# CitroTech Inc.: Form 10-K for the period ended Dec 31, 2023

- Company: [CitroTech Inc.](/companies/citr.md) (CIK 894556)
- Form: 10-K
- Filed: 2024-04-15
- Accepted by EDGAR: Apr 15, 2024, 15:32 ET
- Period: 2023-12-31
- Accession: 0001640334-24-000667
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/894556/000164033424000667/gevi_10k.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/894556/000164033424000667/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 12 months, 2023-01-01 to 2023-12-31 | $520.6k | us-gaap:Revenues |
| Cost of revenue | 12 months, 2023-01-01 to 2023-12-31 | $133.5k | us-gaap:CostOfRevenue |
| Gross profit | 12 months, 2023-01-01 to 2023-12-31 | $387.1k | us-gaap:GrossProfit |
| Operating income | 12 months, 2023-01-01 to 2023-12-31 | −$10.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2023-01-01 to 2023-12-31 | $4.3k | us-gaap:InterestExpense |
| Income tax | 12 months, 2023-01-01 to 2023-12-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 12 months, 2023-01-01 to 2023-12-31 | −$10.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 12 months, 2023-01-01 to 2023-12-31 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 12 months, 2023-01-01 to 2023-12-31 | −$0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 12 months, 2023-01-01 to 2023-12-31 | 96,663,470 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 12 months, 2023-01-01 to 2023-12-31 | −$1.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 12 months, 2023-01-01 to 2023-12-31 | $4.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-12-31 | $549.8k | us-gaap:Cash |
| Current assets | at 2023-12-31 | $1.2m | us-gaap:AssetsCurrent |
| Total assets | at 2023-12-31 | $5.3m | us-gaap:Assets |
| Current liabilities | at 2023-12-31 | $1.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-12-31 | $1.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-12-31 | $3.6m | us-gaap:StockholdersEquity |

## Business

As filed, 13,565 characters.

General Enterprise Ventures, Inc., (“GEVI,” “we,” “us,” or the “Company”) was originally incorporated in Nevada on March 14, 1990. Our offices are located at 1740H Del Range Blvd., Suite 166, Cheyenne, Wyoming 82009. Our telephone number is (800) 401-4535. Our website is www.generalenterpriseventures.com and www.mightyfirebreaker.com.

We do not incorporate the information on or accessible through our website into this Registration Statement, and you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.

We are an environmentally sustainable flame retardant and flame suppression company for the residential home industry throughout the United States and international markets. Management is experienced at business integration and branding potential. The Company is bringing to the marketplace unique, disruptive products with significant environmental impact potential.

We operate one line of business. The Company acquired Mighty Fire Breaker, LLC on April 13, 2022, and formed Mighty Fire Breaker UK Ltd. on November 14, 2022 (collectively, “MFB”). MFB owns 39 patents and patents pending for environmentally sustainable flame retardant and flame suppression industry. MFB’s products are currently being sold to fire departments in the State of California.

Our management is comprised of three individuals, Joshua Ralston, who acts as our President, Chief Executive officer, Chief Financial Officer and Chairman of the Board of Directors, John Costa who serves on the Board of Directors, and Jeffery Pomerantz, who serves on the Board of Directors. It should also be noted that Mr. Ralston has sufficient voting power through his ownership of Series A Preferred Stock with super voting rights to control the vote on substantially all corporate matters.

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### Corporate History

Ultronics Corporation (the “UC”) was incorporated under the laws of the State of Nevada on March 14, 1990. UC never had operations and was formed to investigate potential companies that would be interested in merging with it.

On December 21, 2004, UC formed a subsidiary, Ultronics Acquisition Corporation (“UAC”) for the purpose of facilitating an agreement and plan of merger. UAC was incorporated in the State of Nevada. On December 23, 2004, UC, UAC and General Environmental Management, Inc. (“GEM”) entered into an Agreement and Plan of Merger whereby UAC would be merged into GEM (“Merger”) with GEM to be the surviving corporation. On February 14, 2005, a Certificate of Merger was filed in Delaware; however, there is no evidence of a Certificate of Merger being filed in Nevada. As such, GEM did not cease to exist in Nevada.

