts due from its customers and assesses the financial strength of its customers through a variety of methods that include, but are not limited to, engaging directly with customer operations and leadership personnel, visiting customer locations to observe operating activities, and assessing customer longevity and reputation in the marketplace. As a result, the Company believes that its accounts receivable credit risk exposure is limited.
Note 17 – Subsequent Events
Management has evaluated subsequent events through March 30, 2026, which is the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure, except as follows:
On February 27, 2026, related party F (see Note 12), extended their convertible promissory note until April 28, 2026. Pursuant to the extension, they charged a 1% amendment fee and agreed to release their security pledge against certain intangible assets of the Company.
The Company issued common stock as follows:
| · | 171,878 shares of common stock for conversion of debt and accrued interest valued at $412,500. | |
| · | 180,708 shares of common stock for cashless exercise of 192,708 warrants. | |
| · | 220,000 shares of common stock for acquisition of IP, valued at $1,775,400, which is recorded as additional paid in capital as of December 31, 2025. | |
| · | 55,333 shares of common stock issued for services, valued at $443,377. |
| F-32 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CitroTech Inc. | |||
| Dated: March 30, 2026 | By: | /s/ Wesley Bolsen | |
| Name: | Wesley Bolsen | ||
| Title: | Chief Executive Officer (Principal Executive Officer) |
||
| Dated: March 30, 2026 | By: | /s/ Nanuk Warman | |
| Name: | Nanuk Warman | ||
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Wesley Bolsen | Chief Executive Officer and Director | March 30, 2026 | ||
| Wesley Bolsen | (Principal Executive Officer) | |||
| /s/ Nanuk Warman | Chief Financial Officer | March 30, 2026 | ||
| Nanuk Warman | (Principal Financial and Accounting Officer) | |||
| /s/ Theodore Ralston | Chairman of the Board | March 30, 2026 | ||
| Theodore Ralston | ||||
| /s/ Jeffery Pomerantz | Director | March 30, 2026 | ||
| Jeffery Pomerantz | ||||
| /s/ Lorenzo Calinawan | Director | March 30, 2026 | ||
| Lorenzo Calinawan | ||||
| /s/ Craig Huff | Director | March 30, 2026 | ||
| Craig Huff | ||||
| II-1 |
Exhibit 10.3
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this “Agreement”) is made and entered into on the 31st day of December 2025 (the “Effective Date”), by and between Joshua Ralston, an individual resident of the State of Ohio (“Employee”) and CitroTech Inc., a Wyoming corporation f/k/a General Enterprise Ventures, Inc. (“Employer”). Employee and Employer are hereinafter sometimes collectively referred to as the “Parties” and individually as a “Party”.
RECITALS
WHEREAS, Employer and Employee entered into that certain Employment Agreement dated March 1, 2025 (the “Employment Agreement”);
WHEREAS, each Party is entering into this Agreement to resolve all outstanding matters between the Parties and to confirm and establish the Parties’ obligations in the future;
NOW, THEREFORE, for and in consideration of the premises, mutual promises, covenants, conditions, obligations, agreements, warranties, representations and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto agree as follows.
AGREEMENTS
1. Separation. The Parties agree that Employee will separate from any and all employment, jobs, positions, titles, offices, position as an officer in all capacities related to Employer on December 31, 2025 (the “Effective Date”). In conjunction with the separation, Employee shall sign all documents necessary to effectuate the separation. In connection with Employee’s employment relationship with Employer and the separation by Employee, the Parties expressly deny any violation by Employer of any policies, procedures, state or federal laws or regulations, and Employee hereby agrees that no such violations have occurred.
2. Release. In exchange for the Additional Compensation (as defined herein), Employee hereby compromises, settles, releases and discharges Employer and its respective parents, affiliates, predecessors, servants, employees, members, agents, board members, officers, associates, partners, attorneys, legal representatives, insurers, successors and assigns, any present and former agents, servants, employees, officers, members, board members, associates, attorneys, legal representatives, and any parent, subsidiary, affiliated or related business entities, and their insurers and sureties out of any matter, accounts, notes, covenant, contracts, agreements, promises, liabilities, damages, losses, costs and expenses whatsoever, known or unknown, accrued or unaccrued, suspected or unsuspected, in law or in equity, whether having arisen or hereafter to arise against Employer and its respective and its respective parents, affiliates, predecessors, servants, employees, members, agents, board members, officers, associates, partners, attorneys, legal representatives, insurers, successors and assigns, any present and former agents, servants, employees, officers, members, board members, associates, attorneys, legal representatives, and any parent, subsidiary, affiliated or related business entities, and their insurers and sureties or event occurring contemporaneously with or prior to the execution of this Agreement, including but not limited to all claims arising out his employment and/or representation with Employer, including but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, severance pay, bonuses, contractual obligations, unemployment pay or other unemployment benefits, wage claims, sick leave, holiday pay, vacation pay, life insurance, group medical insurance or any other employment benefit of Employer or workers’ compensation or disability claims. Employee expressly agrees and understands that this release provision extends to any and all claims he may have on the basis of any employment contract, the employment and labor law of the State of Texas, or discrimination on the basis of race, age, color, religion, sex, creed, national origin, disability, handicap, marital status, familial status or any other reason, including without limitation those claims that he may have under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act.
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3. Waiver. Employee hereby agrees it is his intention in executing this instrument that the same shall be effective as a bar to each and every claim, demand and cause of action against Employer; and, in furtherance of this intention, Employee hereby expressly waives any and all rights and benefits conferred upon his by the provisions of any state or federal statute and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those related to unknown and unsuspected claims, demands and causes of action, if any, as those relating to any other claims, demands and causes of action that could possibly be brought against Employer. Employee covenants not to sue or pursue in any agency or court of law any claims against Employer.
4. Consideration Period. The Parties hereby acknowledge that Employee does have a “Consideration Period” within which to rescind this agreement pursuant to the Federal Age Discrimination in Employment Act. Employee expressly recognizes that by signing this Agreement, he is releasing any rights or claims that he believes he may have under the Federal Age Discrimination in Employment Act. Further, Employee recognizes that he has 21 days from the date this Agreement is presented to his to consider it (the “Consideration Period”); however, having been advised of the Consideration Period, Employee may elect, and is in fact electing, to execute this Agreement at any time prior to the expiration of the Consideration Period. If Employee signs this Agreement, he may revoke it within seven (7) days of the date hereof (the “Revocation Period”). To be effective, the revocation must be in writing and delivered by email to: andrew.hotsko@citrotech.com, within the Revocation Period.
5. ADEA Compliance. The Parties hereby recognize and agree that the waiver provisions of this Agreement are acknowledged and conclusively deemed to be in compliance with the requirements of the Older Workers Benefit Protection Act, 29 U.S.C. sections 626 (f) (1) (A)-(E) as well as all other state and federal statutes and regulations. Employee agrees that he has knowingly and voluntarily agreed, for the consideration set forth herein to waive, among other things, any and all rights and claims he may have against Employer under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. section 621, et seq. (“ADEA”) and all other state and federal statutes and regulations. Employee specifically acknowledges that the waiver of rights under the ADEA and other statutes and regulations has been written in a manner that he has understood; that the waiver specifically refers to claims arising under the ADEA and other statutes and regulations; that he has not waived any rights or claims under the ADEA and other statutes and regulations that arise after the date this waiver is executed; that the waiver of rights or claims under the ADEA and other statutes and regulations has been in exchange for consideration in addition to anything of value to which he is already entitled.
6. ERISA Unaffected. The Parties further acknowledge that this Agreement does not affect Employee’s rights that he may have to proceeds under any retirement or other plan covered by Employee Retirement Income Security Act of 1974.
7. Compensation and Benefits; Lock Up. Employee will receive (a) all salary and benefits due to Employee through the Effective Date, and (b) $16,500, which constitutes one month of compensation at Employee’s current salary (the “Additional Compensation”). The Additional Compensation shall be transferred by wire transfer to an account specified by Employee, within three (3) days following the termination of the Revocation Period. In addition, for a period of 90 days following the Effective Date, Employee agrees not to trade any shares of Employer owned, whether directly, indirectly or beneficially, by Employee (the “Lock-Up Period”). Following the expiration of the Lock-Up Period, Employer agrees, as needed, to assist Employee in removing restrictive legends associated with shares of Employer owned, whether directly, indirectly or beneficially, by Employee.
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8. Confidentiality. The Parties agree to keep the terms of this Agreement confidential and not to disclose or discuss such terms with any third party, including without limitation and in particular, other employees of Employer, vendors, suppliers, investors, contractors, business partners, clients and other third parties who do business with Employer and the media; provided, however, the Parties may discuss the terms of this Agreement with that Party’s spouse, accountant, tax preparer or attorney (collectively referred to herein as the “Professionals”) or in response to a valid subpoena or an order from a court of competent jurisdiction. Notwithstanding the foregoing, the Parties may state that, “The employment relationship has been terminated on terms agreeable to the Parties.” In addition, the Parties retain the right to file this Agreement in court, to the extent necessary to secure enforcement of the Agreement.
9. Non-Disclosure. Employee represents that he has held all of Employer’s Confidential Information (as defined herein) confidential and in trust and will continue to do so. Employee further agrees that he shall not at any time divulge, communicate, use to the detriment of Employer, or for the benefit of Employee or any other business, company, person, partnership, governmental agency, corporation, or other entity, or otherwise misuse or disclose, any of Employer’s Confidential Information. For purposes of this Agreement, “Confidential Information” means all information of Employer including without limitation proprietary information, financial information, operations, products, services, pricing, customer lists, customer contact information, marketing plans, business policies and practices, or other technical, financial or strategic information.
10. Non-Solicitation.
(a) Customer Non-Solicitation. During the Restricted Period, Employee shall not directly or indirectly, in any capacity, induce or attempt to induce, any customer and/or investor (regardless of whether Employee initiates contact for such purpose) to: (i) cease doing business with Employer or any affiliate; (ii) do business with a Competing Business; or (iii) reduce, restrict or terminate its relationship with the Employer or any affiliate.
(b) Employee/Contractor non-Solicitation and No-Hire. During the Restricted Period, Employee shall not directly or indirectly, in any capacity, induce, attempt to induce, or solicit any employee or independent contractor of Employer or an affiliate (regardless of whether Employee initiates contact for such purposes) to: (i) work or provide services to a person other than Employer or an affiliate; or (ii) employ and/or establish an independent contractor relationship with any person who is or was an employee or independent contractor of Employer or an affiliate at any time during the Reference Period.
Definitions for Section 10.
“Competing Business” means persons and entities in the business of fire suppression or fire retardation, including businesses that supply, sell, rent and/or market, as applicable, products and/or services that are the same or substantially similar to the products and/or services of Employer or any affiliate, that are supplied, manufactured, produced, designed, sold and/or marketed during the Reference Period.
“Reference Period” means the twelve (12) month period prior to and subsequent to the Effective Date.
“Restricted Period” means the twelve (12) month period following the Effective Date.
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11. Employer Property.
(a) Beginning on the date first set forth above, Employee agrees not to: (i) make any physical copies of, or copy to any flash drive, external hard drive, personal cloud drive or “app”, any confidential information or any financial, operational or other data file of Employer; (ii) alter, change or corrupt any information or any financial, operational or other data file of Employer; or (iii) transmit by email, link, electronic means, to an “app” or third party email address, any confidential information or any financial, operational or other data file of Employer.
(b) On the Effective Date, Employee agrees to return all property of Employer’s, including without limitation: files, documents, customer and vendor contact information and telephone lists, keys, computer equipment, mobile telephone, passwords, materials, equipment and tools. To the extent that Employee has or has access to any of Employer’s Confidential Information, Employee agrees to return it on or before the Effective Date. By accepting the Additional Compensation, Employee represents and warrants that he has complied with this Section 11, and this Agreement, and will continue to do so.
(c) No rights or licenses to any of Employer’s trade secrets, proprietary information, trademarks, copyrights, patents or other intellectual property (collectively, the “Intellectual Property”) are implied or granted to Employee, and Employee acknowledges and agrees that he has no right, title or interest in or to any of the Intellectual Property.
12.No Admission. Each Party further acknowledges and agrees that neither the fact of the execution of this Agreement or the Additional Compensation shall be construed, in any way, as an admission of liability by Employer. Each Party further understands and agrees that no fact pertaining to the making or consummation of this Agreement, nor the Agreement itself, shall be admissible in any proceeding or cause of action (except in an action to enforce this Agreement) as an admission of any liability or responsibility by Employer.
13.Merger Clause. This Agreement constitutes the entire agreement between the Parties, contains all of the final covenants, terms and conditions agreed upon by the Parties with reference to the subject matter hereof, and this Agreement terminates, supersedes, and replaces any and all prior arrangements, understandings, representations, promises, inducements, or other communications, whether written or oral, between the Parties. No other agreements, oral or otherwise, shall be deemed to exist or to bind any of the Parties hereto. Each Party acknowledges and represents that no oral understandings, statements, promises, or inducements contrary to the terms of this Agreement exist. This Agreement can only be amended in writing signed by all of the Parties hereto.
14. Right to Review. The Parties acknowledge that each has discussed this Agreement with his or its own attorney or had the opportunity to discuss this Agreement with an attorney and chose not to do so. The Parties further state and represent that they have each fully reviewed all of the terms of this Agreement and that each Party, by signing below, warrants and affirms that he or it fully understands its terms. The Parties further acknowledge and represent that it is their respective desire, voluntarily and without coercion or influence from any other person or entity, to enter into this Agreement, and the Parties accordingly each do so in any and all capacities as his or its own respective free act and deed.
15. Effect of Invalidity. If any provision of this Agreement or its application to any person or circumstance is held invalid, the invalidity will not affect other provisions or applications of this Agreement that can be given effect without the invalid provision or application.
16. Binding Agreement. Each Party agrees that this Agreement constitutes a valid, binding, and enforceable obligation of each Party and that its terms are lawful and fair. Each Party further agrees that the statements, representations, agreements and covenants contained herein are contractual in nature and not mere recitations of fact, and that the agreements and covenants set forth herein shall be binding upon and shall inure to the benefit of the Parties, and their respective heirs, successors, assigns and personal representatives, as the case may be.
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17. Authority to Sign. Each Party represents and warrants that each has the mental capacity, authority, partnership, or corporate power to enter into and sign this Agreement and they agree to the transactions contemplated herein.
18. Enforcement. This Agreement, any disputes which may arise in connection with the interpretation or enforcement of the Agreement, and the rights and obligations of the Parties generally shall be governed by the laws of the State of Ohio and without regard or reference to its choice or conflict of law rules. All actions to enforce this Agreement shall be brought exclusively in state and federal courts located in Houston, Harris County, Texas, and the Parties consent to the exclusive jurisdiction of the state or federal courts located in Houston, Harris County, Texas for such purpose. If any party to this Agreement brings suit to enforce any right or obligation under this Agreement, the prevailing Party shall be entitled to recover its expenses, including reasonable attorneys’ fees, incurred in connection with that action.
19. Assignment. Neither this Agreement nor any rights under it is assignable or transferable to any other person or entity without the written consent of all Parties hereto.
