CitroTech Inc 10-K for FY2024
CitroTech Inc. (CITR)
About this 10-K
CitroTech Inc filed this 10-K on March 31, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $808.37K
- up 55.3% from $520.65K a year earlier
- Net loss
- $6.88M
- compared with a net loss of $10.1M a year earlier
- Diluted EPS
- -$0.14
- compared with -$0.10 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) |
| ||
(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 | ||
|
| 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
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of June 30, 2024, the last business day of the Registrant’s most recently completed second fiscal quarter, was approximately $
The total number of shares of registrant’s common stock outstanding as of March 21, 2025, 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 websites are www.generalenterpriseventures.com and www.mightyfirebreaker.com.
We do not incorporate the information on or accessible through our website into this Annual Report, 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. 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”), which was owned by Stephen Conboy, in connection with the flame retardant and flame suppression segments of the environmental industry, including patents and patents pending. The genesis of this transaction was that Mr. Conboy, while having the technical expertise in the flame retardant and flame suppression industry, lacked the financial ability and business acumen to take his vision to market. Mr. Conboy was introduced to the Company by Vincent Risalvato, during September 2021. During discussions with Mr. Conboy, the Company realized that its general business acumen and financial ability could help Mr. Conboy realize his vision, and so the Company and Mr. Conboy negotiated the terms and conditions of a purchase agreement.
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 1,000,000 shares of the Series C Convertible Preferred Stock of the Company with a value at closing of $4,200,000, and a 10% royalty on gross sales before taxes of the MFB Ohio family of products. The Company and Mr. Conboy entered into a Consulting Agreement on January 26, 2025 (the “Consulting Agreement”), with an effective date of March 1, 2025. Section 2(c) of the Consulting Agreement provides the Company the right but not the obligation, at any time upon written notice to Mr. Conboy, to purchase the royalty from Mr. Conboy for the amount of $7,500,000. The purchase agreement also states that Mr. Conboy is entitled to one seat on the Board of Directors. As of the date of this Annual Report, Mr. Conboy has not exercised his right to appoint a member of the Board of Directors of the Company.
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Our current products are MFB31- CitroTech™, which is utilized in wildfire defense, and MFB34-CitroTech™, which is used to treat lumber to inhibit fire and mold. We are developing a coating to treat lumber during manufacture prior to distribution. Our products are sustainable, because they are made of food-grade ingredients derived from corn, fruits and other renewable sources. Our current customer base is comprised of homeowners and fire departments in 11 western states. Our product is used in the residential home industry, including individual homeowners, developers and other third parties. Homeowners and commercial customers use our products to proactively spay wood framing during construction to treat the property prior to the occurrence of fires. We install systems to deploy our product remotely to provide a buffer zone around properties to prevent combustion. Fire Departments use our product to proactively spray around controlled burns and areas that traditionally have active wildfire risk to prevent expansion of the burn area.
Stephen Conboy, who founded MFB California, has been in the lumber business for over 30 years. Approximately 10 years ago, he realized that residential and commercial fires, as well as wildfires, would not cease for the foreseeable future. Mr. Conboy understood that, even if lumber was treated, it was toxic by nature and this toxicity is harmful to humans and the environment. He realized that there was a market, and most importantly a need, for a product that was capable of fire suppression and being a fire retardant while also being the safest for the environment and for human beings.
Mr. Conboy set out to develop a formula for a product that would meet these requirements. During the course of research and development, Mr. Conboy formed MFB California and contributed numerous patents toward development of a green product line that was envisioned many years ago. That product is CitroTech. Since MFB Ohio acquired the MFB California portfolio of intellectual property, Company management has continued to develop many formulations to achieve the vision. Prior to the acquiring the portfolio of intellectual property, neither Mr. Ralston nor MFB Ohio had a prior relationship with Mr. Conboy. Subsequent to the acquisition of the portfolio of intellectual property, Mr. Conboy has remained involved with the Company as a technical consultant, and sales and marketing. Mr. Conboy is not an employee nor member of Company management. Mr. Conboy’s services as a technical consultant include supervision of product blending at the Company’s facilities according to the formulas developed by Mr. Conboy, and development of new products and formulas as Chief Technology Officer, which position has been formalized pursuant to his Consulting Agreement with the Company. In addition, under sales and marketing, Mr. Conboy utilizes his network in the fire retardant and flame suppression industry to make introductions to prospective customers and strategic relationships for the Company. For these consulting services, beginning March 1, 2025, Mr. Conboy will receive a month fee of $35,000.
In addition, the Company has been recognized for its achievement. These recognitions and achievements, including twice receiving the EPA Safer Choice award and being the first and only EPA recognized fire retardant (safe for the environment), awarded UL GreenGuard Gold status (demonstrates minimal impact on the indoor environment in the long period), and adoption by fire departments throughout the State of California. In this case, being EPA recognized is being an EPA Safer Choice recipient, which includes a Partnership Agreement between the EPA and MFB Ohio dated August 26, 2022 (the “EPA Partnership Agreement”). Under the EPA Partnership Agreement, MFB Ohio agreed to participate in Safer Choice's surveillance and auditing program. The program consists primarily of annual desk audits and triennial on-site audits pursuant to the Safer Choice Standards. The terms and provisions of the EPA Partnership Agreement sunset three years from the date of the agreement, unless the parties renegotiate and renew a partnership agreement prior to the expiration date.
After the Company’s acquisition of MFB California’s technology, the patent portfolio and technology will be expanded into areas that benefit from an environmentally safe product disrupting a market previously thought of as toxic and carcinogenic. MFB Ohio has developed and is in the initial phases of marketing wood coatings using its safe, environmentally friendly technology. MFB is also currently deploying Proactive Wildfire Defense Systems on residential and commercial properties. MFB installs self-contained sprinkler systems utilizing its patented MFB 31 CitroTech™ product that are proactively deployed in advance of wildfires thereby reducing the risk to the structures protected by the systems. Wildfire insurance is a significant problem in eleven western states. The Company is working with insurance companies to reduce the risk and allow properties to be insured in the Wilderness Urban Interface, a zone of transition between wilderness and developed land where built environment meets natural environment at greater risk of catastrophic wildfires. There is a wildfire base insurance shortage in 11 western states. In those states, policies are not being written on new construction or renewal of existing policies (resulting in cancelation of current polices). MFB is working with a large insurance broker to offer insurance to our customers when installing a MFB, proactive wildfire defense system. The insurance policies are being underwritten by large name insurance companies. MFB Ohio is now in the proof-of-concept phase and developing revenues in the various markets.
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Our management is comprised of two individuals, Joshua Ralston, who is our President, Chief Executive officer, Chief Financial Officer and Chairman of the Board of Directors, and Stephen Conboy, who is the Chief Technology Officer.
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 Stock 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.
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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.
Change of Control
On March 17, 2025, Josh Ralston transferred ownership of 10,000,000 shares of the Series A Convertible Preferred Stock of the Company to TC Special Investments, LLC, which entity is beneficially owned and controlled by Theodore Ralston, making Mr. Ralston the Majority Voting Shareholder.
Series C Preferred Stock
On March 17, 2025, the Company designated 10,000,000 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 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”), which was owned by Stephen Conboy, in connection with the flame retardant and flame suppression segments of the environmental industry, including patents and patents pending. The genesis of this transaction was that Mr. Conboy, while having the technical expertise in the flame retardant and flame suppression industry, lacked the financial ability and business acumen to take his vision to market. Mr. Conboy was introduced to the Company by Vincent Risalvato, during September 2021. During discussions with Mr. Conboy, the Company realized that its general business acumen and financial ability could help Mr. Conboy realize his vision, and so the Company and Mr. Conboy negotiated the terms and conditions of a purchase agreement.
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 1,000,000 shares of the Series C Convertible Preferred Stock of the Company with a value at closing of $4,200,000, and a 10% royalty on gross sales before taxes of the MFB Ohio family of products. The Company and Mr. Conboy entered into a Consulting Agreement on January 26, 2025 (the “Consulting Agreement”), with an effective date of March 1, 2025. Section 2(c) of the Consulting Agreement provides the Company the right but not the obligation, at any time upon written notice to Mr. Conboy, to purchase the royalty from Mr. Conboy for the amount of $7,500,000. The purchase agreement also states that Mr. Conboy is entitled to one seat on the Board of Directors. As of the date of this Annual Report, Mr. Conboy has not exercised his right to appoint a member of the Board of Directors of the Company.
On November 20, 2022, the Company. formed Mighty Fire Breaker UK Limited. On April 30, 2024, MFB UK was dissolved under the Companies House in the United Kingdom. The board of directors of the Company determined that it was in the best interest of the Company to focus its business development on its existing markets. Accordingly, the Company has no current plan to revive the existence of MFB UK.
On June 25, 2024, the Company formed and organized a wholly owned subsidiary, GEVI Insurance Holdings Inc., an Ohio corporation, while the Company contemplates the opportunity to enter the wildfire insurance markets relating to the Company’s flame retardant and flame suppression products. Effective February 18, 2025, MFB Insurance Company, Inc., a Hawaii corporation formed on February 21, 2025, and wholly-owned subsidiary of GEVI Insurance Holdings Inc. received approval as a captive insurance company from the Insurance Division of the Department of Commerce and Consumer Affairs of the State of Hawaii.
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Current operations
Principal products, services and markets
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 recognitions in this industry, such as being the only two time, EPA Safer Choice award recipient, UL GreenGaurd Gold, and we are in the process of USDA approval.
The fire-retardant market is forecast to be $13.6 billion dollars globally by 2034. MFB markets home, industrial and commercial proactive fire defense systems directly and in conjunction with large insurance companies, sells products through retailers and wholesalers directly to large users such as fire departments.
Distribution methods
MFB ships directly from its Rohnert Park, California facility, and has product available to fulfil orders.The Company’s product is blended in Rohnert Park, California according to the formulas developed by Mr. Conboy, under his supervision, whereafter the product is either shipped directly to customers of delivered to the regional retailers for direct sale to 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, 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. A study at the University of Southern California published in Environmental Science and Technology explained that the fire retardant industry is known for having products containing toxic metals that are not environmentally safe, and are considered not friendly toward humans, wildlife, fish, water, and plants. MFB’s CitroTech is an all-green fire retardant. MFB’s product, we believe, will be sold at amounts that can be competitive in many markets, including western states where wildfires occur, and areas of the United States where there is new home construction relating to population growth, such as Florida and Texas. Our industry is evolving rapidly and is becoming increasingly competitive. Competitors, such as Perimeter Solutions, SA have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. Competitors, such as Perimeter Solutions, SA have adopted, and may continue to adopt, aggressive pricing policies and devote substantially more resources to marketing, website and systems development than we do.
Sources and availability of raw materials
MFB’s raw materials are food grade and readily available from multiple sources. The Company maintains significant inventory 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.
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Patents, trademarks and licenses and their duration
MFB currently holds 30 granted patents and 26 pending patents. The granted patents include MFB’s main chemistry and applications. MFB has 21 trademarks and various copyrights.
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 process of obtaining.
Effect of existing or probably government regulations on the business
MFB tracks all proposed regulatory changes and makes commercially reasonable efforts to comply in advance. MFB consults with retired high-level fire officials who watch for regulatory changes for the benefit of the Company. MFB also retains experienced legal counsel.
Cost and effects of compliance with environmental laws
All expenses for the USDA application and the EPA recognition have been paid. MFB’s products are green and EPA recognized, making the only significant maintenance cost the USDA and EPA auditing under its Safe Choice Agreement.
Employees
The Company does not have any employees. The Company has consultants, attorneys, and independent contractors that all perform tasks on behalf of the company.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this Item.