The acquisition was treated as a reverse merger with GEM deemed to be the accounting acquiror, and UAC the legal acquiror. UAC’s name was changed to General Environmental Management, Inc. (the “Company”) on March 16, 2005. On March 10, 2006, the Company entered into an Agreement with K2M Mobile Treatment Services, Inc. of Long Beach, California (“K2M”), a privately held company, pursuant to which the Company acquired all of the issued and outstanding common stock of K2M.

On August 31, 2008, the Company entered into an agreement with Island Environmental Services, Inc. of Pomona, California (“Island”), a privately held company, pursuant to which The Company acquired all of the issued and outstanding common stock of Island, a California-based provider of hazardous and non-hazardous waste removal and remediation services to a variety of private and public sector establishments.

On November 6, 2009, the Company entered into a Stock Purchase Agreement (“CLW Agreement”) with United States Environmental Response, LLC, a California limited liability company pursuant to which the Company purchased all of the issued and outstanding capital stock of California Living Waters, Incorporated (“CLW”), a privately held company. CLW owned all of the issued and outstanding capital stock of Santa Clara Waste Water Company (“SCWW”) a California corporation. CLW's only operating subsidiary was SCWW.

On November 25, 2009, the Company entered into an Agreement with Luntz Acquisition (Delaware), LLC. (“Buyer”) pursuant to which the Company sold to Luntz all of the issued and outstanding stock of the Company's primary operating subsidiaries for cash (the “Sale”). On February 26, 2010, after approval of the transaction by the Company’s shareholders at a special meeting held on February 19, 2010, the Company completed the sale of the entities created out of GEM DE. The net cash proceeds from the transaction were used by the Company to retire senior debt and other obligations of the Company. The Company was not merged out of Nevada pursuant to this transaction.

Subsequent to the Luntz transaction, the Company’s revenues and expenses, operations, assets and liabilities were discontinued from February 2010 until January 2021.

On March 19, 2019, Small Cap Compliance, LLC was awarded custodianship of the Company by the Eighth Judicial District Court of Nevada. On May 19, 2019, the Company was revived in Nevada. On May 30, 2019, the custodian filed an Amendment to the Designations of the Series A Convertible Preferred Shares of the Company, and filed a Custodian’s Certification of Amendment certifying the same.

On January 15, 2021, the Company filed a Certificate of Conversion from a Non-Delaware Corporation to a Delaware Corporation, and the associated Certificate of Incorporation, to become a corporation in Delaware. Delaware recognized this domestication of the Company.

On March 31, 2021, the Company formed General Entertainment Ventures, Inc. (“GEVI”) in Delaware as a wholly owned subsidiary of the Company. The purpose of the formation of GEVI was to merge the Company into GEVI pursuant to Section 251(g) of the General Corporation Law of the State of Delaware.

On April 10, 2021, after approval by the board of directors and shareholders of the Company, the Company was merged into GEVI pursuant to an Agreement and Plan of Merger dated as of the same date. GEVI is the accounting and legal acquiror of the Company.

On June 3, 2021, after approval by the board of directors and shareholders of the Company, the Company was redomiciled to the State of Wyoming.

On October 11, 2021, after approval by the board of directors and shareholders of the Company, the Company was renamed General Enterprise Ventures, Inc., in the State of Wyoming.

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### Change of Control

On April 28, 2022, Jan Ralston transferred ownership of 10,000,000 Preferred A shares to CEO, Joshua Ralston, making Mr. Ralston the new Majority Shareholder

### Series C Preferred Stock

On April 13, 2022, The Company designated 5,000,000 shares of Series C convertible Preferred Stock (“Series C Preferred Stock”), par value $0.0001. The Series C Preferred Stock is convertible into twenty (20) shares of Common Stock for each share of Series C Preferred Stock at the option of the stockholder. The Series C Preferred Stock does not have voting rights and is not eligible to receive dividends.

### Corporate changes

On April 13, 2022, the Company acquired Mighty Fire Breaker, LLC, an Ohio Limited Liability company (“MFB”) and all associated IP, in exchange for 1,000,000 Preferred C Shares and a 10% royalty on the gross sales before taxes of products sold under the MFB family of products. MFB has 56 patents centered around its CitroTech MFB 31 Technology for the prevention and spread of wildfires. Its core products can be used for lumber treatments for fire prevention. It has been widely tested and is currently in testing at 3 major us government agencies. When CitroTech Science is sprayed and applied it takes flammable fuels like dry native vegetation and wood and makes them noncombustible. During the third quarter of 2022 the company received EPA Safer Choice status and UL Green-Guard Gold approval on its CitroTech fire inhibitor. It continues to pursue additional accreditations such Missoula Testing approval for selling products to the government. Currently the Company’s subsidiary Mighty Fire Breaker LLC Ohio is involved in installing large home and facility Proactive Wildfire Prevention Systems.