20. Rules of Contract Construction. Each Party represents that this Agreement is the product of negotiations among the Parties. All Parties acting through themselves or their attorneys have participated in the drafting of this Agreement. Therefore, no Party to this Agreement shall be charged with having promulgated this Agreement or have this document construed for or against a Party under the rules of contract construction. Headings are used herein only to assist the reader, and to the extent there are any conflicts between the Headings and the substance of this Agreement, the substance of this Agreement shall govern.
21. Counterparts. The Parties further agree that this Agreement may be executed in multiple counterparts, including by electronic transmission and by email in portable document format, each of which shall constitute an original and all of which shall constitute one and the same document.
22. Non-Disparagement. In exchange for the Additional Compensation, Employee shall refrain from making any false or disparaging statements, either written or oral, about Employer, its officers, employees, stockholders, directors, affiliates and the respective entities and property of Employer. Employee further agrees not to make any complaints or reports to any governmental agencies, departments or offices that are false about Employer, its facilities and/or its agents and employees. Employee acknowledges and agrees that any such false or disparaging remarks or communications, of whatever nature to whomsoever communicated, may have a detrimental and deleterious effect on Employer. Employee further agrees that there are no issues, reasons, causes, situations, sets of facts or circumstances concerning the relationship between Employee and Employer or otherwise, in existence that would justify the dissemination and/or publication of disparaging remarks. Employee agrees that if Employee should violate this contractual undertaking, it will be difficult, if not impossible for Employer to be adequately compensated by money and, therefore, upon sufficient proof of a breach, equitable remedies including injunctive relief shall be appropriate.
23. Notices. Any notice required or permitted to be given in connection with this Agreement shall be in writing and shall be sufficiently given if delivered in person, by overnight courier or email to the addresses set forth on the signature page below. Any notice delivered or transmitted to a Party as provided herein shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a business day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a business day then notice shall be deemed to have been given and received on the next business day. Any Party may, from time to time, change its address by giving notice to the other Party in accordance with the provisions of this Section 24.
24. Amendment and Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against either Party unless such modification, amendment or waiver is approved in writing by each Party hereto. The failure of any Party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Party thereafter to enforce each and every provision of this Agreement in accordance with its terms.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the first date set forth above to be effective as of the Effective Date.
EMPLOYEE:
/s/ Joshua Ralston_
Joshua Ralston
Address: [***]
Email: [***]
EMPLOYER:
CITROTECH INC.
By: /s/ Wesley J. Bolsen
Name: Wesley J. Bolsen
Title: Chief Executive Officer
Address for Notice:
6400 S. Fiddler Green Cir,
Suite 300 Greenwood Village, CO 80111
Email: wes.bolsen@citrotech.com
[SIGNATURE PAGE TO CITR / RALSTON SEPARATION AGREEMENT]
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Exhibit 10.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the “Agreement”), executed on the 1st day of April 2025 (the “Effective Date”), is entered into by and between GENERAL ENTERPRISE VENTURES, INC., a Wyoming corporation (the “Company”), and Theodore Ralston, an individual resident of the State of Ohio (the “Consultant”). The Company and the Consultant may be referred to singularly as “Party” or collectively as “Parties”.
WITNESSETH:
WHEREAS, the Company desires that Consultant provide the Company with outside chief executive officer services; and
WHEREAS, Consultant wishes to provide the Company with outside chief executive officer services;
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto do hereby agree as follows:
1. Consultant. The Company hereby appoints Consultant to provide chief executive officer services to the Company and to perform services to the Company as directed by the Board of Directors of the Company.
2. Consulting Fee.
(a)Compensation. Consultant shall receive compensation as follows:
(i) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $120,000,000;
(ii) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $150,000,000;
(iii) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $200,000,000; and
(iv) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $250,000,000 (Section 2(a)(i)-(v), each a “Share Award” and collectively, the “Share Awards”).
For the avoidance of doubt, so long Consultant provides services to the Company for the Initial Term, the Consultant shall have vested in his right to receive the Shares Awards contemplated in this Section 2(a), regardless of whether this Agreement is subsequently terminated.
(b) If this Agreement is terminated by the Company within six (6) months following Consultant: (i) no longer owning Series A Preferred Stock, or (ii) owning (or having the right to convert to) on a fully diluted basis less than five percent (5%) of the common stock of the Company, then within 30 days thereafter the Company shall remit to Consultant or his designee the amount of 70,000 shares of Series C Convertible Preferred Stock in book as soon as reasonably possible for the transfer agent to make the book entry on behalf of Consultant or his designee.
(c) Additional Compensation. Consultant will be eligible to participate in any executive compensation plan put into effect by the Company. Consultant acknowledges that any awards under an executive compensation plan are in the discretion of the Board of Directors of the Company.
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3. Expenses. The Company shall reimburse Consultant for all pre-approved expenses incurred on behalf of the Company, so long as the expenses are documented to the Company’s satisfaction to allow the Company to deduct the expenses on its financial statements or tax returns.
4. Consultant’s Duties. Consultant shall devote his business time, attention, skill, and energy to the performance of his duties hereunder and will use his best efforts to promote the success, best interests, and goodwill of the Company.
5. Term. The term of this Agreement shall be for a period of 12 months (the “Initial Term”), which Term shall automatically renew for successive 6-month periods unless either Party provides the other Party at least 30 days’ written notice (email being sufficient) of its intent not to renew this Agreement (each such 6-month period, a “Renewal Term” and collectively with the Initial Term, the “Term”).
6. Confidential Information. The Consultant acknowledges that in the course of his services to the Company, he may receive certain trade secrets, know-how, lists of customers, employee records and other confidential information and knowledge concerning the Business (“Confidential Information”), which the Company desires to protect. The Consultant understands that such Confidential Information is confidential and agrees to not reveal such Confidential Information to anyone outside the Company; provided, however, that Confidential Information does not include any information that: (a) is or becomes generally available to the public other than as a result of Consultant’s breach of this Agreement; (b) is obtained by Consultant on a non-confidential basis from a third party that, to Consultant’s knowledge, was not legally or contractually restricted from disclosing such information; (c) was in Consultant’s possession before receiving such information from Company; or (d) was or is independently developed by Consultant without using any Confidential Information.. Upon termination of this Agreement, the Consultant shall surrender to the Company all papers, documents, writings, and other property produced by him or coming into his possession by or through this Agreement and relating to the information referred to in this Section 6, which are not general knowledge in the industry, and the Consultant agrees that all such materials will at all times remain the property of the Company.
7. Termination. This Agreement may be terminated immediately by written notice to Consultant (email being sufficient) upon the occurrence of any of the following: (i) a material breach of this Agreement that remains uncured following 30 days’ notice thereof; (ii) making disparaging statements (whether written or verbal) about the Company, or its subsidiaries, affiliates, officers, employees, or Board of Directors; or (iii) engaging in any activity that reflects negatively on the Company’s reputation or standing in its business community.
8. Notices. All notices, requests, consents, demands, or other communications required or permitted to be given pursuant to this Agreement shall be in writing and delivered by email as follows:
If to the Company:
General Enterprise Ventures, Inc.
Email: nwarman@generalenterpriseventures.com
Attn: Nanuk Warman, Chief Financial Officer
If to Consultant:
Theodore Ralston
Email: [***]
Any Party, at any time, may designate additional or different addresses for subsequent notices or communication by furnishing notice to the other Party in the manner described above.
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9. Specific Performance. The Company and the Consultant each acknowledge and agree that a remedy at law for any breach or threatened breach of Section 6 of this Agreement will be inadequate and that each Party may be entitled to specific performance, injunctive relief, and any other remedies available to it for such breach or threatened breach. If a bond is required to be posted for either Party to secure an injunction, then the Parties stipulate that a bond in the amount of One Thousand and No/100 Dollars ($1,000.00) will be sufficient and reasonable in all circumstances to protect the rights of the Parties.
10. Representations, Warranties and Covenants of Consultant. The Consultant hereby represents, warrants and covenants to the Company that (i) the Consultant’s execution of this Agreement and the Consultant’s performance of services hereunder does not, and will not, violate any agreements, whether oral or written, by and between the Consultant and any third party; (ii) this Agreement and the performance by the Consultant of any services hereunder do not, and will not, violate any applicable law or regulation; (iii) the Consultant is not bound to any third party by any confidentiality or non-competition obligations that might prohibit Consultant from performing services hereunder; and (iv) Consultant will not disclose to the Company any information belonging to a third party that is a trade secret or of a confidential nature.
11. Governing Law. ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WYOMING, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF WYOMING OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF WYOMING. THE PARTIES AGREE THAT ALL DISPUTES, LEGAL ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE BROUGHT EXCLUSIVELY IN A FEDERAL DISTRICT COURT LOCATED IN THE DISTRICT OF OHIO OR THE OHIO STATE COURTS LOCATED IN LIMA, OHIO (COLLECTIVELY THE “DESIGNATED COURTS”). EACH PARTY HEREBY CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS. NO LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY OTHER FORUM. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL CLAIMS OF IMMUNITY FROM JURISDICTION AND ANY RIGHT TO OBJECT ON THE BASIS THAT ANY DISPUTE, ACTION, SUIT OR PROCEEDING BROUGHT IN THE DESIGNATED COURTS HAS BEEN BROUGHT IN AN IMPROPER OR INCONVENIENT FORUM OR VENUE.
12. Mutual Waiver of Jury Trial. THE COMPANY AND CONSULTANT EACH WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS AGREEMENT IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE COMPANY AND CONSULTANT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
13. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provisions shall be ineffective to the extent of such provision or invalidity only, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
14. Assignment. Assignment. Neither Party may assign this Agreement without the express written consent of the other Party, which consent is in the sole discretion of the Party.
15. Binding Effect. Subject to the provisions of Section 14 above, this Agreement shall be binding upon and inure to the benefit of the Parties hereto, Consultant’s heirs and personal representatives, and the successors and assigns of the Company.
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16. Independent Contractor. Nothing herein shall be construed or deemed to create a joint venture, contract of employment or Company. It is agreed and understood between the Parties hereto that Consultant is an independent contractor and is not an employee of the Company hereunder. Consultant will be solely responsible for payment of all taxes due or which may become due on monies paid by the Company to Consultant hereunder, specifically including but not limited to income tax (withholding) and FICA. Consultant shall not be entitled to corporate benefits of the Company provided to its employees so long as this Agreement remains in effect.
17. Headings. Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
18. Parole Evidence. This Agreement constitutes the sole and complete agreement between the Parties hereto, and no verbal or other statements, inducements or representations have been made to or relied upon by either Party, and no modification hereof shall be effective unless in writing, signed, and executed in the same manner as this Agreement.
19. Waiver. Failure by either Party hereto to enforce at any time or for any period of time any provision or right hereunder shall not constitute a waiver of such provision or of the right of such Party thereafter to enforce each and every such provision. Any waiver to be enforceable must be in writing and executed by the Party against whom the waiver is sought to be enforced.
20. Attorneys’ Fees. If any litigation is instituted to enforce or interpret the provisions of this Agreement or the transactions described herein, the prevailing Party in such action shall be entitled to recover its costs and reasonable attorneys’ fees from the non-prevailing Party hereto.
21. Drafting. Both Parties hereto acknowledge that each Party was actively involved in the negotiation and drafting of this Agreement and that no law or rule of construction shall be raised or used in which the provisions of this Agreement shall be construed in favor or against either Party hereto because one is deemed to be the author thereof.
22. Multiple Counterparts. This Agreement may be executed in multiple counterparts, including by electronic means and by email in portable document format, each of which shall have the force and effect of an original, and all of which shall constitute one and the same agreement.
23. Acknowledgment of Enforceability. Consultant acknowledges and agrees that this Agreement contains reasonable limitations as to time, geographical area, and scope of activity to be restrained that do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the Company. Therefore, Consultant agrees that all restrictions are fairly compensated for and that no unreasonable restrictions exist.
24. Reconstruction of Agreement. Should a court of competent jurisdiction or an arbitrator having jurisdiction declare any of the provisions of this Agreement unenforceable due to any unreasonable restriction of time, geographical area, scope of activity, or otherwise, in lieu of declaring such provision unenforceable, the court, to the extent permissible by law, shall, at the Company’s request, revise or reconstruct such provisions in a manner sufficient to cause them to be enforceable.
25. COUNSEL. CONSULTANT ACKNOWLEDGES THAT HE IS EXECUTING A LEGAL DOCUMENT THAT CONTAINS CERTAIN DUTIES, OBLIGATIONS AND RESTRICTIONS AS SPECIFIED HEREIN. CONSULTANT FURTHERMORE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF HIS RIGHT TO RETAIN LEGAL COUNSEL, AND THAT HE HAS EITHER BEEN REPRESENTED BY LEGAL COUNSEL PRIOR TO HIS EXECUTION HEREOF OR HAS KNOWINGLY ELECTED NOT TO BE SO REPRESENTED.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the first date set forth above, to be effective as of the Effective Date.
COMPANY:
GENERAL ENTERPRISE VENTURES. INC.
By: /s/ Nanuk Warman
Name: Nanuk Warman
Title: Chief Financial Officer
CONSULTANT:
By: /s/ Theodore Ralston
THEODORE RALSTON
[SIGNATURE PAGE TO GEVI / RALSTON CONSULTING AGREEMENT]
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Exhibit 10.16
FIRST AMENDMENT TO 10% SENIOR SECURED CONVERTIBLE PROMISSORY
NOTE
This FIRST AMENDMENT TO 10% SENIOR SECURED CONVERTIBLE PROMISSORY NOTE (this “Amendment”), is made and entered into as of February 27, 2026, by and among CitroTech Inc. (f/k/a General Enterprise Ventures, Inc.), a Wyoming corporation (the “Company”), and BoltRock Holdings, LLC, a Delaware limited liability company (the “Holder”).
W I T N E S S E T H:
WHEREAS, the Company issued that certain 10% Senior Secured Convertible Promissory Note (the “Note”) to the Holder in connection with that that certain Subscription Agreement, dated as of February 28, 2025, by and between the Company and the Holder;
WHEREAS, in connection with the Note, the Company and the Holder entered into that certain Pledge and Security Agreement dated February 28, 2025 (the “Pledge Agreement”)l
WHEREAS, the Company and the Holder desire to amend the Note and terminate the Pledge Agreement upon the terms and subject to the conditions set forth herein; and
WHEREAS, pursuant to Section 5.1 of the Note, any provision of the Note may be amended if, and only if, such amendment is agreed by written consent of the Company and the Holders of the Notes representing not less than 100% of the aggregate Conversion Amount under all Notes (which the Holder holds).
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Note.
2. Amendments to the Note. The parties hereto hereby agree that the Note is hereby amended as follows:
(a) The second sentence of the preamble of the Note shall be amended and replace the phrase “that is 12 months following the date first set forth above” with “April 28, 2026”.
(b) The third sentence of the preamble of the Note shall be amended and restated to state “Interest shall accrue daily at a rate of 10% per annum, (i) to but excluding, February 28, 2026 (the “Amendment Effectiveness Date”) and be capitalized (added to principal) with the Amendment Fee (as defined below, and which shall also be capitalized (added to principal)) on the Amendment Effectiveness Date and (ii) from and including the Amendment Effectiveness Date, to the Maturity Date, and shall be capitalized (added to principal) on the Maturity Date.”
(c) Section 2.1 shall be amended to include the following defined term: “Amendment Fee” means 1.00% of the amount capitalized (added to principal) on the Amendment Effectiveness Date. Such fee is payable in kind.”
