CitroTech Inc 10-K for FY2023
CitroTech Inc. (CITR)
About this 10-K
CitroTech Inc filed this 10-K on April 15, 2024, covering the fiscal year ended December 31, 2023 (FY2023).
Headline figures
Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $520.65K
- up 730.0% from $62.73K a year earlier
- Net loss
- $10.1M
- compared with a net loss of $2.91M a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 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 |
For the transition period from ____________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
Registrant’s telephone number, including area code.
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Ex- change Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
At June 30, 2023, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $
The total number of shares of registrant’s common stock outstanding as of April 2, 2024, was
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements. The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This 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.
PART I
Item 1. Business.
General Enterprise Ventures, Inc., (“GEVI,” “we,” “us,” or the “Company”) was originally incorporated in Nevada on March 14, 1990. Our offices are located at 1740H Del Range Blvd., Suite 166, Cheyenne, Wyoming 82009. Our telephone number is (800) 401-4535. Our website is www.generalenterpriseventures.com and www.mightyfirebreaker.com.
We do not incorporate the information on or accessible through our website into this Registration Statement, and you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.
We are an environmentally sustainable flame retardant and flame suppression company for the residential home industry throughout the United States and international markets. Management is experienced at business integration and branding potential. The Company is bringing to the marketplace unique, disruptive products with significant environmental impact potential.
We operate one line of business. The Company acquired Mighty Fire Breaker, LLC on April 13, 2022, and formed Mighty Fire Breaker UK Ltd. on November 14, 2022 (collectively, “MFB”). MFB owns 39 patents and patents pending for environmentally sustainable flame retardant and flame suppression industry. MFB’s products are currently being sold to fire departments in the State of California.
Our management is comprised of three individuals, Joshua Ralston, who acts as our President, Chief Executive officer, Chief Financial Officer and Chairman of the Board of Directors, John Costa who serves on the Board of Directors, and Jeffery Pomerantz, who serves on the Board of Directors. It should also be noted that Mr. Ralston has sufficient voting power through his ownership of Series A Preferred Stock with super voting rights to control the vote on substantially all corporate matters.
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Corporate History
Ultronics Corporation (the “UC”) was incorporated under the laws of the State of Nevada on March 14, 1990. UC never had operations and was formed to investigate potential companies that would be interested in merging with it.
On December 21, 2004, UC formed a subsidiary, Ultronics Acquisition Corporation (“UAC”) for the purpose of facilitating an agreement and plan of merger. UAC was incorporated in the State of Nevada. On December 23, 2004, UC, UAC and General Environmental Management, Inc. (“GEM”) entered into an Agreement and Plan of Merger whereby UAC would be merged into GEM (“Merger”) with GEM to be the surviving corporation. On February 14, 2005, a Certificate of Merger was filed in Delaware; however, there is no evidence of a Certificate of Merger being filed in Nevada. As such, GEM did not cease to exist in Nevada.
The acquisition was treated as a reverse merger with GEM deemed to be the accounting acquiror, and UAC the legal acquiror. UAC’s name was changed to General Environmental Management, Inc. (the “Company”) on March 16, 2005. On March 10, 2006, the Company entered into an Agreement with K2M Mobile Treatment Services, Inc. of Long Beach, California (“K2M”), a privately held company, pursuant to which the Company acquired all of the issued and outstanding common stock of K2M.
On August 31, 2008, the Company entered into an agreement with Island Environmental Services, Inc. of Pomona, California (“Island”), a privately held company, pursuant to which The Company acquired all of the issued and outstanding common stock of Island, a California-based provider of hazardous and non-hazardous waste removal and remediation services to a variety of private and public sector establishments.
On November 6, 2009, the Company entered into a Stock Purchase Agreement (“CLW Agreement”) with United States Environmental Response, LLC, a California limited liability company pursuant to which the Company purchased all of the issued and outstanding capital stock of California Living Waters, Incorporated (“CLW”), a privately held company. CLW owned all of the issued and outstanding capital stock of Santa Clara Waste Water Company (“SCWW”) a California corporation. CLW's only operating subsidiary was SCWW.
On November 25, 2009, the Company entered into an Agreement with Luntz Acquisition (Delaware), LLC. (“Buyer”) pursuant to which the Company sold to Luntz all of the issued and outstanding stock of the Company's primary operating subsidiaries for cash (the “Sale”). On February 26, 2010, after approval of the transaction by the Company’s shareholders at a special meeting held on February 19, 2010, the Company completed the sale of the entities created out of GEM DE. The net cash proceeds from the transaction were used by the Company to retire senior debt and other obligations of the Company. The Company was not merged out of Nevada pursuant to this transaction.
Subsequent to the Luntz transaction, the Company’s revenues and expenses, operations, assets and liabilities were discontinued from February 2010 until January 2021.
On March 19, 2019, Small Cap Compliance, LLC was awarded custodianship of the Company by the Eighth Judicial District Court of Nevada. On May 19, 2019, the Company was revived in Nevada. On May 30, 2019, the custodian filed an Amendment to the Designations of the Series A Convertible Preferred Shares of the Company, and filed a Custodian’s Certification of Amendment certifying the same.
On January 15, 2021, the Company filed a Certificate of Conversion from a Non-Delaware Corporation to a Delaware Corporation, and the associated Certificate of Incorporation, to become a corporation in Delaware. Delaware recognized this domestication of the Company.
On March 31, 2021, the Company formed General Entertainment Ventures, Inc. (“GEVI”) in Delaware as a wholly owned subsidiary of the Company. The purpose of the formation of GEVI was to merge the Company into GEVI pursuant to Section 251(g) of the General Corporation Law of the State of Delaware.
On April 10, 2021, after approval by the board of directors and shareholders of the Company, the Company was merged into GEVI pursuant to an Agreement and Plan of Merger dated as of the same date. GEVI is the accounting and legal acquiror of the Company.
On June 3, 2021, after approval by the board of directors and shareholders of the Company, the Company was redomiciled to the State of Wyoming.
On October 11, 2021, after approval by the board of directors and shareholders of the Company, the Company was renamed General Enterprise Ventures, Inc., in the State of Wyoming.
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Change of Control
On April 28, 2022, Jan Ralston transferred ownership of 10,000,000 Preferred A shares to CEO, Joshua Ralston, making Mr. Ralston the new Majority Shareholder
Series C Preferred Stock
On April 13, 2022, The Company designated 5,000,000 shares of Series C convertible Preferred Stock (“Series C Preferred Stock”), par value $0.0001. The Series C Preferred Stock is convertible into twenty (20) shares of Common Stock for each share of Series C Preferred Stock at the option of the stockholder. The Series C Preferred Stock does not have voting rights and is not eligible to receive dividends.
Corporate changes
On April 13, 2022, the Company acquired Mighty Fire Breaker, LLC, an Ohio Limited Liability company (“MFB”) and all associated IP, in exchange for 1,000,000 Preferred C Shares and a 10% royalty on the gross sales before taxes of products sold under the MFB family of products. MFB has 56 patents centered around its CitroTech MFB 31 Technology for the prevention and spread of wildfires. Its core products can be used for lumber treatments for fire prevention. It has been widely tested and is currently in testing at 3 major us government agencies. When CitroTech Science is sprayed and applied it takes flammable fuels like dry native vegetation and wood and makes them noncombustible. During the third quarter of 2022 the company received EPA Safer Choice status and UL Green-Guard Gold approval on its CitroTech fire inhibitor. It continues to pursue additional accreditations such Missoula Testing approval for selling products to the government. Currently the Company’s subsidiary Mighty Fire Breaker LLC Ohio is involved in installing large home and facility Proactive Wildfire Prevention Systems.
Effective April 1, 2022, the Company implemented a plan to divest its Crypto Mining operations and focus resources on the operations of Mighty Fire Breaker LLC (“MFB”). We expanded our services by building upon its foundation of emerging technology development, by creating a Crypto-Currency mining operation (farm). Previously, the Company had 20 Bitmain Antminer SJ19 PRO 104t/h and 99 Mini-Doge 185 m/h miners deployed, which are mining, Bitcoin, Doge, and Litecoin through the F2Pool and utilized its 8,000 Sq Ft Commercial space to house these ASIC Miners.
Effective November 20, 2022, the Company. formed a UK branch of MFB, named Mighty Fire Breaker UK Limited. The new subsidiary, headquartered in the United Kingdom, will be used to direct the sales of the Mighty Fire Breaker line of products and technologies in Europe, the Middle East and Africa.
Current operations
Principal products, services and markets
The Company’s subsidiary MFB holds various intellectual property in the form of patents and trademarks in the fields of fire suppression, mapping and tracking of fire retardant dispersion and fire inhibition chemistry and technology. The Company and MFB have obtained multiple certification and accreditations in this industry, such as being the only EPA Safer Choice approved, long-term fire retardant, UL GreenGaurd Gold, California Bioassay water approval, LENS, and in the process of USDA approval.
The fire retardant market is forecast to be $13 billion dollars globally by 2025. MFB markets home, industrial and commercial proactive fire defense systems directly and in conjunction with large insurance companies, sells EPA products through various retailers and directly to large users such as Fire Departments and other countries.
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Distribution methods
MFB ships directly from its Rohnert Park, California facility, can drop ship large volume orders through toll blenders and has product available at 12 regional retailers for smaller consumers.
Status of publicly announced product or service
To date, all publicly announced orders have been shipped and delivered, including the San Diego Fire Department, Brazil, various retailers and system installers.
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. Typically, the market is regarded as having products that are not known for their environmental safety or sustainability, and are generally considered as not friendly toward humans, wildlife, fish, water, and plants. MFB’s CitroTech is the first all-green, food grade EPA approved fire retardant. MFB’s products are sold at substantial margins and can be competitive in many markets. The need for safer and sustainable chemistry should drive demand for MFB’s products.
Sources and availability of raw materials
MFB’s products are food grade and readily available from multiple sources. Significant inventory is kept on hand at all times.
Dependence on one or a few customers
Use of fire retardant is spread widely over multiple markets. There is little likelihood that as the popularity of a green chemistry spreads that there will be a business concentration, until USDA approval is obtained, at which point the U.S. government could be could a significant customer.
Patents, trademarks and licenses and their duration
MFB currently holds 56 total patents and patents pending with 30 patents granted, including U.S. and international patents. The granted patents include MFB’s main chemistry and applications include technology patents. MFB has 21 trademarks and various copyrights, both in the United State and internationally. Granted patent offer up to 20 years from the application filing date infringement protection with additional continuation patents frequently filed. Plans are to file additional patents stemming from our research and development endeavors.
Need for government approval of principal products or services.
Use of MFB’s product on government land typically requires USDA approval which MFB is in the midst of. In many case entities such as Fire Departments can request a waiver. We have already sold to customers under the waiver process. MFB’s EPA approval helps with this process.
Effect of existing or probably government regulations on the business
MFB is ahead of the regulations that have been proposed by the U.S. government by already having EPA approval. MFB tracks all proposed regulatory changes and makes commercially reasonable efforts to comply in advance. MFB maintains an advisory board of retired high level fire officials that watch such changes for the Company. MFB also retains experienced legal counsel in this regard.
Cost and effects of compliance with environmental laws
All expenses for the USDA application and the EPA application and subsequent approval have been paid. MFB’s products are green and EPA approved, making the only significant maintenance cost the USDA QPL approval and EPA annual testing.
Employees
The Company currently employees, 8 people full-time and hosts several consultants, attorneys, and independent contractors that all perform tasks on behalf of the company.
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Item 1A. Risk Factors.
Risks Relating to Our Business
Our results could be materially and adversely affected by the impact of the COVID-19 pandemic.