Effective April 1, 2022, the Company implemented a plan to divest its Crypto Mining operations and focus resources on the operations of Mighty Fire Breaker LLC (“MFB”). We expanded our services by building upon its foundation of emerging technology development, by creating a Crypto-Currency mining operation (farm). Previously, the Company had 20 Bitmain Antminer SJ19 PRO 104t/h and 99 Mini-Doge 185 m/h miners deployed, which are mining, Bitcoin, Doge, and Litecoin through the F2Pool and utilized its 8,000 Sq Ft Commercial space to house these ASIC Miners.

Effective November 20, 2022, the Company. formed a UK branch of MFB, named Mighty Fire Breaker UK Limited. The new subsidiary, headquartered in the United Kingdom, will be used to direct the sales of the Mighty Fire Breaker line of products and technologies in Europe, the Middle East and Africa.

### Current operations

### Principal products, services and markets

The Company’s subsidiary MFB holds various intellectual property in the form of patents and trademarks in the fields of fire suppression, mapping and tracking of fire retardant dispersion and fire inhibition chemistry and technology. The Company and MFB have obtained multiple certification and accreditations in this industry, such as being the only EPA Safer Choice approved, long-term fire retardant, UL GreenGaurd Gold, California Bioassay water approval, LENS, and in the process of USDA approval.

The fire retardant market is forecast to be $13 billion dollars globally by 2025. MFB markets home, industrial and commercial proactive fire defense systems directly and in conjunction with large insurance companies, sells EPA products through various retailers and directly to large users such as Fire Departments and other countries.

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### Distribution methods

MFB ships directly from its Rohnert Park, California facility, can drop ship large volume orders through toll blenders and has product available at 12 regional retailers for smaller consumers.

### Status of publicly announced product or service

To date, all publicly announced orders have been shipped and delivered, including the San Diego Fire Department, Brazil, various retailers and system installers.

### Competitive business conditions and the Company’s competitive position in the industry

The fire retardant market has been status quo for many years without significant innovation. Typically, the market is regarded as having products that are not known for their environmental safety or sustainability, and are generally considered as not friendly toward humans, wildlife, fish, water, and plants. MFB’s CitroTech is the first all-green, food grade EPA approved fire retardant. MFB’s products are sold at substantial margins and can be competitive in many markets. The need for safer and sustainable chemistry should drive demand for MFB’s products.

### Sources and availability of raw materials

MFB’s products are food grade and readily available from multiple sources. Significant inventory is kept on hand at all times.

### Dependence on one or a few customers

Use of fire retardant is spread widely over multiple markets. There is little likelihood that as the popularity of a green chemistry spreads that there will be a business concentration, until USDA approval is obtained, at which point the U.S. government could be could a significant customer.

### Patents, trademarks and licenses and their duration

MFB currently holds 56 total patents and patents pending with 30 patents granted, including U.S. and international patents. The granted patents include MFB’s main chemistry and applications include technology patents. MFB has 21 trademarks and various copyrights, both in the United State and internationally. Granted patent offer up to 20 years from the application filing date infringement protection with additional continuation patents frequently filed. Plans are to file additional patents stemming from our research and development endeavors.

### Need for government approval of principal products or services.

Use of MFB’s product on government land typically requires USDA approval which MFB is in the midst of. In many case entities such as Fire Departments can request a waiver. We have already sold to customers under the waiver process. MFB’s EPA approval helps with this process.

### Effect of existing or probably government regulations on the business

MFB is ahead of the regulations that have been proposed by the U.S. government by already having EPA approval. MFB tracks all proposed regulatory changes and makes commercially reasonable efforts to comply in advance. MFB maintains an advisory board of retired high level fire officials that watch such changes for the Company. MFB also retains experienced legal counsel in this regard.

### Cost and effects of compliance with environmental laws

All expenses for the USDA application and the EPA application and subsequent approval have been paid. MFB’s products are green and EPA approved, making the only significant maintenance cost the USDA QPL approval and EPA annual testing.