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. 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 and expires July 31, 2025. The Company leases commercial space for office, retail and warehousing at 3230 Production Avenue, Suite B, Oceanside, CA 92058, which is under a one year lease agreement at $6,225 per month and expires March 31, 2025. Commencing April 1, 2025, the Company leases commercial space for office, retail and warehousing at 3230 Production Avenue, Suite C & D, Oceanside, CA 92058, which is under a five year lease at $15,810 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 Registrant’s 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 2024 |
| High Bid |
|
| Low Bid |
| ||
First Quarter |
| $ | 0.900 |
|
| $ | 0.750 |
|
Second Quarter |
| $ | 0.740 |
|
| $ | 0.640 |
|
Third Quarter |
| $ | 0.850 |
|
| $ | 0.580 |
|
Fourth Quarter |
| $ | 0.900 |
|
| $ | 0.640 |
|
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 |
|
Security Holders
As of March 21, 2025, we estimate there were approximately 750 holders of record and 52,378,201 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 completed the following transactions in reliance upon exemptions from registration under the Securities Act:
Between September 27, 2023, and March 21, 2025, we issued 1,001,969 shares of Series 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.
Purchaser |
| Series C Preferred Shares Issued |
|
| Amount Raised |
| ||
|
|
|
|
|
|
| ||
Peter Zilahy |
|
| 25,000 |
|
| $ | 100,000 |
|
Alta Investments LLC |
|
| 20,833 |
|
| $ | 49,999 |
|
Robert Dailey |
|
| 41,666 |
|
| $ | 99,998 |
|
FEC Investments LLC |
|
| 75,000 |
|
| $ | 300,000 |
|
East Shore Industries LLC |
|
| 12,500 |
|
| $ | 50,000 |
|
Gerald Yanowitz |
|
| 14,000 |
|
| $ | 33,600 |
|
Joel Yanowitz and Amy Metzenbaum Revocable Trust |
|
| 40,000 |
|
| $ | 96,000 |
|
Super Eight Capital Holding Ltd. |
|
| 7,000 |
|
| $ | 28,000 |
|
Loma LLC |
|
| 12,500 |
|
| $ | 50,000 |
|
Hunts Road LLC |
|
| 25,000 |
|
| $ | 100,000 |
|
Alta Investments LLC |
|
| 37,500 |
|
| $ | 90,000 |
|
Super Eight Capital Holding Ltd. |
|
| 8,333 |
|
| $ | 19,999 |
|
Michael Feigin |
|
| 20,000 |
|
| $ | - |
|
Noonan 2006 Revocable Trust |
|
| 100,000 |
|
| $ | 300,000 |
|
Jeffrey P. Bash |
|
| 12,500 |
|
| $ | 75,000 |
|
JBCG Enterprises LLC |
|
| 20,000 |
|
| $ | - |
|
Alta Investments LLC |
|
| 54,166 |
|
| $ | 130,000 |
|
RJ Dailey |
|
| 20,833 |
|
| $ | 50,000 |
|
FinTekk AP LLC |
|
| 83,333 |
|
| $ | 500,000 |
|
Robert Dailey |
|
| 108,750 |
|
| $ | 335,000 |
|
FEC SDR, LLC |
|
| 75,000 |
|
| $ | 300,000 |
|
Kenneth C. Noonan Family Trust |
|
| 22,222 |
|
| $ | 100,000 |
|
NUVIEW IRA LLC |
|
| 16,667 |
|
| $ | 100,000 |
|
ARMAND + L P Della Monica TTEE |
|
| 25,000 |
|
| $ | 100,000 |
|
Steve Boyd |
|
| 50,000 |
|
| $ | 300,000 |
|
Robert Anderson - Equity Trust |
|
| 8,333 |
|
| $ | 50,000 |
|
Kim Anderson - Equity Trust |
|
| 8,333 |
|
| $ | 50,000 |
|
Michael L. Meyer |
|
| 16,667 |
|
| $ | 100,000 |
|
The Tim and Tiffany Hodges Revocable Trust |
|
| 5,000 |
|
| $ | 30,000 |
|
Alan E. Cunningham |
|
| 2,500 |
|
| $ | 15,000 |
|
General Pacific |
|
| 33,333 |
|
| $ | 200,000 |
|
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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
Overview
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, and our email address is welcome@generalenterpriseventures.com. 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 fire retardant and fire suppression company throughout the United States. Management is highly experienced at business integration and re-branding potential. Our brand will be unique as we focus on markets in need of development.
We operate one line of business, which is sales and services relating to the CitroTech flame retardant and flame suppression product. Since MFB Ohio acquired the MFP portfolio of intellectual property on April 13, 2022 (“MFB”). MFB owns 33 patents and has 49 patents pending in and for the flame retardant and flame suppression industry. Our fire retardant and fire suppression product helps slow, stop and prevent wildfires. This product is typically applied ahead of an active wildfire to stop or slow its spread. Our product is differentiated by a high level of retardant and suppression effectiveness. While fire retardant and is primarily used to stop or slow the spread of wildfires, our product is also utilized in a fire preventative capacity. Since the wildfires in Los Angeles, California during January 2025, western U.S. states are becoming diligent in wildfire prevention efforts and increasing investments to prevent wildfire risk.
Our management is comprised of two individuals, Joshua Ralston, who is our President, Chief Executive officer, Chief Financial Officer and Chairman of the Board of Directors, and Stepheon Conboy, our Chief Technology Officer.
Known Trends and Uncertainties
Growth in Fire Safety
We believe that fire safety benefits from several growth drivers, including increasing fire severity, as measured by higher acres burned, longer fire seasons and a growing urban component, resulting in a need for higher quantity of fire retardant and fire suppression use per acre, thereby increasing production. We believe these trends are prevalent in North America, as well as globally and we expect these trends to continue and drive growth in demand for fire retardant and fire suppression products.
We are working to grow our fire prevention and protection business, which is primarily focused on expanding use of ground-applications for long-term fire retardant. This growth includes use of ground assets in response to active fires (protection), as well as proactive treatments around critical infrastructure and known high-risk areas (prevention). Fire prevention products can be used to prevent fire ignitions and protect property from potential fire danger by providing proactive retardant treatment in high-risk areas such as residential neighborhoods and commercial infrastructure. Treating these areas ahead of the fire season can potentially stop ignitions from equipment failures or sparks.
We have invested and intend to continue investing in the expansion of our fire retardant and fire suppression business through product development and business development to grow our customer base.
Weather Conditions and Climate Trends
Our business is highly dependent on the needs of residential homeowners and fire departments to prevent and suppress fires. As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Typically, sales of our product is higher during the summer months in the United States of America due to weather patterns that are generally correlated to a higher prevalence of wildfires. We believe, however, that due to the effect of the wildfires in Los Angeles, California during January 2025, and the more common wildfire season during the summer months that product orders will continue at the current rate throughout calendar year 2025.
Results of Operations
The Company is in the early stage of developing and commercializing their product lines. The Company has been focused historically on obtaining patents and various accreditations. To date, the Company does not have a large customer base, having relied heavily on a few customers, for the commercialization and testing of our CitroTech products and delivery systems. The Company currently does not have an established retail product line nor recurring significant customer base. Therefore, period over period comparisons of our results of operations are not indicative of future results.
The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended December 31, 2024 and 2023, which are included herein.
Our results of operations for the years ended December 31, 2024 and 2023 are summarized below:
|
| Years Ended |
|
|
|
|
|
|
| |||||||
|
| December 31, |
|
|
|
|
|
|
| |||||||
|
| 2024 |
|
| 2023 |
|
| Change |
|
| % |
| ||||
Revenue |
| $ | 808,372 |
|
| $ | 520,645 |
|
| $ | 287,727 |
|
|
| 55 | % |
Operating expenses |
|
| 6,113,050 |
|
|
| 10,618,583 |
|
|
| (4,505,533 | ) |
| (42 | %) | |
Other (income) expenses |
|
| 1,577,044 |
|
|
| 4,328 |
|
|
| 1,572,716 |
|
|
| 36338 | % |
Net loss |
| $ | (6,881,722 | ) |
| $ | (10,102,266 | ) |
| $ | 3,220,544 |
|
| (32 | %) | |
Revenue
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. During the year ended December 31, 2024, the revenue increased $290,000 from the year ended December 31, 2023, largely due to the commercialization of our CitroTech products following entry into a Partnership Agreement with the EPA, dated August 22, 2022 (the “EPA Agreement”). After entering into the EPA Agreement and the granting of many of our patents, the Company commenced more on the commercialization of our CitroTech products. Through a few concentrated customers we sold more of our product as customers bought our systems and CitroTech products for their own internal testing and product usage.
Our revenues consisted of the following:
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Products sale |
| $ | 626,389 |
|
| $ | 452,285 |
|
Product installation service |
|
| 181,983 |
|
|
| 68,360 |
|
|
| $ | 808,372 |
|
| $ | 520,645 |
|
| 10 |
| Table of Contents |
Our revenues from significant customers for the year ended December 31, 2024 and 2023, are as follows:
|
| Percentage of products sale |
|
| Percentage of installation service |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
Customer A |
|
| 19.6 | % |
|
| - |
|
|
| 10.6 | % |
|
| - |
|
Customer B |
|
| 13.7 | % |
|
| - |
|
|
| - |
|
|
| - |
|
Customer C |
|
| 10.2 | % |
|
| - |
|
|
| 0.1 | % |
|
| - |
|
Customer D |
|
| 19.5 | % |
|
| 32.7 | % |
|
| - |
|
|
| - |
|
Customer E |
|
| - |
|
|
| 44.2 | % |
|
| - |
|
|
| - |
|
Total (as a group) |
|
| 63.0 | % |
|
| 76.8 | % |
|
| 10.8 | % |
|
| 0.0 | % |
Operating Expenses
|
| Years Ended |
|
|
|
|
|
|
| |||||||
|
| December 31, |
|
|
|
|
|
|
| |||||||
|
| 2024 |
|
| 2023 |
|
| Change |
|
| % |
| ||||
Cost of revenue |
| $ | 655,499 |
|
| $ | 260,134 |
|
| $ | 395,365 |
|
|
| 152 | % |
Amortization and depreciation |
|
| 264,696 |
|
|
| 248,510 |
|
|
| 16,186 |
|
|
| 7 | % |
General and administration |
|
| 498,445 |
|
|
| 256,602 |
|
|
| 241,843 |
|
|
| 94 | % |
Advertising and marketing |
|
| 1,005,504 |
|
|
| 148,289 |
|
|
| 857,215 |
|
|
| 578 | % |
Management compensation |
|
| 75,000 |
|
|
| 180,000 |
|
|
| (105,000 | ) |
| (58 | %) | |
Professional fees |
|
| 3,599,904 |
|
|
| 9,525,048 |
|
|
| (5,925,144 | ) |
| (62 | %) | |
Research and development |
|
| 14,002 |
|
|
| - |
|
|
| 14,002 |
|
|
| - |
|
Total operating expenses |
| $ | 6,113,050 |
|
| $ | 10,618,583 |
|
| $ | (4,505,533 | ) |
| (42 | %) | |
The decrease in operating expenses was primarily attributed to decreases in profession fees of $5.9 million, management compensation of $105,000, partially offset by increases in cost of revenue of approximately $395,000, advertising and marketing of approximately $857,000 and general and administrative expenses of approximately $242,000.