A pandemic similar to COVID-19 could materially and adversely impact our business, including as a result of the loss of adequate labor, whether as a result of high absenteeism or challenges in recruiting and retention or otherwise, prolonged closures, or series of temporary closures, of one or more fulfillment centers as a result of a COVID-19 type of outbreak, a government order or otherwise, or supply chain or carrier interruptions or delays. Further, a COVID-19 type pandemic could have a negative impact on economic conditions, which may adversely impact consumer demand for our products, which may have a material adverse effect on our business, financial condition, and operating results. To the extent any of these events occur, our business, financial condition, and operating results could be materially and adversely affected. The extent to which a COVID-19 type pandemic impacts our business will depend on future developments not within our control, including the duration and severity of a COVID-19 type pandemic and surges, the timing of widespread availability of a vaccine in the United States, the length of time restrictions stay in effect and for economic and operating conditions to return to pre-pandemic levels, together with resulting consumer behaviors, and numerous other uncertainties, all of which remain uncertain. The unavailability and incapacity of Mr. Ralston, Mr. Costa and Mr. Pomerantz, our executive officers and directors, due to a COVID-19 type pandemic would have a material adverse effect of our business.
Because 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. We acquired Mighty Fire Breaker, LLC in April 2022 and entered the fire retardant and fire suppression industry. As a result of us recently entering into these business lines, 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.
We do not currently have sufficient cash flow to maintain our business.
We do not currently have enough cash flow to operate our business. Therefore, we will be dependent upon additional capital in the form of either debt or equity to continue our operations and expand our products to new markets. At present, we do not have arrangements to raise all of the needed additional capital, and we will need to identify potential investors and negotiate appropriate arrangements with them. We may not be able to arrange enough investment within the time the investment is required or that if it is arranged, that it will be on favorable terms. If we cannot get the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.
Our management has limited experience operating a public company and is subject to the risks commonly encountered by early-stage companies.
Although our management has experience in operating small companies, our current management has not managed expansion while being a public company. Many investors may treat us as an early-stage company. Also, our management has not overseen a company with considerable growth. Because we have a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets.
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We depend heavily on key personnel.
We believe our success depends heavily on the continued active participation of our current executive officers. If we were to lose our executive officers’ services, the loss could have a material adverse effect on our business, financial condition, or operation results. Also, to achieve our future growth plans, we will need to recruit, hire, train, and retain other highly qualified technical and managerial personnel. Competition for qualified employees is intense, and if we cannot attract, retain and motivate these additional employees, their absence could have a materially adverse effect on our business, financial condition, or results of operations.
Increased operating costs and obstacles to cost recovery due to the pricing and cancelation 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, other labor-related expenses, especially when we cannot recover such increased costs through increases in the prices for our products and services. In some cases, we will have to absorb any cost increases, which may adversely impact our operating results.
Governmental regulations relating to environmental products may subject us to significant liability.
The regulations relating to each of product segments are numerous and complex. A variety of rules and regulations at various governmental levels relating to the handling, preparation, and serving of environmental products. We cannot assure you that we are in full compliance with all applicable laws and regulations at all times or that we will be able to comply with any future laws and regulations. Furthermore, legislation and regulatory attention to environmental safety is very high. Additional or amended rules and regulations in this area may significantly increase the cost of compliance or expose us to liabilities.
If we fail to comply with applicable laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions, or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, or debarments from government contracts. The cost of compliance or the consequences of non-compliance, including debarments, could have a material adverse effect on our business and operations results. Also, governmental units may make changes in the regulatory frameworks within which we operate that may require either the Company as a whole or individual businesses to incur substantial increases in costs to comply with such laws and regulations.
If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.
Before we market any product, we will need to purchase significant product liability insurance. However, in the event of major claims from the use of our products, 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 products 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.
If our relationship with key business suppliers and distributors were to be disrupted, we could experience disruptions to our operations and cost structure.
If critical suppliers to our business were disrupted, it would affect our ability to source necessary raw materials needed to produce our products. If our relationship with any of these key suppliers or distributors were disrupted, if it was not already arranged, we would have to source and engage alternative suppliers and distributors. This disruption could affect our operations and cost structure.
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Risks Related to Mighty Fire Breaker
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 concepts, and shifts in these consumer preferences could negatively affect our future profitability.
Negative publicity over certain environmental products may adversely affect demand for our products 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 products 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 be required to disclose third-party products we sell due to federal regulations, which may affect customer confidence.
We may become subject to potential claims for product liability.
Our business could expose us to claims for personal injury from contamination of our products. We believe that our products’ 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 products 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 products may in the long term make it more difficult for us to earn a profit.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
The Company has cloud based security, and their computers and servers are fire walled. In addition, the Company does not allow virtual log-in on their computers.
Item 2. Properties.
Our Company owns no real property. Our principal office is located at 2170 Allentown Rd, Lima, OH 45808 which is commercial space under on one year lease agreement at $500 per month In addition, the Company leases commercial space for retail and warehousing at 5050 Commerce Blvd., Rohnert Park, CA 90928, which is under a two year lease agreement at $5,200 per month.
Item 3. Legal Proceedings.
Currently, there are no legal proceedings pending or threatened against us. 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 Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our Common Stock is quoted on the OTC Pink under the symbol “GEVI.” Our stock is thinly traded on the OTC Markets and there can be no assurance that a liquid market for our common stock will ever develop.
For the periods indicated, the following table sets forth the high and low bid prices per share of common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Fiscal Year 2023 |
| High Bid |
|
| Low Bid |
| ||
First Quarter |
| $ | 0.50 |
|
| $ | 0.15 |
|
Second Quarter |
| $ | 0.50 |
|
| $ | 0.17 |
|
Third Quarter |
| $ | 1.11 |
|
| $ | 0.40 |
|
Fourth Quarter |
| $ | 0.98 |
|
| $ | 0.42 |
|
Fiscal Year 2022 |
| High Bid |
|
| Low Bid |
| ||
First Quarter |
| $ | 0.180 |
|
| $ | 0.049 |
|
Second Quarter |
| $ | 0.235 |
|
| $ | 0.175 |
|
Third Quarter |
| $ | 0.210 |
|
| $ | 0.125 |
|
Fourth Quarter |
| $ | 0.580 |
|
| $ | 0.208 |
|
Security Holders
As of April 2,2024, we estimate there were approximately 721 holders of record and 36,302,150 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.
Recent Sales of Unregistered Securities
During the past two years, we effected the following transactions in reliance upon exemptions from registration under the Securities Act:
Between September 27, 2023, and February 13, 2024, we issued 471,832 shares of Siers C Convertible Preferred Stock. The following table summarizes the offering, including the number of shares sold and the amount raised. 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.
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Purchaser |
| Series C Preferred Shares Issued |
|
| Amount Raised |
| ||
|
|
|
|
|
|
| ||
Peter Zilahy |
|
| 25,000 |
|
| $ | 100,000.00 |
|
Alta Investments LLC |
|
| 20,833 |
|
| $ | 49,999.20 |
|
Robert Dailey |
|
| 41,666 |
|
| $ | 99,998.40 |
|
FEC Investments LLC |
|
| 75,000 |
|
| $ | 300,000.00 |
|
East Shore Industries LLC |
|
| 12,500 |
|
| $ | 50,000.00 |
|
Gerald Yanowitz |
|
| 14,000 |
|
| $ | 33,600.00 |
|
Joel Yanowitz and Amy Metzenbaum Revocable Trust |
|
| 40,000 |
|
| $ | 96,000.00 |
|
Super Eight Capital Holding Ltd. |
|
| 7,000 |
|
| $ | 28,000.00 |
|
Loma LLC |
|
| 12,500 |
|
| $ | 50,000.00 |
|
Hunts Road LLC |
|
| 25,000 |
|
| $ | 100,000.00 |
|
Alta Investments LLC |
|
| 37,500 |
|
| $ | 90,000.00 |
|
Super Eight Capital Holding Ltd. |
|
| 8,333 |
|
| $ | 19,999.20 |
|
Michael Feigin |
|
| 20,000 |
|
| $ | 0.00 |
|
Noonan 2006 Revocable Trust |
|
| 100,000 |
|
| $ | 300,000.00 |
|
Jeffrey P. Bash |
|
| 12,500 |
|
| $ | 75,000.00 |
|
JBCG Enterprises LLC |
|
| 20,000 |
|
| $ | 0.00 |
|
Each investor was given adequate access to sufficient information about us to make an informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.
Issuer Purchases of Equity Securities
None.
Use of proceeds
None.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following Management’s Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Annual Report. The Management’s Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this Annual Report.
We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report, except as required by U.S. federal securities laws.
| 11 |
| Table of Contents |
Overview
The Company’s U.S. subsidiary, Mighty Fire Breaker LLC (“MFB”) is currently engaged in developing solutions to support the resolution of the insurance crisis in the western United States by use of it’s EPA approved CitroTech products. MFB has developed and patented addition intellectual property in this regard, such as a system for commercial properties and homes that puts fire inhibiting buffer zone around a property blocking blown in embers from igniting. The technology continues to work dry which unlike other products allows for early deployment and evacuation of people. It also has developed a job site trailer allowing for the fire protection of the property during the construction phase and the fire hardening of the inner construction and installation of our patented system during that phase. Hopefully allow the owner to get insurance to start the project. The company also is continuing its USDA approval process. It has sold products to various fire departments and continues to demonstrate market its products.
Results of Operations
The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended December 31, 2023, and 2022, which are included herein.
Our results of operations for the years ended December 31, 2023, and 2022 are summarized below:
|
| Years Ended |
|
|
|
| ||||||
|
| December 31, |
|
|
|
| ||||||
|
| 2023 |
|
| 2022 |
|
| Change |
| |||
Revenue |
| $ | 520,645 |
|
| $ | 62,732 |
|
| $ | 457,913 |
|
Operating expenses |
|
| 10,237,828 |
|
|
| 2,979,398 |
|
|
| 7,258,430 |
|
Other expenses |
|
| 4,328 |
|
|
| 255 |
|
|
| 4,073 |
|
Net loss from continuing operations |
| $ | (9,855,019 | ) |
| $ | (2,918,814 | ) |
| $ | 7,847,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations |
|
| - |
|
|
| 13,016 |
|
|
| (13,016 | ) |
Loss on disposition of digital currency and digital currency assets |
|
| - |
|
|
| (2,030 | ) |
|
| 2,030 |
|
Net income from discontinued operations, net of tax |
| $ | - |
|
| $ | 10,986 |
|
| $ | (10,986 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (9,855,019 | ) |
| $ | (2,907,828 | ) |
| $ | (6,947,191 | ) |
Revenue
Our Company generated $520,645 and $67,732 revenue for the years ended December 31, 2023, and 2022, respectively. The Company’s revenue is associated with revenue from Mighty Fire Breaker, LLC (“MFB”) which was acquired in April 2022.
Operating Expenses
For the year ended 31, 2023, the operating expenses consisted of stock-based management compensation of $180,000, professional fees - related party of $8,640,000, professional fees of $932,352, marketing expenses of $148,289 and general and administrative expenses of $337,187, compared to management compensation of $2,100,000, professional fees of $500,875, marketing expenses of $96,553 and general and administrative of $281,970 in the year ended December 31, 2022.
During the year ended December 31, 2022, the Company recorded management compensation of $2,100,000 related to Chief Executive Officer (CEO) for 70,000,000 restricted stock awards (the holder of the restricted stock shall be entitled to vote but is not entitled to dividends or disposal).
During the year ended December 31, 2023, the Company issued 1,200,000 shares of Convertible Series C Preferred Stock to a related party for consulting services rendered to the Company from October 2021 through July 2023. The Company valued the 1,200,000 shares of Convertible Preferred Stock, as if converted to 24,000,000 shares of common stock, using the quoted stock price of the Company’s common stock at approval date (November 1, 2022), resulting in a value of $8,640,000.
| 12 |
| Table of Contents |
On November 1, 2022, the Company’s Board of Directors approved the issuance of 250,000 shares of common stock to each of the two independent directors for their board services in support of the Company. As of December 31, 2023, the Company has not issued the shares. During the year ended December 31,2023, the Company valued the 500,000 shares of common stock at the market value of the Company’s common stock at approval date for the amount of $180,000.