### Employees

The Company currently employees, 8 people full-time and hosts several consultants, attorneys, and independent contractors that all perform tasks on behalf of the company.

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## Risk factors

As filed, 10,767 characters.

### Risks Relating to Our Business

***Our results could be materially and adversely affected by the impact of the COVID-19 pandemic.***

A pandemic similar to COVID-19 could materially and adversely impact our business, including as a result of the loss of adequate labor, whether as a result of high absenteeism or challenges in recruiting and retention or otherwise, prolonged closures, or series of temporary closures, of one or more fulfillment centers as a result of a COVID-19 type of outbreak, a government order or otherwise, or supply chain or carrier interruptions or delays. Further, a COVID-19 type pandemic could have a negative impact on economic conditions, which may adversely impact consumer demand for our products, which may have a material adverse effect on our business, financial condition, and operating results. To the extent any of these events occur, our business, financial condition, and operating results could be materially and adversely affected. The extent to which a COVID-19 type pandemic impacts our business will depend on future developments not within our control, including the duration and severity of a COVID-19 type pandemic and surges, the timing of widespread availability of a vaccine in the United States, the length of time restrictions stay in effect and for economic and operating conditions to return to pre-pandemic levels, together with resulting consumer behaviors, and numerous other uncertainties, all of which remain uncertain. The unavailability and incapacity of Mr. Ralston, Mr. Costa and Mr. Pomerantz, our executive officers and directors, due to a COVID-19 type pandemic would have a material adverse effect of our business.

***Because we have a limited operating history, it is difficult for potential investors to evaluate our business.***

Our limited operating history makes it difficult for potential investors to evaluate our business or prospective operations. Since our formation in March of 1990, we have not generated enough revenues to exceed our expenses. We acquired Mighty Fire Breaker, LLC in April 2022 and entered the fire retardant and fire suppression industry. As a result of us recently entering into these business lines, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications, and delays inherent in new business lines. Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. Our business is dependent upon the implementation of our business plan. We may not be successful in implementing such a plan and cannot guarantee that, if implemented, we will ultimately be able to attain profitability.

### We do not currently have sufficient cash flow to maintain our business.

We do not currently have enough cash flow to operate our business. Therefore, we will be dependent upon additional capital in the form of either debt or equity to continue our operations and expand our products to new markets. At present, we do not have arrangements to raise all of the needed additional capital, and we will need to identify potential investors and negotiate appropriate arrangements with them. We may not be able to arrange enough investment within the time the investment is required or that if it is arranged, that it will be on favorable terms. If we cannot get the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.

***Our management has limited experience operating a public company and is subject to the risks commonly encountered by early-stage companies.***

Although our management has experience in operating small companies, our current management has not managed expansion while being a public company. Many investors may treat us as an early-stage company. Also, our management has not overseen a company with considerable growth. Because we have a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets.

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### We depend heavily on key personnel.

We believe our success depends heavily on the continued active participation of our current executive officers. If we were to lose our executive officers’ services, the loss could have a material adverse effect on our business, financial condition, or operation results. Also, to achieve our future growth plans, we will need to recruit, hire, train, and retain other highly qualified technical and managerial personnel. Competition for qualified employees is intense, and if we cannot attract, retain and motivate these additional employees, their absence could have a materially adverse effect on our business, financial condition, or results of operations.

***Increased operating costs and obstacles to cost recovery due to the pricing and cancelation terms of our raw materials and support services contracts may constrain our ability to make a profit.***

Our profitability can be adversely affected to the extent we are faced with cost increases for raw materials, wages, other labor-related expenses, especially when we cannot recover such increased costs through increases in the prices for our products and services. In some cases, we will have to absorb any cost increases, which may adversely impact our operating results.

***Governmental regulations relating to environmental products may subject us to significant liability.***

The regulations relating to each of product segments are numerous and complex. A variety of rules and regulations at various governmental levels relating to the handling, preparation, and serving of environmental products. We cannot assure you that we are in full compliance with all applicable laws and regulations at all times or that we will be able to comply with any future laws and regulations. Furthermore, legislation and regulatory attention to environmental safety is very high. Additional or amended rules and regulations in this area may significantly increase the cost of compliance or expose us to liabilities.