Cost of revenue
|
| Years Ended |
|
|
|
|
|
|
| |||||||
|
| December 31, |
|
|
|
|
|
|
| |||||||
|
| 2024 |
|
| 2023 |
|
| Change |
|
| % |
| ||||
Cost of inventory |
| $ | 407,334 |
|
| $ | 101,978 |
|
| $ | 305,356 |
|
|
| 299 | % |
Freight and shipping |
|
| 9,321 |
|
|
| 14,494 |
|
|
| (5,173 | ) |
| (36 | %) | |
Consulting and advisory-related party |
|
| 19,400 |
|
|
| 30,100 |
|
|
| (10,700 | ) |
| (36 | %) | |
Royalty and sales commission-related party |
|
| 81,917 |
|
|
| 47,304 |
|
|
| 34,613 |
|
|
| 73 | % |
Rent expense |
|
| 137,527 |
|
|
| 66,258 |
|
|
| 71,269 |
|
|
| 108 | % |
Total cost of revenue |
| $ | 655,499 |
|
| $ | 260,134 |
|
| $ | 395,365 |
|
|
| 152 | % |
During the year ended December 31, 2024, the cost of revenue increased over the year ended December 31, 2023, primarily due to an increase in cost of inventory and royalty and sales commissions.
| 11 |
| Table of Contents |
Cost of inventory consists of product costs, related supplies and direct testing our CitroTech product and various components required to for installation of Mighty Fire Breaker proactive wildfire defence systems. Cost of inventory increased during the year ended December 31, 2024, primarily due to an increase in product sales and supplies from increased sales.
Consulting and advisory services are to a related party company for services related to product installations.
Freight and shipping relate to costs for shipping products to customers.
Royalty and sales commissions increased in the year ended December 31, 2024 from more revenue. The Company recognizes an allocated portion of consulting and direct labor costs associated with our revenue as royalty and sales cost of revenue.
Rent expenses are warehouse rent expenses. The increase in rent expense is because the Company leased commercial space for office, retail and warehousing from March 2024 under a one year contract.
Amortization and depreciation
Amortization and depreciation expenses are an amortization of patents and a depreciation of vehicle and furniture and equipment.
General and administrative
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the year ended December 31, 2024, the Company incurred increased expenditures on our website and IT development and travel as well as general office and insurance expenses from expansion of operations.
Advertising and marketing
The increase in advertising and marketing during the year ended December 31, 2024, over December 31, 2023, is primarily stock-based compensation for marketing and services of $660,000 and increased expenses to support revenue growth. The Company issued 83,333 shares of Series C Convertible Stock, valued at $500,000 for a NASCAR sponsorship and 250,000 shares of Common Stock, valued at $160,000 for compensation of marketing services provided.
Professional fees
The professional fees during the year ended December 31, 2024 primarily included stock-based management compensation of $1.4 million to advisors to our subsidiary MFB and stock-based compensation of $1.0 million to various consultants for IT service for software development, legal on patents and other consulting services in 2024. During 2023, the Company issued 1,200,000 shares of Series C Preferred Stock for professional fees to a related party consultant (TC Special Investments, LLC (“TCSI”)), which is valued as if they are fully converted to 24 million shares of common stock upon issuance, using the quoted stock price of the Company’s common stock at approval date (November 1, 2022), resulted in an accounting valuation of $8,640,000. TCSI’s consulting services to the Company include sales and business development, customer relationship management, strategy optimization, investor relations, underwriter interface, coordinating outside counsel and other business aspects at the request of the Board of Directors.
In addition to TCSI, stock-based compensation was remitted to certain individuals with fire retardant and flame suppression industry experience, who provided guidance and insight to the Company’s management and Board of Directors with respect to the fire retardant and flame suppression industry, business development connections, and oversight during the testing and recognition processes.
Other Expenses
For the year ended December 31, 2024 and 2023, the other expenses consisted of $258,000 and $4,000 interest related to convertible notes payable issued in 2024, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2024 of $410,000 and $0, respectively, and loss on settlement of notes payable and convertible note issued in 2022 of $909,000 and $0, respectively.
Net loss
The net loss for the year ended December 31, 2024, decreased by approximately $3.2 million as compared to the year ended December 31, 2023 primarily due to the decrease in operating expenses, primarily from stock-based professional fees, partially offset by an increase in other expenses.
| 12 |
| Table of Contents |
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was $6.9 million and $10.1 million for the years ended December 31, 2024 and 2023, respectively. During fiscal year 2024, we completed a debt offering and an equity offering which generated net proceeds of approximately $1.2 million and $1.8 million respectively.
Working capital
|
| December 31, |
|
| December 31, |
|
|
|
|
|
|
| ||||
|
| 2024 |
|
| 2023 |
|
| Change |
|
| % |
| ||||
Current assets |
| $ | 1,617,478 |
|
| $ | 1,218,056 |
|
| $ | 399,422 |
|
|
| 33 | % |
Current liabilities |
| $ | 2,161,883 |
|
| $ | 1,617,785 |
|
| $ | 544,098 |
|
|
| 34 | % |
Working capital (deficiency) |
| $ | (544,405 | ) |
| $ | (399,729 | ) |
| $ | (144,676 | ) |
|
| 36 | % |
As of December 31, 2024 and 2023, the current assets consisted of cash of $$775,000 and $550,000, respectively, inventory of $325,000 and $230,000, respectively accounts receivable of $317,000 and $427,000, respectively, prepaid expenses of $74,000 and $11,000, respectively, and deferred offering costs of $126,000 and $0, respectively.
As of December 31, 2024 and 2023, the current liabilities consisted of accounts payable and accrued liabilities of $187,000 and $55,000, respectively, due to related parties of $0 and $1.3 million, respectively, promissory note of $0 and $120,000, respectively, convertible notes net of discount of $196,000 and $54,000, respectively, convertible note – related party of $577,000 and $0, respectively, financing loan of $97,000 and $0, respectively, derivative liability of $1,055,000 and $0, respectively, and current portion of operating lease liability of $50,000 and $80,000, respectively.
The increase in working capital deficiency in 2024 was primarily due to the convertible notes and derivative liability related to convertible notes. The Company had net loss and negative cash flows from our operations. In 2024, the Company generated funds from more debt financing than equity financing, therefore, current liabilities increased more than current assets.
Cash Flows
For the year ended December 31, 2024 and 2023
|
| Years Ended |
|
|
| |||||||
|
| December 31, |
|
|
| |||||||
|
| 2024 |
|
| 2023 |
|
| Change |
| |||
Cash used in operating activities |
| $ | (1,937,651 | ) |
| $ | (1,211,764 | ) |
| $ | (725,887 | ) |
Cash used in investing activities |
| $ | - |
|
| $ | (4,015 | ) |
| $ | 4,015 |
|
Cash provided by financing activities |
| $ | 2,163,029 |
|
| $ | 1,710,100 |
|
| $ | 452,929 |
|
Net Change in cash |
| $ | 225,378 |
|
| $ | 494,321 |
|
| $ | (268,943 | ) |
Operating Activities
We have not generated positive cash flows from operating activities.
For the year ended December 31, 2024, net cash flows used in operating activities consisted of a net loss of $6.9 million, reduced by stock-based compensation of $3.1 million, non-cash lease expenses of $80,000, bad debt expense of $23,000, amortization and depreciation of $265,000, amortization of debt discount of $196,000, loss on settlement of debt of $909,000, and changes in derivative liability of $410,000, which were increased by net changes in operating assets and liabilities of $3,000.
| 13 |
| Table of Contents |
For the year ended December 31, 2023, net cash flows used in operating activities was $1.2 million, consisting of a net loss of $10 million, reduced by stock-based compensation of $9 million, non-cash lease expenses of $71,000, and amortization and depreciation of $249,000, which were increased by net changes in operating assets and liabilities of $396,000.
Investing Activities
The Company did not use any funds for investing activities during the year ended December 31, 2024.
For the year ended December 31, 2023, the cash flows used in investing activities were $4,015, which was related to the purchase of equipment.
Financing Activities
For the year ended December 31, 2024, net cash provided by financing activities consisted of $1.8 million proceeds from the issuance of Series C Convertible Preferred Stock, $1.2 million from the issuance of convertible promissory notes and associated warrants in fourth quarter of 2024, $2,000 received from a related party, $126,000 deferred offering cost payment, repayment of a financing loan of $23,000, and $741,000 from a repayment of loan from a related party.
The basic terms of the convertible promissory notes issued in third and fourth quarter of 2024 are: (i) a 12-month term; (ii) interest of 10% per annum, compounded annually; and (iii) voluntary conversion during the term at a conversion price of $0.40 for each dollar of principal amount. The associated warrants are exercisable for a period of 5 years from the issuance date, for an aggregate of up to 1,620,000 shares at an exercise price of $0.50.
For the year ended December 31, 2023, cash provided by financing activities consisted of $308,000 received from a related party for funding operating costs without interest and due on demand, $908,000 from issuance of Series C Convertible Preferred Stock, $500,000 from stock subscriptions, $120,000 from promissory notes and repayments of $125,000 to a related party.
Contractual Obligations
Convertible notes
In third and fourth quarter 2024, the Company entered into twenty (20) subscription agreements for convertible notes ($1,296,000) and warrants (1,620,000 shares of common stock). The material terms of this convertible note indebtedness are, (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, either (x) divided by 0.40 or (y) a 30% discount to the price sale of its Common Stock pursuant to a registration statement filed with the SEC and listing of the Common Stock on national securities exchange; and (iv) warrant coverage for five years at the rate of 1.25 shares of Common Stock for each dollar of principal, at an exercise price of $0.50 per share. .
Convertible notes – related party
On December 31, 2024, the Company issued convertible note of $577,000 to a related party, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $0.36.
Financing loan
The Company had financing loan for a purchase of vehicle of $97,000 as of December 31, 2024. A repayment of loan schedule is $1,898 per month for the first 36 months and then $2,590 per month for the remaining 30 months with an interest rate of $11.54%. The Company fully settled this financing loan in March 2025.
Lease Agreements
The Company has one lease classified as an operating lease for an office and warehouse purpose. The following table outlines maturities of our lease liabilities as of December 31, 2024:
Year ended December 31,
2025 |
| $ | 50,862 |
|
Thereafter |
|
| - |
|
|
|
| 50,862 |
|
Less: Imputed interest |
|
| (815 | ) |
Operating lease liabilities |
| $ | 50,047 |
|
| 14 |
| Table of Contents |
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.
Future Capital Requirements
We expect our existing cash, plus proceeds from recent capital raising to enable us to fund our operating expenses through and capital expenditure requirements for five years from the date of this Annual Report. We anticipate being cash-flow positive by the end of calendar year 2025. We believe we will achieve cash-flow positive by the end of calendar year 2025, because (i) we anticipate that our monthly sales, general and administrative expense will be less than $150,000 per month during calendar year 2025, and (ii) during December 2024 and January 2025, our product orders increased to, on average, more than $100,000 per week. Based on the assumption that product orders will continue at that rate through at least April 2025, we believe that we will be cash flow positive for the entire calendar year 2025. We believe, however, that due to the effect of the wildfires in Los Angeles during January 2025, and the more common wildfire season during the summer months, that our product orders will continue at the current rate through out the rest of the calendar year 2025. We do not anticipate a material increase to our sales, general and administrative expense during 2025. Excess cash flow will enable us to expand sales and business development efforts to further increase product orders subsequent to calendar year 2025. Therefore, the Company does not anticipate being dependent upon additional capital in the form of either debt or equity to continue our operations and expand our product to new markets.
Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. In consultation with its legal counsel as appropriate, our management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is likely, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
| 15 |
| Table of Contents |
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which require management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We believe our most critical accounting estimates relate to the following:
| · | Incremental borrowing rate for Right of Use Assets |
| · | Fair Value of Convertible Notes |
| · | Fair Value of Warrant to Purchase Common Stock |
While our estimates and assumptions are based on our knowledge of current events and on actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company’s significant accounting policies, refer to Note 2 of Notes to Consolidated Financial Statements.