Other expenses
For the years ended December 31, 2023, and 2022, the other expenses consisted of interest expense of $4,328 and $255 related to convertible notes and loan payable to lenders.
Discontinuing Operating Income (Expenses)
During the year ended December 31, 2022, loss on discontinued operations of $2,030 was the result of a loss on disposition of the Company’s digital currency assets, including equipment and digital currency, against a note payable issued as consideration for the equipment when it was previously acquired.
During the year ended December 31, 2022, income from discontinued operations of $13,016 was the result of the net income from the operations of crypto mining and the disposition of crypto mining which the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition.
Net Loss
As a result of the foregoing, we incurred a net loss of $9,855,019, for the year ended December 31, 2023, compared to a net loss of $2,907,828 for the corresponding year ended December 31, 2022.
Liquidity and Capital Resources
|
| December 31, |
|
| December 31, |
|
|
|
| |||
|
| 2023 |
|
| 2022 |
|
| Change |
| |||
Cash |
| $ | 549,755 |
|
| $ | 55,434 |
|
| $ | 494,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
| $ | 1,218,056 |
|
| $ | 170,319 |
|
| $ | 1,047,737 |
|
Current Liabilities |
| $ | 1,617,785 |
|
| $ | 1,060,918 |
|
| $ | 556,867 |
|
Working Capital (Deficiency) |
| $ | (399,729 | ) |
| $ | (890,599 | ) |
| $ | 490,870 |
|
The decrease in working capital deficiency in 2023, was primarily the result of an increases in cash of $494,321, inventory of $115,552, accounts receivable of $427,433 and prepaid expenses of $10,431 offset by an increase in due to related parties of $409,924, promissory note of $120,000, convertible note of $19,000 and current portion of operating lease liability of $40,769 and a reduce in accounts payable and accrued liabilities of $76,657.
As of December 31, 2023, and 2022, the current assets consisted of cash of $549,755 and $55,434, inventory of $230,197 and $114,645, accounts receivable of $427,433 and $0, and prepaid expenses of $10,671 and 240, respectively.
As of December 31, 2023, and 2022, the current liabilities consisted of accounts payable and accrued liabilities of $54,572 and $87.398, due to related parties of $1,309,077 and $899,153, promissory note of $120,000 and $0, convertible note of $54,000 and $35,000, and current portion of operating lease liability of $80,136 and $39,367, respectively.
| 13 |
| Table of Contents |
Cash Flows
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Cash used in operating activities |
| $ | (1,211,764 | ) |
| $ | (708,450 | ) |
Cash used in investing activities |
| $ | (4,015 | ) |
| $ | (5,349 | ) |
Cash provided by financing activities |
| $ | 1,710,100 |
|
| $ | 763,764 |
|
Net Change in Cash |
| $ | 494,321 |
|
| $ | 49,965 |
|
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the year ended December 31, 2023, net cash flows used in operating activities was $1,211,764, consisting of a net loss of $9,855,019, reduced by stock-based compensation of $8,966,850, non-cash lease expenses of $71,349, depreciation of $1,263 and increased by changes in operating assets and liabilities of $396,207.
For the year ended December 31, 2022, net cash flows used in operating activities were $708,450, consisting of a net loss of $2,907,828, reduced by non-cash management compensation of $2,100,000, loss on disposition of digital currency and digital currency assets of $2,029, impairment loss on digital assets of $6,125, non-cash lease expense of $44,647, depreciation of $15,862 and reduced by an increase in changes in operating assets and liabilities of $30,175.
Cash Flows from Investing Activities
For the years ended December 31, 2023, and 2022, the cash flows used in investing activities were $4,015 and $5,350, which was related to the purchase of equipment and reduced by $0 and $1 share capital of Mighty Fire Breaker UK Limited (MFB). respectively.
Cash Flows from Financing Activities
For the year ended December 31, 2023, net cash provided by financing activities was $1,710,100, consisting of $307,500 received from a related party, $907,600 from issuance Convertible Series C Preferred Stock, $500,000 from stock subscriptions, $120,000 from promissory note and repayments of $125,000 to related party.
For the year ended December 31, 2022, net cash provided by financing activities was $763,764, consisting of $784,484 received from related parties, $35,000 from convertible note and repayments of $55,720 to related party.
Going Concern
The accompanying consolidated financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant income to date. The Company is subject to the risks and uncertainties associated with a business with no substantive revenue, as well as limitations on its operating capital resources. These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. In light of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise capital and generate revenue and profits in the future.
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.
| 14 |
| Table of Contents |
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Our most critical accounting policies and estimates relate to the following:
● | Revenue Recognition | |
● | Incremental borrowing rate for Right of Use Assets | |
● | Share based compensation |
Revenue Recognition
Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally of products used for lumber products for fire prevention. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the products transfer from the Company to the customer. All of our performance obligations under the terms of contracts with our customers have an original duration of one year or less.
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.
Share-Based Compensation
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company,” this item is not required.
| 15 |
| Table of Contents |
Item 8. Financial Statements and Supplementary Data.
General Enterprise Ventures, Inc.
Index to Audited Consolidated Financial Statements
December 31, 2023 and 2022
| 16 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: | The Board of Directors and Stockholders of |
| General Enterprises Ventures, Inc. |
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of General Enterprises Ventures, Inc. (the “Company”) as of December 31, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred substantial losses during the year ended December 31, 2023. As of December 31, 2023, the Company had a working capital deficit. Accordingly, these factors give rise to substantial doubt that the Company will be able to continue as a going concern. Management closely monitors the Company’s financial position and has prepared a plan that is found in Note 1 that addresses this substantial doubt. These financial statements do not include any adjustments that might result from the outcome of this uncertainly.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.
| F-1 |
| Table of Contents |
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the 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 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 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.
The engagement team determined that the Company’s intangible assets and related impairment met the criteria to be considered a critical audit matter because the intangible assets comprised a material portion of the Company’s total assets, and they require a significant amount of judgment to estimate the carrying value and ensure the intangible assets are not impaired, and those assets are expected to contribute to the Company’s ability generate future profit. In order to the address this critical audit matter, we first gained an understanding of how management values these assets and reperformed the valuation on those assets, and considered the reasonableness of the inputs that management is using for their valuation.
The engagement team determined that the preferred stock, especially those with conversion features, met the criteria of a critical audit matter because it is substantial relative to the Company’s shareholders’ equity, and determining their valuation and allocation requires the engagement team to identify and understand the attributes of the securities, understand how those attributes go towards determining the value of those securities. Additionally, the disclosure regarding these securities are extensive and quite complex. The engagement team addressed the critical audit matters by gaining an understanding of management’s valuation, allocation, recognition and approach towards disclosure, and then vouched certain details of those securities and reperformed the valuation and allocation of such preferred stock to determine if management had properly accounted for those securities.
/s/ WWC, P.C.
Certified Public Accountants
PCAOB ID:
We have served as the Company’s auditor since 2018.
April 15, 2024
| F-2 |
| Table of Contents |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of General Enterprise Ventures, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of General Enterprise Ventures, Inc. as of December 31, 2022, the related statements of operations and comprehensive loss, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. 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 audit 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 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, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
Critical audit matters are matters arising from the current-period audit of the 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 financial statements and (2) involved our especially challenging, subjective, or complex judgments.
We determined that there are no critical audit matters.
/S/ BF Borgers CPA PC (PCAOB ID 5041)
We have served as the Company's auditor from 2022 to 2023
Lakewood, CO
March 31, 2023
| F-3 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Balance Sheets
|
| December 31, |
|
| December 31, |
| ||
|
| 2023 |
|
| 2022 |
| ||
Assets |
|
|
|
|
|
| ||
Current Assets |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Prepaid expenses |
|
|
|
|
|
| ||
Accounts receivable |
|
|
|
|
|
| ||
Inventory |
|
|
|
|
|
| ||
Total Current Assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
|
| ||
Operating lease right-of-use asset |
|
|
|
|
|
| ||
Equipment, net |
|
|
|
|
|
| ||
Total Assets |
| $ |
|
| $ |
| ||
|
|
|
|
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|
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|
|
Liabilities and Stockholders' Equity |
|
|
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|
Current liabilities |
|
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|
Accounts payable and accrued liabilities |
| $ |
|
| $ |
| ||
Promissory note |
|
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| ||
Convertible note payable |
|
|
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| ||
Due to related parties |
|
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| ||
Operating lease liability - current portion |
|
|
|
|
|
| ||
Total Current Liabilities |
|
|
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| ||
|
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|
|
Operating lease liability – noncurrent |
|
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| ||
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Total Liabilities |
|
|
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| ||
|
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|
Commitments and contingencies |
|
|
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|
Stockholders' Equity |
|
|
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|
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|
|
|
Series A Preferred Stock, par value $ |
|
|
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| |||
Series C Convertible Preferred Stock, par value $ |
|
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| |||
Common Stock par value $ |
|
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| |||
Additional paid-in capital |
|
|
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|
|
| ||
Common Stock to be issued - |
|
|
|
|
|
| ||
Subscription received – |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total Stockholders' Equity |
|
|
|
|
|
| ||
Total Liabilities and Stockholders' Equity |
| $ |
|
| $ |
| ||
See the accompanying Notes, which are an integral part of these Financial Statements.
| F-4 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statement of Operations and Comprehensive Loss
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Revenue |
| $ |
|
| $ |
| ||
Cost of revenue |
|
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| ||
Gross Profit |
|
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| ||
|
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Operating Expenses |
|
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General and administration |
|
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| ||
Marketing |
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| ||
Management compensation |
|
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| ||
Professional fees- related party |
|
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| ||
Professional fees |
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| ||
Total operating expenses |
|
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| ||
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Loss from Operations |
|
| ( | ) |
|
| ( | ) |
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Other Income (Expense) |
|
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Interest expense |
|
| ( | ) |
|
| ( | ) |
Total other income (expense) |
|
| ( | ) |
|
| ( | ) |
|
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Loss from continuing operations before taxes |
|
| ( | ) |
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| ( | ) |
|
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Provision for income taxes |
|
|
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| ||
Loss from continuing operations |
| $ | ( | ) |
| $ | ( | ) |
|
|
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|
Discontinued operations: |
|
|
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|
Income from discontinued operations |
| $ |
|
| $ |
| ||
Loss on disposition of digital currency and digital currency assets |
|
|
|
|
| ( | ) | |
Income (Loss) from discontinued operations, net of tax |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Comprehensive loss |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
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|
|
Loss from continuing operations per Common Share – Basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
Income from discontinuing operations per Common Share– Basic and diluted |
| $ |
|
| $ |
| ||
Net loss per common share - Basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Loss from continuing operations Per Common Share – Diluted |
| $ |
|
| $ | ( | ) | |
Income (Loss) from discontinuing operations Per Common Share– Diluted |
| $ |
|
| $ |
| ||
Net loss per common share - Diluted |
| $ |
|
| $ | ( | ) | |
Basic and Diluted Weighted Average Number of Common Shares Outstanding |
|
|
|
|
|
| ||
Diluted Weighted Average Number of Common Shares Outstanding |
|
|
|
|
|
| ||
See the accompanying Notes, which are an integral part of these Financial Statements.