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3. Collateral. The parties acknowledge and agree that upon the execution of this Amendment, the Pledge Agreement shall immediately be terminated and thereafter be null, void and of no further effect.
4. Date of Effectiveness; Limited Effect. This Amendment will be deemed effective as of the date first written above. Except as expressly provided in this Amendment, all of the terms and provisions of the Note are and will remain in full force and effect and are hereby ratified and confirmed by the parties. Except as expressly provided in this Amendment, and without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Note or of any other transaction document or as a waiver of or consent to any further or future action on the part of either party that would require the waiver or consent of the other party. On and after the effective date of this Amendment, each reference in the Note to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference to the Note in any other agreements, documents, or instruments executed and delivered pursuant to, or in connection with, the Note will mean and be a reference to the Note as amended by this Amendment.
5. Entire Agreement. This Amendment, the Note, the Warrant and the Subscription Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters. For the avoidance of doubt, upon the execution of this Amendment, the Pledge Agreement shall immediately be terminated and thereafter be null, void and of no further effect.
6. Miscellaneous. Sections 5.1 – 5.6 and 5.8 – 5.9 of the Note are each hereby incorporated by reference mutatis mutandis.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
CITROTECH INC.
By: /s/ Wesley J. Bolsen_
Name: Wesley J. Bolsen
Title: Chief Executive Officer and Director
By: /s/ Theodore Ralston_
Name: Theodore Ralston
Title: Director
By: /s/ Jeffery Pomerantz_
Name: Jeffery Pomerantz
Title: Director
By: /s/ Lorenzo Calinawan_
Name: Lorenzo Calinawan
Title: Director
BOLTROCK HOLDINGS, LLC
By: /s/ Craig Huff_
Name: Craig Huff
Title: Managing Member
[Signature Page to the First Amendment to Promissory Note]
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Exhibit 10.17
CITROTECH INC. 2026 EQUITY AND INCENTIVE PLAN
1.Purpose. The purpose of the CitroTech Inc. 2026 Equity and Incentive Plan (the “Plan”) is to provide a means through which the Company and its Affiliates (each as defined below) may attract and retain key personnel and align their interests with those of the Company’s shareholders by providing them the opportunity to acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may (but need not) be measured by reference to the value of Common Shares (as defined below).
2.Definitions. The following definitions shall be applicable throughout the Plan:
(a)“Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.
(b)“Award” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock Bonus Award, and Performance Compensation Award granted under the Plan.
(c)“Board” means the Board of Directors of the Company.
(d)“Business Combination” has the meaning given such term in the definition of “Change in Control.”
(e)“Cause” means, in the case of a particular Award, unless the applicable Award agreement states otherwise, (i) the Company or an Affiliate having “cause” to terminate a Participant’s employment or service, as defined in any employment or consulting or similar agreement between the Participant and the Company or an Affiliate in effect at the time of such termination or (ii) in the absence of any such employment or consulting or similar agreement (or the absence of any definition of “Cause” contained therein), (A) gross misconduct by the Participant which results in loss, damage or injury to the Company or any of its Affiliates, or its or their goodwill, business or reputation; (B) the commission or attempted commission of an act of embezzlement, fraud or breach of fiduciary duty which results in loss, damage or injury to the Company or any of its Affiliates, or its or their goodwill, business or reputation; (C) the unauthorized disclosure or misappropriation of any trade secret or confidential information of the Company, any of its Affiliate or any third party who has a business relationship with the Company, other than in connection with the disclosure of a trade secret or confidential information that is made (1) in confidence to a federal, state, or local government official, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; (D) the Participant’s commission or conviction of, or plea of nolo contendere to, a felony under any state or federal law which materially interferes with such Participant’s ability to perform his or her services for the Company or any of its Affiliates or which results in loss, damage or injury to the Company or any of its Affiliates, or its or their goodwill, business or reputation; (E) the violation (or potential violation) by the Participant, in any material respect, of a non-competition, non-solicitation, non-disclosure or assignment of inventions covenant between the Participant and the Company or any of its Affiliates; (F) the Participant’s failure to perform the Participant’s assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, after written notice given to the Participant by the Company; or (G) the use of controlled substances, illicit drugs, alcohol or other substances or behavior which interferes with the Participant’s ability to perform his or her services for the Company or any of its Affiliates or which otherwise results in loss, damage or injury to the Company, or any of its Affiliates, or its or their goodwill, business or reputation. Any determination of whether Cause exists shall be made by the Committee in its sole discretion.
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(f)“Change in Control” shall, in the case of a particular Award, be deemed to occur upon:
(i)Any sale (in one or a series of related transactions) of all or substantially all of the assets of the Company to an unrelated third party;
(ii)Except for any transaction involving the Series A Preferred Stock of the Company, any “Person” as such term is used in Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes, directly or indirectly, the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act of securities of the Company that represent more than 50% of the combined voting power of the Company’s then outstanding voting securities (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this paragraph 2(f)(ii), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company principally for bona fide equity financing purposes, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate, (D) any acquisition by any corporation pursuant to a transaction that complies with paragraph 2(f)(iv), (E) any acquisition involving beneficial ownership of less than 50% of the then-outstanding Common Shares (the “Outstanding Company Common Shares”) or the Outstanding Company Voting Securities that is determined by the Board, based on review of public disclosure by the acquiring Person with respect to its passive investment intent, not to have a purpose or effect of changing or influencing the control of the Company; or
(iii)Consummation of a merger, amalgamation or consolidation (a “Business Combination”) of the Company with any other corporation, unless, following such Business Combination, all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Shares and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries).
(g)“Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto. Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.
(h)“Committee” means the Compensation Committee of the Company, who shall administer the Plan or, if no such committee has been appointed by the Board or if the Board elects to act as the Committee with respect to any action, the Board.
(i)“Common Shares” means shares of the Company’s common stock, par value $0.0001 per share (and any stock or other securities into which such ordinary shares may be converted or into which they may be exchanged).
(j)“Company” means CitroTech Inc., a Wyoming corporation, and its successors and assignees.
(k)“Date of Grant” means the date on which the granting of an Award is authorized, or such other date as may be specified in such authorization.
(l)“Disability” means, unless the applicable Award agreement says otherwise, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. The Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which such Participant participates.
(m) “Effective Date” means the date this Plan is approved by the Board, as set forth on the signature page hereto.
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(n)“Eligible Director” means a person who is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.
(o) “Eligible Person” with respect to an Award denominated in Common Shares, means any (i) individual employed by the Company or an Affiliate; provided, however, that no such employee covered by a collective bargaining agreement shall be an Eligible Person unless and to the extent that such eligibility is set forth in such collective bargaining agreement which includes rules regarding equity entitlement or in an agreement or instrument relating thereto; (ii) director of the Company or an Affiliate; (iii) an individual consultant or advisor to the Company or an Affiliate; provided that if the Securities Act applies, such persons must be eligible to be offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or any of its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he or she begins employment with or begins providing services to the Company or any of its Affiliates).
(p)“Exchange Act” has the meaning given such term in the definition of “Change in Control,” and any reference in the Plan to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations or guidance.
(q)“Exercise Price” has the meaning given such term in paragraph 7(b) of the Plan.
(r)Fair Market Value” means, as of any date, the value of Common Shares determined as follows:
(i)If the Common Shares are listed on any established stock exchange or a national market system will be the closing sales price for such shares (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable;
(ii)If the Common Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Common Share will be the mean between the high bid and low asked prices for the Common Shares on the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or
(iii)In the absence of an established market for the Common Shares, the Fair Market Value will be determined in good faith by the Committee, in accordance with Section 409A of the Code.
(s)“Good Reason” means, if applicable to any Participant in the case of a particular Award, as defined in any employment or consulting or similar agreement between the Participant and the Company or an Affiliate in effect at the time of such termination, or in the absence of any such employment or consulting or similar agreement (or the absence of any definition of “Cause” contained therein) as defined in the applicable Award agreement.
(t)“Immediate Family Members” shall have the meaning set forth in paragraph 15(b).
(u)“Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in the Plan.
(v)“Indemnifiable Person” shall have the meaning set forth in paragraph 4(e) of the Plan.
(w)“Mature Shares” means Common Shares owned by a Participant that are not subject to any pledge or security interest and that have been either previously acquired by the Participant on the open market or meet such other requirements, if any, as the Committee may determine are necessary in order to avoid an accounting earnings charge on account of the use of such shares to pay the Exercise Price or satisfy a tax or deduction obligation of the Participant.
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(x)“Nonqualified Stock Option” means an Option that is not designated by the Committee and/or does not qualify as an Incentive Stock Option.
(y)“Option” means an Award granted under Section 7 of the Plan.
(z)Option Period” has the meaning given such term in paragraph 7(c) of the Plan.
(aa)“Outstanding Company Common Shares” has the meaning given such term in the definition of “Change in Control.”
(bb)“Outstanding Company Voting Securities” has the meaning given such term in the definition of “Change in Control.”
(cc)“Participant” means an Eligible Person who has been selected by the Committee to participate in the Plan and to receive an Award pursuant to Section 6 of the Plan.
(dd)“Performance Compensation Award” shall mean any Award designated by the Committee as a Performance Compensation Award pursuant to Section 11 of the Plan.
(ee)“Performance Criteria” shall mean the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance Period with respect to any Performance Compensation Award under the Plan, as described in Section 11 of the Plan.
(ff)“Performance Formula” shall mean, for a Performance Period, the one or more formulae applied against the relevant Performance Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the Performance Compensation Award has been earned for the Performance Period.
(gg)“Performance Goals” shall mean, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria.
(hh)“Performance Period” shall mean the one or more periods of time, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance Compensation Award.
(ii)“Permitted Transferee” shall have the meaning set forth in paragraph 15(b) of the Plan.
(jj)“Person” has the meaning given such term in the definition of “Change in Control.”
(kk)“Plan” means this CitroTech Inc. 2026 Equity and Incentive Plan, as amended from time to time.
(ll)“Qualifying Termination” means, except as otherwise provided by the Committee as set forth in the Award, the occurrence of either a termination of a Participant’s employment by the Company without Cause or for Good Reason, in either case, occurring on or within the 12-month period following (or such other period specified in the applicable Award agreement) the consummation of a Change in Control.
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(mm)“Restricted Period” means the period of time determined by the Committee during which an Award is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.
(nn)“Restricted Stock Unit” or “RSU” means an unfunded and unsecured promise to deliver Common Shares or, as specified in the applicable Award agreement, cash, other securities or other property, subject to certain performance or time-based restrictions (including, without limitation, a requirement that the Participant remain continuously employed or provide continuous services for a specified period of time), granted under Section 9 of the Plan.
(oo)“Restricted Stock” means Common Shares, subject to certain specified performance or time-based restrictions (including, without limitation, a requirement that the Participant remain continuously employed or provide continuous services for a specified period of time), granted under Section 9 of the Plan.
(pp) “Retirement” means, in the case of a particular Award, the definition set forth in the applicable Award agreement.
(qq)“SAR Period” has the meaning given such term in paragraph 8(b) of the Plan.
(rr)“Securities Act” means the Securities Act of 1933, as amended, and any successor thereto. Reference in the Plan to any section of the Securities Act shall be deemed to include any rules, regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, rules, regulations or guidance.
(ss) “Share Pool” has the meaning given such term in paragraph 5(b) of the Plan.
(tt)“Stock Appreciation Right” or “SAR” means an Award granted under Section 8 of the Plan.
(uu)“Stock Bonus Award” means an Award granted under Section 10 of the Plan.
(vv)“Strike Price” has the meaning given such term in paragraph 8(b) of the Plan.
(ww)“Subsidiary” means, with respect to any specified Person:
(i)any corporation, association or other business entity of which more than 50% of the total voting power of shares (without regard to the occurrence of any contingency and after giving effect to any voting agreement or shareholders’ agreement that effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(ii)any partnership (or any comparable foreign entity) (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is such Person or Subsidiary of such Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).
(ww)“Substitute Award” has the meaning given such term in paragraph 5(e).
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3.Effective Date; Duration. The Plan shall be effective as of the Effective Date. The expiration date of the Plan, on and after which date no Awards may be granted hereunder, shall be the tenth (10th) anniversary of the Effective Date; provided, however, that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards.
4.Administration.
(a) The Committee shall administer the Plan. To the extent required to comply with the applicable provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is not acting as the Committee under the Plan), it is intended that each member of the Committee shall, at the time he or she takes any action with respect to an Award under the Plan, be an Eligible Director. However, the fact that a Committee member shall fail to qualify as an Eligible Director shall not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.
(b)Subject to the provisions of the Plan and applicable law, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by the Plan or by the Board, to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Common Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the form of Award agreement and the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Shares, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common Shares, other securities, other Awards or other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant or of the Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan including rules related to insider trading restrictions; (ix) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, including, but not limited to, upon a Qualifying Termination; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
(c)The Committee may delegate to one or more officers of the Company the authority to act on behalf of the Committee with respect to any matter, right, obligation, or election that is the responsibility of or that is allocated to the Committee herein, and that may be so delegated as a matter of law, except for grants of Awards to persons subject to Section 16 of the Exchange Act.
(d)Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award or any documents evidencing Awards granted pursuant to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any shareholder of the Company.
(e)To the maximum extent permitted by applicable law, no member of the Board, the Committee, delegate of the Committee or any employee or agent of the Company (each such person, an “Indemnifiable Person”) shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder. To the maximum extent permitted by applicable law, each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be a party or in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable Person, provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts or omissions of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company’s Articles of Incorporation or Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Indemnifiable Persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.
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(f)Notwithstanding anything to the contrary contained in the Plan, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer the Plan with respect to such Awards other than as may be prohibited by applicable securities laws (including, without limitation, Rule 16b-3 promulgated under the Exchange Act). Provided that such authority is not prohibited by applicable securities laws, the Board shall have all the authority granted to the Committee under the Plan.
5.Grant of Awards; Shares Subject to the Plan; Limitations.
(a) The Committee may recommend to the Board for approval, from time to time, the granting of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Bonus Awards and/or Performance Compensation Awards to one or more Eligible Persons.
(b)Subject to Section 12 of the Plan, the Committee is authorized to deliver under the Plan an initial amount equal to the aggregate of 1,000,000 Common Shares (the “Share Pool”), all of which may be issued through the exercise of Incentive Stock Options granted under the Plan. The Share Pool shall be reduced by the sum of the aggregate number of Common Shares which become subject to Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Bonus Awards and/or Performance Compensation Awards, other than Substitute Awards.
(c)In the event that (i) any Option or other Award granted hereunder is exercised through the tendering of Common Shares (either actually or by attestation) or by the withholding of Common Shares by the Company, or (ii) tax or deduction liabilities arising from such Option or other Award are satisfied by the tendering of Common Shares (either actually or by attestation) or by the withholding of Common Shares by the Company, then in each such case the Common Shares so tendered or withheld shall not count against the Common Shares available for grant from the Share Pool. Shares underlying Awards under this Plan that are forfeited, cancelled, expire unexercised, or are settled in cash are available again for Awards from the Share Pool. Notwithstanding the provisions of this paragraph 5(c), any such reverted Common Shares shall not be subsequently issued pursuant to the exercise of Incentive Stock Options.
(d)Common Shares delivered by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.
(e)Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). The number of Common Shares underlying any Substitute Awards shall not be counted against the Share Pool, except as required by reason of Section 422 and related provisions of the Code.