Incremental borrowing rate for Right of Use Assets
As the Company’s operating leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate. The assessment of the Company’s incremental borrowing rate involves judgment regarding the cost of borrowing funds on a collateralized basis over a similar term and in a similar economic environment.
Fair Value of Convertible Notes
The Company determined that the conversion feature, embedded in convertible notes, met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note become convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note.
For the conversion feature classified as a liability, the Company uses a Binomial Lattice valuation model to value the derivative instrument at inception and on subsequent valuation dates. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
The underlying assumptions of Binomial Lattice model are as follows:
| 1. | The short-term interest rates, including risk-free rate, are known and remain constant over time. |
| 2. | The absence of any arbitrage opportunities is assumed. |
| 3. | The stock price follows a continuous-time random walk, with the rate of variance proportional to the square of the stock price. |
| 4. | The distribution of possible stock prices at the end of any given finite interval is assumed to be lognormal. |
| 5. | The variance of the rate of return on the stock is constant. |
| 6. | No commissions or transaction costs are incurred when buying or selling the stock or option. |
| 7. | The option's early exercise value is evaluated at each node of the lattice. |
| 8. | If applicable, the tax rate remains consistent for all transactions and market participants. |
Fair Value of Warrant to Purchase Common Stock
The Company has issued warrants to investors in our debt offerings.
We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815. In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative.
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
The warrants are valued using a Black Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
Off-balance sheet arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
| 16 |
| Table of Contents |
Item 8. Financial Statements and Supplementary Data.
General Enterprise Ventures, Inc.
Index to Audited Consolidated Financial Statements
December 31, 2024 and 2023
Contents |
| Page | |
| |||
Report of Independent Registered Public Accounting Firm (PCAOB ID: |
| F-2 | |
|
| ||
| F-4 | ||
|
| ||
| F-5 | ||
|
| ||
| F-6 | ||
|
| ||
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 |
| F-7 | |
|
| ||
| F-8 |
| F-1 |
| 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 sheets of General Enterprises Ventures, Inc. (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, 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 has suffered recurring losses from operations and has a working capital deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans with regard to these matters are also described in Note 1. 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 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
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.
| F-2 |
| Table of Contents |
Valuation of Intangible Assets
Description of the Matter
As described in Notes 2 and 6 to the consolidated financial statements, the Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s intangible assets comprised of patents and totaled $3.7 million as of December 31, 2024. We identified the auditing of the valuation of intangible assets as a critical audit matter because it represents a significant portion of the Company’s total assets, and it requires a significant amount of judgment to evaluate the recoverability of the carrying amount of the intangible assets. The primary procedures we performed to address this critical audit matter included the following, among others:
| · | We obtained an understanding of the process utilized by the Company’s management to evaluate the recoverability of the carrying amount of the intangible assets. |
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| · | We tested the Company’s process and evaluated the reasonableness of the inputs that management used in its analysis, including the comparison of revenue projections with actual results. |
Valuation of Derivative Liability
Description of the Matter
As described in Notes 2, 8 and 9 to the consolidated financial statements, the Company recorded convertible notes that included a conversion feature that was required to be accounted for separately as a derivative liability under ASC 815, Derivatives and Hedging. We identified the auditing of the valuation of derivative liability as a critical audit matter due to the significant judgment and complex estimation required in determining its fair value. The fair value of this derivative liability is estimated using a binomial lattice model, which incorporates assumptions about the Company’s conversion price, volatility, dividend yield, risk-free interest rate, credit risk, and potential early conversion behavior. The primary procedures we performed to address this critical audit matter included the following, among others:
| · | We obtained the Company’s valuation model and obtained an understanding of the process utilized by the Company to determine the fair value of the derivative liability. |
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| · | We tested the Company’s process and evaluated the reasonableness of the inputs and assumptions used in the Company’s fair value calculation. |
/s/ WWC, P.C.
Certified Public Accountants
PCAOB ID:
We have served as the Company’s auditor since 2024.
March 31, 2025
F-3 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Balance Sheets
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| December 31, |
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| 2023 |
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Assets |
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Current Assets |
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Cash |
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Accounts receivable |
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Inventory |
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Prepaid expenses |
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Deferred offering costs |
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Total Current Assets |
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Non-Current Assets |
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Intangible assets, net |
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Operating lease right-of-use asset |
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Equipment, net |
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Total Assets |
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Liabilities and Stockholders' Equity |
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Current liabilities |
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Accounts payable and accrued liabilities |
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Promissory note |
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Convertibles notes, net of discount |
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Convertibles note - related party |
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Financing loan |
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Due to related parties |
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Derivative liability |
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Operating lease liability - current portion |
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Total Current Liabilities |
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Non-current Liability |
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Operating lease liability |
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Total Liabilities |
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Stockholders' Equity |
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Preferred Stock, par value $ |
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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 - |
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Subscription received - |
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Accumulated deficit |
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Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity |
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See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-4 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Operations and Comprehensive Loss
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| Years Ended |
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| December 31, |
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Revenue |
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Operating expenses |
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Cost of revenue, exclusive of amortization and depreciation shown separately below |
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Cost of revenue - related parties |
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Amortization and depreciation |
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General and administration |
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Advertising and marketing |
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Management compensation |
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Professional fees |
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Professional fees - related parties |
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Research and development expense |
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Total operating expenses |
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Loss from operations |
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Other expense |
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Interest expense |
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Change in fair value of derivative liability |
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Loss on settlement of debt |
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Total other expense |
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Loss from operations before taxes |
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Provision for income taxes |
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Net loss |
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Comprehensive loss |
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Net loss per common share - basic and diluted |
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Basic and diluted weighted average number of common shares outstanding |
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See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-5 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Change in Stockholders’ Equity
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| Convertible Series A |
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| Convertible Series C |
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| Additional |
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| Preferred Stock |
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| Common Stock |
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| Total |
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| Common Stock |
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| Paid-In |
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| to be |
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| Accumulated |
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| Stockholders' |
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| Shares |
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| Amount |
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| Amount |
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| Deficit |
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Balance - December 31, 2022 |
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| $ |
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Subscription received - Series C Preferred shares to be issued |
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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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Issuance Series C Preferred Stock for services -related party |
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| - |
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Contribution inventory - related party |
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Net loss |
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Balance - December 31, 2023 |
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Series C Preferred Stock issued for preferred stock to be issued |
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Series C Preferred Stock issued in cash |
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Series C Preferred Stock issued for services |
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Common stock issued for stock to be issued - management |
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Common stock issued for conversion and settlement of debt |
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Cancellation of comment stock -related party |
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Common stock issued for compensation |
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Common stock issued for services |
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Common stock warrants issued |
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Net loss |
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Balance - December 31, 2024 |
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See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-6 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statement of Cash Flows
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| Years Ended |
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| December 31, |
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| 2024 |
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| 2023 |
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Cash Flows from Operating Activities: |
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Net loss |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation |
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Series C Preferred stock-based compensation |
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Bad debt expense |
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Non-cash lease expenses |
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Depreciation and amortization |
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Amortization debt discount |
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Loss on settlement of debt |
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Change in fair value of derivative |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Inventory |
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Prepaid expense |
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Related party advances funding operating expense |
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Accounts payable and accrued liabilities |
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Operating lease liabilities |
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Net Cash used in Operating Activities |
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Cash Flows from Investing Activities: |
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Purchase of equipment |
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Net Cash used in Investing Activities |
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Cash Flows from Financing Activities: |
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Proceeds from convertible notes |
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Deferred offering cost |
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Proceeds from loan - related party |
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Repayments of loan- related party |
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Proceeds from issuance Series C Preferred Stock |
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Proceeds from stock subscription |
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Proceeds from promissory note |
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Repayments of financing loan |
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Net Cash provided by Financing Activities |
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Change in cash |
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Cash, beginning of period |
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Cash, end of period |
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Supplemental Disclosure Information: |
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Cash paid for interest |
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Non-Cash Financing Disclosure: |
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Common stock issued for services |
| $ |
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Common stock to be issued for management |
| $ |
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| $ |
| ||
Series C Preferred stock issued for services |
| $ |
|
| $ |
| ||
Common stock issued upon conversion of Series C Preferred stock |
| $ |
|
| $ |
| ||
Common stock issued for conversion and settlement of debt |
| $ |
|
| $ |
| ||
Common stock issued for stock to be issued - management |
| $ |
|
| $ |
| ||
Series C Preferred stock issued for subscription received |
| $ |
|
| $ |
| ||
Cancellation comment stock - related party |
| $ |
|
| $ |
| ||
Warrants issued in conjunction with convertible debts |
| $ |
|
| $ |
| ||
Reclassification of due to related party to convertible note |
| $ |
|
| $ |
| ||
Contribution inventory - related party |
| $ |
|
| $ |
| ||
Issuance Series C Preferred stock for services -related party |
| $ |
|
| $ |
| ||
Right -of-use assets obtained in exchange for new operating lease liabilities |
| $ |
|
| $ |
| ||
Recognition of derivative liability as debt discount |
| $ |
|
| $ |
| ||
Acquisition of property and equipment as financing loan |
| $ |
|
| $ |
| ||
See the accompanying Notes, which are an integral part of these consolidated financial statements.
| F-7 |
| Table of Contents |
General Enterprise Ventures, Inc.
Notes to Consolidated Financial Statements
December 31, 2024 and 2023
Note 1 – Organization, Business and Going Concern
General Enterprise Ventures, Inc., was originally incorporated under the laws of the State of Nevada on March 14, 1990 and on June 3, 2021 was redomiciled to the State of Wyoming. When used in these notes, the terms “GEVI,” “Company,” “we,” “us” and “our” mean General Enterprise Ventures, Inc. and all entities included in our consolidated financial statements.
Business
We are an environmentally sustainable flame retardant and flame suppression company for the residential home industry throughout the United States and Canada markets. Management is experienced at business integration and branding potential. The Company is bringing to the marketplace unique, disruptive product with significant environmental impact potential.
The Company 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 has obtained multiple certification and accreditations in this industry, such as being the only EPA Safer Choice approved, long-term fire retardant, awarded UL GreenGuard Gold status, California Bioassay water approval, and LENS.
Going Concern
Our consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred losses since inception and has a net loss of approximately $
Management recognizes that the Company must obtain additional resources to successfully implement its business plans. During the year ended December 31, 2024, the Company completed financings from the issuance of Series C preferred stock, common stock, promissory notes and related party loans, generating net proceeds of approximately $
Management plans to continue to raise funds and complete an Initial Public Offering (IPO) to support our operations in 2025. However, no assurances can be given that we will be successful. If management is not able to timely and successfully raise additional capital and/or complete an IPO, the implementation of the Company’s business plan, financial condition and results of operations will be materially affected. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
| F-8 |
| Table of Contents |
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 subsidiary. Intercompany transactions and balances have been eliminated.
Reclassification
Certain amounts have been reclassified to improve the clarity and comparability of the financial statements. These reclassifications had no impact on previously reported total assets, liabilities, equity, net income (loss), or cash flows for any periods presented.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Segment Information
Our Chief Executive Officer (“CEO”) is the chief operating decision maker who reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we determined we operate in a single reporting segment - environmentally sustainable flame retardant and flame suppression company for the residential home industry.
Our CEO assesses performance and decides how to allocate resources primarily based on consolidated net income, which is reported on our Consolidated Statements of Operations. Total assets on the Consolidated Balance Sheets represent our segment assets.
| F-9 |
| Table of Contents |
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, 2024 and 2023. The Company had cash of $
Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $
Inventory
Inventories consist of finished goods and raw materials which are stated at lower cost or net realizable value, with cost being determined on the weighted average method.
Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any expected loss on the trade accounts receivable balances and charged to the provision for doubtful accounts.. 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, 2024 and 2023, the Company recorded bad debt expense of $
Intangible Assets
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed on the straight-line method. Currently our assets consist of furniture and equipment and vehicle which we amortize over a useful life of
| F-10 |
| Table of Contents |
Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in the income.