| F-5 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Change in Stockholders’ Deficit
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| Series A |
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| Series C |
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| Additional |
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| Preferred |
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| Common |
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| Total |
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| Preferred stock |
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| Preferred stock |
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| Common Stock |
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| Paid-In |
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| Stock |
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| Stock to |
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| Accumulated |
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| Stockholders' |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| to be issued |
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| be issued |
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| Deficit |
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| Equity (Deficit) |
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Balance - December 31, 2021 |
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| $ |
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| - |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||||
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| - |
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| - |
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Debt forgiveness - former related party |
|
| - |
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| - |
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Shares issued for acquisition of Mighty Fire Breakers |
|
| - |
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| - |
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Conversion of Convertible Series C Preferred stock of Common stock |
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| - |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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Stock based compensation |
|
| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| ( | ) |
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| ( | ) | |||||
Balance - December 31, 2022 |
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| $ |
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| $ |
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Subscription received – Series C Preferred stock to be issued |
|
| - |
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| - |
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| - |
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Common stock to be issued - management |
|
| - |
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| - |
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| - |
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Issuance Series C Preferred Stock in cash |
|
| - |
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| - |
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Common stock issued for services |
|
| - |
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| - |
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Conversion of Convertible Series C Preferred Stock in Common stock |
|
| - |
|
|
|
|
|
| ( | ) |
|
| ( | ) |
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| ( | ) |
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| |||||||
Issuance Series C Preferred Stock for services -related party |
|
| - |
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|
|
|
|
|
|
|
|
|
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| - |
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Contribution inventory - related party |
|
| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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|
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|
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|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance - December 31, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||||||
See the accompanying Notes, which are an integral part of these Financial Statements.
| F-6 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statement of Cash Flows
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2023 |
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| 2022 |
| ||
|
|
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| ||
Cash Flows from Operating Activities: |
|
|
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| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
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Stock-based compensation |
|
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| ||
Loss on disposition of digital currency and digital currency assets |
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Impairment loss on digital assets |
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Non-cash lease expenses |
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Depreciation and amortization |
|
|
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| ||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| ( | ) |
|
|
| |
Inventory |
|
| ( | ) |
|
| ( | ) |
Contribution inventory - related party |
|
|
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|
| ||
Digital currency |
|
|
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| ||
Prepaid expense |
|
| ( | ) |
|
| ( | ) |
Related party advances funding operating expense |
|
|
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|
|
| ||
Accounts payable and accrued liabilities |
|
| ( | ) |
|
|
| |
Operating lease liabilities |
|
| ( | ) |
|
| ( | ) |
Net Cash used in Operating Activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchase of equipment |
|
| ( | ) |
|
| ( | ) |
Share capital - Mighty Fire Breaker UK Limited |
|
|
|
|
|
| ||
Net Cash used in Investing Activities |
|
| ( | ) |
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| ( | ) |
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|
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|
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Cash Flows from Financing Activities: |
|
|
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|
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Proceed from convertible note |
|
|
|
|
|
| ||
Proceeds from loan - related party |
|
|
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|
|
| ||
Repayment of loan- related party |
|
| ( | ) |
|
| ( | ) |
Proceed from issuance Series C Preferred Stock |
|
|
|
|
|
| ||
Proceed from stock subscription |
|
|
|
|
|
| ||
Proceeds from promissory note |
|
|
|
|
|
| ||
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: |
|
|
|
|
|
|
|
|
Issuance of common stock for services |
| $ |
|
| $ |
| ||
Issuance of Series C Convertible Preferred stock for acquisition of Mighty Fire Breaker |
| $ |
|
| $ |
| ||
Common stock issued upon conversion of Series C Convertible Preferred stock |
| $ |
|
| $ |
| ||
Debt forgiveness - related party |
| $ |
|
| $ |
| ||
Reclassification of due to related party to convertible note |
| $ |
|
| $ |
| ||
Contribution inventory - related party |
| $ |
|
| $ |
| ||
Issuance Series C Convertible Preferred stock for services - related party |
| $ |
|
| $ |
| ||
Right -of-use assets obtained in exchange for new operating lease liabilities |
| $ |
|
| $ |
| ||
See the accompanying Notes, which are an integral part of these Financial Statements.
| F-7 |
| Table of Contents |
General Enterprise Ventures, Inc.
Notes to Consolidated Financial Statements
December 31, 2023 and 2022
Note 1 – Organization, Business and Going Concern
General Enterprise Ventures, Inc., (the “Company” “GEVI”), was originally incorporated under the laws of the State of Nevada on March 14, 1990.
In January 2021, Board of Directors of the Company approved redomiciling the Company in Delaware. On March 31, 2021, the Company formed General Entertainment Ventures, Inc. in Delaware as a wholly owned subsidiary of the Company. The purpose of the formation of GEVI was to merge the Company into GEVI pursuant to Section 251(g) of the General Corporation Law of the State of Delaware. On April 10, 2021, after approval by the board of directors and shareholders of the Company, the Company was merged into GEVI pursuant to an Agreement and Plan of Merger dated as of the same date. GEVI is the accounting and legal acquiror of the Company.
On October 17, 2021, the Board of Directors approved the corporate name change from General Entertainment Ventures, Inc. to General Enterprise Ventures, Inc.
Corporate Changes
On May 10, 2021, GEVI acquired all the issued and outstanding equity of Strategic Asset Holdings, LLC (“SAH”), a Wyoming limited liability company, for $
On June 3, 2021, after approval by the board of directors and shareholders of the Company, the Company was redomiciled to the State of Wyoming.
Effective April 1, 2022, the Company implemented a plan to divest its Crypto Mining operations and focus resources on the operations of Mighty Fire Breaker LLC (“MFB”). We expanded our services by building upon its foundation of emerging technology development, by creating a Crypto-Currency mining operation (farm). Previously,
Effective November 20, 2022 General Enterprise Ventures Inc. formed a UK branch of its US subsidiary Mighty Fire Breaker LLC, named Mighty Fire Breaker UK Limited. The new Subsidiary headquartered in the United Kingdom, will be used to direct the sales of the Mighty Fire Breaker line of products and technologies in Europe, the Middle East and Africa.
| F-8 |
| Table of Contents |
Change of Control
On April 14, 2021, Jan Ralston acquired
On April 28, 2022, Jan Ralston transferred ownership of
Series C Preferred Stock
On April 13, 2022, The Company designated
Business
We are a fully integrated technology company structured to provide mergers and acquisitions of new and available technology. Through our services, we incubate first-to-market products and help existing companies accelerate their product development within all regulatory requirements.
Going Concern
The accompanying consolidated financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated limited revenues to date. The Company is subject to the risks and uncertainties associated with a business with no substantive revenue, as well as limitations on its operating capital resources. These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. In light of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise capital and generate revenue and profits in the future.
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 General Enterprise Ventures, Inc., and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.
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.
| F-9 |
| Table of Contents |
Business Combinations
In accordance with ASC 805-10, “Business Combinations”, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible 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 not have any cash equivalents at December 31, 2023 and 2022. The Company had cash of $
Inventory
Inventories consist of raw materials which are stated at lower cost or net realizable value, with cost being determined on the weighted average method. As of December 31, 2023, and 2022, the Company held inventories of $
During the years ended December 31, 2023, and 2022, the Company recorded cost of goods sold of $
Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company maintains allowances for doubtful accounts 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 31,2023 and 2022, the Company had no allowance for doubtful accounts.
Intangible Assets
Intangible assets with an indefinite life are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired. 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. Those assets represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of the respective assets.
| F-10 |
| Table of Contents |
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed on the straight-line method. Currently our assets consist solely of furniture and equipment 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.
Digital Assets
We account for all digital assets held as a result of these transactions as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. We have ownership of and control over our digital assets and we may use third-party custodial services to secure it. The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheet at cost, net of any impairment losses incurred since acquisition.
We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. If the current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined.
Impairment losses are recognized within other income (expense) on the statements of operations and comprehensive loss in the period in which the impairment is identified. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same digital assets held within other income (expense). In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.
During the year ended December 31, 2022, the Company recorded an impairment loss of $
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.
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.
| F-11 |
| Table of Contents |
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 31,2023, and 2022, the Company’s lease agreement is accounted for as operating leases.
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. |
The Company’s financial instruments, including cash, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2023 and 2022, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 5).
Segments
Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one operating segment and all of the Company’s revenues and operations are currently in the United States.
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.
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. |
| F-12 |
| Table of Contents |
For the year ended December 31, 2023, our revenues currently consist of products used for lumber products for fire prevention. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the products transfer from the Company to the customer.
During the year ended December 31,2022, the Company earned cryptocurrency mining revenues. The Company earned its cryptocurrency mining revenues by providing transaction verification services within the digital currency networks of cryptocurrencies, for Bitcoin, Litecoin, and Dogecoin. The Company satisfied its performance obligations at the point in time that the Company was awarded a unit of digital asset through its participation in the applicable network and network participants benefit from the Company’s verification service. In consideration for these services, the Company received Bitcoin, Litecoin, and Dogecoin, net of applicable network fees, which was recorded as revenue using the closing U.S. dollar price of the digital asset on the date of receipt. Expenses associated with running the cryptocurrency mining operations, which consisted of utilities, equipment depreciation and monitoring services were recorded as cost of revenues.
There is currently no specific definitive guidance in GAAP or alternative accounting frameworks for the accounting for the production and mining of digital assets and management has exercised significant judgment in determining appropriate accounting treatment for the recognition of revenue for mining of digital assets. Management has examined various factors surrounding the substance of the Company’s operations and the guidance in ASC 606, including identifying the transaction price, when performance obligations are satisfied, and collectability is reasonably assured being the completion and addition of a block to a blockchain and the award of a unit of digital currency to the Company. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies which could result in a change in the Company’s financial statements.
On April 1, 2022, the Company implemented a plan to discontinue its crypto mining operations and divest all related assets. As of December 31, 2022, all of the crypto mining assets had been discarded and as the Company no longer engages in crypto mining all revenue during the year ended December 31, 2022, has been reclassified to income from discontinued operations (see Note 4).
Basic and Diluted Net Loss Per Common Share
Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued.
For the years ended December 31, 2023 and 2022, 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.
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Convertible notes |
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Convertible Series C Preferred Stock |
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Convertible Series A Preferred Stock(1) |
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(1) Series A Preferred Stock was amended in March 2024 to remove the conversion feature (Note 11).
For the years ended December 31, 2023 and 2022 the reconciliation to net loss per common share basic and the anti-dilutive impact on net loss per share, are as follows:
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Numerator: |
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Net Loss |
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Net Loss - diluted |
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Denominator: |
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Weighted average common shares outstanding |
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Effect of dilutive shares |
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Convertible notes |
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Preferred stock |
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Diluted |
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Net loss per common share: |
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Basic |
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Diluted |
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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.
| F-13 |
| Table of Contents |
Recently Issued Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. This ASU is currently not expected to have a material impact on our financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ending December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements and whether we will apply the standard prospectively or retrospectively.
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.
Reclassification
Certain accounts from prior periods have been reclassified to conform to the current period presentation.
Note 3 – Acquisition
On January 3, 2022, the Company formed Mighty Fire Breaker, LLC, an Ohio limited liability company (“MFB Ohio”), to acquire all the intellectual property of Mighty Fire Breaker, LLC, a California limited liability company (“MFB California”) pertaining to the fire suppression segment of the environmental industry, including patents and patents pending. On April 13, 2022, the transaction between the Company, MFB Ohio and MFB California closed. The transaction consideration to the equity holders of MFB California was
MFB has 19 patents centered around its CitroTech MFB 31 Technology for the prevention and spread of wildfires. Its core products can be used for lumber treatments for fire prevention. It has been widely tested and is currently in testing at 3 major us government agencies. When CitroTech Science is sprayed and applied it takes flammable fuels like dry native vegetation and wood and makes them noncombustible.