If we fail to comply with applicable laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions, or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, or debarments from government contracts. The cost of compliance or the consequences of non-compliance, including debarments, could have a material adverse effect on our business and operations results. Also, governmental units may make changes in the regulatory frameworks within which we operate that may require either the Company as a whole or individual businesses to incur substantial increases in costs to comply with such laws and regulations.

***If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.***

Before we market any product, we will need to purchase significant product liability insurance. However, in the event of major claims from the use of our products, it is possible that our product liability insurance will not be sufficient to cover claims against us. We cannot assure you that we will not face liability arising out of the use of our products which is significantly in excess of the limits of our product liability insurance. In such event, if we do not have the funds or access to the funds necessary to satisfy such liability, we may be unable to continue in business.

***If our relationship with key business suppliers and distributors were to be disrupted, we could experience disruptions to our operations and cost structure.***

If critical suppliers to our business were disrupted, it would affect our ability to source necessary raw materials needed to produce our products. If our relationship with any of these key suppliers or distributors were disrupted, if it was not already arranged, we would have to source and engage alternative suppliers and distributors. This disruption could affect our operations and cost structure.

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### Risks Related to Mighty Fire Breaker

***Changes in consumer preferences or discretionary consumer spending could harm our performance.***

The success of our business depends, in part, upon the continued popularity of our concepts, and shifts in these consumer preferences could negatively affect our future profitability.

Negative publicity over certain environmental products may adversely affect demand for our products and could result in a decrease in our revenues, which could materially harm our business. Additionally, our success depends, in part, on a builder preference for our products and to an extent on numerous factors affecting operational budgeting, including economic conditions and customer confidence.

A decline in operational budgeting or economic conditions could reduce guest traffic or impose practical limits on pricing, either of which could harm our business, financial condition, operating results, or cash flow. We may be required to disclose third-party products we sell due to federal regulations, which may affect customer confidence.

### We may become subject to potential claims for product liability.

Our business could expose us to claims for personal injury from contamination of our products. We believe that our products’ quality is carefully monitored through regular product testing, but we may be subject to liability as a result of customer or distributor misuse or storage. The Company maintains product liability insurance against certain types of claims in amounts which it believes to be adequate. The Company also maintains an umbrella insurance policy that it considers to be sufficient to cover claims made above its product liability insurance limits. Although no claims have been made against the Company or its distributors to date and the Company believes its current level of insurance to be adequate for its current business operations, it is possible that such claims will arise in the future, and the Company’s policies may not be sufficient to pay for such claims.

***Increases in prices of commodities needed to manufacture our product could adversely affect profitability.***

The ingredients and materials needed to manufacture and package our products are subject to the commodities markets’ normal price fluctuations. Any increase in the price of those ingredients and materials that cannot be passed along to the consumer will adversely affect our profitability. Any prolonged or permanent increase in the cost of the raw ingredients to manufacture our products may in the long term make it more difficult for us to earn a profit.

## Cybersecurity

As filed, 161 characters.

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.

## Properties

As filed, 368 characters.

Our Company owns no real property. Our principal office is located at 2170 Allentown Rd, Lima, OH 45808 which is commercial space under on one year lease agreement at $500 per month In addition, the Company leases commercial space for retail and warehousing at 5050 Commerce Blvd., Rohnert Park, CA 90928, which is under a two year lease agreement at $5,200 per month.

## Legal proceedings

As filed, 384 characters.

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.

## Management's discussion and analysis

As filed, 14,017 characters.

*The following Management’s Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Annual Report. The Management’s Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this Annual Report.*

*We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report, except as required by U.S. federal securities laws.*

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Overview

The Company’s U.S. subsidiary, Mighty Fire Breaker LLC (“MFB”) is currently engaged in developing solutions to support the resolution of the insurance crisis in the western United States by use of it’s EPA approved CitroTech products. MFB has developed and patented addition intellectual property in this regard, such as a system for commercial properties and homes that puts fire inhibiting buffer zone around a property blocking blown in embers from igniting. The technology continues to work dry which unlike other products allows for early deployment and evacuation of people. It also has developed a job site trailer allowing for the fire protection of the property during the construction phase and the fire hardening of the inner construction and installation of our patented system during that phase. Hopefully allow the owner to get insurance to start the project. The company also is continuing its USDA approval process. It has sold products to various fire departments and continues to demonstrate market its products.

### Results of Operations

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended December 31, 2023, and 2022, which are included herein.