Impairment of Long-lived Assets Other Than Goodwill
Long-lived assets with finite lives, primarily property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.
Leases
ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances.
As of December 31, 2024 and 2023, 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; |
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|
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| ● | 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 |
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|
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| ● | Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
| F-11 |
| Table of Contents |
The Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2024 and 2023, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.
Convertible Notes
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For our derivative financial instruments, the Company used a Binomial Lattice model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.
Warrant
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
Revenue
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
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;
| F-12 |
| Table of Contents |
iii. Determine the transaction price;
iv. Allocate the transaction price to the performance obligations in the contract;
v. Recognize revenue when the Company satisfies a performance obligation.
For the year ended December 31, 2024, our revenues currently consist of a sale of product used for lumber products for fire prevention and an installation of self-contained sprinkler systems. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the product transfer from the Company to the customer.
Cost of Revenue
For the years ended December 31, 2024 and 2023, cost of revenue consisted of:
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Cost of inventory |
| $ |
|
| $ |
| ||
Freight and shipping |
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| ||
Consulting and advisory-related party |
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| ||
Royalty and sales commission-related party |
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| ||
Rent expense |
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| ||
Total cost of revenue |
| $ |
|
| $ |
| ||
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, 2024 and 2023, 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.
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
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| 2023 |
| ||
|
| Shares |
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| Shares |
| ||
Convertible notes |
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| ||
Common stock warrants |
|
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|
|
| - |
| |
Convertible Series C Preferred Stock |
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|
| ||
Convertible Series A Preferred Stock(1) |
|
| - |
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| |
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| ||
(1) Series A Preferred Stock was amended in March 2024 to remove the conversion feature (Note 12).
| F-13 |
| Table of Contents |
For the years ended December 31, 2024 and 2023 the reconciliation to net loss per common share basic and the anti-dilutive impact on net loss per share, are as follows:
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Numerator: |
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| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Change in fair value of derivatives |
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| ||
Interest on convertible debts |
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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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| ||
Common stock warrants |
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| - |
| |
Diluted |
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Net income per common share: |
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Basic |
| $ | ( | ) |
| $ | ( | ) |
Diluted |
| $ | ( | ) |
| $ | ( | ) |
Deferred Offering Costs
Pursuant to ASC 340-10-S99-1, costs directly attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the offering as a reduction of additional paid-in capital. Deferred offering costs consist of underwriting, legal, accounting, and other expenses incurred through the balance sheet date that are directly related to the proposed public offering. Should the proposed public offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be expensed.
As of December 31, 2024 and 2023, deferred offering costs consisted of the following:
|
| December 31, |
|
| December 31 |
| ||
|
| 2024 |
|
| 2023 |
| ||
Legal fees |
| $ |
|
| $ |
| ||
General and administrative expenses |
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| ||
Total |
| $ |
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| $ |
| ||
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.
During the years ended December 31, 2024 and 2023, stock-based compensation was recognized as follows:
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Management compensation |
| $ |
|
| $ |
| ||
Professional fees |
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| ||
Professional fees - related party |
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| ||
Advertising and marketing |
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| ||
|
| $ |
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| $ |
| ||
The Company valued common stock based on the quoted stock price on a date of issuance and Series C Preferred stock as if converted to common stock, using the quoted stock price of the Company’s common stock on a date of issuance.
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-14 |
| Table of Contents |
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In March 2024, the FASB issued ASU 2024-02 "Codification Improvements – Amendments to Remove References to the Concepts Statements" ("ASU 2024-02"), which contains amendments to the Codification to remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. Generally, ASU 2024-02 is not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective for the Company for fiscal years beginning after December 15, 2024. The Company does not expect this update to have a material impact on its 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.
Recently Adopted Accounting Pronouncement
In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires additional disclosures around significant segment expenses and disclosures to identify the title and position of the chief operating decision maker (“CODM”). ASU 2023-07 was effective for the year ended December 31, 2024 and interim periods thereafter.
Note 3 – Inventory
At December 31, 2024 and 2023, inventory consisted of the following:
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Finished goods |
| $ |
|
| $ |
| ||
Raw materials |
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|
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| ||
|
| $ |
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| $ |
| ||
The Company did not write-off any inventories as unsalable for the years ended December 31, 2024 and 2023.
Note 4 – Prepaid expenses
At December 31, 2024 and 2023, equipment consisted of the following:
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
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| 2023 |
| ||
Insurance |
| $ |
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| $ |
| ||
Legal retainer |
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Security deposit |
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Other prepaid operating expenses |
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| ||
|
| $ |
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| $ |
| ||
| F-15 |
| Table of Contents |
Note 5 – Equipment, net
At December 31, 2024 and 2023, equipment consisted of the following:
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
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| 2023 |
| ||
Cost: |
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| ||
Equipment |
| $ |
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| $ |
| ||
Vehicle |
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| ||
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| ||
Less: accumulated depreciation |
|
| ( | ) |
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| ( | ) |
Equipment, net |
| $ |
|
| $ |
| ||
During the years ended December 31, 2024 and 2023, the Company recorded depreciation of $
During the year ended December 31, 2024, the Company purchased a vehicle for $
Financing loan
The Company had financing loan for a purchase of vehicle for the year ended December 31, 2024.
Note 6 – Intangible Assets, net
In 2022, the Company acquired the intellectual property of MFB California, 19 patents centered around its MFB Technology for the prevention and spread of wildfires.
As of December 31, 2024 and 2023, finite lived intangible assets consisted of the following:
|
| December 31, |
|
| December 31 |
| ||
|
| 2024 |
|
| 2023 |
| ||
Patents |
| $ |
|
| $ |
| ||
Accumulated amortization |
|
| ( | ) |
|
| ( | ) |
Intangible assets, net |
| $ |
|
| $ |
| ||
| F-16 |
| Table of Contents |
Estimated future amortization expense for finite lived intangibles are as follows:
December 31, |
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|
| |
2025 |
| $ |
| |
2026 |
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| |
2027 |
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| |
2028 |
|
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| |
2029 |
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| |
Thereafter |
|
|
| |
|
| $ |
| |
As of December 31, 2024, the weighted-average useful life is
During the year ended December 31, 2024 and 2023, the amortization expense was $
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.
For the years ended December 31, 2024 and 2023, right-of-use asset and lease information about the Company’s operating lease consist of:
|
| Year Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
The components of lease expense were as follows: |
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| ||
Operating lease cost |
| $ |
|
| $ |
| ||
Short-term lease cost |
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| ||
Variable lease cost |
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| ||
Total lease cost |
| $ |
|
| $ |
| ||
Supplemental cash flow information related to leases was as follows:
|
| Year Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Cash paid for operating cash flows from operating leases |
| $ |
|
| $ |
| ||
Right-of-use asset obtained in exchange for new operating lease liabilities |
| $ |
|
| $ |
| ||
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|
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|
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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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| % | ||
Supplemental balance sheet information related to leases was as follows:
|
| December 31, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Operating lease right-of-use asset |
| $ |
|
| $ |
| ||
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Operating lease liabilities: |
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|
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|
|
Current portion |
| $ |
|
| $ |
| ||
Non-current portion |
|
|
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|
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| ||
|
| $ |
|
| $ |
| ||
| F-17 |
| Table of Contents |
The following table outlines maturities of our lease liabilities as of December 31, 2024:
Year ended December 31,
2025 |
| $ |
| |
Thereafter |
|
|
| |
|
|
|
| |
Less: Imputed interest |
|
| ( | ) |
Operating lease liabilities |
| $ |
|
Note 8 – Convertible Notes
The components of convertible notes as of December 31, 2024 and 2023, were as follows:
|
| Principal |
|
|
|
| Interest |
|
| December 31, |
|
| December 31, |
| ||||
Payment date |
| Amount |
|
| Maturity date |
| Rate |
|
| 2024 |
|
| 2023 |
| ||||
August 11, 2022 |
| $ |
|
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|
| % |
| $ |
|
| $ |
| |||||
September 2, 2022 |
| $ |
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| % |
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| |||||
April 1, 2023 |
| $ |
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| % |
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| |||||
July 15, 2024 |
| $ |
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| % |
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| |||||
August 15, 2024 |
| $ |
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| % |
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| |||||
November 15, 2024 |
| $ |
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| % |
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| |||||
December 15, 2024 |
| $ |
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| % |
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| |||||
Total Convertible notes |
|
|
|
|
|
|
|
|
|
|
| $ |
|
| $ |
| ||
Less: Unamortized debt discount |
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| ( | ) |
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| |
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Less: Current portion |
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| ( | ) |
|
| ( | ) |
Long -term portion |
|
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| $ |
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| $ |
| ||
On September 30, 2022, the Company entered into a convertible note agreement for the amount of $54,000, with term of six (6) months from the date of receipt of the funds, at interest rate of
On July 15, 2024 and August 15, 2024, the Company entered into seventeen (17) subscription agreements for convertible notes ($
| F-18 |
| Table of Contents |
During the year ended December 31, 2024, the Company recognized the debt discount of $
During the year ended December 31, 2024 and 2023, the Company recognized interest expenses of $
The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note.
Note 9 – Derivative Liability
Fair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Binomial Lattice model to calculate the fair value as of issuance and December 31, 2024.
The underlying assumptions of Binomial Lattice model are as follows:
| 1. | The short-term interest rates, including risk-free rate, are known and remain constant over time. |
| 2. | The absence of any arbitrage opportunities is assumed. |
| 3. | The stock price follows a continuous-time random walk, with the rate of variance proportional to the square of the stock price. |
| 4. | The distribution of possible stock prices at the end of any given finite interval is assumed to be lognormal. |
| 5. | The variance of the rate of return on the stock is constant. |
| 6. | No commissions or transaction costs are incurred when buying or selling the stock or option. |
| 7. | The option's early exercise value is evaluated at each node of the lattice. |
| 8. | If applicable, the tax rate remains consistent for all transactions and market participants. |
For the year ended December 31, 2024, the estimated fair values of the liabilities measured on a recurring basis are as follows:
|
| December 31 |
| |
|
| 2024 |
| |
Expected term |
|
| ||
Total Nodes |
|
|
| |
Risk-free interest rate |
|
| % | |
Stock price at valuation date |
| $ |
| |
Adjusted stock price at valuation date |
| $ |
| |
Expected average volatility |
|
| % | |
| F-19 |
| Table of Contents |
The following table summarizes the changes in the derivative liabilities during the year ended December 31, 2024:
Fair Value Measurements Using Significant Observable Inputs (Level 3) |
| |||
|
|
|
| |
Balance - December 31, 2023 |
| $ |
| |
|
|
|
|
|
Addition of new derivatives recognized as debt discounts |
|
|
| |
Addition of new derivatives recognized as loss on derivatives |
|
|
| |
Balance - December 31, 2024 |
| $ |
| |
Note 10 – Promissory Note
On June 7, 2023, the Company entered into a promissory note agreement for the amount of $
During the year ended December 31, 2024, the Company settled the promissory note with principal amount of $
Note 11 – Related Party Transactions
The related parties that had material transactions for the years ended December 31, 2024 and 2023, consist of the following:
Related Party | Nature of Relationship to the Company | |
A | An Ohio Corporation – a significant shareholder | |
B | Owner of related party A | |
C | Chief Executive Officer (CEO) of the Company | |
D | A California Corporation owned by related party E | |
E | Significant shareholder | |
F | Former MFB Ohio board advisor, resigned during 2024 | |
G | MFB Ohio board advisor | |
H | MFB Ohio board advisor | |
I | MFB Ohio board advisor | |
J | Director and Chief Executive Officer of GEVI Insurance Holdings Inc. | |
K | Former MFB Ohio board advisor, resigned during 2024 |
| F-20 |
| Table of Contents |
As of December 31, 2024 and 2023, amounts owing to related parties consists as follows:
|
| December 31, |
|
| December 31, |
| ||
Related Party |
| 2024 |
|
| 2023 |
| ||
A |
| $ |
|
| $ |
| ||
B |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
During the years ended December 31, 2024 and 2023, related party A advanced to the Company an amount of $
For the years ended December 31, 2024 and 2023, expenses to related parties and their nature consists of:
|
| Year Ended |
|
|
|
|
| ||||||
|
| December 31 |
|
|
|
|
| ||||||
Related Party |
| 2024 |
|
| 2023 |
|
| Nature of transaction |
| Financial Statement Line Item | |||
C |
| $ |
|
| $ |
|
|
| General and administration | ||||
D |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
D |
| $ |
|
| $ |
|
|
| Cost of revenue – related party | ||||
E |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
E |
| $ |
|
| $ |
|
|
| Cost of revenue – related party | ||||
F |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
G |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
H |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
I |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
J |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
K |
| $ |
|
| $ |
|
|
| Professional fees - related party | ||||
Convertible note – related party
On December 31, 2024, the Company issued convertible note of $576,693, to related party A, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $0.36. The conversion price is a fixed price and the Company determined that conversion feature did not need to be bifurcated. The Company has accounting for the convertible debt at amortized cost under ASC 470-20.