The following table summarizes the consideration paid for MFB and the amounts of the assets acquired, and liabilities assumed at the acquisition date of April 13, 2022:
Consideration: |
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Convertible Series C Preferred stock |
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Assets acquired and liabilities assumed: |
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Intangible assets |
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Operating lease right-of-use assets |
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Operating lease liabilities |
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Note 4 – Discontinued Operations
On April 1, 2022, the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition. The Company recognized a loss of $
| F-14 |
| Table of Contents |
The following is a summary of the assets and liabilities of the Company’s crypto mining operations as of April 1, 2022:
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| April 1, |
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Digital currency |
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Digital currency equipment, net |
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Total assets from discontinued operations |
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Due to related party |
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The following is a summary of discontinued operations for the period ended April 1,2022:
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Operating expenses: |
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Impairment loss |
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Total operating expenses |
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Income from discontinued operations |
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Note 5 – Equipment, net
At December 31, 2023 and 2022, equipment consisted of the following:
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Cost: |
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Furniture and equipment |
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Less: accumulated depreciation |
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Property and equipment, net |
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During the years ended December 31, 2023 and 2022, the Company recorded depreciation of $
Note 6 – Intangible Assets, net
The Company has capitalized the costs associated with acquiring the intellectual property of MFB (see Note 3) at a value of $
The amount capitalized consisted of a portion of the fair value of
As of December 31, 2023 and 2022,finite lived intangible assets consisted of the following:
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Patents |
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Accumulated amortization |
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Intangible assets, net |
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Estimated future amortization expense for finite lived intangibles are as follows:
Year Ended December 31, |
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2025 |
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2028 |
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Thereafter |
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As of December 31, 2023, the weighted-average useful life is
During the year ended December 31, 2023 and 2022, the amortization expense was $
| F-15 |
| Table of Contents |
Note 7 – Lease
In March 2022, the Company has entered into an operating lease for the office, with the term of 18 months. In July 2023, the Company amended the contract and extended the lease term to July 2025.
The following summarizes right-of-use asset and lease information about the Company’s operating lease as of December 31, 2023, and 2022:
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The components of lease expense were as follows: |
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Supplemental cash flow information related to leases was as follows: |
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Cash paid for operating cash flows from operating leases |
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Right -of-use assets obtained upon acquisition |
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Supplemental balance sheet information related to leases was as follows:
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Operating lease right-of-use asset |
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Operating lease liabilities: |
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Current portion |
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Non-current portion |
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Weighted-average remaining lease term - operating leases (year) |
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Weighted-average discount rate — operating leases |
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The following table outlines maturities of our lease liabilities as of December 31, 2023:
2024 |
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Thereafter |
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Less: Imputed interest |
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Operating lease liabilities |
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| F-16 |
| Table of Contents |
Note 8 – Convertible Note
On September 30, 2022, the Company entered into a convertible note agreement for the amount of $54,000, with term of six (6) months from the date of receipt of the funds, at interest rate of
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August 11, 2022 |
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September 2, 2022 |
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April 1, 2023 |
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Total Convertible notes |
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Current portion |
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Long -term portion |
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On June 9, 2022, the lender paid $
During the years ended December 31, 2023, and 2022, the Company recognized interest expense of $
Note 9 – Promissory Note
On June 7, 2023, the Company entered into a promissory note agreement for the amount of $
Note 10 – Related Party Transactions
During the year ended December 31, 2022, our former officer forgave $
During the year ended December 31, 2022, as part of the Company’s divestiture of its digital asset operations, a related party forgave loans payable of $
During the year ended December 31, 2022, a related party paid $
On June 13, 2022, the Company issued
On November 1, 2022, the Company’s Board of Directors approved the issuance of
On October 23, 2021, the Company entered into a consulting agreement with a related party. The consultant shall render to the Company, upon the request of any members of Board of Directors or the President of the Company, consulting services on matters relating to the business affairs of the Company. The agreement shall take effect of the date of agreement and shall terminate upon mutual agreement of the parties. The compensation of consultant is a number of Convertible Series C Preferred Shares which the Board of Directors of the Company may determine at its discretion. On November 1, 2022, the Company’s Board of Directors approved issuance of
On June 9, 2022, the Company received $
During the years ended December 31, 2023, and 2022, a related party advanced to the Company an amount of $
During the years ended December 31, 2023, and 2022, a related party advanced to the Company an amount of $
During the years ended December 31, 2023, and 2022, the Company repaid to a related party $
During the years ended December 31, 2023, and 2022, the Company paid $
As of December 31, 2023, and 2022, the Company was obliged to related parties, for unsecured, non-interest-bearing demand loans with a balance of $
| F-17 |
| Table of Contents |
Note 11 – Stockholders’ Equity
Preferred Shares
Shares Outstanding
The Company is authorized to issue up to
Series A Preferred Stock
The Company originally designated
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
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.
The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of its Charter and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of the Series A Preferred Stock against impairment.
So long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by the Wyoming Business Corporations Act) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series A Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series A Preferred Stock; (c) increase the authorized number of shares of Series A Preferred Stock; or (d) authorize or issue any shares of senior securities.
Fully Paid. The issued and outstanding shares of Series A Preferred Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Series A Preferred Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares.
Series C Convertible Preferred Stock
The Company has designated
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 20 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.
If at any time or from time to time there shall be (i) a merger or consolidation of the Company with or into another corporation, (ii) the sale of all or substantially all of the Company’s capital stock or assets to any other person, (iii) any other form of business combination or reorganization in which the Company shall not be the continuing or surviving entity of such business combination or reorganization, or (iv) any transaction or series of transactions by the Company in which more than 50 percent (50%) of the Company’s voting power is transferred (each a “Reorganization”) then as a part of such Reorganization, the provision shall be made so that the holders of the Series C Convertible Preferred Stock shall thereafter be entitled to receive the same kind and amount of stock or other securities or property (including cash) of the Company, or the successor corporation resulting from such Reorganization.
Other Rights. The holders of the Series C Convertible Preferred Stockare 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.
The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of its Charter and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of the Series C Convertible Preferred Stock against impairment.
| F-18 |
| Table of Contents |
So long as any shares of Series C Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by the Wyoming Business Corporations Act) of the holders of at least a majority of the then outstanding shares of Series C Convertible Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series C Convertible Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series C Convertible Preferred Stock; (c) increase the authorized number of shares of Series C Convertible Preferred Stock; or (d) authorize or issue any shares of senior securities.
Fully Paid. The issued and outstanding shares of Series A Convertible Preferred Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Series C Convertible Preferred Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares.
On April 13, 2022, the Company’s board of directors approved the issuance of
On June 7, 2022, the holder of the Convertible Series C Preferred Stock converted
On April 5, 2023, the holder of the Convertible Series C Preferred Stock converted
During the year ended December 31, 2023, the Company issued
During the year ended December 31, 2023, the Company received $
During the year ended December 31, 2023, the Company issued
As of December 31, 2023, and 2022, there were
Common Stock
The Company has authorized
During the years ended December 31, 2023, and 2022, the holder of the Convertible Series C Preferred Stock converted
During the year ended December 31, 2023, the company issued
As of December 31, 2023, and 2022, there were
Stock-Based Compensation
On June 13, 2022, the Company issued
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Balance, December 31, 2021 |
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Vested |
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Forfeited |
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Balance, December 31, 2022 |
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Forfeited |
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Balance, December 31, 2023 |
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As of December 31, 2023,
| F-19 |
| Table of Contents |
Common Stock to be Issued
On November 1, 2022, the Company’s Board of Directors approved the issuance of
Note 12 - Income Taxes
Components of income tax expense (benefit) are as follows for the years ended December 31, 2023, and 2022:
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Current tax expense: |
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Current Income Tax Expense - federal |
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Current Income Tax Expense - state |
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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, 2023 and 2022:
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Deferred tax assets and liabilities |
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Net Operating loss Carryforward |
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Amortization |
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Less: valuation allowance |
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Net deferred tax assets |
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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, 2023 and 2022, 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, 2023 and 2022. 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:
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Federal statutory income tax at 21% |
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Application of a full valuation allowance |
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Provision for income taxes |
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| F-20 |
| Table of Contents |
Note 13– Commitments and Contingencies
As part of the consideration for the Company’s acquisition of Mighty Fire Breaker, LLC (“MFB’), the vendor will be entitled to a ten (10%) percent royalty on the gross sales before taxes of products sold under the MFB family of products (see Note 3).
Note 14 – Concentration
During years ended December 31, 2023 and 2022, customer and supplier concentrations (more than 10%) were as follows:
Revenue and accounts receivable
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Customer A |
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Customer B |
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Customer C |
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Customer D |
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Customer E |
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Purchase and accounts payable
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Supplier A |
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Total (as a group) |
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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 15 – Subsequent Events
Management has evaluated subsequent events through 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:
The Company received subscriptions of $
The company had the following transactions in the Common stock as follows:
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The Company had the following transactions in the Series C Preferred shares
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·
| F-21 |
| Table of Contents |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On January 29, 2024, the Company’s Board of Directors selected WWC Professional Corporation Limited (the “New Accountant”) to serve as the Company’s independent registered public accounting firm for the review of its Annual Report on Form 10-K for the year ending December 31, 2023. As a result, the Board of Directors determined that BF Borgers CPA PC (the “Former Accountant”) would no longer serve as the Company’s independent registered public accounting firm, effective as of March 21, 2023.
On January 31, 2024, the Company filed a Current Report on Form 8-K (the “Form 8-K”) with the SEC disclosing the changes in its certifying accountant.
As disclosed in the Form 8-K, the Former Accountant’s audit report on our financial statements for the years ended December 31, 2022 and 2021 contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report on the financial statements of the Company for the year ended December 31, 2022 and 2021 contained an uncertainty about the Company’s ability to continue as a going concern (the “Going Concern Opinion”).
For the years ended December 31, 2022 and 2021 and through the date of the Form 8-K, the Company had no “disagreements” (as defined in Regulation S-K, Item 304(a)(1)(iv) and the related instructions) with the Former Accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to the satisfaction of the Former Accountant would have caused them to make reference thereto in their reports on the financial statements for such periods.
There were no reportable events for the years ended December 31, 2022 or 2021 and through the date of the Form 8-K, there were no reportable events as defined in item 304(a)(1)(v) of Regulation S-K.
As also disclosed in the Form 8-K, prior to retaining the New Accountant, the Company did not consult with the New Accountant regarding either: (i) the application of accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements; or (ii) any matter that was the subject of a “disagreement” or a “reportable event” (as those terms are defined in Item 304(a)(1)(iv) and (a)(1)(v) of Regulation S-K, respectively).
On January 29, 2024, the Company provided the Former Accountant with the disclosures contained in the Form 8-K disclosing the dismissal of the Former Accountant and requested in writing that the Former Accountant furnish the Company with a letter addressed to the SEC stating whether or not they agree with such disclosures. The Former Accountant’s response was filed as Exhibit 16.1 to the Form 8-K.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information 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.
As of December 31, 2023, our management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Such evaluation was carried out under the supervision of our Chief Executive Officer, who is also our Chief Financial Officer, and our third party financial service provider, PubCo Reporting. Based on this evaluation, management concluded that our disclosure controls and procedures were, and continues to be, ineffective as of December 31, 2023. Based on the foregoing, our management concluded that our internal controls over the following financial reporting areas to be material weaknesses:
| 17 |
| Table of Contents |
| ● | Due to our size and stage of development, segregation of all conflicting duties may not always be possible and may not be economically feasible. During the year, we lacked sufficient review procedures and segregation of duties such that a proper review had not been performed by someone other than preparer, including manual journal entries, and that process documentation is lacking for review and monitoring controls over financial statements close process and financial reporting. |
|
|
|
| ● | We identified findings related to overall information technology general controls (“ITGCs”) including issues with access and segregation of duties for systems supporting the Company’s internal control processes and controls. |
Changes in Internal Controls over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting. Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and are committed to taking further action and implementing additional improvements as necessary.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
| 18 |
| Table of Contents |
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
The following table sets forth the names, positions, and ages of our current executive officers and directors. All directors serve until the next annual meeting of stockholders or until their successors are elected and qualified.