(f) In any fiscal year of the Company during any part of which this Plan is in effect, no Participant who is an Eligible Person solely by reason of being a non-employee director of the Company or an Affiliate may be awarded cash compensation and Awards that have a fair value that exceeds $100,000 in the aggregate (with the “fair value” of Awards issued under the Plan, determined as of their Dates of Grant in accordance with FASB ASC Topic 718 (or other applicable accounting guidance)).
6.Eligibility. Participation shall be limited to Eligible Persons who have received written notification from the Committee, or from a person designated by the Committee, that they have been selected to participate in the Plan and who have accepted (or, if required by the Committee, entered into) an Award agreement.
7.Options.
(a)Generally. Each Option granted under the Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Option so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award agreement expressly states that the Option is intended to be an Incentive Stock Option and such Incentive Stock Option so qualifies as an Incentive Stock Option. Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and Affiliates that constitutes a “parent” or “subsidiary corporation” within the meaning of Section 424 of the Code, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the shareholders of the Company in a manner intended to comply with the shareholder approval requirements of Section 422(b)(1) of the Code; provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such non-qualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.
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(b)Exercise Price. Except with respect to Substitute Awards, the exercise price (“Exercise Price”) per Common Share for each Option shall not be less than 100% of the Fair Market Value of such share determined as of the Date of Grant; provided, however, that in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns shares representing more than 10% of the total combined voting power of all classes of shares of the Company or any related corporation (as determined in accordance with Treasury Regulation Section 1.422-2(f)), the Exercise Price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share on the Date of Grant; provided further, that, notwithstanding any provision herein to the contrary, the Exercise Price shall not be less than the par value per Common Share.
(c)Vesting and Expiration. Options shall vest and become exercisable in such manner and on such date or dates determined by the Committee and shall expire after such period, not to exceed ten (10) years, as may be determined by the Committee (the “Option Period”); provided, however, that the Option Period shall not exceed five (5) years from the Date of Grant in the case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns shares representing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any related corporation (as determined in accordance with Treasury Regulation Section 1.422-2(f)); provided further, that notwithstanding any vesting dates set forth in the Award agreement, the Committee may, in its sole discretion, accelerate the exercisability of any Option, which acceleration shall not affect the terms and conditions of such Option other than with respect to exercisability. Unless otherwise provided by the Committee in an Award agreement: (i) the unvested portion of an Option shall expire upon termination of employment or service of the Participant granted the Option, and the vested portion of such Option shall remain exercisable for (A) one (1) year following termination of employment or service by reason of such Participant’s death or Disability (as determined by the Committee), but not later than the expiration of the Option Period or (B) three (3) months following termination of employment or service for any reason other than such Participant’s death or Disability, and other than such Participant’s termination of employment or service for Cause, but not later than the expiration of the Option Period; and (ii) both the unvested and the vested portion of an Option shall expire upon the termination of the Participant’s employment or service by the Company for Cause. If the Option would expire at a time when the exercise of the Option would violate applicable securities laws, the expiration date applicable to the Option will be automatically extended to a date that is thirty (30) calendar days following the date such exercise would no longer violate applicable securities laws (so long as such extension shall not violate Section 409A of the Code); provided, that in no event shall such expiration date be extended beyond the expiration of the Option Period.
(d)Method of Exercise and Form of Payment. No Common Shares shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal to any taxes required to be withheld or paid. Options that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Option accompanied by payment of the Exercise Price. The Exercise Price shall be payable (i) in cash, check, cash equivalent and/or Common Shares valued at the fair market value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of Common Shares in lieu of actual delivery of such shares to the Company); provided that such Common Shares are not subject to any pledge or other security interest and are Mature Shares; and (ii) by such other method as the Committee may permit in accordance with applicable law, in its sole discretion, on a case by case basis, including without limitation: (A) in other property having a fair market value on the date of exercise equal to the Exercise Price; (B) if there is a public market for the Common Shares at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Common Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price; or (C) by a “net exercise” method whereby the Company withholds from the delivery of the Common Shares for which the Option was exercised that number of Common Shares having a fair market value equal to the aggregate Exercise Price for the Common Shares for which the Option was exercised. No fractional Common Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Common Shares, or whether such fractional Common Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
(e)Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date he or she makes a disqualifying disposition of any Common Shares acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of such Common Shares before the later of (i) two (2) years after the Date of Grant of the Incentive Stock Option or (ii) one (1) year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession of any Common Shares acquired pursuant to the exercise of an Incentive Stock Option as agent for the applicable Participant until the end of the period described in the preceding sentence.
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(f)Compliance with Laws, etc. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a manner that the Committee determines would violate the Sarbanes-Oxley Act of 2002, if applicable, or any other applicable law or the applicable rules and regulations of the Securities and Exchange Commission or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.
8.Stock Appreciation Rights.
(a)Generally. Each SAR granted under the Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each SAR so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement.
(b)Strike Price. Except with respect to Substitute Awards, the strike price (“Strike Price”) per Common Share for each SAR shall not be less than one hundred percent (100%) of the Fair Market Value of such share determined as of the Date of Grant.
(c)Vesting and Expiration. A SAR shall vest and become exercisable and shall expire in such manner and on such date or dates determined by the Committee and shall expire after such period, not to exceed ten (10) years, as may be determined by the Committee (the “SAR Period”); provided, however, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any SAR, which acceleration shall not affect the terms and conditions of such SAR other than with respect to exercisability. Unless otherwise provided by the Committee in an Award agreement: (i) the unvested portion of a SAR shall expire upon termination of employment or service of the Participant granted the SAR, and the vested portion of such SAR shall remain exercisable for (A) one (1) year following termination of employment or service by reason of such Participant’s death or Disability (as determined by the Committee), but not later than the expiration of the SAR Period or (B) three (3) months following termination of employment or service for any reason other than such Participant’s death or Disability, and other than such Participant’s termination of employment or service for Cause, but not later than the expiration of the SAR Period; and (ii) both the unvested and the vested portion of a SAR shall expire upon the termination of the Participant’s employment or service by the Company for Cause. If the SAR would expire at a time when the exercise of the SAR would violate applicable securities laws, the expiration date applicable to the SAR will be automatically extended to a date that is thirty (30) calendar days following the date such exercise would no longer violate applicable securities laws (so long as such extension shall not violate Section 409A of the Code); provided, that in no event shall such expiration date be extended beyond the expiration of the SAR Period.
(d)Method of Exercise. SARs that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such SARs were awarded.
(e)Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares subject to the SAR that are being exercised multiplied by the excess, if any, of the Fair Market Value of one Common Share on the exercise date over the Strike Price, less an amount equal to any taxes required to be withheld or paid. The Company shall pay such amount in cash, in Common Shares valued at Fair Market Value, or any combination thereof, as determined by the Committee and set forth in the Award agreement. No fractional Common Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Common Shares, or whether such fractional Common Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
9.Restricted Stock and Restricted Stock Units.
(a)Generally. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each such grant shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement.
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(b)Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, a book entry in a restricted account shall be established in the Participant’s name at the Company’s transfer agent and, if the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than held in such restricted account pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate share power (endorsed in blank) with respect to the Restricted Stock covered by such agreement. If a Participant shall fail to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and blank share power within the amount of time specified by the Committee, the Award shall be null and void. Subject to the restrictions set forth in this Section 9 and the applicable Award agreement, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock, including without limitation the right to vote such Restricted Stock and the right to receive dividends, if applicable; provided, however, that any dividends with respect to the Restricted Stock shall be withheld by the Company for the Participant's account, and interest may be credited on the amount of the dividends withheld at a rate and subject to such terms as determined by the Committee. The dividends so withheld and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the Participant in cash or, at the discretion of the Committee and as set forth in the Award agreement, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends. To the extent shares of Restricted Stock are forfeited, any share certificates issued to the Participant evidencing such shares shall be returned to the Company, and all rights of the Participant to such shares and as a shareholder with respect thereto shall terminate without further obligation on the part of the Company.
(c)Vesting; Acceleration of Lapse of Restrictions. Unless otherwise provided by the Committee in an Award agreement, the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be forfeited upon termination of employment or service of the Participant granted the applicable Award.
(d)Delivery of Restricted Stock and Settlement of Restricted Stock Units.
(i) Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in the applicable Award agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her beneficiary, without charge, the share certificate evidencing the shares of Restricted Stock that have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full share). Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, at the sole discretion of the Committee as specified in the Award agreement, in Common Shares having a Fair Market Value equal to the amount of such dividends, upon the release of restrictions on such share. If such share is forfeited, the Participant shall have no right to such dividends.
(ii)Unless otherwise provided by the Committee in an Award agreement, upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one (1) Common Share for each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its sole discretion, elect to (A) pay cash or part cash and part Common Shares in lieu of delivering only Common Shares in respect of such Restricted Stock Units, as specified in the Award agreement, or (B) defer the delivery of Common Shares (or cash or part cash and part Common Shares, as the case may be) beyond the expiration of the Restricted Period if such delivery would result in a violation of applicable law until such time as is no longer the case. If a cash payment is made in lieu of delivering Common Shares, the amount of such payment shall be equal to the Fair Market Value of the Common Shares as of the date on which the Restricted Period lapsed with respect to such Restricted Stock Units, less an amount equal to any taxes required to be withheld or paid. The Award agreement with respect to a Restricted Stock Unit Award may specify that the Participant shall be eligible to receive dividend equivalents; provided, however, that any dividend equivalents with respect to the Restricted Stock Units shall be withheld by the Company for the Participant's account, and interest may be credited on the amount of the dividend equivalents withheld at a rate and subject to such terms as determined by the Committee. The dividend equivalents so withheld and attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed to the Participant in cash or, at the discretion of the Committee and as set forth in the Award agreement, in shares of Common Stock having a Fair Market Value equal to the amount of such dividend equivalents, if applicable, upon the settlement of the underlying Restricted Stock Units and, if such Restricted Stock Unit is forfeited, the Participant shall have no right to such dividend equivalents.
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10.Stock Bonus Awards. The Committee may issue unrestricted Common Shares, or other Awards denominated in Common Shares, under the Plan to Eligible Persons, either alone or in tandem with other Awards, in such amounts as the Committee shall from time to time in its sole discretion determine. Each Stock Bonus Award granted under the Plan shall be evidenced by an Award agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Stock Bonus Award so granted shall be subject to such conditions not inconsistent with the Plan as may be reflected in the applicable Award agreement.
11.Performance Compensation Awards.
(a)Generally. The Committee shall have the authority, at the time of grant of any Award described in Sections 7 through 10 of the Plan, to designate such Award as a Performance Compensation Award. The Committee shall have the authority to make an award of a cash bonus to any Participant and designate such Award as a Performance Compensation Award. Unless otherwise determined by the Committee, all Performance Compensation Awards shall be evidenced by an Award agreement.
(b)Discretion of Committee with Respect to Performance Compensation Awards. The Committee shall have the discretion to establish the terms, conditions and restrictions of any Performance Compensation Award. With regard to a particular Performance Period, the Committee shall have sole discretion to select the length of such Performance Period, the type(s) of Performance Compensation Awards to be issued, the Performance Criteria that will be used to establish the Performance Goal (s), the kind(s) and/or level(s) of the Performance Goals(s) that is (are) to apply, and the Performance Formula.
(c)Performance Criteria. The Committee may establish Performance Criteria that will be used to establish the Performance Goal(s) for Performance Compensation Awards which may be based on the attainment of specific levels of performance of the Company (and/or one or more Affiliates, divisions, business segments or operational units, or any combination of the foregoing) and may include, without limitation, any of the following: (i) net earnings or net income (before or after taxes); (ii) basic or diluted earnings per share (before or after taxes); (iii) revenue or revenue growth (measured on a net or gross basis); (iv) gross profit or gross profit growth; (v) operating profit (before or after taxes); (vi) return measures (including, but not limited to, return on assets, capital, invested capital, equity, or sales); (vii) cash flow (including, but not limited to, operating cash flow, free cash flow, net cash provided by operations and cash flow return on capital); (viii) financing and other capital raising transactions (including, but not limited to, sales of the Company’s equity or debt securities); (ix) earnings before or after taxes, interest, depreciation and/or amortization; (x) gross or operating margins; (xi) productivity ratios; (xii) share price (including, but not limited to, growth measures and total shareholder return); (xiii) expense targets; (xiv) margins; (xv) productivity and operating efficiencies; (xvi) customer satisfaction; (xvii) customer growth; (xviii) working capital targets; (xix) measures of economic value added; (xx) inventory control; (xxi) enterprise value; (xxii) sales; (xxiii) debt levels and net debt; (xxiv) combined ratio; (xxv) timely launch of new facilities; (xxvi) client or customer retention; (xxvii) employee retention; (xxviii) timely completion of new product rollouts; (xxix) cost targets; (xxx) reductions and savings; (xxxi) productivity and efficiencies; (xxxii) strategic partnerships or transactions; (xxxiii) personal targets, goals or completion of projects and (xxxiv) any other goal selected by the Committee, whether or not listed herein. Any one or more of the Performance Criteria may be used on an absolute or relative basis to measure the performance of the Company and/or one or more Affiliates as a whole or any business unit(s) of the Company and/or one or more Affiliates or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Criteria may be compared to the performance of a selected group of comparison or peer companies, or a published or special index that the Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria specified in this paragraph. Any Performance Criteria that are financial metrics, may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”) or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP.
(d)Modification of Performance Goal(s). The Committee is authorized at any time to adjust or modify the calculation of a Performance Goal for such Performance Period, based on and in order to appropriately reflect any specified circumstance or event that occurs during a Performance Period, including but not limited to the following: (i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results; (iv) any reorganization and restructuring programs; (v) unusual and/or infrequently occurring items as described in Accounting Principles Board Opinion No. 30 (or any successor pronouncement thereto) and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (vi) acquisitions or divestitures; (vii) discontinued operations; (viii) any other specific unusual or infrequently occurring or non-recurring events, or objectively determinable category thereof; (ix) foreign exchange gains and losses; and (x) a change in the Company’s fiscal year.
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(e)Terms and Condition to Receipt of Payment. Unless otherwise provided in the applicable Award agreement, a Participant must remain continuously employed by or in service with the Company through the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period. Unless otherwise determined by the Committee or as set forth in the Award agreement, Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that: (A) the Performance Goals for such period are achieved; and (B) all or some portion of such Participant’s Performance Compensation Award has been earned for the Performance Period based on the application of the Performance Formula to such achieved Performance Goals. Following the completion of a Performance Period, the Committee shall determine whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, calculate the amount of the Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then determine the amount of each Participant’s Performance Compensation Award actually payable for the Performance Period.
(f)Timing of Award Payments. Except as provided in an Award agreement, Performance Compensation Awards granted for a Performance Period shall be paid to Participants as soon as administratively practicable following the Committee’s determination in accordance with paragraph 11(e).