As of December 31, 2024, the Company recorded convertible note – related party of $
Note 12 – Stockholders’ Equity
Amended Articles of Incorporation
Effective on March 17, 2025,
| F-21 |
| Table of Contents |
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.
As of December 31, 2024 and 2023, there were
| F-22 |
| Table of Contents |
Series C Convertible Preferred Stock
The Company originally 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 is 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 C 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.
| F-23 |
| Table of Contents |
During the year ended December 31, 2024, the Company issued
| · | |
| · | |
| · |
During the year ended December 31, 2023, the Company issued
| · | During the year ended December 31, 2023, the Company issued |
| · | During the year ended December 31, 2023, the Company issued |
On April 5, 2023, the holder of the Convertible Series C Preferred Stock converted
As of December 31, 2024 and 2023, there were
Subscription Received
During the year ended December 31, 2023, the Company received $
Common Stock
The Company has authorized
During the year ended December 31, 2024, the Company issued
| · | |
| · | |
| · | |
| · | |
| · |
| F-24 |
| Table of Contents |
During the year ended December 31, 2023, the Company issued
| · | |
| · |
As of December 31, 2024 and 2023, there were
Restricted Stock Awards
On June 13, 2022, the Company issued
|
| Restricted Stock Award |
|
| Weighted -Average Grant Price |
| ||
Balance, December 31, 2022 |
|
|
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| $ |
| ||
Granted |
|
| - |
|
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| |
Vested |
|
| - |
|
|
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| |
Forfeited |
|
| - |
|
|
| - |
|
Balance, December 31, 2023 |
|
|
|
| $ |
| ||
Granted |
|
| - |
|
|
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| |
Vested |
|
| - |
|
|
|
| |
Cancelled |
|
| ( | ) |
|
|
| |
Balance, December 31, 2024 |
|
|
|
| $ |
| ||
As of December 31, 2023,
Common Stock to be Issued
On November 1, 2022, the Company’s Board of Directors approved the issuance of
On April 22, 2024, the Company entered into an advisory and consulting agreement for a period of twelve (12) months with share compensation of
As of December 31, 2024 and 2023, 0 and
Warrants
The Company issued a total of
We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815. In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
The warrants are valued using a Black Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
The Company utilized the following assumptions:
|
| 2024 |
| |
Expected term |
|
| ||
Expected average volatility |
| % | ||
Expected dividend yield |
|
|
| |
Risk-free interest rate |
| % | ||
A summary of activity of the warrants during the year ended December 31, 2024 as follows:
|
| Warrants Outstanding |
|
|
|
| ||||||
|
|
|
|
| Weighted Average |
|
| Weighted Average Remaining |
| |||
|
| Shares |
|
| Exercise Price |
|
| Contractual life (in years) |
| |||
|
|
|
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|
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|
|
| |||
Outstanding, December 31, 2023 |
|
|
|
| $ |
|
|
| - |
| ||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| - |
|
|
| - |
|
|
| - |
|
Forfeited/canceled |
|
| - |
|
|
| - |
|
|
| - |
|
Outstanding, December 31, 2024 |
|
|
|
| $ |
|
|
|
| |||
The intrinsic value of the warrants as of December 31, 2024 is $
| F-25 |
| Table of Contents |
Note 13 - Income Taxes
Components of income tax expense (benefit) are as follows for the years ended December 31, 2024 and 2023:
|
| 2024 |
|
| 2023 |
| ||
Current |
| $ |
|
| $ |
| ||
Deferred |
|
|
|
|
|
| ||
Income tax benefit |
| $ |
|
| $ |
| ||
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, 2024 and 2023:
|
| 2024 |
|
| 2023 |
| ||
Deferred tax assets and liabilities |
|
|
|
|
|
| ||
Net operating losses carried forward |
| $ |
|
| $ |
| ||
Intangibles |
|
| ( | ) |
|
| ( | ) |
Total deferred tax asset |
|
|
|
|
|
| ||
Less: valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred tax asset |
| $ |
|
| $ |
| ||
The Company will have approximately $
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2024 and 2023, 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, 2024 and 2023. 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:
|
| 2024 |
|
| 2023 |
| ||
Statutory tax rate |
|
| % |
|
| % | ||
State tax rate |
|
| % |
|
| % | ||
Effect of change in income tax rate for deferred tax assets |
|
|
|
|
|
|
|
|
Effect of expenses not deductible for tax purpose |
|
| ( | )% |
|
| % | |
Amortization |
|
| % |
|
| % | ||
Change in valuation allowance |
|
| ( | )% |
|
| ( | )% |
Effective income tax rate |
|
| % |
|
| % | ||
| F-26 |
| Table of Contents |
Note 14 – Commitments and Contingencies
As part of the intellectual asset purchase agreement with MFB California, the Company is subject to royalties of
Note 15 – Disaggregated revenue and Concentration
During years ended December 31, 2024 and 2023, disaggregated revenue was as follows:
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Products sale |
| $ |
|
| $ |
| ||
Product installation service |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
During years ended December 31, 2024 and 2023, customer and supplier concentrations (more than 10%) were as follows:
Revenue and accounts receivable
|
| Percentage of Revenue |
|
| Percentage of |
| ||||||||||
|
| For Year Ended |
|
| Accounts Receivable |
| ||||||||||
|
| December 31 |
|
| December 31 |
|
| December 31 |
| |||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
Customer A |
|
| % |
|
| - |
|
|
| - |
|
|
| - |
| |
Customer B |
|
| % |
|
| - |
|
|
| % |
|
| - |
| ||
Customer C |
|
| % |
|
| - |
|
|
| - |
|
|
| - |
| |
Customer D |
|
| % |
|
| % |
|
| % |
|
| % | ||||
Customer E |
|
| - |
|
|
| % |
|
| - |
|
|
| % | ||
Customer F |
|
| % |
|
| - |
|
|
| % |
|
| - |
| ||
Total (as a group) |
|
| % |
|
| % |
|
| % |
|
| % | ||||
Purchase and accounts payable
|
| Percentage of Purchase |
|
| Percentage of |
| ||||||||||
|
| For Year Ended |
|
| Accounts payable for purchase |
| ||||||||||
|
| December 31 |
|
| December 31 |
|
| December 31 |
| |||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
Supplier A |
|
| % |
|
| % |
|
| - |
|
|
| - |
| ||
Supplier B |
|
| % |
|
| - |
|
|
| % |
|
| - |
| ||
Supplier C |
|
| % |
|
| - |
|
|
| - |
|
|
| - |
| |
Supplier D |
|
| % |
|
| % |
|
| % |
|
| - |
| |||
Total (as a group) |
|
| % |
|
| % |
|
| % |
|
| - |
| |||
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.
| F-27 |
| Table of Contents |
Note 16 – Subsequent Events
Management has evaluated subsequent events through March 31, 2025, which is the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure, except as follows:
| · | |
| · | 225,000 shares of Series C Convertible Preferred stock were issued as follows; |
|
| o |
|
| o |
| · | In February 2025, the Company entered into twelve (12) subscription agreements for convertible notes ($ |
| F-28 |
| Table of Contents |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
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, 2024, 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, 2024. Based on the foregoing, our management concluded that our internal controls over the following financial reporting areas to be material weaknesses:
| · | 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, 2024 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.
| 17 |
| 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.
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 as Chief Executive Officer. From August 2021 to the present, Mr. Ralston has been stationed at U.S. Coast Guard Base Cleveland ESD in Cleveland, Ohio, where he has directed electronics support. From June 2021 to July 2021, Mr. Ralston was stationed at PATFOR SWA BAHRAIN in Manama, Bahrain, where he provided technical support to joint military operations. From August 2016 to May 2020, Mr. Ralston was stationed at USCG BASE Kodiak ESD in Kodiak, Alaska, where his primary duties were cyber security and information assurance. Mr. Ralston’s educational background is business marketing. Mr. Ralston received a degree in Marketing in 2012 from Ohio State University, and a degree in Cybersecurity and Information Assurance in 2022 from Western Governors University. Mr. Ralston does not have any experience in the fire retardant or fire suppression industry.
| 18 |
| Table of Contents |
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. From 2017 to 2019, Mr. Costa worked with Verizon Digital Services to Architect and Design a greenfield developed overview of worldwide data connectivity and equipment allocations and configurations. From 2019 to 2021, Mr. Costa worked with Pricewaterhouse Coopers to aid the in the revamp of procurement, purchase and accounts payable services on an extensive 18 month project. From 2021 to 2023, Mr. Costa worked with Northrup Grumman helping to define User Experience Strategies and team directives with a partial focus on Extended Realities focused on development and fabrication directives of NGC product development and Virtualization of Data. From 2023 to the present, Mr. Costa has been with the U.S. Department of State to recreate government directives in the productivity of immigration, identification and overseas Consular activities. Mr. Costa received a degree in communications in 1989 from St. Petersburg College. Mr. Costa does not have any experience in the fire retardant or fire suppression industry.
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. From 2019 to the present, Mr. Pomerantz has been in the Promotional Products Industry, in which he has owned and operated a business supervising manufacturing (including China), sales and distribution of hundreds of products. Mr. Pomerantz received a degree in accounting in 1967 from Temple University. Mr. Pomerantz does not have any experience in the fire retardant or fire suppression industry.
Family Relationships
There are no familial relationships among any of our directors or officers. 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: |
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| 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; |
| (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. |
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Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms furnished to us and written representations by our officers and directors regarding their compliance with applicable reporting requirements under Section 16(a) of the Exchange Act, we believe that all Section 16(a) filing requirements for our executive officers, directors and 10% stockholders were met during the year ended December 31, 2024.
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. 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
The Company adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. 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, 2024 and 2023. No other officers or directors received annual compensation in excess of $100,000 during the last fiscal year.
Name and Principal Position |
| Year Ended December 31, |
| Salary ($) |
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| Stock Awards ($)(1) |
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| All Other Compensation for ($) |
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| Total ($) |
| ||||
Joshua Ralston, President, Chief Executive officer, Chief Financial Officer and Chairman of the Board of Directors |
| 2024 |
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| 75,000 |
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| - |
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| - |
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| 75,000 |
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| 2023 |
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| - |
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| - |
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| - |
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| - |
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Director Compensation
For the 12-month period ending December 31, 2024, the Company did not remit compensation to its Board of Directors.