Our results of operations for the years ended December 31, 2023, and 2022 are summarized below:

|  | Years Ended December 31, 2023 | 2022 | Change |
| --- | ---: | ---: | ---: |
| Revenue | $520,645 | $62,732 | $457,913 |
| Operating expenses | 10,237,828 | 2,979,398 | 7,258,430 |
| Other expenses | 4,328 | 255 | 4,073 |
| Net loss from continuing operations | $(9,855,019) | $(2,918,814) | $7,847,958 |
| Income from discontinued operations | - | 13,016 | (13,016) |
| Loss on disposition of digital currency and digital currency assets | - | (2,030) | 2,030 |
| Net income from discontinued operations, net of tax | $- | $10,986 | $(10,986) |
| Net loss | $(9,855,019) | $(2,907,828) | $(6,947,191) |

#### Revenue

Our Company generated $520,645 and $67,732 revenue for the years ended December 31, 2023, and 2022, respectively. The Company’s revenue is associated with revenue from Mighty Fire Breaker, LLC (“MFB”) which was acquired in April 2022.

#### Operating Expenses

For the year ended 31, 2023, the operating expenses consisted of stock-based management compensation of $180,000, professional fees - related party of $8,640,000, professional fees of $932,352, marketing expenses of $148,289 and general and administrative expenses of $337,187, compared to management compensation of $2,100,000, professional fees of $500,875, marketing expenses of $96,553 and general and administrative of $281,970 in the year ended December 31, 2022.

During the year ended December 31, 2022, the Company recorded management compensation of $2,100,000 related to Chief Executive Officer (CEO) for 70,000,000 restricted stock awards (the holder of the restricted stock shall be entitled to vote but is not entitled to dividends or disposal).

During the year ended December 31, 2023, the Company issued 1,200,000 shares of Convertible Series C Preferred Stock to a related party for consulting services rendered to the Company from October 2021 through July 2023. The Company valued the 1,200,000 shares of Convertible Preferred Stock, as if converted to 24,000,000 shares of common stock, using the quoted stock price of the Company’s common stock at approval date (November 1, 2022), resulting in a value of $8,640,000.

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On November 1, 2022, the Company’s Board of Directors approved the issuance of 250,000 shares of common stock to each of the two independent directors for their board services in support of the Company. As of December 31, 2023, the Company has not issued the shares. During the year ended December 31,2023, the Company valued the 500,000 shares of common stock at the market value of the Company’s common stock at approval date for the amount of $180,000.

#### Other expenses

For the years ended December 31, 2023, and 2022, the other expenses consisted of interest expense of $4,328 and $255 related to convertible notes and loan payable to lenders.

#### Discontinuing Operating Income (Expenses)

During the year ended December 31, 2022, loss on discontinued operations of $2,030 was the result of a loss on disposition of the Company’s digital currency assets, including equipment and digital currency, against a note payable issued as consideration for the equipment when it was previously acquired.

During the year ended December 31, 2022, income from discontinued operations of $13,016 was the result of the net income from the operations of crypto mining and the disposition of crypto mining which the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition.

#### Net Loss

As a result of the foregoing, we incurred a net loss of $9,855,019, for the year ended December 31, 2023, compared to a net loss of $2,907,828 for the corresponding year ended December 31, 2022.

### Liquidity and Capital Resources

|  | December 31, 2023 | December 31, 2022 | Change |
| --- | ---: | ---: | ---: |
| Cash | $549,755 | $55,434 | $494,321 |
| Current Assets | $1,218,056 | $170,319 | $1,047,737 |
| Current Liabilities | $1,617,785 | $1,060,918 | $556,867 |
| Working Capital (Deficiency) | $(399,729) | $(890,599) | $490,870 |

The decrease in working capital deficiency in 2023, was primarily the result of an increases in cash of $494,321, inventory of $115,552, accounts receivable of $427,433 and prepaid expenses of $10,431 offset by an increase in due to related parties of $409,924, promissory note of $120,000, convertible note of $19,000 and current portion of operating lease liability of $40,769 and a reduce in accounts payable and accrued liabilities of $76,657.

As of December 31, 2023, and 2022, the current assets consisted of cash of $549,755 and $55,434, inventory of $230,197 and $114,645, accounts receivable of $427,433 and $0, and prepaid expenses of $10,671 and 240, respectively.