12.Changes in Capital Structure and Similar Events. In the event of (a) any dividend (other than ordinary cash dividends) or other distribution (whether in the form of cash, Common Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, amalgamation, consolidation, spin-off, split-up, split-off, combination, repurchase or exchange of Common Shares or other securities of the Company, issuance of warrants or other rights to acquire Common Shares or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Change in Control) that affects the Common Shares, or (b) unusual or infrequently occurring events (including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall make any such adjustments in such manner as it may deem equitable, including without limitation any or all of the following:
(i) adjusting any or all of (A) the number of Common Shares or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan (including, without limitation, adjusting any or all of the limitations under Section 5 of the Plan) and (B) the terms of any outstanding Award, including, without limitation, (1) the number of Common Shares or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Exercise Price or Strike Price with respect to any Award or (3) any applicable performance measures (including, without limitation, Performance Criteria and Performance Goals);
(ii) providing for a substitution or assumption of Awards in a manner that substantially preserves the applicable terms of such Awards;
(iii) accelerating the exercisability or vesting of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event;
(iv) modifying the terms of Awards to add events, conditions or circumstances (including termination of employment within a specified period after a Change in Control) upon which the exercisability or vesting of or lapse of restrictions thereon will accelerate;
(v) deeming any performance measures (including, without limitation, Performance Criteria and Performance Goals) satisfied at target, maximum or actual performance through closing or such other level determined by the Committee in its sole discretion, or providing for the performance measures to continue (as is or as adjusted by the Committee) after closing;
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(vi) providing that for a period prior to the Change in Control determined by the Committee in its sole discretion, any Options or SARs that would not otherwise become exercisable prior to the Change in Control will be exercisable as to all Common Shares subject thereto (but any such exercise will be contingent upon and subject to the occurrence of the Change in Control and if the Change in Control does not take place after giving such notice for any reason whatsoever, the exercise will be null and void) and that any Options or SARs not exercised prior to the consummation of the Change in Control will terminate and be of no further force and effect as of the consummation of the Change in Control; and
(vii) canceling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, Common Shares, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Committee (which if applicable may be based upon the price per Common Share received or to be received by other shareholders of the Company in such event), including without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Common Shares subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value of a Common Share subject thereto may be canceled and terminated without any payment or consideration therefor); provided, however, that in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards Codification Topic 718), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.
13.Amendments and Termination.
(a)Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that (i) no amendment to paragraph 13(b) (to the extent required by the proviso in such paragraph 13(b)) shall be made without shareholder approval and (ii) no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the Common Shares may be listed or quoted); provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary.
(b)Amendment of Award Agreements. The Committee may, to the extent consistent with the terms of any applicable Award agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award agreement, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant; provided, further, that without shareholder approval, except as otherwise permitted under Section 12 of the Plan, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike Price of any SAR; (ii) the Committee may not cancel any outstanding Option or SAR where the Fair Market Value of the Common Shares underlying such Option or SAR is less than its Exercise Price or Strike Price and replace it with a new Option or SAR, another Award or cash; and (iii) the Committee may not take any other action that is considered a “repricing” for purposes of the shareholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Common Shares are listed or quoted.
14.General.
(a)Nontransferability.
(i) Each Award shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under applicable law, by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
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(ii)Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred by a Participant, without consideration, subject to such rules as the Committee may adopt consistent with any applicable Award agreement to preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant and his or her Immediate Family Members; (C) a partnership or limited liability company whose only partners or shareholders are the Participant and his or her Immediate Family Members; or (D) any other transferee as may be approved either (1) by the Board or the Committee in its sole discretion, or (2) as provided in the applicable Award agreement (each transferee described in clauses (A), (B), (C) and (D) above is hereinafter referred to as a “Permitted Transferee”); provided that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.
(iii)The terms of any Award transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award agreement, to a Participant shall be deemed to refer to the Permitted Transferee, except that (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option or SAR unless there shall be in effect a registration statement on an appropriate form covering the Common Shares to be acquired pursuant to the exercise of such Option or SAR if the Committee determines, consistent with any applicable Award agreement, that such a registration statement is necessary or appropriate; (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise; and (D) the consequences of the termination of the Participant’s employment by, or services to, the Company or an Affiliate under the terms of the Plan and the applicable Award agreement shall continue to be applied with respect to the Participant, including, without limitation, that an Option or SAR shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award agreement.
(b)Tax Withholding and Deductions.
(i) A Participant shall be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to deduct and withhold, from any cash, Common Shares, other securities or other property deliverable under any Award or from any compensation or other amounts owing to a Participant, the amount (in cash, Common Shares, other securities or other property) of any required taxes (up to the maximum statutory rate under applicable law as in effect from time to time as determined by the Committee) and deduction in respect of an Award, its grant, vesting or exercise, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of such taxes.
(ii)Without limiting the generality of clause (i) above, the Committee may, in its sole discretion, determined on a case-by-case basis, permit a Participant to satisfy, in whole or in part, the foregoing tax and deduction liability by (A) the delivery of Common Shares (which are not subject to any pledge or other security interest and are Mature Shares, except as otherwise determined by the Committee) owned by the Participant having a fair market value equal to such liability or (B) having the Company withhold from the number of Common Shares otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of shares with a fair market value equal to such liability.
(c)No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the Company or an Affiliate, or other person, shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or an Affiliate, nor shall it be construed as giving any Participant any rights to continued service on the Board. The Company or any of its Affiliates may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or any Award agreement. By accepting an Award under the Plan, a Participant shall thereby be deemed to have waived any claim to continued exercise or vesting of an Award or to damages or severance entitlement related to non-continuation of the Award beyond the period provided under the Plan or any Award agreement, notwithstanding any provision to the contrary in any written employment contract or other agreement between the Company and its Affiliates and the Participant, whether any such agreement is executed before, on or after the Date of Grant.
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(d)Addenda. The Committee may adopt such addenda to the Plan as it may consider necessary or appropriate for the purpose of granting Awards, which Awards may contain such terms and conditions as the Committee deems necessary or appropriate to accommodate differences in local law, tax policy or custom, which may deviate from the terms and conditions set forth in this Plan. The terms of any such addenda shall supersede the terms of the Plan to the extent necessary to accommodate such differences but shall not otherwise affect the terms of the Plan as in effect for any other purpose. With respect to Participants who reside or work outside of the United States of America, the Committee may in its sole discretion amend the terms of the Plan or outstanding Awards with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.
(e)Designation and Change of Beneficiary. Each Participant may file with the Committee (or its designee) a written designation of one or more persons as the beneficiary(ies) who shall be entitled to receive the amounts payable with respect to an Award, if any, due under the Plan upon his or her death. A Participant may, from time to time, revoke or change his or her beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee (or its designee). The last such designation received by the Committee (or its designee) shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee (or its designee) prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, the beneficiary shall be deemed to be his or her spouse or, if the Participant is unmarried at the time of death, his or her estate.
(f)Termination of Employment/Service. Unless determined otherwise by the Committee at any point following such event: (i) neither a temporary absence from employment or service due to illness, vacation or leave of absence, nor a transfer from employment or service with the Company to employment or service with an Affiliate (or vice-versa), shall be considered a termination of employment or service with the Company or an Affiliate; and (ii) if a Participant’s employment with the Company and its Affiliates terminates, but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity (or vice-versa), such change in status shall not be considered a termination of employment with the Company or an Affiliate, provided that there is no break in such service.
(g)No Rights as a Shareholder. Except as otherwise specifically provided in the Plan or any Award agreement, no person shall be entitled to the privileges of ownership in respect of Common Shares or other securities that are subject to Awards hereunder until such shares have been issued or delivered to that person.
(h)Government and Other Regulations.
(i) The obligation of the Company to settle Awards in Common Shares or other consideration shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Common Shares or other securities pursuant to an Award unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any of the Common Shares or other securities to be offered or sold under the Plan. The Committee shall have the authority to provide that all certificates for Common Shares or other securities of the Company or any Affiliate delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award agreement, the federal securities laws, or the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer quotation system upon which such shares or other securities are then listed or quoted and any other applicable federal, state, local or non-U.S. laws, and, without limiting the generality of Section 9 of the Plan, the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that it, in its sole discretion, deems necessary or advisable in order for such Award to comply with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.
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(ii)The Committee may cancel an Award or any portion thereof if it determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Common Shares from the public markets, the Company’s issuance of Common Shares or other securities to the Participant, the Participant’s acquisition of Common Shares or other securities from the Company and/or the Participant’s sale of Common Shares to the public markets, illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of an Award denominated in Common Shares in accordance with the foregoing, the Company shall pay to the Participant an amount equal to the excess of (A) the aggregate Fair Market Value of the Common Shares subject to such Award or portion thereof canceled (determined as of the earlier of (i) the applicable Award cancellation date, or (ii) the exercise date or the date that the shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a condition of delivery of Common Shares (in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof.
(i)Payments to Persons Other Than Participants. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly-appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
(j)Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options or other equity-based awards otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.
(k)No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.
(l)Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accountant of the Company and its Affiliates and/or any other information furnished in connection with the Plan by any agent of the Company or the Committee or the Board, other than himself or herself.
(m)Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.
(n)Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Wyoming applicable to contracts made and performed wholly within the State of Wyoming, without giving effect to the conflict of laws provisions thereof. Each party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the state and federal courts seated in Cheyenne, Wyoming (and any appellate courts thereof) in any action or proceeding arising out of or relating to this Plan, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such court, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in any such court, and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Each party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby knowingly, voluntarily and intentionally irrevocably waives the right to a trial by jury in respect to any litigation, dispute, claim, legal action or other legal proceeding based hereon, or arising out of, under, or in connection with, this Plan.
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(o)Severability. If any provision of the Plan or any Award or Award agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(p)Obligations Binding on Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.
(q)Code Section 409A.
(i)Notwithstanding any provision of this Plan to the contrary, all Awards made under this Plan are intended to be exempt from or, in the alternative, comply with Code Section 409A and the interpretive guidance thereunder, including the exceptions for stock rights and short-term deferrals. The Plan shall be construed and interpreted in accordance with such intent. Unless otherwise specifically provided in the Award agreement, each payment under an Award shall be treated as a separate payment for purposes of Code Section 409A.
(ii)If a Participant is a “specified employee” at the time of his or her “separation from service” (as each such term is defined for purposes of Code Section 409A), no amount that is nonqualified deferred compensation subject to Code Section 409A and that becomes payable by reason of such “separation from service” shall be paid to the Participant (or in the event of the Participant’s death, the Participant’s representative or estate) before the earlier of (A) the first business day after the date that is six (6) months following the date of the Participant’s termination of service, and (B) within thirty (30) days following the date of the Participant’s death. For purposes of determining the timing of any payment, references in the Plan and any Award agreement to “termination of employment,” “termination of service” or similar terms shall mean a “separation from service” as defined for purposes of Code Section 409A. If any Award is or becomes subject to Code Section 409A and if payment of such Award would be accelerated or otherwise triggered under a Change in Control, then the definition of Change in Control shall be deemed modified, only to the extent necessary to avoid the imposition of an excise tax under Code Section 409A, to mean a “change in control event” as such term is defined for purposes of Code Section 409A.
(iii)Any adjustments made pursuant to Section 12 to Awards that are subject to Code Section 409A shall be made in compliance with the requirements of Code Section 409A, and any adjustments made pursuant to Section 12 to Awards that are not subject to Code Section 409A shall be made in such a manner as to ensure that after such adjustment, the Awards either (A) continue not to be subject to Code Section 409A, or (B) comply with the requirements of Code Section 409A.
(r)Expenses; Gender; Titles and Headings. The expenses of administering the Plan shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine gender shall refer to both men and women. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control.
(s)Other Agreements. Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of Common Shares or other securities under an Award, that the Participant execute lock-up, shareholder or other agreements, as it may determine in its sole and absolute discretion.
(t)Payments. Participants shall be required to pay, to the extent required by applicable law, any amounts required to receive Common Shares or other securities under any Award made under the Plan.
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(u)Erroneously Awarded Compensation. All Awards shall be subject (including on a retroactive basis) to (i) any clawback, forfeiture or similar incentive compensation recoupment policy established from time to time by the Company, including, without limitation, any such policy established to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, (ii) applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), and/or (iii) the rules and regulations of the applicable securities exchange or inter-dealer quotation system on which the Common Shares or other securities are listed or quoted, and such requirements shall be deemed incorporated by reference into all outstanding Award agreements.
[Signature page follows]
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IN WITNESS WHEREOF, this CitroTech Inc. 2026 Equity and Incentive Plan has been duly approved and adopted by the Company and the shareholders as of the dates set forth below.
Adopted by consent of the Board: March 16, 2026
CitroTech Inc.
By: /s/ Wesley J. Bolsen
Name: Wesley J. Bolsen
Title: Chief Executive Officer
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ADDENDUM A
CITROTECH INC. 2026 EQUITY AND INCENTIVE PLAN
CALIFORNIA PARTICIPANTS
Prior to the date, if ever, on which the Common Shares of the Company become a listed security and/or the Company is subject to the reporting requirements of the Exchange Act, the terms of this Addendum shall apply to Awards issued to a Participant whose Award is issued in reliance on Section 25102(o) of the California Corporations Code (a "California Participant"). This Addendum is intended to satisfy the requirements of Section 25102(o) of the California Corporations Code and the regulations issued thereunder ("Section 25102(o)"). Definitions in the Plan and Award agreement are applicable to this Addendum.
1. In the event of termination of the Participant's employment or other service other than for Cause, Options that are exercisable on the date of termination may not terminate prior to the earlier to occur of the Option expiration date or thirty (30) days from termination (six (6) months, if termination is due to death or Disability).
2. Notwithstanding anything to the contrary in the Plan, no Option Award may be exercisable on or after the tenth (10th) anniversary of the grant date and any Award agreement shall terminate on or before the tenth (10th) anniversary of the grant date.
3. Options granted under the Plan shall be non-transferable other than by will, by the laws of descent and distribution, to a revocable trust or as permitted by Rule 701 of the Securities.
4. Notwithstanding anything to the contrary in the Plan dealing with capital adjustments, the Board shall in any event make such adjustments as may be required by Section 25102(o).
5. The Company shall furnish summary financial information (audited or unaudited) of the Company's financial condition and results of operations, consistent with the requirements of applicable laws, at least annually to each California Participant during the period such Participant has one or more Awards outstanding, and in the case of an individual who acquired shares of Common Stock pursuant to the Plan, during the period such Participant owns such shares of Common Stock; provided, however, the Company shall not be required to provide such information if (a) the issuance is limited to key persons whose duties in connection with the Company assure their access to equivalent information or (b) the Plan complies with all conditions of Rule 701 of the Securities Act; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a "family member" as that term is defined in Rule 701.
6. The Plan must be approved by a majority of the outstanding securities entitled to vote by the later of (a) within 12 months before or after the date the Plan is adopted or (b) prior to or within 12 months of the granting of any Option or issuance of any security under the Plan in the State of California. Any Option granted to any person in the State of California that is exercised before security holder approval is obtained must be rescinded if security holder approval is not obtained in the manner described in the preceding sentence. Such securities shall not be counted in determining whether such approval is obtained. This provision shall not apply to a foreign private issuer, as defined by Rule 3b-4 of the Exchange Act, provided that the aggregate number of persons in the State of California granted options under all option plans and agreements and issued securities under all purchase and bonus plans and agreements does not exceed 35.
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Exhibit 10.18
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the “Agreement”), executed on the 30th day of September 2025 (the “Effective Date”), is entered into by and between GENERAL ENTERPRISE VENTURES, INC., a Wyoming corporation (the “Company”), and BOLTROCK HOLDINGS, LLC, a Delaware limited liability company (the “Consultant”). The Company and the Consultant may be referred to singularly as “Party” or collectively as “Parties”.