Directors are elected to serve until the next annual meeting of stockholders until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which they were elected and until a successor has been elected and qualified.
A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all Board members individually or collectively consent in writing to the action.
Executive officers are appointed by and serve at the pleasure of the Company’s Board of Directors, subject to any contractual arrangements.
Name |
| Age |
| Title |
Joshua Ralston |
| 36 |
| Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer, President and Secretary |
John Costa |
| 55 |
| Director |
Jeffery Pomerantz |
| 79 |
| Director |
Set forth below is a description of the background and business experience of our directors and executive officers.
| 19 |
| Table of Contents |
Joshua Ralston – Chairman, President, Secretary, Chief Executive Officer, Chief Financial Officer and Director
On October 10, 2021, the majority voting stockholder appointed Joshua Ralston as a member of the Board of Directors and Chief Executive Officer. Mr. Ralston is currently stationed at U.S. Coast Guard Base Cleveland ESD in Cleveland, Ohio. Prior to this station, Mr. Ralston was stationed in Manama, Bahrain, and Kodiak, Alaska. His primary duties have been electronics support technical support for joint military operations and cyber security. His educational background is business marketing.
John Costa - Director
On April 25, 2022, the Board of Directors appointed John Costa as a member of the Board of Directors. Mr. Costa has over 30-years of experience in the IT industry; which includes an employment history with several Fortune 100 and 500 companies. Mr. Costa’s areas of IT practice were diversified in Technological Development, Product Design, Modalities and Applications, Artificial Intelligence, Augmented Reality, Virtual and Practical Design, and Website Design. Mr. Costa has a deep understanding of what is capable and possible from a technical and usability standpoint.
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 IPO's and Corporate Up-Listings; additionally, he has a variety of international connections to resources and networks that create product distribution channels throughout the world.
Family Relationships
None of our directors and executive officers has been involved in any legal or regulatory proceedings, as set forth in Item 401 of Regulation S-K, during the past ten years.
Involvement in Certain Legal Proceedings
During the past ten years, no director, executive officer, promoter, or control person of the Company has been involved in the following:
| (1) | A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; |
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| (2) | Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
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|
|
| (3) | Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: |
| i. | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
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| ii. | Engaging in any type of business practice; or |
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| iii. | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
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| (4) | Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) below, or to be associated with persons engaged in any such activity; |
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| (5) | Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
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|
| (6) | Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated; |
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|
| (7) | Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended, or vacated, relating to an alleged violation of: |
| i. | Any Federal or State securities or commodities law or regulation; or |
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| ii. | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
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| iii. | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| (8) | Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
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 not met during the year ended December 31, 2023.
Delinquent Section 16(a) Reports are as follows:
Name |
| Late Reports |
| Transactions Covered* |
| Number of Shares |
| |
Joshua Ralston |
| Form 3 and 5 |
| Common stock/preferred stock |
|
| 70,000,000 |
|
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Corporate Governance
Our board of directors has not established any committees, including an audit committee, a compensation committee or a nominating committee, or any committee performing a similar function. The functions of those committees are being undertaken by our board. Because we do not have any independent directors, our board believes that the establishment of committees of our board would not provide any benefits to our company and could be considered more form than substance.
We do not have a policy regarding the consideration of any director candidates that may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our officers and directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our officers and directors have not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our board of directors.
Given our relative size and lack of directors’ and officers’ insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our board will participate in the consideration of director nominees.
As with most small, early stage companies until such time as we further develop our business, achieve a stronger revenue base and have sufficient working capital to purchase directors’ and officers’ insurance, we do not have any immediate prospects to attract independent directors. When we are able to expand our board to include one or more independent directors, we intend to establish an audit committee of our board of directors. It is our intention that one or more of these independent directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements that a majority of our board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an audit committee or other committee of our board.
Code of Ethics
We expect that we will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Once adopted, we will make the code of business conduct and ethics available on our website at www.generalenterpriseventures.com. We intend to post any amendments to the code, or any waivers of its requirements, on our website.
Item 11. Executive Compensation.
Summary Compensation Table
The following table summarizes the compensation of our executive officers, directors and President during the fiscal years ended December 31, 2023 and 2022. No other officers or directors received annual compensation in excess of $100,000 during the last fiscal year.
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| Nonqualified |
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| Non-Equity |
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| Deferred |
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| ||||||||
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| Stock |
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| Option |
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| Incentive Plan |
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| Compensation |
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| All Other |
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| ||||||||
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| Year Ended |
| Salary |
|
| Bonus |
|
| Awards |
|
| Awards |
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| Compensation |
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| Earnings |
|
| Compensation |
|
| Total |
| ||||||||
Name and Principal Position |
| December 31, |
| ($) |
|
| ($) |
|
| ($) |
|
| ($) |
|
| ($) |
|
| ($) |
|
| ($) |
|
| ($) |
| ||||||||
Joshua Ralston, President, Secretary, CEO, CFO and Chairman |
| 2023 |
|
| - |
|
|
| - |
|
|
| 8,640,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8,640,000 |
|
|
| 2022 |
|
| - |
|
|
| - |
|
|
| 2,100,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,100,000 |
|
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| Table of Contents |
Stock-Based Compensation
On June 13, 2022, the Company issued 70,000,000 Restricted Stock Award to a member of the board of directors and President of the Company. The holder of the Restricted stock shall be entitled to vote but is not entitled to dividends or disposal. The Company valued the voting rights associated with the awards at $2,100,000 which is recorded as stock-based compensation during the year ended December 31, 2022.
During the year ended December 31, 2023, the Company issued 1,200,000 shares of Convertible Series C Preferred Stock to an entity under control of the Company’s Chief Executive Officer for consulting services rendered to the Company from October 2021 through July 2023. The Company valued the 1,200,000 shares of Convertible Preferred Stock, as if converted to 24,000,000 shares of common stock, using the quoted stock price of the Company’s common stock at approval date (November 1, 2022), resulting in a value of $8,640,000.
Director Compensation
On November 1, 2022, the Company’s Board of Directors approved the issuance of 250,000 shares of common stock to each of the two independent directors for their board services in support of the Company. As of December 31, 2023, the Company has not issued the shares. The Company valued the 500,000 shares of common stock at the market value of the Company’s common stock at approval date for the amount of $180,000.
Employment Agreement
We have no employment agreements with any of our officers and have not issued any incentive or other stock options, profit sharing or similar benefits.
Equity Compensation Plan Information
We have no equity compensation plan, profit sharing or similar benefits.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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) named executive officers, 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 97,545,388 shares of Common Stock, 10,000,000 shares of Series A Preferred Stock, and 2,273,499 shares of Series C Convertible Preferred Stock outstanding as of December 31, 2023, and any shares of Common Stock, Series A Preferred Stock and Series C Convertible Preferred 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 General Enterprise Ventures Inc., 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009.
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| Table of Contents |
Name and Address of Beneficial Owner (1) |
| Common Stock Beneficially Held (2) |
|
| Percent of Class (3) |
| ||
Named Executive Officers and Directors |
|
|
|
|
|
| ||
Joshua Ralston |
|
| 70,000,000 |
|
|
| 71.76 | % |
Theodore Ralston |
|
| 3,149,258 |
|
|
| 3.23 | % |
Steven Conboy |
|
| 3,900,000 |
|
|
| 3.99 | % |
|
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All Executive Officers and Directors as a group (1 Person) |
|
| 70,000,000 |
|
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| 71.98 | % |
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5% or More Stockholders |
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None |
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Name and Address of Beneficial Owner |
| Title of Class |
|
| Amounts and nature of Beneficial Owner |
|
| Percent of Class | |||
5% Stockholder |
|
|
| Shares |
|
| % | ||||
Joshua Ralston Preferred A Shares |
|
| 10,000,000 |
|
|
| 100 | % |
|
| |
TC Special Investments, LLC Preferred C Shares |
|
| 1,200,000 |
|
|
| 52.78 | % |
|
| |
| (1) | 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 General Enterprise Ventures, Inc., 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009. |
|
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|
| (2) | 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. |
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. |
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| Table of Contents |
During the year ended December 31, 2022, our former officer forgave $9,355 in accrued salary and the Company recognized it as additional paid-in-capital.
During the year ended December 31, 2022, as part of the Company’s divestiture of its digital asset operations, a related party forgave loans payable of $301,175 in exchange for digital asset equipment with a net book value of $276,379 and digital currency intangible assets of $26,825, of which the Company recorded a loss on disposition of $2,030.
During the year ended December 31, 2022, a related party paid $1 for share capital - Mighty Fire Breaker UK Limited.
On June 13, 2022, the Company issued 70,000,000 Restricted Stock Award to a member of the board of directors and President of the Company. The holder of the Restricted stock shall be entitled to vote but is not entitled to dividends or disposal. The Company valued the voting rights associated with the awards at $2,100,000 which is recorded as stock-based compensation during the year ended December 31, 2022.
On November 1, 2022, the Company’s Board of Directors approved the issuance of 250,000 shares of common stock to each of the two independent directors for their board services in support of the Company. As of December 31, 2023, the shares have not been issued, and the Company valued the 500,000 shares of common stock at market price on approval date and accrued $180,000.
On October 23, 2021, the Company entered into a consulting agreement with a related party. The consultant shall render to the Company, upon the request of any members of Board of Directors or the President of the Company, consulting services on matters relating to the business affairs of the Company. The agreement shall take effect of the date of agreement and shall terminate upon mutual agreement of the parties. The compensation of consultant is a number of Convertible Series C Preferred Shares which the Board of Directors of the Company may determine at its discretion. On November 1, 2022, the Company’s Board of Directors approved issuance of 1,200,000 shares of Convertible Series C Preferred Stock to consultant - related party for their past consulting services and continuing to July 2023. On September 5, 2023. the Company issued 1,200,000 shares of Convertible Series C Preferred Stock for consulting services rendered to the Company. The Company valued the 1,200,000 shares of Convertible Preferred Stock at $8,640,000.
On June 9, 2022, the Company received $19,000 cash from a third party, and it was recorded as an advance from a related party. On April 1, 2023, the Company recognized the error and the amount owing to the related party was reclassified to convertible note related to a lender for $19,000.
During the years ended December 31, 2023, and 2022, a related party advanced to the Company an amount of $307,500 and $784,484 for working capital propose, respectively.
During the years ended December 31, 2023, and 2022, a related party advanced to the Company an amount of $246,425 and $108,569 for operating expenses on behalf of the Company, respectively.
During the years ended December 31, 2023, and 2022, the Company repaid to a related party $125,000 and $55,720 owing of the loan, respectively.
During the years ended December 31, 2023, and 2022, the Company paid $150,500 and $126,500 consulting fee to an entity under common control of a related party and $186,500 and $91,500 commission to a related party.
As of December 31, 2023, and 2022, the Company was obliged to related parties, for unsecured, non-interest-bearing demand loans with a balance of $1,307,077 and $899,153, respectively.
Item 14. Principal Accountant Fees and Services.
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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, 2023 |
|
| Fiscal Year Ended December 31, 2022 |
| ||
Audit Fees: |
| $ | 83,000 |
|
| $ | 93,500 |
|
Audit-Related Fees |
|
| - |
|
|
| - |
|
Tax Fees: |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
Total |
| $ | 83,000 |
|
| $ | 93,500 |
|
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.
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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
Exhibit Number |
| Description |
| ||
| ||
| ||
| ||
| Designations and Preferences of Series C Convertible Preferred Stock | |
| ||
| ||
| Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer | |
| Section 1350 Certification of Chief Executive Officer and Chief Financial Officer | |
101* |
| Inline XBRL Document Set for the financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. |
104* |
| Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set. |
________
* Filed herewith.
Item 16. Form 10-K Summary.
None.