As of December 31, 2023, and 2022, the current liabilities consisted of accounts payable and accrued liabilities of $54,572 and $87.398, due to related parties of $1,309,077 and $899,153, promissory note of $120,000 and $0, convertible note of $54,000 and $35,000, and current portion of operating lease liability of $80,136 and $39,367, respectively.

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#### Cash Flows

|  | Years Ended December 31, 2023 | 2022 |
| --- | ---: | ---: |
| Cash used in operating activities | $(1,211,764) | $(708,450) |
| Cash used in investing activities | $(4,015) | $(5,349) |
| Cash provided by financing activities | $1,710,100 | $763,764 |
| Net Change in Cash | $494,321 | $49,965 |

#### Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the year ended December 31, 2023, net cash flows used in operating activities was $1,211,764, consisting of a net loss of $9,855,019, reduced by stock-based compensation of $8,966,850, non-cash lease expenses of $71,349, depreciation of $1,263 and increased by changes in operating assets and liabilities of $396,207.

For the year ended December 31, 2022, net cash flows used in operating activities were $708,450, consisting of a net loss of $2,907,828, reduced by non-cash management compensation of $2,100,000, loss on disposition of digital currency and digital currency assets of $2,029, impairment loss on digital assets of $6,125, non-cash lease expense of $44,647, depreciation of $15,862 and reduced by an increase in changes in operating assets and liabilities of $30,175.

#### Cash Flows from Investing Activities

For the years ended December 31, 2023, and 2022, the cash flows used in investing activities were $4,015 and $5,350, which was related to the purchase of equipment and reduced by $0 and $1 share capital of Mighty Fire Breaker UK Limited (MFB). respectively.

#### Cash Flows from Financing Activities

For the year ended December 31, 2023, net cash provided by financing activities was $1,710,100, consisting of $307,500 received from a related party, $907,600 from issuance Convertible Series C Preferred Stock, $500,000 from stock subscriptions, $120,000 from promissory note and repayments of $125,000 to related party.

For the year ended December 31, 2022, net cash provided by financing activities was $763,764, consisting of $784,484 received from related parties, $35,000 from convertible note and repayments of $55,720 to related party.

### Going Concern

The accompanying consolidated financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant income to date. The Company is subject to the risks and uncertainties associated with a business with no substantive revenue, as well as limitations on its operating capital resources. These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. In light of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise capital and generate revenue and profits in the future.

### Off-balance sheet arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

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### Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Our most critical accounting policies and estimates relate to the following:

- Revenue Recognition
- Incremental borrowing rate for Right of Use Assets
- Share based compensation

#### Revenue Recognition

Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally of products used for lumber products for fire prevention. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the products transfer from the Company to the customer. All of our performance obligations under the terms of contracts with our customers have an original duration of one year or less.

#### Incremental borrowing rate for Right of Use Assets

As the Company’s operating leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate. The assessment of the Company’s incremental borrowing rate involves judgment regarding the cost of borrowing funds on a collateralized basis over a similar term and in a similar economic environment.

#### Share-Based Compensation

The Company accounts for employee and non-employee stock awards under ASC 718, Compensation – Stock Compensation, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service.

## Controls and procedures

As filed, 2,659 characters.

### Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of December 31, 2023, our management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Such evaluation was carried out under the supervision of our Chief Executive Officer, who is also our Chief Financial Officer, and our third party financial service provider, PubCo Reporting. Based on this evaluation, management concluded that our disclosure controls and procedures were, and continues to be, ineffective as of December 31, 2023. Based on the foregoing, our management concluded that our internal controls over the following financial reporting areas to be material weaknesses:

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- Due to our size and stage of development, segregation of all conflicting duties may not always be possible and may not be economically feasible. During the year, we lacked sufficient review procedures and segregation of duties such that a proper review had not been performed by someone other than preparer, including manual journal entries, and that process documentation is lacking for review and monitoring controls over financial statements close process and financial reporting.
- We identified findings related to overall information technology general controls (“ITGCs”) including issues with access and segregation of duties for systems supporting the Company’s internal control processes and controls.

### Changes in Internal Controls over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting. Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and are committed to taking further action and implementing additional improvements as necessary.

Filed Apr 15, 2024.
Source: SEC EDGAR, the filing index for accession 0001640334-24-000667. Last ingested by Listed: Oct 26, 2026, 16:31 ET. No prices; not investment advice.