WITNESSETH:
WHEREAS, the Company desires that Consultant provide the Company general business and commercial advice upon the terms and conditions hereinafter set forth; and
WHEREAS, Consultant desires to provide the Company with general business and commercial advice upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto do hereby agree as follows:
1. Consultant. The Company hereby appoints Consultant to provide with general business and commercial advice, and to perform other services to the Company as requested by the Chief Executive Officer, President or Board of Directors of the Company.
2. Consulting Fee.
(a)Compensation.For so long as Consultant provide services to the
Company, Consultant shall receive compensation as follows:
(i) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $120,000,000;
(ii) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $150,000,000;
(iii) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $200,000,000; and
(iv) 70,000 shares of the Company’s Series C Convertible Preferred Stock when the Company's market capitalization reaches and sustains a market capitalization for 30 consecutive days above $250,000,000 (Section 2(a)(i)-(v), each a “Share Award” and collectively, the “Share Awards”). For the avoidance of doubt, upon execution of this Agreement, the Consultant shall have vested in his right to receive the Shares Awards contemplated in this Section 2(a), regardless of whether this Agreement is subsequently terminated.
(b) If this Agreement is terminated by the Company within six (6) months following Consultant: (i) no longer owning Series A Preferred Stock, or (ii) owning (or having the right to convert to) on a fully diluted basis less than five percent (5%) of the common stock of the Company, then within 30 days thereafter the Company shall remit to Consultant or its designee the amount of 100,000 shares of Series C Convertible Preferred stock in book as soon as reasonably possible for the transfer agent to make the book entry on behalf of Consultant or its designee.
(c) Additional Compensation. Consultant will be eligible to participate in any incentive compensation plan put into effect by the Company. Consultant acknowledges that any awards under an incentive compensation plan are in the discretion of the Board of Directors of the Company.
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3. Expenses. The Company shall reimburse Consultant for all pre-approved expenses incurred on behalf of the Company, so long as the expenses are documented to the Company’s satisfaction to allow the Company to deduct the expenses on its financial statements or tax returns.
4. Consultant’s Duties. Consultant will use its best efforts to promote the success, best interests, and goodwill of the Company.
5. Term. The term of this Agreement shall be for a period of 12 months (the “Initial Term”), which Term shall automatically renew for successive 6-month periods unless either Party provides the other Party at least 30 days’ written notice (email being sufficient) of its intent not to renew this Agreement (each such 6-month period, a “Renewal Term” and collectively with the Initial Term, the “Term”).
6. Confidential Information. The Consultant acknowledges that in the course of its services to the Company, it may receive certain trade secrets, know-how, lists of customers, employee records and other confidential information and knowledge concerning the Business (“Confidential Information”), which the Company desires to protect. The Consultant understands that such Confidential Information is confidential and agrees to not reveal such Confidential Information to anyone outside the Company; provided, however, that Confidential Information does not include any information that: (a) is or becomes generally available to the public other than as a result of Consultant’s breach of this Agreement; (b) is obtained by Consultant on a non-confidential basis from a third party that, to Consultant’s knowledge, was not legally or contractually restricted from disclosing such information; (c) was in Consultant’s possession before receiving such information from Company; or (d) was or is independently developed by Consultant without using any Confidential Information as evidenced by written documentation. Upon termination of this Agreement, the Consultant shall surrender to the Company all papers, documents, writings, and other property produced by him or coming into its possession by or through this Agreement and relating to the information referred to in this Section 6, which are not general knowledge in the industry, and the Consultant agrees that all such materials will at all times remain the property of the Company.
7. Termination. This Agreement may be terminated immediately by written notice to Consultant (email being sufficient) upon the occurrence of any of the following: (i) a material breach of this Agreement that remains uncured following 30 days’ written notice thereof (email being sufficient); (ii) making disparaging statements (whether written or verbal) about the Company, or its subsidiaries, affiliates, officers, employees, or Board of Directors; or (iii) engaging in any activity that reflects negatively on the Company’s reputation or standing in its business community.
8. Notices. All notices, requests, consents, demands, or other communications required or permitted to be given pursuant to this Agreement shall be in writing and delivered by email as follows:
If to the Company:
General Enterprise Ventures, Inc.
Email: nanuk@mightyfirebreaker.com
Attn: Nanuk Warman, Chief Financial Officer
If to Consultant:
Craig A. Huff
Email: ch@boltrockholdings.com
\
Any Party, at any time, may designate additional or different addresses for subsequent notices or communication by furnishing notice to the other Party in the manner described above.
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9. Specific Performance. The Company and the Consultant each acknowledge and agree that a remedy at law for any breach or threatened breach of Section 6 of this Agreement will be inadequate and that each Party may be entitled to specific performance, injunctive relief, and any other remedies available to it for such breach or threatened breach. If a bond is required to be posted for either Party to secure an injunction, then the Parties stipulate that a bond in the amount of One Thousand and No/100 Dollars ($1,000.00) will be sufficient and reasonable in all circumstances to protect the rights of the Parties.
10. Representations, Warranties and Covenants of Consultant. The Consultant hereby represents, warrants and covenants to the Company that (i) the Consultant’s execution of this Agreement and the Consultant’s performance of services hereunder does not, and will not, violate any agreements, whether oral or written, by and between the Consultant and any third party; (ii) this Agreement and the performance by the Consultant of any services hereunder do not, and will not, violate any applicable law or regulation; (iii) the Consultant is not bound to any third party by any confidentiality or non-competition obligations that might prohibit Consultant from performing services hereunder; and (iv) Consultant will not disclose to the Company any information belonging to a third party that is a trade secret or of a confidential nature.
11. Governing Law. ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WYOMING, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF WYOMING OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF WYOMING. THE PARTIES AGREE THAT ALL DISPUTES, LEGAL ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE BROUGHT EXCLUSIVELY IN A FEDERAL DISTRICT COURT LOCATED IN THE DISTRICT OF OHIO OR THE OHIO STATE COURTS LOCATED IN LIMA, OHIO (COLLECTIVELY THE “DESIGNATED COURTS”). EACH PARTY HEREBY CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS. NO LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY OTHER FORUM. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL CLAIMS OF IMMUNITY FROM JURISDICTION AND ANY RIGHT TO OBJECT ON THE BASIS THAT ANY DISPUTE, ACTION, SUIT OR PROCEEDING BROUGHT IN THE DESIGNATED COURTS HAS BEEN BROUGHT IN AN IMPROPER OR INCONVENIENT FORUM OR VENUE.
12. Mutual Waiver of Jury Trial. THE COMPANY AND CONSULTANT EACH WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS AGREEMENT IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE COMPANY AND CONSULTANT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
13. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provisions shall be ineffective to the extent of such provision or invalidity only, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
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14. Assignment. Neither Party may assign this Agreement without the express written consent of the other Party, which consent is in the sole discretion of the Party.
15. Binding Effect. Subject to the provisions of Section 14 above, this Agreement shall be binding upon and inure to the benefit of the Parties hereto, Consultant’s heirs and personal representatives, and the successors and assigns of the Company.
16. Independent Contractor. Nothing herein shall be construed or deemed to create a joint venture, contract of employment or Company. It is agreed and understood between the Parties hereto that Consultant is an independent contractor and is not an employee of the Company hereunder. Consultant will be solely responsible for payment of all taxes due or which may become due on monies paid by the Company to Consultant hereunder, specifically including but not limited to income tax (withholding) and FICA. Consultant shall not be entitled to corporate benefits of the Company provided to its employees so long as this Agreement remains in effect.
17. Headings. Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
18. Parole Evidence. This Agreement constitutes the sole and complete agreement between the Parties hereto, and no verbal or other statements, inducements or representations have been made to or relied upon by either Party, and no modification hereof shall be effective unless in writing, signed, and executed in the same manner as this Agreement.
19. Waiver. Failure by either Party hereto to enforce at any time or for any period of time any provision or right hereunder shall not constitute a waiver of such provision or of the right of such Party thereafter to enforce each and every such provision. Any waiver to be enforceable must be in writing and executed by the Party against whom the waiver is sought to be enforced.
20.
Attorneys’ Fees. If any litigation is instituted to enforce or interpret the
provisions of this Agreement or the transactions described herein, the prevailing Party in such action shall be entitled to recover its
costs and reasonable attorneys’ fees from the non-prevailing Party hereto.
21. Drafting. Both Parties hereto acknowledge that each Party was actively involved in the negotiation and drafting of this Agreement and that no law or rule of construction shall be raised or used in which the provisions of this Agreement shall be construed in favor or against either Party hereto because one is deemed to be the author thereof.
22.
Multiple Counterparts. This Agreement may be executed in multiple
counterparts, including by electronic means and by email in portable document format, each of which shall have the force and effect of
an original, and all of which shall constitute one and the same agreement.
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23. Acknowledgment of Enforceability. Consultant acknowledges and agrees that this Agreement contains reasonable limitations as to time, geographical area, and scope of activity to be restrained that do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the Company. Therefore, Consultant agrees that all restrictions are fairly compensated for and that no unreasonable restrictions exist.
24. Reconstruction of Agreement. Should a court of competent jurisdiction or an arbitrator having jurisdiction declare any of the provisions of this Agreement unenforceable due to any unreasonable restriction of time, geographical area, scope of activity, or otherwise, in lieu of declaring such provision unenforceable, the court, to the extent permissible by law, shall, at the Company’s request, revise or reconstruct such provisions in a manner sufficient to cause them to be enforceable.
25.COUNSEL. CONSULTANT ACKNOWLEDGES THAT IT IS EXECUTING A LEGAL DOCUMENT THAT CONTAINS CERTAIN DUTIES, OBLIGATIONS AND RESTRICTIONS AS SPECIFIED HEREIN. CONSULTANT FURTHERMORE ACKNOWLEDGES THAT IT HAS BEEN ADVISED OF ITS RIGHT TO RETAIN LEGAL COUNSEL, AND THAT IT HAS EITHER BEEN REPRESENTED BY LEGAL COUNSEL PRIOR TO ITS EXECUTION HEREOF OR HAS KNOWINGLY ELECTED NOT TO BE SO REPRESENTED.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the first date set forth above, to be effective as of the Effective Date.
COMPANY:
GENERAL ENTERPRISE VENTURES, INC.
By: /s/ Theodore Ralston
Name: Theodore Ralston
Title: Chief Executive Officer
CONSULTANT:
BOLTROCK HOLDINGS, LLC
By: /s/ Craig Huff
Name: Craig Huff
Title: Managing Member
[SIGNATURE PAGE TO GEVI / BRH CONSULTING AGREEMENT]
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Exhibit 10.19
FINANCIAL COMMITMENT AND PLEDGE AGREEMENT
This Financial Commitment and Pledge Agreement (the “Agreement”) is made as of March 28, 2026 by and between Wesley J. Bolsen (“Pledgor”) and CitroTech, Inc. (the “Company”).
1. Commitment to Provide Financing
Pledgor hereby irrevocably commits to make available to the Company, upon written request by the Board of Directors of the Company, a loan of up to Two Million Dollars ($2,000,000) (the “Committed Amount”), subject to the terms and conditions set forth herein.
The Company may draw upon this commitment, in whole or in part, by providing not less than seven (7) days’ written notice to the Pledgor.
2. Loan Terms
Any amounts funded pursuant to this Agreement shall constitute a loan from Pledgor to the Company and shall be subject to the following terms:
| · | Interest Rate: The loan shall bear interest at a rate equal to the Prime Rate plus one percent (Prime + 1%), as published in The Wall Street Journal on the date of funding. | |
| · | Repayment Term: Each draw under this Agreement shall have a maturity of up to twenty-four (24) months from the date such funds are advanced, unless otherwise mutually agreed in writing. | |
| · | Use of Proceeds: For general corporate purposes of the Company. |
3. Security
All amounts advanced under this Agreement shall be secured by the intellectual property (IP) of the Company as it exists at the time of each draw, pursuant to a security agreement to be executed in connection with each funding.
4. Evidence of Financial Capacity
Pledgor affirms that this financial commitment is supported by liquid assets held in the following account:
| · | Account Holder: [***] | |
| · | Institution: [***] | |
| · | Account Number: [***] |
Pledgor agrees that the value of liquid assets in the above-referenced account shall be maintained at or above the Committed Amount of $2,000,000 at all times during the term of this Agreement, such that the commitment can be honored if called by the Board.
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5. Accredited Investor Representation
Pledgor hereby represents and warrants that he is an accredited investor, as defined under applicable U.S. securities laws, and has substantial experience in evaluating and making investments of this nature. This representation is affirmed by execution of this Agreement.
6. Related Party Acknowledgment
The Company acknowledges and agrees that this Agreement constitutes a related party transaction, as Pledgor currently serves as a member of the Board of Directors and Chief Executive Officer of the Company. The Company affirms that such relationship has been disclosed and that the Board has approved or will approve this Agreement in accordance with its governance policies.
7. Term and Automatic Expiration
This Agreement shall remain in effect until the earliest of:
| · | (a) termination by mutual written agreement of the parties; | |
| · | (b) the commitment being fully drawn and repaid; or | |
| · | (c) the Company completing an aggregate of at least Five Million Dollars ($5,000,000) in new debt or equity financing. |
Upon the occurrence of clause (c), this Agreement and the Pledgor’s obligations hereunder shall automatically terminate and be of no further force or effect, without any further action required by either party.
8. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to its conflict of law principles.
9. Entire Agreement
This Agreement constitutes the entire understanding between the parties with respect to the subject matter herein and supersedes all prior discussions or agreements, whether written or oral.
10. Counterparts
This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
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SIGNATURES
PLEDGOR:
Wesley J. Bolsen
[***]
[***]
Signature: /s/ Wesley J. Bolsen____
Date: 3/28/2026
ACCEPTED AND AGREED:
CITROTECH, INC.
By: /s/ Theodore Ralston
Name: Theodore Ralston
Title: Chairman of the Board
Date: 3/28/2026
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Exhibit 19.1
CITROTECH INC.
STATEMENT OF COMPANY POLICY REGARDING INSIDER TRADING AND UNAUTHORIZED DISCLOSURES
Effective: March 16, 2026
The following information regarding our Policy on Insider Trading and Unauthorized Disclosures may be summarized simply as follows: DO NOT trade on or pass to others material nonpublic information about the Company or about those with whom the Company has a business relationship. To do so could have grave consequences to both you and the Company.
I. Introduction and Background
A. Purpose. Under the U.S. federal securities laws, it is illegal to trade in the securities of CitroTech Inc. while in the possession of material nonpublic information about CitroTech Inc. or any of its divisions, subsidiaries, affiliates or successors (collectively, the “Company”). It is also illegal to disclose or give material nonpublic information to others who may trade on the basis of that information or to advise others how to trade while in possession of material nonpublic information. Any person who possesses material nonpublic information about the Company is deemed to be an “insider.” The category of insiders is NOT limited to officers and directors.
The U.S. Securities and Exchange Commission (the “SEC”) and the national stock exchanges are very effective at detecting and pursuing insider trading cases. The SEC has successfully prosecuted cases against employees trading through foreign accounts, trading by family members and friends, and trading involving only a small number of shares. The federal securities laws impose severe sanctions on those who engage in insider trading. Individuals who either trade on material non-public information or provide a “tip” of such information to others may be subject to, among other things:
| Ø | Criminal fines up to $5,000,000; |
| Ø | Prison sentence of up to twenty-five (25) years; | |
| Ø | Civil penalties of up to three times the profit gained or loss avoided as a result of such sale, purchase or tip. |
In addition to sanctions against those who directly violate the prohibition on insider trading, in certain circumstances the U.S. federal securities laws impose large fines on companies and their directors and officers for failure to take reasonable measures to prevent such violations (what is referred to as “controlling person” liability).