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| Table of Contents |
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.
| General Enterprise Ventures, Inc. |
| |
|
|
|
|
Dated: April 15, 2024 | By: | /s/ Joshua Ralston |
|
|
| Joshua Ralston |
|
|
| Chief Executive Officer and Chief Financial 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.
Dated: April 15, 2024 | By: | /s/ Joshua Ralston |
|
|
| Joshua Ralston |
|
|
| Chief Executive Officer and Chief Financial Officer |
|
EXHIBIT 3.1
EXHIBIT 3.2
EXHIBIT 3.3
BYLAWS
OF
GENERAL ENTERPRISE VENTURES, INC.
A Wyoming Corporation
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office initially shall be at the office of 1740H Dell Range Blvd., Suite 166, in the City of Cheyenne, State of Wyoming 82009.
Section 2. Other Offices. The corporation may also have offices at such other places both within and without the State of Wyoming as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Annual Meeting. An annual meeting of the stockholders for the election of directors shall be held at such place either within or without the State of Wyoming as shall be designated on an annual basis by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Wyoming, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Any other proper business may be transacted at the annual meeting.
Section 2. Notice of Annual Meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than 60 days before the date of the meeting.
Section 3. Voting List. The officer who has charge of the stock ledger of the corporation shall prepare and make, or cause a third party to prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
Section 4. Special Meetings. Special meetings of the stockholders of this corporation, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, shall be called by the President or Secretary at the request in writing of a majority of the members of the Board of Directors or holders of a majority of the total voting power of all outstanding shares of stock of this corporation then entitled to vote, and may not be called absent such a request. Such request shall state the purpose or purposes of the proposed meeting.
Section 5. Notice of Special Meetings. As soon as reasonably practicable after receipt of a request as provided in Section 4 of this Article II, written notice of a special meeting, stating the place, date (which shall be not less than ten nor more than 60 days from the date of the notice) and hour of the special meeting and the purpose or purposes for which the special meeting is called, shall be given to each stockholder entitled to vote at such special meeting.
Section 6. Scope of Business at Special Meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Section 7. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting or the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as provided in Section 5 of this Article II.
Section 8. Qualifications to Vote. The stockholders of record on the books of the corporation at the close of business on the record date as determined by the Board of Directors and only such stockholders shall be entitled to vote at any meeting of stockholders or any adjournment thereof.
Section 9. Record Date. The Board of Directors may fix a record date for the determination of the stockholders entitled to notice of or to vote at any stockholders’ meeting and at any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action. The record date shall not be more than 60 nor less than ten days before the date of such meeting, and not more than 60 days prior to any other action. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 10. Action at Meetings. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Articles of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.
Section 11. Voting and Proxies. Unless otherwise provided in the Articles of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless it is coupled with an interest sufficient in law to support an irrevocable power.
Section 12. Action by Stockholders Without a Meeting. Unless otherwise provided in the Articles of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in Wyoming (by hand or by certified or registered mail, return receipt requested), to its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded; provided, however, that action by written consent to elect directors, if less than unanimous, shall be in lieu of holding an annual meeting only if all the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the corporation by delivery to its registered office in Wyoming (by hand or by certified or registered mail, return receipt requested), to its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings or meetings of stockholders are recorded.
ARTICLE III
DIRECTORS
Section 1. Powers. The business of the corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by applicable law or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.
Section 2. Number; Election; Tenure and Qualification. The number of directors which shall constitute the whole board shall be fixed from time to time by resolution of the Board of Directors or by the Stockholders at an annual meeting of the Stockholders (unless the directors are elected by written consent in lieu of an annual meeting as provided in Article II, Section 12). With the exception of the first Board of Directors, which shall be elected by the incorporator, and except as provided in the corporation’s Articles of Incorporation or in Section 3 of this Article III, the directors shall be elected at the annual meeting of the stockholders by a plurality vote of the shares represented in person or by proxy and each director elected shall hold office until his successor is elected and qualified unless he shall resign, become disqualified, disabled or otherwise removed. Directors need not be stockholders.
Section 3. Vacancies and Newly Created Directorships. Unless otherwise provided in the Articles of Incorporation, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. The directors so chosen shall serve until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office.
Section 4. Location of Meetings. The Board of Directors of the corporation may hold meetings, both regular and special, either within or without the State of Wyoming.
Section 5. Meeting of Newly Elected Board of Directors. The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.
Section 6. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of such location.
Section 7. Special Meetings. Special meetings of the Board of Directors may be called by the President on two days’ notice to each director by mail, overnight courier service or facsimile; special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of two directors unless the Board of Directors consists of only one director, in which case special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of the sole director. Notice may be waived in accordance with Wyoming law.
Section 8. Quorum and Action at Meetings. At all meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Articles of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Action Without a Meeting. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.
Section 10. Telephonic Meeting. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 11. Committees. The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
Section 12. Committee Authority. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving, adopting or recommending to the stockholders any action or matter expressly required by the Wyoming law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaw of the corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.
Section 13. Committee Minutes. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required to do so by the Board of Directors.
Section 14. Director Compensation. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
Section 15. Resignation. Any director or officer of the corporation may resign at any time. Each such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by either the Board of Directors, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.
Section 16. Removal. Unless otherwise restricted by the Articles of Incorporation, these Bylaws or applicable law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Notice to Directors and Stockholders. Whenever, under the provisions of the statutes or of the Articles of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the corporation that the notice has been given shall in the absence of fraud, be prima facie evidence of the facts stated therein. Notice to directors may also be given by telephone, facsimile or telegram (with confirmation of receipt).
Section 2. Waiver. Whenever any notice is required to be given under the provisions of the statutes or of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. The written waiver need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Attendance at the meeting is not a waiver of any right to object to the consideration of matters required by the Wyoming law to be included in the notice of the meeting but not so included, if such objection is expressly made at the meeting.
ARTICLE V
OFFICERS
Section 1. Enumeration. The officers of the corporation shall be chosen by the Board of Directors and shall include a President and a Secretary and such other officers with such other titles as the Board of Directors shall determine. The Board of Directors may elect from among its members a Chairman or Chairmen of the Board and a Vice Chairman of the Board. The Board of Directors in its discretion may also choose and elect a Treasurer and/or a Chief Financial Officer and one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person, unless the Articles of Incorporation or these Bylaws otherwise provide.
Section 2. Election. The Board of Directors at its first meeting after each annual meeting of stockholders shall elect a President and a Secretary and such other officers with such other titles as the Board of Directors shall determine.
Section 3. Appointment of Other Agents. The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.
Section 4. Compensation. The salaries of all officers of the corporation shall be fixed by the Board of Directors or a committee thereof. The salaries of agents of the corporation shall, unless fixed by the Board of Directors, be fixed by the President or any Vice President of the corporation.
Section 5. Tenure. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors of the Board of Directors. Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.
Section 6. Chairman of the Board and Vice Chairman of the Board. The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which the Chairman shall be present. The Chairman shall have and may exercise such powers as are, from time to time, assigned to the Chairman by the Board of Directors and as may be provided by law. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which the Vice Chairman shall be present. The Vice Chairman shall have and may exercise such powers as are, from time to time, assigned to such person by the Board of Directors and as may be provided by law.
Section 7. President. The President shall be the Chief Executive Officer of the corporation unless such title is assigned to another officer of the corporation; in the absence of a Chairman and Vice Chairman of the Board, the President shall preside as the chairman of meetings of the stockholders and the Board of Directors; and the President shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.
Section 8. Vice President. In the absence of the President or in the event of the President’s inability or refusal to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Vice President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
Section 9. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision the Secretary shall be subject. The Secretary shall have custody of the corporate seal of the corporation and the Secretary, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the Secretary’s signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by such officer’s signature.
Section 10. Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
Section 11. Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors, President or Chief Executive Officer, taking proper vouchers for such disbursements, and shall render to the President, Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all such transactions as Treasurer and of the financial condition of the corporation.
Section 12. Assistant Treasurer. The Assistant Treasurer, or if there be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
ARTICLE VI CAPITAL STOCK
Section 1. Certificates. The shares of the corporation shall be represented by a certificate, unless and until the Board of Directors adopts a resolution permitting shares to be uncertificated. Certificates shall be signed by, or in the name of the corporation by, (i) the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President and (ii) the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, certifying the number of shares owned by such stockholder in the corporation. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be specified.
Section 2. Class or Series. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided by Wyoming law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Wyoming law or a statement that the corporation will furnish without charge, to each stockholder who so requests, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Section 3. Signature. Any of or all of the signatures on a certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
Section 4. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 5. Transfer of Stock. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be canceled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the corporation.
Section 6. Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 7. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Wyoming.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the applicable provisions, if any, of the Articles of Incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions of the Articles of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the Board of Directors shall think conducive to the interest of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
Section 2. Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
Section 4. Seal. The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Wyoming”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 5. Loans. The Board of Directors of this corporation may, without stockholder approval, authorize loans to, or guaranty obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be made, any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation.
ARTICLE VIII
INDEMNIFICATION
Section 1. Scope. The corporation shall, to the fullest extent permitted by Wyoming law, as that Section may be amended and supplemented from time to time, indemnify any director, officer, employee or agent of the corporation, against expenses (including attorneys’ fees), judgments, fines, amounts paid in settlement and/or other matters referred to in or covered by that Section, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.
Section 2. Advancing Expenses. Expenses (including attorneys’ fees) incurred by a present or former director or officer of the corporation in defending a civil, criminal, administrative or investigative action, suit or proceeding by reason of the fact that such person is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized by relevant provisions of Wyoming law; provided, however, the corporation shall not be required to advance such expenses to a director (i) who commences any action, suit or proceeding as a plaintiff unless such advance is specifically approved by a majority of the Board of Directors or (ii) who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors which alleges willful misappropriation of corporate assets by such director, disclosure of confidential information in violation of such director’s fiduciary or contractual obligations to the corporation, or any other willful and deliberate breach in bad faith of such director’s duty to the corporation or its stockholders.
Section 3. Liability Offset. The corporation’s obligation to provide indemnification under this Article VIII shall be offset to the extent the indemnified party is indemnified by any other source including, but not limited to, any applicable insurance coverage under a policy maintained by the corporation, the indemnified party or any other person.
Section 4. Continuing Obligation. The provisions of this Article VIII shall be deemed to be a contract between the corporation and each director of the corporation who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.
Section 5. Nonexclusive. The indemnification and advancement of expenses provided for in this Article VIII shall (i) not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (ii) continue as to a person who has ceased to be a director and (iii) inure to the benefit of the heirs, executors and administrators of such a person.
Section 6. Other Persons. In addition to the indemnification rights of directors, officers, employees or agents of the corporation, the Board of Directors in its discretion shall have the power on behalf of the corporation to indemnify any other person made a party to any action, suit or proceeding who the corporation may indemnify under Wyoming law.
Section 7. Definitions. The phrases and terms set forth in this Article VIII shall be given the same meaning as the identical terms and phrases are given under Wyoming law, as that Section may be amended and supplemented from time to time.
ARTICLE IX
AMENDMENTS
Except as otherwise provided in the Articles of Incorporation, these Bylaws may be altered, amended or repealed, or new Bylaws may be adopted, by the holders of a majority of the outstanding voting shares or by the Board of Directors, when such power is conferred upon the Board of Directors by the Articles of Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Articles of Incorporation, it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws.
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CERTIFICATE OF SECRETARY
OF
GENERAL ENTERPRISE VENTURES, INC.
The undersigned certifies:
1. That the undersigned is the duly elected and acting Secretary of General Enterprise Ventures, Inc., a Wyoming corporation (the “Corporation”); and
2. That the foregoing Bylaws constitute the Bylaws of the Corporation as duly adopted by the Action by Unanimous Written Consent in Lieu of a Special Meeting by the Board of Directors of the Corporation, dated June 29, 2023.