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 52,378,201 shares of Common Stock, 10,000,000 shares of Series A Preferred Stock, 2,450,138 shares of Series C Convertible Preferred Stock, 6,713,750 warrants, and $5,947,693 convertible debt outstanding as of March 21, 2025, and any shares of Common Stock, the person has the right to acquire within the 60 days following the filing date of this filing. Unless otherwise further indicated in the following table, the footnotes to it or elsewhere in this report, the persons and entities named in the following table have sole voting and sole investment power concerning the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable. Unless as otherwise indicated in the following table and the footnotes, our named executive officers and directors’ address in the following table is c/o General Enterprise Ventures Inc., 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009.
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| Number of Shares |
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| Subject to |
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| Series C Convertible Preferred, |
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| Number of Shares |
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| Convertible Debt and Warrant |
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| Total shares |
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| % of |
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Name of |
| Series A Preferred |
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| Series C Preferred |
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| Common |
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| exercisable |
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| Beneficial owned (2) |
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| Total |
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Beneficial Owner(1) |
| Shares Held |
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| % |
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| Shares Held |
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| % |
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| Shares Held |
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| % |
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| within 60 days |
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| Number |
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| % |
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| Voting Power(3) |
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Named Executive Officers and Directors |
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Joshua Ralston |
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| - |
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| - |
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| - |
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| - |
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| 3,500,000 |
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| 6.7 | % |
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| - |
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| 3,500,000 |
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| 6.7 | % |
| * |
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John Costa |
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| - |
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| - |
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| - |
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| - |
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| 250,000 |
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| * |
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| - |
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| 250,000 |
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| * |
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| * |
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Jeffery Pomerantz |
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| - |
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| - |
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| - |
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| - |
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| 250,000 |
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| * |
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| - |
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| 250,000 |
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| * |
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All Executive Officers and Directors as a group (3 persons) |
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| - |
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| - |
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| - |
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| - |
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| 4,000,000 |
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| 7.6 | % |
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| - |
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| 4,000,000 |
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| 7.6 | % |
| * |
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5% or More Stockholders |
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TC Special Investments, Inc.(4) |
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| 8,184,845 |
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| 81.8 | % |
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| 700,000 |
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| 28.6 | % |
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| 450,000 |
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| * |
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| 15,601,925 |
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| 16,051,925 |
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| 23.6 | % |
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| 81.5 | % | |
Theodore Ralston (4) |
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| - |
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| - |
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| - |
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| - |
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| 3,319,048 |
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| 6.3 | % |
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| - |
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| 3,319,048 |
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| 4.9 | % |
| * |
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Stephen Conboy (5) |
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| - |
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| - |
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| 550,000 |
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| 22.4 | % |
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| 3,900,000 |
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| 7.4 | % |
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| 1,337,820 |
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| 5,237,820 |
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| 9.8 | % |
| * |
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CVC California LLC(6) |
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| - |
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| - |
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| - |
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| - |
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| 4,350,000 |
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| 8.3 | % |
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| - |
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| 4,350,000 |
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| 8.3 | % |
| * |
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BoltRock Holdings LLC (7) |
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| 1,815,155 |
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| 18.2 | % |
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| 650,000 |
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| 26.5 | % |
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| 1,500,000 |
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| 2.9 | % |
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| 20,500,000 |
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| 22,000,000 |
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| 30.2 | % |
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| 18.2 | % |
Equus Total Return, Inc (8) |
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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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| 5,625,000 |
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| 5,625,000 |
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| 9.7 | % |
| * |
| |
_____________
* Less than 1%
| 22 |
| Table of Contents |
| (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. |
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| (3) | Percentage of total voting power with respect to all shares of our Series A preferred stock and common stock, as a single class. The holders of our Series A preferred stock are entitled to one thousand (1,000) votes per share and holders of our common stock are entitled to one (1) vote per share. |
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| (4) | TC Special Investments, LLC, through Mr. Theodore Ralston, has sole dispositive and voting power with respect to all shares. The address of TC Special Investments, LLC is c/o General Enterprise Ventures, Inc., 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009. Total beneficial common share ownership consists of 3,769,048 common shares and 15,601,925 shares of common stock issuable pursuant to 14,000,000 shares of Series C Convertible Preferred Stock and 1,601,925 shares from conversion of debt. |
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| (5) | Stephen Conboy has sole dispositive and voting power with respect to all shares. Stephen Conboy address is c/o General Enterprise Ventures, Inc., 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009. Total beneficial common share ownership consists of 3,900,000 common shares and 1,337,820 shares of common stock issuable pursuant to 1,337,820 shares from conversion of Series C Convertible Preferred Stock. |
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| (6) | Based on information reported on our transfer agent report for shareholder information, CVC California LLC stated address is 525 Okeechobee Blvd, Ste 1050, West Palm Beach, FL 33401. The Company does not know who has dispositive and voting power with respect to shares owned by CVC California LLC. |
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| (7) | Based on information reported on our transfer agent report for shareholder information, BoltRock Holdings LLC stated address is 712 5th Ave 22nd FL New York, NY 10019. Total beneficial common share ownership consists of 1,500,000 common shares and 20,500,000 shares of common stock issuable pursuant to 13,000,000 shares from conversion of Series C Convertible Preferred Stock, 5,000,000 shares from conversion of debt and 2,500,000 shares from warrants. |
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| (8) | Based on information reported on our transfer agent report for shareholder information, Equus Total Return, Inc stated address is 700 Louisiana Street, 43rd Floor, Houston, TX 77002, Total beneficial common share ownership consists of 5,625,000 shares of common stock issuable pursuant to 3,750,000 shares from conversion of debt and 1,875,000 shares from warrants. |
Change of Control
The Company is not aware of any arrangements which may at a subsequent date result in a change of control of the Company.
| 23 |
| Table of Contents |
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 |
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· | 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. |
Related Party | Nature of Relationship to the Company | |
TC Special Investments, LLC | An Ohio Corporation - a significant shareholder | |
Theodore Ralston | Owner of TC Special Investments, LLC | |
Joshua Ralston | Chief Executive Officer (CEO) of the Company | |
Mighty Fire Breaker, LLC, California | A California Corporation owned by Stephen Conboy | |
Stephen Conboy | Significant shareholder | |
Dan Reese | Subsidiary - MFB Ohio board advisor | |
Jeffery R Bowman | Subsidiary - MFB Ohio board advisor | |
Franklin O. Carroll | Subsidiary - MFB Ohio board advisor | |
Peter Brierty | Subsidiary - MFB Ohio board advisor | |
Michael Feigin | Director and Chief Executive Officer of GEVI Insurance Holdings Inc. | |
Jim Thompson | Subsidiary - MFB Ohio board advisor |
For the year ended December 31, 2023:
In September 2023, the Company granted 250,000 shares of Common Stock for services to John Costa, independent director, valued at $90,000.
In September 2023, the Company granted 250,000 shares of Common Stock for services to Jeffery Pomerantz, independent director, valued at $90,000.
In September 2023, the Company issued 1,200,000 shares of Convertible Series C Preferred Stock as consulting services to TC Special Investments, LLC, valued at $8,640,000.
In the year 2023, the Company paid commission fees of $186,500 to Stephen Conboy.
In the year 2023, the Company paid consulting fees of $150,500 to MFB CA.
In the year 2023, TC Special Investments, LLC, advanced to the Company an amount of $307,500 for working capital purpose and paid operating expenses of $246,425 on behalf of the Company.
In the year 2023, the Company repaid $125,000 owing to the loan payable to TC Special Investments, LLC.
| 24 |
| Table of Contents |
For the year ended December 31, 2024:
During the year ended December 31, 2024, the Company paid management fees of $75,000 to Joshua Ralston.
In March 2024, Joshua Ralston cancelled 65,000,000 of the 70,000,000 restricted stock awards issued in June 2022.
During the year ended December 31, 2024, the Company repaid $330,000 owing to the loan payable to TC Special Investments, LLC.
During the year ended December 31, 2024, TC Special Investments, LLC, paid operating expenses of $6,495 on behalf of the Company.
In November 2024, the Company repaid $410.880 owing to the loan payable to Theodore Ralston.
During the year ended December 31, 2024, the Company paid commission fees of $245,571 to Stephen Conboy.
During the year ended December 31, 2024, the Company paid consulting fees of $97,000 to MFB CA.
Issued 20,000 shares of Convertible Series C Preferred Stock for services to one (1) MFB Ohio advisory board member, valued at $348,000.
Issuance 1,250,000 shares of Common Stock for services to five (5) MFB Ohio advisory board members, valued at $1,074,750.
On December 31, 2024, the Company issued convertible note of $576,693, to related party A, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $0.36.
Item 14. Principal Accountant Fees and Services.
The following table shows the fees that were billed for the audit and other services provided by our principal auditor, for the periods presented, as follows:
|
| Fiscal Year Ended December 31, 2024 |
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| Fiscal Year Ended December 31, 2023 |
| ||
Audit Fees: |
| $ | 125,000 |
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| $ | 83,000 |
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Audit-Related Fees |
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| - |
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| - |
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Tax Fees: |
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| - |
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| - |
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All Other Fees |
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| - |
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| - |
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Total |
| $ | 125,000 |
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| $ | 83,000 |
|
Audit Fees
This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
Audit-Related Fees
This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC and other accounting consulting.
Tax Fees
This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees
This category consists of fees for other miscellaneous items.
Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting.
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| Table of Contents |
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
________
* Filed herewith.
Item 16. Form 10-K Summary.
None.
| 26 |
| 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. |
| |
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Dated: March 31, 2025 | 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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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: March 31, 2025 | 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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| 27 |
EXHIBIT 3.2
EXHIBIT 3.4
SECOND AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION AND PREFERENCES
OF
SERIES A PREFERRED STOCK
OF
GENERAL ENTERPRISE VENTURES, INC.
WHEREAS, pursuant to and in accordance with the Wyoming Business Corporations Act (“WBCA”), General Enterprise Ventures, Inc., a Wyoming corporation (the “Corporation”), does hereby certify that, pursuant to the authority conferred on the Board of Directors by the Articles of Incorporation of the Corporation, and pursuant and in accordance with the applicable provisions of the WBCA, said Board of Directors, pursuant to a Joint Written Consent of the Board of Directors and Majority Voting Stockholders dated effective February 1, 2025, duly adopted resolutions providing for the authorization and issuance of Ten Million (10,000,000) shares of Series A Preferred Stock; and
WHEREAS, the resolutions applicable to the Series A Preferred Stock, which set forth the amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of the Series A Preferred Stock and the qualifications, limitations and restrictions thereof are amended and restated as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of its Articles of Incorporation, the Series A Preferred Stock of the Corporation be, and it hereby is, amended and restated, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
Of the authorized but unissued shares of the capital stock of the Corporation, there is hereby established the following series of the authorized preferred stock of this Corporation having a par value of $0.0001 per share, which series shall be designated as “Series A Preferred Stock” (the “Series A Preferred Stock”), consisting of Ten Million (10,000,000) shares. The Series A Preferred Stock shall have the following rights.
1. Certain Definitions. Unless the context otherwise requires, the terms defined in this Section 1 shall have, for all purposes of this resolution, the meanings herein specified.
Board of Directors. The term “Board of Directors” shall mean the Board of Directors of this Corporation and, to the extent permitted by law, any committee of such Board of Directors authorized to exercise the powers of such Board of Directors.
2. Dividends. The Series A Preferred Stock shall not be entitled to receive dividends.
3. Distributions Upon Liquidation, Dissolution or Winding Up. The Series A Preferred Stock shall not be entitled to a liquidation preference.