B. Persons Subject to this Policy. This Policy applies to all officers of the Company and its subsidiaries, and all members of the Company’s Board of Directors. The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information. In addition, this Policy also applies to the following:
1.Transactions by Family Members and Others. This Policy applies to your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company Securities (collectively referred to as “Family Members”). You are responsible for the transactions of these other persons and therefore, you should make them aware of the need to confer with you before they trade in any Company Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account. This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.
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2.Transactions by Entities that You Influence or Control. This Policy applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account.
C. Transactions Subject to the Policy.
1. Transactions in Company Securities. This Policy applies to transactions in the Company’s securities (collectively referred to in this Policy as “Company Securities”), including the Company’s common shares, options to purchase common shares, or any other type of securities that the Company may issue, including (but not limited to) preferred stock, convertible notes, debentures and warrants, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company’s Securities.
2. Transaction in Securities of Other Companies. No director, officer or employee who, while acting for the Company, obtains material nonpublic information about another publicly-traded company, including customers, suppliers, competitors, joint-venture partners or potential acquisition targets, may buy or sell securities (or enter into any transaction involving derivative or any other securities) of that company or otherwise misuse such information.
D. Individual Responsibility. Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not engage in transactions in Company Securities while in possession of material nonpublic information. Each individual is responsible for making sure that he or she complies with this Policy, and that any Family Member, household member or entity whose transactions are subject to this Policy, as discussed herein, also comply with this Policy. In all cases, the responsibility for determining whether an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company, the Compliance Officer (as defined below) or any other employee or director pursuant to this Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws. You could be subject to severe legal penalties (both civil and criminal) and disciplinary action by the Company for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading “Consequences of Violations.”
E. Administration of the Policy – Compliance Officer. The Company’s General Counsel shall serve as the initial Compliance Officer for the purposes of this Policy, and in his or her absence, another employee designated by the Compliance Officer shall be responsible for administration of this Policy. All determinations and interpretations of this Policy by such Compliance Officer shall be final and not subject to further review.
II. Statement of Policy
A. General Policy. It is the policy of the Company that no director or officer of the Company (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the Company may, directly, or indirectly through family members or other persons or entities:
1. Buy or sell any Company Securities or engage in any other transactions in Company Securities, except as otherwise specified in this Policy under the headings “Transactions Under Company Plans”, “Transactions Not Involving a Purchase or Sale” and “Rule 10b5-1 Plans (as set forth below)”;
2. Recommend the purchase or sale of any Company Securities;
3. Disclose material nonpublic information to persons within the Company whose jobs do not require them to have that information, or outside of the Company to other persons, including, but not limited to, family, friends, business associates, investors and expert consulting firms, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company; or
4. Assist anyone engaged in any of the above activities.
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There are no exceptions to this Policy, except as specifically noted herein. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not exempted from this Policy. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.
B. Disclosing Information to Others; Tipping. The Company is required under Regulation FD of the federal securities laws to avoid the selective disclosure of material nonpublic information. The Company has established procedures for releasing material nonpublic information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. You may not disclose Company information to anyone outside the Company, including Family Members, friends, social acquaintances or anyone else, or other than in accordance with those procedures. You may not pass on to others any nonpublic information about the Company (or any other company that you obtain information about while acting for the Company) or recommend the purchase or sale of the Company’s securities while in the possession of material nonpublic information. This prohibition applies whether or not you receive any benefit from the other person’s use of that information.
1. Designated Spokespersons. The Company has authorized the Company’s Chief Executive Officer, Chief Financial Officer, Chairman and General Counsel, if any, together with those persons whom they designate from time to time in writing, to be the “Company Spokespersons.” Due to the risk of inadvertent disclosure of material nonpublic information, no one but a Company Spokespersons may speak about or on behalf of the Company to any broker-dealer including their associated persons (such as an analyst or investment banker), investment adviser, institutional investment manager or investment company, media outlet or shareholder, except when and if he or she has been designated a Company Spokesperson. Requests for information about the Company should in all cases be promptly directed to a Company Spokesperson.
2. Internet Disclosures. Due to the risk of inadvertent disclosure of material nonpublic information, no director, officer or employee of the Company may disclose or discuss any nonpublic information of the Company via use of an Internet website (whether or not such site is specifically related to the Company). While you may “like” or “share” information that has already been publicly released on Twitter, Facebook or LinkedIn, we strongly discourage you from adding commentary as you may inadvertently add material nonpublic information. We also strongly discourage you from participating in any Internet-based forum, chat room, message board or social media site when the subject matter relates to the Company, competitors to the Company or entities with which the Company has a significant business relationship. It is a common misperception that the identity of participants on Internet discussion forums is secret. You should be aware that government agencies, companies and individuals may obtain this information under certain circumstances, and thus there may be no real “anonymity” on the Internet.
3. No Comment Policy for Rumors and Litigation. The Company has a general policy that it will not comment on rumors concerning Company developments, including, but not limited to, rumors concerning public offerings of the Company’s securities, acquisitions or dispositions, restructurings or similar matters, except as approved by a Company Spokesperson (or a designee of a Company Spokesperson). Additionally, the Company has a general policy that it will not comment on any pending or threatened litigation. Any requests for comment on the foregoing matters should be directed to an authorized Company Spokesperson.
4. Confidential Information. Your confidentiality agreement with the Company prohibits you from disclosing any proprietary or confidential information of the Company (or of any other Company that you obtain information from about while acting for the Company) to ANY third party, regardless of whether such information is material, except when necessary for, and clearly authorized in connection with, the conduct of the Company’s business.
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C. Definition of Material Nonpublic Information. Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect the Company’s stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities with the benefit of hindsight. While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:
| · | Projections of future financial performance, earnings or losses, or other earnings guidance; | |
| · | Changes to previously announced earnings guidance, or the decision to suspend earnings guidance; | |
| · | Knowledge regarding a pending or proposed merger, acquisition tender offer or acquisition or disposition of a significant asset; | |
| · | A major contract award or cancellation of an existing significant contract; | |
| · | The gain or loss of a significant customer, partner, distributor or supplier; | |
| · | A Company restructuring; | |
| · | A change in dividend policy or plans to announce a dividend; | |
| · | The declaration of a stock split, or an offering of additional securities; | |
| · | The establishment of a repurchase program for Company Securities; | |
| · | Bank borrowings or other financing transactions out of the ordinary course; | |
| · | A significant change in the Company’s pricing or cost structure; | |
| · | A change in management; | |
| · | Significant related party transactions; | |
| · | A change in the Company’s auditors or notification that the auditor’s reports may no longer be relied upon; | |
| · | Development (or the status of) of a breakthrough technology, new product, process or service; | |
| · | Breaches of the Company’s information technology systems or other cybersecurity incidents; | |
| · | Adverse or favorable developments with the Company’s regulators, including the US FDA; | |
| · | Developments in pending or threatened significant litigation, or the resolution of such litigation; | |
| · | Impending bankruptcy or the existence of severe liquidity problems; or | |
| · | The imposition of a ban on trading in Company Securities or the securities of another company. |
Either positive or negative information may be material. If you are unsure at any time as to whether you are aware of material nonpublic information about the Company, you should contact the Compliance Officer for clarification.
Twenty-Twenty Hindsight. Please be advised that anyone scrutinizing your transactions will be doing so after the fact, with the benefit of hindsight. As a practical matter, before engaging in any transaction, you should carefully consider how enforcement authorities and others might view your actions in hindsight.
D. When Information is Considered Public. Information that has not been disclosed to the public is generally considered to be nonpublic information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through the Dow Jones newswire services, a broadcast on widely-available radio or television programs, publication in a widely-available newspaper, magazine or news website, or public disclosure documents filed with the SEC that are available on the SEC’s website. By contrast, information would likely not be considered widely disseminated if it is available only to the Company’s employees, or if it is only available to a select group of analysts, brokers and institutional investors.
Once information is widely disseminated, it is still necessary to afford the investing public with sufficient time to absorb the information before it will be deemed to be publicly disclosed. As a general rule, information should not be considered fully absorbed by the marketplace until after one full business day after the day on which the information is released. If, for example, the Company were to make an announcement on a Monday, you should not trade in Company Securities until Wednesday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information.
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E. Transactions Under Company Plans; Gifts and Rule 10b5-1 Trading Programs. This Policy does not apply in the case of the following transactions, except as specifically noted:
1. Stock Option Exercises. This Policy does not apply to the cash exercise of an employee stock option acquired pursuant to the Company’s equity plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.
2. Restricted Stock Awards. This Policy does not apply to the vesting of restricted stock, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock. The Policy does apply, however, to any market sale of restricted stock.
3. 401(k) Plan. This Policy does not apply to purchases of Company Securities in the Company’s 401(k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election. This Policy does apply, however, to certain discretionary elections you may make under the 401(k) plan, including, but not limited to, an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock or any self-directed investments through your 401(k) account.
4. Employee Stock Purchase Plan. The Company may in the future implement an employee stock purchase plan. This Policy does not apply to purchases of Company Securities in an employee stock purchase plan resulting from your periodic contribution of money to such plan pursuant to the election you made at the time of your enrollment in the plan. This Policy also does not apply to purchases of Company Securities resulting from lump sum contributions to the plan, provided that you elected to participate by lump sum payment at the beginning of the applicable enrollment period. This Policy does apply, however, to your election to participate in the plan for any enrollment period, and to your sales of Company Securities purchased pursuant to such plan.
5. Dividend Reinvestment Plan. This Policy does not apply to purchases of Company Securities under a dividend reinvestment plan resulting from your reinvestment of dividends paid on Company Securities. This Policy does apply, however, to voluntary purchases of Company Securities resulting from additional contributions you choose to make to a dividend reinvestment plan, and to your election to participate in a plan or increase your level of participation in such plan. This Policy also applies to your sale of any Company Securities purchased pursuant to such a plan.
6. Transactions Not Involving a Purchase or Sale. Bona fide gifts of securities (without any consideration) are not transactions subject to this Policy. Further, transactions in mutual funds that are invested in Company Securities are not transactions subject to this Policy.
7. Rule 10b5-1 Trading Plan. This Policy does not apply to the purchase or sale of Company Securities in Rule 10b5-1 trading plan that (i) has been pre-approved in writing by the Compliance Officer (and the Company’s outside counsel, as applicable), which approval shall be in the sole discretion of such officer (and the Company’s outside counsel, as applicable), and (ii) meets such other requirements as the Company may impose from time to time as set forth in its 10b5-1 Trading Policy, including the following (a “10b5-1 Plan”):
a. A Rule 10b5-1 Plan must be entered into at a time when the person entering
into the plan is not aware of material nonpublic information and is not at that time subject to a Quarterly Blackout Window or a Special Blackout Window. Once the 10b5-1 Plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or delegate all discretion on these matters to an independent third party.
b. The 10b5-1 Plan must comply with the applicable cooling-off period under Rule 10b5-1(c)(1)(i)(B) (the “Cooling-Off Period”), and be signed and dated by the person entering into the 10b5-1 Plan, but may not be established within six months after a prior Form 10b5-1 Plan was terminated prior to the expiration of its term;
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c. If the 10b5-1 Plan is amended or modified, the first trade pursuant to such amended or modified 10b5-1 Plan shall not occur until the expiration of the Cooling-Off Period following the adoption of such amendment or modification;
d. The 10b5-1 Plan must be in a form that meets the requirements of Rule 10b5-1 (as interpreted by the sole discretion of the Compliance Officer) and must explicitly provide for the Company’s right of suspension pursuant to subsection e below;
e. The 10b5-1 Plan must by its terms be subject to the right of the Company to suspend trades to the extent the Company deems such suspension to be in the best interests of the Company, as for example, where such suspension is necessary to comply with the requests of underwriters for “lock-up” agreements in connection with an underwritten public offering of the Company’s securities.
F. Additional Prohibited Transactions. The Company considers it improper and inappropriate for any director or officer or other employee of the Company to engage in short-term or speculative transactions in the Company’s securities. It therefore is the Company’s policy that directors, officers and other employees may NOT engage in any of the following transactions (except as specifically provided below):
1. Short Sales. Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller’s incentive to improve the Company’s performance. For these reasons, short sales of the Company’s securities are prohibited by this Policy. In addition, Section 16(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prohibits officers and directors from engaging in short sales.
2. Publicly Traded Company Options. A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that the director or employee is trading based on inside information. Transactions in options also may focus the director’s or employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”)
3. Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, are prohibited as they allow an employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the director or employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the director or employee may no longer have the same objectives as the Company’s other shareholders. While the foregoing hedging transactions are prohibited, the Company strongly discourages you from engaging in any other transactions. Any person wishing to enter into such an arrangement must first pre-clear the proposed transaction with the Compliance Officer. Any request for pre-clearance of a hedging or similar arrangement must be submitted to the Compliance Officer at least two weeks prior to the proposed execution of documents evidencing the proposed transaction and must set forth the mechanics of such arrangement as well as the justification for the proposed arrangement.
4. Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers and other employees are prohibited from holding Company Securities in a margin account or pledging Company Securities as collateral for a loan. An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any person who wishes to pledge Company securities as collateral for a loan must submit a request for approval to the Compliance Officer at least one week prior to the proposed execution of documents evidencing the proposed pledge.
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5. Standing Limit Orders. Standing and limit orders (except standing and limit orders under pre-approved Rule 10b5-1 Plans, as described above) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on Company Securities. If a person subject to this Policy determines that they must use a standing order or limit order, the order should be limited to short duration and should otherwise comply with the restrictions and procedures outlined below under the heading “Additional Procedures” including that it cannot extend into any Blackout Period.
III. Additional Procedures and Protections.
The Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety.
A. Pre-Clearance Procedures. Any person subject to this policy, as well as the Family Members and the Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining pre-clearance of the transaction IN WRITING from the Compliance Officer. A request for pre-clearance should be submitted to the Compliance Officer at least two business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance, and may, in such officer’s sole discretion, determine not to permit the transaction. If a person seeks pre-clearance and permission to engage in the transaction is denied, then he or she must refrain from initiating any transaction in Company Securities and should not inform any other person of the restriction. Any transactions that have been pre-cleared in writing, must be effected within five (5) business days of the date of approval or an additional pre-approval in writing must be obtained from the Compliance Officer for such transaction.
When a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic information about the Company and should describe fully those circumstances to the Compliance Officer. If the requester is also an officer or director of the Company, they should also indicate whether he or she has effected any non-exempt “opposite-way” transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule 144 and file Form 144, if necessary, on or before the time of any sale.
B. Quarterly Trading Restrictions – Blackout Windows. Any person subject to this policy, as well as their Family Members or Controlled Entities, may not buy or sell or conduct any transactions involving the Company’s Securities (other than as specified by this Policy), during a “Quarterly Blackout Period,” which begins two weeks before the end of each fiscal quarter and ends one full business day after the date of the public release of the Company’s earnings results for that quarter. If the quarterly earnings are released on Monday at any time, then the Quarterly Blackout Period won’t open until the stock market opens on Wednesday. In other words, these persons may only conduct transactions in Company Securities when the Company is not in a Blackout Period.