IN WITNESS WHEREOF, I have hereunto subscribed my name as of June 29, 2023.
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| /s/ Joshua Ralson |
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| Joshua Ralston |
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| Secretary |
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EXHIBIT 3.4
EXHIBIT 3.5
EXHIBIT 4.1
DESCRIPTION OF SECURITIES
References to the “Company” herein are, unless the context otherwise indicates, only to General Enterprise Ventures, Inc. and not to any of its subsidiaries.
Description of Capital Stock
General
The following is a summary of information concerning capital stock of the Company. The summaries and descriptions below do not purport to be complete statements of the relevant provisions of the Company’s Articles of Incorporation (“Charter”) and Bylaws (the “Bylaws”) and are entirely qualified by these documents.
Common Stock
Shares Outstanding. The Company is authorized to issue up to 1 billion shares of common stock, par value $0.0001 per share (the “Common Stock”).
Dividends. Subject to prior dividend rights of the holders of any shares of preferred stock of the Company (“Preferred Stock”), holders of shares of Common Stock are entitled to receive dividends when, as and if declared by the Company’s Board of Directors (the “Board”) out of funds legally available for that purpose. Wyoming law allows a corporation to pay dividends only out of surplus, as determined under Wyoming law.
Voting Rights. Each share of Common Stock is entitled to one vote on all matters submitted to a vote of stockholders. Holders of shares of Common Stock do not have cumulative voting rights. This means a holder of a single share of Common Stock cannot cast more than one vote for each position to be filled on the Board.
Other Rights. In the event of any liquidation, dissolution or winding up of the Company, after the satisfaction in full of the liquidation preferences of holders of any shares of Preferred Stock, holders of shares of Common Stock are entitled to ratable distribution of the remaining assets available for distribution to stockholders. The shares of Common Stock are not subject to redemption by operation of a sinking fund or otherwise.
Fully Paid. The issued and outstanding shares of Common Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Common Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares. Any additional shares of Common Stock that the Company may issue in the future will also be fully paid and non-assessable.
Preferred Stock
Shares Outstanding. The Company is authorized to issue up to 15 million shares of Preferred Stock, par value $0.0001 per share.
Series A Preferred Stock
The Company originally designated 10 million shares of its Preferred Stock as Series A Convertible Preferred Stock. Issued and outstanding Series A Convertible Preferred stock as of December 31, 2023 and 2022, was 10,000,000, respectively. On March 29, 2024, the Company amended and restated its Series A Convertible Preferred Stock to designate 10 million shares of its Preferred Stock as Series A Preferred Stock, par value $0.0001, 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 stockholders. 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.
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.
The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of its Charter and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of the Series A Preferred Stock against impairment.
So long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by the Wyoming Business Corporations Act) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series A Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series A Preferred Stock; (c) increase the authorized number of shares of Series A Preferred Stock; or (d) authorize or issue any shares of senior securities.
Fully Paid. The issued and outstanding shares of Series A Preferred Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Series A Preferred Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares.
Series C Convertible Preferred Stock
The Company has designated 5 million 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 20 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.
If at any time or from time to time there shall be (i) a merger or consolidation of the Company with or into another corporation, (ii) the sale of all or substantially all of the Company’s capital stock or assets to any other person, (iii) any other form of business combination or reorganization in which the Company shall not be the continuing or surviving entity of such business combination or reorganization, or (iv) any transaction or series of transactions by the Company in which more than 50 percent (50%) of the Company’s voting power is transferred (each a “Reorganization”) then as a part of such Reorganization, the provision shall be made so that the holders of the Series C Convertible Preferred Stock shall thereafter be entitled to receive the same kind and amount of stock or other securities or property (including cash) of the Company, or the successor corporation resulting from such Reorganization.
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.
The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of its Charter and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of the Series C Convertible Preferred Stock against impairment.
So long as any shares of Series C Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by the Wyoming Business Corporations Act) of the holders of at least a majority of the then outstanding shares of Series C Convertible Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series C Convertible Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series C Convertible Preferred Stock; (c) increase the authorized number of shares of Series C Convertible Preferred Stock; or (d) authorize or issue any shares of senior securities.
Fully Paid. The issued and outstanding shares of Series A Convertible Preferred Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Series C Convertible Preferred Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares.
EXHIBIT 14.1
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
| I. | Covered Officers/Purpose of the Code |
This code of ethics (this “Code”) applies to the persons acting as principal executive officer, principal financial officer and principal accounting officer or controller of General Enterprise Ventures, Inc. (the “Company”), as set forth on Exhibit A and amended from time to time (collectively, the “Covered Officers”) for the purpose of promoting:
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| honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
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| full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by each series of the Company; |
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| compliance with applicable laws and governmental rules and regulations; |
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| the prompt internal reporting of violations of this Code to an appropriate person or persons identified in this Code; and |
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| accountability for adherence to this Code. |
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
| II. | Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest |
Overview. A “conflict of interest” occurs when a Covered Officer’s private interests interfere with the interests of, or the Covered Officer’s service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of the Covered Officer’s family, receives improper personal benefits as a result of the Covered Officer’s position with the Company. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with any series of the Company because of their status as “affiliated persons” of the Company.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the Company’s administrator or its principal underwriter of which a Covered Officer is also an officer or employee. As a result, this Code recognizes that Covered Officers will, in the normal course of their duties, whether formally for the Company or any service provider or affiliate of the Company, be involved in establishing policies and implementing decisions that will have different effects on these entities and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and its service providers and affiliates and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Code, such activities will be deemed to have been handled ethically.
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The following list provides examples of conflicts of interest under this Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interests of the Company.
Each Covered Officer must:
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| not use personal influence or personal relationships improperly to influence investment decisions or financial reporting by any series of the Company whereby the Covered Officer would benefit personally to the detriment of the series; |
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| not cause the Company or any series to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Company; |
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| not use material non-public knowledge of portfolio transactions made or contemplated for any series of the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; |
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| report at least annually any affiliations or other relationships related to conflicts of interest that the Officers Questionnaire covers. |
There are some conflict of interest situations that should always be discussed with the Chief Compliance Officer of the Company or Counsel to the Company, if material. Examples of these include:
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| service as a director on the board of any public company; |
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| the receipt of any non-nominal gifts; |
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| the receipt of any entertainment from any company with which the Company has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any questions of impropriety; |
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| any ownership interest in, or any consulting or employment relationship with, any of the Company’s service providers, other than its principal underwriter, transfer agent, administrator or any affiliated person thereof; and |
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| a direct or indirect financial interest in commissions, transaction charges, soft dollar credits or spreads paid by any series of the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership. |
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| III. | Disclosure and Compliance |
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| Each Covered Officer shall become familiar with the disclosure requirements generally applicable to the Company. |
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| Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company’s directors and auditors, and to governmental regulators and self-regulatory organizations. |
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| Each Covered Officer should, to the extent appropriate within the Covered Officer’s area of responsibility, consult with other officers and employees of the investment advisers to each series of the Company and the Company’s administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents that each series of the Company files with, or submits to, the SEC and in other public communications made by the series. |
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| It is the responsibility of each Covered Officer to promote Company compliance with the standards and restrictions imposed by applicable laws, rules and regulations. |
| IV. | Reporting and Accountability |
Each Covered Officer must:
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| upon adoption of this Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that the Covered Officer has received, read, and understands this Code; |
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| annually thereafter affirm to the Board that the Covered Officer has complied with the requirements of this Code; |
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| not retaliate against any other Covered Officer or any employee of the Company or their affiliated persons for reports of potential violations that are made in good faith; and |
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| notify the Chief Compliance Officer promptly if the Covered Officer knows of any violation of this Code. Failure to do so is itself a violation of this Code. |
The Chief Compliance Officer is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by a Covered Officer will be considered by the Audit Committee of the Board (the “Committee”), which will make recommendations to the Board.
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The Company will follow these procedures in investigating and enforcing this Code:
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| the Chief Compliance Officer for the Company will take all appropriate action to investigate any potential violations reported to the Compliance Officer; |
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| the Chief Compliance Officer will review with the outside legal counsel to the Company the findings and conclusions of such investigation; |
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| if, after such investigation and review, the Chief Compliance Officer believes that no violation has occurred, the Chief Compliance Officer is not required to take any further action; |
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| any matter that the Chief Compliance Officer believes is a violation will be reported to the Committee; |
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| if the Committee concurs that a violation has occurred, it will inform and make a recommendation to the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures (including changes to this Code); notification of the violation to appropriate personnel of the investment adviser or the administrator or its board; or a recommendation to take disciplinary action against the Covered Officer, which may include, without limitation, dismissal; |
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| the Board will be responsible for granting waivers, as appropriate; and |
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| any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules, currently on Form N-CSR. |
| V. | Other Policies and Procedures |
This Code shall be the sole code of ethics adopted by the Company for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder.
| VI. | Amendments |
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board.
| VII. | Confidentiality |
To the extent possible, all records, reports and other information prepared, maintained or acquired pursuant to this Code will be treated as confidential and shall be maintained and protected accordingly. Except as otherwise required by law or regulation or this Code, such matters shall not be disclosed to anyone other than the Board, it being understood that it may be necessary or advisable, that certain matters be disclosed to third parties (e.g., to the board of directors or officers of the investment adviser to an applicable series or the Company’s administrator).
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| VIII. | Internal Use |
This Code is intended solely for the internal use by the Company and does not constitute an admission, by or on behalf of the Company, as to any fact, circumstance, or legal conclusion.
Adopted and Approved April 1, 2024.
EXHIBIT A
Persons Covered by this Code of Ethics
Joshua Ralston
EXHIBIT B
Covered Officer Annual Affirmation
For the period ended December 31, 2023
In accordance with Section IV of the Code of Ethics for Principal Executive and Senior Financial Officers (the “Code”), the undersigned Covered Officer of the Company (as defined in the Code) hereby affirms to the Board that the Covered Officer, at all times during the period for which this affirmation is given, has complied with each of the requirements of the Code.
By:
Name:
Date:
EXHIBIT C
Covered Officer Initial Affirmation of Understanding
In accordance with Section IV of the Code of Ethics for Principal Executive and Senior Financial Officers (the “Code”), the undersigned Covered Officer of the Company (as defined in the Code) hereby affirms to the Board that the Covered Officer has received, read, and understands the Code.
By:
Name:
Date:
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EXHIBIT 21.1
Subsidiaries of General Enterprise Ventures Inc.
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| Jurisdiction Of Incorporation |
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| Mighty Fire Breaker UK Limited |
| United Kingdon |
| Mighty Fire Breaker, LLC |
| Ohio, U.S. |
EXHIBIT 31.1/31.2
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
RULE 13a-14(a) UNDER THE EXCHANGE ACT
I, Joshua Ralston certify that:
| 1. | I have reviewed this annual report on Form 10-K of General Enterprise Ventures, Inc.; |
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| 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; |
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| 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; |
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| 4. | The registrant's other certifying officer(s) 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: |
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| (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; |
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| (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; |
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| (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 |
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| (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(s) 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): |
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| (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 |
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| (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. |
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| General Enterprise Ventures, Inc. |
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| Dated: April 15, 2024 | By: | /s/ Joshua Ralston |
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| Joshua Ralston |
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| Chief Executive Officer and Chief Financial Officer |
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EXHIBIT 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Joshua Ralston, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of General Enterprise Ventures, Inc. on Form 10-K for the year ended December 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of General Enterprise Ventures, Inc. at the dates and for the periods indicated.
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| General Enterprise Ventures, Inc. |
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| Dated: April 15, 2024 | By: | /s/ Joshua Ralston |
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| Joshua Ralston |
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| Chief Executive Officer and Chief Financial Officer |
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A signed original of this written statement required by Section 906 has been provided to General Enterprise Ventures, Inc. and will be retained by General Enterprise Ventures, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.