4. Convertibility. The Series A Preferred Stock shall not be convertible.
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5. Redemption. The Series A Preferred Stock may not be redeemed by the Corporation without the consent of the Series A Preferred Shareholders.
6. Voting Rights. The holders of the issued and outstanding shares of Series A Preferred Stock shall have one thousand (1,000) votes for each share of Series A Preferred Stock, the voting of which may be cast in any written consent or any meeting of the shareholders of Common Stock of the Corporation, voting together with the shareholders of Common Stock of the Corporation as a single class, and without a separate class vote by the Common Stock.
7. Exclusion of Other Rights. Except as may otherwise be required by law, the shares of Series A Preferred Stock shall not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth herein. The shares of Series A Preferred Stock shall have no preemptive or subscription rights.
8. Headings of Subdivision. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
9. Severability of Provisions. If any right, preference or limitation of the Series A Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth herein which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.
10. Status of Reacquired Shares. Shares of Series A Preferred Stock which have been issued and reacquired in any manner shall (upon compliance with any applicable provisions of the laws of the State of Wyoming) have the status of authorized and unissued shares of Series A Preferred Stock, issuable in series undesignated as to series and may be redesignated and reissued.
This Certificate of Designation has been duly adopted by the Corporation by all necessary action by the Corporation.
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IN WITNESS WHEREOF, General Enterprise Ventures, Inc. has caused this certificate to be duly executed as of this 17th day of February 2025.
| GENERAL ENTERPRISE VENTURES, INC. | |||
| By: | /s/ Joshua Ralson | ||
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| Name: | Joshua Ralston | |
| Title: | President | ||
[SIGNATURE PAGE TO GEVI SECOND AMENDED AND RESTATED SERIES A DESIGNATIONS]
EXHIBIT 3.5
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION AND PREFERENCES
OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
GENERAL ENTERPRISE VENTURES, INC.
WHEREAS, pursuant to and in accordance with the Wyoming Business Corporations Act (“WBCA”), General Enterprise Ventures, Inc., a Wyoming corporation (the “Corporation”), does hereby certify that, pursuant to the authority conferred on the Board of Directors by the Articles of Incorporation of the Corporation, and pursuant and in accordance with the applicable provisions of the WBCA, said Board of Directors, pursuant to a Joint Written Consent of the Board of Directors and Majority Voting Stockholders dated effective February 1, 2025, duly adopted resolutions providing for the authorization and issuance of Ten Million (10,000,000) shares of Series C Convertible Preferred Stock; and
WHEREAS, the resolutions applicable to the Series C Convertible Preferred Stock, which set forth the amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of the Series C Convertible Preferred Stock and the qualifications, limitations and restrictions thereof are as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of the Corporation and the provisions of the Articled of Incorporation of the Corporation creating a class of authorized Preferred Stock of the Company designated as Series C Convertible Preferred Stock:
Of the authorized but unissued shares of the capital stock of the Corporation, there is hereby established the following series of the authorized preferred stock of this Corporation having a par value of $0.0001 per share, which series shall be designated as “Series C Convertible Preferred Stock” (the “Series C Preferred Stock”), consisting of 10,000,000 shares. The Series C Preferred Stock shall have the following dividend rights, dividend rates, voting rights, conversion rights, rights and terms of redemption, redemption prices and liquidation preferences.
1. Certain Definitions. Unless the context otherwise requires, the terms defined in this Section 1 shall have, for all purposes of this resolution, the meanings herein specified.
Board of Directors. The term “Board of Directors” shall mean the Board of Directors of this Corporation and, to the extent permitted by law, any committee of such Board of Directors authorized to exercise the powers of such Board of Directors.
Common Stock. The term “Common Stock” shall mean all shares now or hereafter authorized of any class of common stock of this Corporation and any other stock of this Corporation, howsoever designated, authorized after the Issue Date, which has the right (subject always to prior rights of any class or series of preferred shares) to participate in the distribution of the assets and earnings of this Corporation without limit as to per share amount.
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Issue Date. The term “Issue Date” shall mean the date that each share of Series C Preferred Stock is issued to a holder by the Corporation.
2. Dividends. While the Series C Preferred Stock is outstanding, each holder of shares of Series C Preferred Stock shall receive no dividends.
3. INTENTIONALLY OMITTED.
4. Convertibility.
(a) Conversion of Preferred Stock. When the Articles of Incorporation of the Corporation shall have been amended to provide for sufficient additional shares of authorized Common Stock to allow such conversion, the holders of the Series C Preferred Stock shall have the right to convert their Series C Preferred Stock into fully paid and nonassessable shares (subject to adjustment as herein provided in Section 4) of Common Stock of the Corporation at a conversion rate (the “Series C Conversion Rate”) of twenty (20) shares of Common Stock for each share of Series C Preferred Stock.
(b) Certification of Shares. As soon as practicable after the conversion of the Series C Preferred Stock into Common Stock, the Corporation shall issue and shall deliver at the office of the holder of the Series C Preferred Stock (or such other address of which the holder of such shares shall provide to the Corporation) a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of the Series C Preferred Stock.
(c) Survival of Conversion Right. In case of any other reorganization of the Corporation (or any other corporation the stock or other securities of which are at the time deliverable on the conversion of the shares) after the date of issuance of the shares, or in case, after such date, the Corporation (or any such other corporation) shall consolidate with or merge into another corporation or convey all or substantially all its assets to another corporation, then and in each such case the holder(s) of the shares, upon the conversion thereof, at any time after the consummation of such reorganization, consolidation, merger or conveyance, shall be entitled to receive the stock or other securities or property to which such holder(s) would have been entitled upon such consummation if such holder(s) had converted the Shares immediately prior thereto, all subject to further adjustments as provided herein; in each such case all the terms of this Section 4 (including this Directors’ Resolution) shall be applicable to the shares of stock or other securities or property receivable upon the conversion of the shares after such consummation.
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(d) Covenant regarding Conversion Right. The Corporation will not, by amendment of its Articles of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the shares (including this Directors’ Resolution), but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the holder(s) of shares against dilution or other impairment. Without limiting the generality of the foregoing, as a condition precedent to the taking of any action which would cause the then aggregate par value of the shares of Common Stock issuable upon conversion of the then outstanding shares to be below the aggregate par value of the shares of Common Stock issuable upon conversion, the Corporation will take such corporate action as may be necessary in order that it may at all times validly and legally issue fully paid and nonassessable shares of Common Stock upon conversion of the shares. If in any case a state of facts occurs wherein in the opinion of the Board of Directors the other provisions of this Section 4 are not strictly applicable, or, if strictly applicable, would not fairly protect the conversion rights of the holders of the Preferred Stock in accordance with the essential intent and principles of such provisions, then the Board of Directors shall make an adjustment consistent with such essential intent and principles so as to protect such conversion rights as aforesaid.
(e) Adjustment of the Conversion Rate.
(1) In case additional shares of Common Stock are issued as a dividend, stock split or other distribution on the Common Stock without the payment to the Corporation of any consideration, the Series C Conversion Rate in effect at the opening of business on the date of the issuance of such dividend, stock split or distribution (the “Issuance Date”) shall be adjusted by multiplying each of the Series C Conversion Rate by a fraction the numerator of which shall be the sum of (i) such number of shares outstanding at the close of business immediately prior to the Issuance Date, and (ii) the number of shares constituting such dividend, stock split or other distribution, such reduction to become effective immediately after the opening of business on the Issuance Date for such dividend or distribution and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business immediately prior to the Issuance Date. For the purposes of this Section 4(e)(1), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation.
(2) In case the outstanding shares of Common Stock are reduced by a reverse stock split or similar arrangement (but not the repurchase of shares of Common Stock by the Corporation) without the payment by the Corporation of any consideration (the “Interest Reduction”), the Series C Conversion Rate in effect at the opening of business on the Issuance Date shall be adjusted by dividing the Series C Conversion Rate by the quotient of the number of shares of Common Stock outstanding at the close of business immediately prior to the Issuance Date divided by the number of shares of Common Stock which will be outstanding after the Interest Reduction. For the purposes of this Section 4(e)(2), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation.
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(f) Notice of Adjusted Conversion Rate. Whenever the Series C Conversion Rate are adjusted as herein provided the Corporation shall compute the adjusted Series C Conversion Rate in accordance with Section 4(e) above and shall prepare a certificate signed by the President of the Corporation setting forth the adjusted Series C Conversion Rate and the effective date thereof and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall be delivered to the preferred shareholder as soon as practicable but no later than 30 days after the effective date thereof.
(g) Reservation of Common Stock. The Corporation will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the shares, such shares of Common Stock and other stock, securities and property as from time to time shall be issuable upon the exercise of the shares at the time outstanding.
5. Method of Conversion.
(a) Conversion. Immediately following the amendment of the Corporation’s Articles of Incorporation to increase the number of authorized shares of Common Stock, each holder of shares of Series C Preferred Stock shall have the right to convert such shares to the number of shares of Common Stock as determined by Series C Conversion Rate in effect at the time of conversion. The holder of the Series C Preferred Stock may exercise such right by delivering written notice to the Corporation.
(b) Manner of Effectuating Conversion. To receive new shares of Common Stock following the exercise of such conversion right, each preferred stockholder shall surrender the original stock certificates representing his or her preferred stock in the Corporation at the office of the Corporation.
On the day (the “Conversion Date”) the preferred shareholder's preferred stock is surrendered for conversion and received by the Corporation, all in accordance with the foregoing provisions, and at such time the Corporation shall issue a certificate or certificates representing preferred shareholder’s converted Common Stock and the preferred shareholder shall be treated for all purposes as the record holder of the number of shares of Common Stock, for which number of shares of preferred stock have been converted at such time; provided, however, that any such conversion on any date when the stock transfer books of the Corporation shall be closed shall be effective for all purposes at the opening of business on the next succeeding day on which such stock transfer book is open.
6. Redemption. The Series C Preferred Stock may not be redeemed by the Corporation without the consent of the holders of a majority of the outstanding shares of Series C Preferred Stock.
7. Voting Rights. The holders of the issued and outstanding shares of Series C Preferred Stock shall have no voting rights.
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8. Exclusion of Other Rights. Except as may otherwise be required by law, the shares of Series C Preferred Stock shall not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth herein. The shares of Series C Preferred Stock shall have no preemptive or subscription rights.
9. Headings of Subdivision. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
10. Severability of Provisions. If any right, preference or limitation of the Series C Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth herein which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.
This Certificate of Designation has been duly adopted by the Corporation by all necessary action by the Corporation.
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IN WITNESS WHEREOF, Aureus Inc. has caused this certificate to be duly executed as of this 17th day of February 2025.
| GENERAL ENTERPRISE VENTURES, INC. | |||
| By: | /s/ Joshua Ralston | ||
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| Name: | Joshua Ralston | |
| Title: | President | ||
[SIGNATURE PAGE TO GEVI A&R SERIES C DESIGNATIONS]
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 30 million shares of Preferred Stock, par value $0.0001 per share.
Series A Preferred Stock
The Company has designated 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 the shareholders of Common Stock, voting together as a single class. Holders of shares of Series A Preferred Stock do not have cumulative voting rights. This means a holder of a single share of Series A Preferred Stock cannot cast more than one vote for each position to be filled on the Board.
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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 10 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.
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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 C 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.
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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. |
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| 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.
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. |
| 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.
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).
| 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:
EXHIBIT 21.1
Subsidiaries of General Enterprise Ventures Inc.
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| Jurisdiction Of Incorporation |
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| Mighty Fire Breaker, LLC |
| Ohio, U.S.A. |
| GEVI Insurance Holdings Inc. |
| Ohio, U.S.A. |
| MFB Insurance Company, Inc. |
| Hawaii, U.S.A. |
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: March 31, 2025 | 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, 2024 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: March 31, 2025 | 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.