C. Event-Specific Trading Restriction Periods. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, any persons subject to this policy may not trade Company Securities. In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, persons subject to this policy should refrain from trading in Company Securities even sooner than the typical Quarterly Blackout Period described above. In that situation, the Compliance Officer may notify these persons that they should not trade in the Company’s Securities, without disclosing the reason for the restriction. The existence of an event-specific trading restriction period or extension of a Blackout Period will not be announced to the Company as a whole, and should not be communicated to any other person. No exceptions will be granted during an event-specific trading restriction period.
D. Exceptions. The quarterly trading restrictions and event-driven trading restrictions do not apply to those transactions to which this Policy does not apply, as described above under the headings “Transactions Under Company Plans” and “Transactions Not Involving a Purchase or Sale” Further, the requirement for pre-clearance, the quarterly trading restrictions and event-driven trading restrictions do not apply to transactions conducted pursuant to approved Rule 10b5-1 plans, described under the heading “Rule 10b5-1 Plans” that meet the requirements for such a Plan.
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IV. Post-Termination Transactions
This Policy continues to apply to transactions in Company Securities even after termination of your service to the Company. If an individual is in possession of material nonpublic information when his or her service terminates, that individual may not trade in Company Securities until that information has become public or is no longer material. The pre-clearance procedures specified under the heading “Additional Procedures” above, however, will cease to apply to transactions in Company Securities upon the expiration of any Blackout Period or other Company-imposed trading restrictions applicable at the time of the termination of service.
V. Consequences of Violations
The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in the Company’s Securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities as well as the laws of foreign jurisdictions. Punishment for insider trading violations is severe, and could include significant fines and imprisonment. While the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on companies and other “controlling persons” if they fail to take reasonable steps to prevent insider trading by company personnel.
In addition, an individual’s failure to comply with this Policy may subject the individual to Company-imposed sanctions, including dismissal for cause, whether or not the person’s failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career.
VI. Company Assistance
Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from our initial Compliance Officer, Anthony Newton, who can be reached by telephone at +1 832-452-0269 or by e-mail at tony.newton@citrotech.com. In addition, if you have any doubt as to whether you are in possession of material, nonpublic information or whether a trade may otherwise violate this Policy, you should contact the Compliance Officer before trading any Company Securities.
Ultimately, the responsibility for adhering to this Policy and avoiding unlawful transactions rests with the individual officer or director.
Please note: The Company may change these procedures or adopt such other procedures in the future as the Company considers appropriate in order to carry out the purposes of this Policy or to comply with the federal securities laws.
No Third Party Rights. This Policy is not intended to create any rights in third parties with respect to any violation of its terms and is also not intended to create any legal liability for the Company or any employee, officer or director beyond those for which they are already responsible under applicable securities laws.
Certifications. All officers and directors must certify their understanding of, and intent to comply with this Policy. A copy of the certification that all officers and directors must sign is attached to this Policy.
* * * * * *
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CERTIFICATION
I certify that:
1. I have read and understand the CitroTech Inc. (the “Company”) Policy on Insider Trading and Unauthorized Disclosures effective March 16, 2026 (the “Policy”). I understand that the Compliance Officer and our outside legal counsel are available to answer to any questions that I have regarding the Policy.
2. I agree that I will continue to comply with the Policy for as long as I am subject to the Policy.
3. This certification constitutes consent for the Company to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy.
Signature:___________________________________
Print Name:__________________________________
Date:_______________________________________
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Exhibit 31.1
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Wesley Bolsen, certify that:
1. I have reviewed this Annual Report on Form 10-K of CitroTech Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: March 30, 2026 | /s/ Wesley Bolsen |
| Wesley Bolsen | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Nanuk Warman, certify that:
1. I have reviewed this Annual Report on Form 10-K of CitroTech Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: March 30, 2026 | /s/ Nanuk Warman |
| Nanuk Warman | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of CitroTech Inc. (the “Company”), for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wesley Bolsen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered by the Report. |
| Date: March 30, 2026 | By: | /s/ Wesley Bolsen |
| Wesley Bolsen | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of CitroTech Inc. (the “Company”), for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nanuk Warman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered by the Report. |
| Date: March 30, 2026 | By: | /s/ Nanuk Warman |
| Nanuk Warman | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Exhibit 97.1
General Enterprise Ventures, Inc.
Executive Compensation Recovery Policy
This policy covers General Enterprise Ventures, Inc.’s (the “Company”) Covered Officers and explains when the Company will be required or authorized, as applicable, to seek recovery of Incentive Compensation awarded or paid to Covered Officers. Please refer to Exhibit A attached hereto (the “Definitions Exhibit”) for the definitions of capitalized terms used throughout this Policy.
| 1. | Miscalculation of Financial Performance Measure Results. In the event of a Restatement, the Company will seek to recover, reasonably promptly, all Recoverable Incentive Compensation from a Covered Officer during the Applicable Period. Such recovery, in the case of a Restatement, will be made without regard to any individual knowledge or responsibility related to the Restatement or the Recoverable Incentive Compensation. Notwithstanding the foregoing, if the Company is required to undertake a Restatement, the Company will not be required to recover the Recoverable Incentive Compensation if the Compensation Committee determines it Impracticable to do so, after exercising a normal due process review of all the relevant facts and circumstances. |
The Company will seek to recover all Recoverable Incentive Compensation that was awarded or paid in accordance with the definition of “Recoverable Incentive Compensation” set forth on the Definitions Exhibit. If such Recoverable Incentive Compensation was not awarded or paid on a formulaic basis, the Company will seek to recover the amount that the Compensation Committee determines in good faith should be recouped.
| 2. | Legal and Compliance Violations. Compliance with the law and the Company’s Standards of Business Conduct and other corporate policies is a pre-condition to earning Incentive Compensation. If the Company in its sole discretion concludes that a Covered Officer (1) committed a significant legal or compliance violation in connection with the Covered Officer’s employment, including a violation of the Company’s corporate policies or the Company’s Standards of Business Conduct (each, “Misconduct”), or (2) was aware of or willfully blind to Misconduct that occurred in an area over which the Covered Officer had supervisory authority, the Company may, at the direction of the Compensation Committee, seek recovery of all or a portion of the Recoverable Incentive Compensation awarded or paid to the Covered Officer for the Applicable Period in which the violation occurred. In addition, the Company may, at the direction of the Compensation Committee, conclude that any unpaid or unvested Incentive Compensation has not been earned and must be forfeited. |
In the event of Misconduct, the Company may seek recovery of Recoverable Incentive Compensation even if the Misconduct did not result in an award or payment greater than would have been awarded or paid absent the Misconduct.
In the event of Misconduct, in determining whether to seek recovery and the amount, if any, by which the payment or award should be reduced, the Compensation Committee may consider—among other things— the seriousness of the Misconduct, whether the Covered Officer was unjustly enriched, whether seeking the recovery would prejudice the Company’s interests in any way, including in a proceeding or investigation, and any other factors it deems relevant to the determination.
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| 3. | Other Actions. The Compensation Committee may, subject to applicable law, seek recovery in the manner it chooses, including by seeking reimbursement from the Covered Officer of all or part of the compensation awarded or paid, by electing to withhold unpaid compensation, by set-off, or by rescinding or canceling unvested stock. |
In the reasonable exercise of its business judgment under this Policy, the Compensation Committee may in its sole discretion determine whether and to what extent additional action is appropriate to address the circumstances surrounding a Restatement or Misconduct to minimize the likelihood of any recurrence and to impose such other discipline as it deems appropriate.
| 4. | No Indemnification or Reimbursement. Notwithstanding the terms of any other policy, program, agreement or arrangement, in no event will the Company or any of its affiliates indemnify or reimburse a Covered Officer for any loss under this Policy and in no event will the Company or any of its affiliates pay premiums on any insurance policy that would cover a Covered Officer’s potential obligations with respect to Recoverable Incentive Compensation under this Policy. | |
| 5. | Administration of Policy. The Compensation Committee will have full authority to administer this Policy. Actions of the Compensation Committee pursuant to this Policy will be taken by the vote of a majority of its members. The Compensation Committee will, subject to the provisions of this Policy and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Company’s applicable exchange listing standards, make such determinations and interpretations and take such actions in connection with this Policy as it deems necessary, appropriate or advisable. All determinations and interpretations made by the Compensation Committee will be final, binding and conclusive. | |
| 6. | Other Claims and Rights. The remedies under this Policy are in addition to, and not in lieu of, any legal and equitable claims the Company or any of its affiliates may have or any actions that may be imposed by law enforcement agencies, regulators, administrative bodies, or other authorities. Further, the exercise by the Compensation Committee of any rights pursuant to this Policy will not impact any other rights that the Company or any of its affiliates may have with respect to any Covered Officer subject to this Policy. | |
| 7. | Condition to Eligibility for Incentive Compensation. All Incentive Compensation subject to this Policy will not be earned, even if already paid, until the Policy ceases to apply to such Incentive Compensation and any other vesting conditions applicable to such Incentive Compensation are satisfied. | |
| 8. | Amendment; Termination. The Board or the Compensation Committee may amend or terminate this Policy at any time. | |
| 9. | Effectiveness. Except as otherwise determined in writing by the Compensation Committee, this Policy will apply to any Incentive Compensation that (a) in the case of any Restatement, is Received by Covered Officers prior to, on or following the Effective Date, and (b) in the case of Misconduct, is awarded or paid to a Covered Officer on or after the Effective Date. This Policy will survive and continue notwithstanding any termination of a Covered Officer’s employment with the Company and its affiliates. | |
| 10. | Successors. This Policy shall be binding and enforceable against all Covered Officers and their successors, beneficiaries, heirs, executors, administrators, or other legal representatives. | |
| 11. | Governing Law. To the extent not preempted by U.S. federal law, this Policy will be governed by and construed in accordance with the laws of the State of Wyoming, without reference to principles of conflict of laws. |
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EXHIBIT A
DEFINITIONS
“Applicable Period” means (a) in the case of any Restatement, the three completed fiscal years of the Company immediately preceding the earlier of (i) the date the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes (or reasonably should have concluded) that a Restatement is required or (ii) the date a regulator, court or other legally authorized entity directs the Company to undertake a Restatement, and (b) in the case of any Misconduct, such period as the Compensation Committee or Board determines to be appropriate in light of the scope and nature of the Misconduct. The “Applicable Period” also includes any transition period (that results from a change in the Company’s fiscal year) within or immediately following the three completed fiscal years identified in the preceding sentence.
“Board” means the Board of Directors of the Company.
“Compensation Committee” means the Company’s committee of independent directors responsible for executive compensation decisions, or in the absence of such a committee, a majority of the independent directors serving on the Board.
“Covered Officer” means (a) in the case of any Restatement, any person who is, or was at any time, during the Applicable Period, an Executive Officer of the Company, and (b) in the case of any Misconduct, any person who was an Executive Officer at the time of the Misconduct. For the avoidance of doubt, a Covered Officer may include a former Executive Officer that left the Company, retired, or transitioned to an employee role (including after serving as an Executive Officer in an interim capacity) during the Applicable Period.
“Effective Date” means November 20, 2025.
“Executive Officer” means the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person (including an officer of the Company’s parent(s) or subsidiaries) who performs similar policy-making functions for the Company.
“Financial Performance Measure” means a measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements (including “non-GAAP” financial measures, such as those appearing in the Company’s earnings releases or Management Discussion and Analysis), and any measure that is derived wholly or in part from such measure. Stock price and total shareholder return (and any measures derived wholly or in part therefrom) shall be considered Financial Performance Measures.
“Impracticable.” The Compensation Committee may determine in good faith that recovery of Recoverable Incentive Compensation is “Impracticable” (a) in the case of any Restatement, if: (i) pursuing such recovery would violate home country law of the jurisdiction of incorporation of the Company where that law was adopted prior to October 2, 2023 and the Company provides an opinion of counsel to that effect acceptable to the Company’s listing exchange; (ii) the direct expense paid to a third party to assist in enforcing this Policy would exceed the Recoverable Incentive Compensation and the Company has (A) made a reasonable attempt to recover such amounts and (B) provided documentation of such attempts to recover to the Company’s applicable listing exchange; or (iii) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of the Internal Revenue Code of 1986, as amended, and (b) in the case of any Misconduct, in its sole discretion, in light of the scope and nature of the Misconduct.
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“Incentive Compensation” means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Performance Measure. Incentive Compensation does not include any base salaries (except with respect to any salary increases earned wholly or in part based on the attainment of a Financial Performance Measure performance goal); bonuses paid solely at the discretion of the Compensation Committee or Board that are not paid from a “bonus pool” that is determined by satisfying a Financial Performance Measure performance goal; bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period; non-equity incentive plan awards earned solely upon satisfying one or more strategic measures or operational measures; and equity awards that vest solely based on the passage of time and/or attaining one or more non-Financial Performance Measures. Notwithstanding the foregoing, in the case of any Misconduct, Incentive Compensation will include all forms of cash and equity incentive compensation, including, without limitation, cash bonuses and equity awards that are received or vest solely based on the passage of time and/or attaining one or more non-Financial Performance Measures.
“Received.” Incentive Compensation is deemed “Received” in the Company’s fiscal period during which the Financial Performance Measure specified in the Incentive Compensation award is attained, even if the payment or grant of the Incentive Compensation occurs after the end of that period.
“Recoverable Incentive Compensation” means (a) in the case of any Restatement, the amount of any Incentive Compensation (calculated on a pre-tax basis) Received by a Covered Officer during the Applicable Period that is in excess of the amount that otherwise would have been Received if the calculation were based on the Restatement, and (b) in the case of any Misconduct, the amount of any Incentive Compensation (calculated on a pre-tax basis) awarded or paid to a Covered Officer during the Applicable Period that the Compensation Committee determines, in its sole discretion, to be appropriate in light of the scope and nature of the Misconduct. For the avoidance of doubt, in the case of any Restatement, Recoverable Incentive Compensation does not include any Incentive Compensation Received by a person (i) before such person began service as a Covered Officer and (ii) who did not serve as a Covered Officer at any time during the performance period for that Incentive Compensation. For the avoidance of doubt, in the case of any Restatement, Recoverable Incentive Compensation may include Incentive Compensation Received by a person while serving as an employee if such person previously served as a Covered Officer and then transitioned to an employee role. For Incentive Compensation based on (or derived from) stock price or total shareholder return where the amount of Recoverable Incentive Compensation is not subject to mathematical recalculation directly from the information in the applicable Restatement, the amount will be determined by the Compensation Committee based on a reasonable estimate of the effect of the Restatement on the stock price or total shareholder return upon which the Incentive Compensation was Received (in which case, the Company will maintain documentation of such determination of that reasonable estimate and provide such documentation to the Company’s applicable listing exchange).
“Restatement” means an accounting restatement of any of the Company’s financial statements filed with the Securities and Exchange Commission under the Exchange Act, or the Securities Act of 1933, as amended, due to the Company’s material noncompliance with any financial reporting requirement under U.S. securities laws, regardless of whether the Company or Covered Officer misconduct was the cause for such restatement. “Restatement” includes any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (commonly referred to as “Big R” restatements), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (commonly referred to as “little r” restatements).
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