CitroTech Inc.
For the period ended Mar 31, 2025. Filed May 20, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 20, 2025
CITR$2.47+5.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-18.
0001640334-24-001748
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-20.
0001640334-25-000913
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 94 current paragraphs.
31 unchanged; 23 reworded; 38 added; 36 removed; 8 previous and 2 current paragraphs rearranged.
Tables are not compared: 10 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
General Enterprise Ventures, Inc., was originally incorporated under the laws of the State of Nevada on March 14, 1990. When used in these notes, the terms “GEVI,” “Company,” “we,” “us” and “our” mean General Enterprise Ventures, Inc. and all entities included in our unaudited consolidated financial statements.
Current report
In January 2021, Board of Directors of the Company approved redomiciling the Company in Delaware. On March 31, 2021, the Company formed General Entertainment Ventures, Inc. in Delaware as a wholly owned subsidiary of the Company (“GEVI”). 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.
Current report
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.
Current report
Corporate Changes
Current report
On April 13, 2022, the Company, Mighty Fire Breaker, LLC, an Ohio limited liability company (“MFB Ohio”), Mighty Fire Breaker, LLC, a California limited liability company (“MFB California”) and Mr. Steven Conboy, the sole member of MFB California, entered into a Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company (i) acquired all membership interests of MFB California, (ii) acquired all intellectual property owned by MFB California and Mr. Conboy, (iii) issued 166,667 shares of Series C Convertible Preferred Stock, par value of $0.0001 per share of the Company (“Series C Convertible Preferred Stock”), valued at $4,200,000 at closing to Mr. Conboy and (iv) agreed to provide a 10% royalty to Mr. Conboy on gross sales before taxes of the MFB Ohio product.
Current report
Effective June 25, 2024, the Company formed and organized a wholly owned subsidiary, GEVI Insurance Holdings Inc., an Ohio corporation (“GEVI Insurance”), to enter the wildfire insurance markets utilizing the Company’s flame retardant and flame suppression product. Effective February 21, 2025, the Company formed MFB Insurance Company, Inc., a Hawaii corporation and organized it as a wholly owned subsidiary of GEVI Insurance to act as a captive insurance company to enter the wildfire insurance market.
Current report
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 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.
Current report
Our revenues consisted of the following:
Current report
Product installation services commenced in the second quarter of 2024.
Current report
Our revenues from significant customers for the three months ended March 31, 2025 and 2024, are as follows:
Current report
The increase in operating expenses was primarily attributed to increases in cost of revenue and payroll and management compensation.
Current report
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.
Current report
Amortization and depreciation
Current report
Amortization and depreciation expenses are an amortization of patents and a depreciation of vehicle, and furniture and equipment.
Current report
The professional fees during the three months ended March 31, 2025, primarily included stock-based compensation of $2.1 million to a related party consultant (TC Special Investments, LLC (“TCSI”)) and various professional fee for accounting and audit related to SEC filing, legal on patents and other consulting services in 2025. The professional fees during the three months ended March 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.
Current report
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.
Current report
Payroll and management compensation
Current report
During the three months ended March 31, 2025, management compensation primality included stock-based management compensation of $410,000 to a management of subsidiary and cash payments of $142,000 to our former CEO, and payroll to our employees of $76,203.
Current report
During the three months ended March 31, 2024, management compensation primality included cash payment of $25,000 to our former CEO.
Current report
Operating Activities
Current report
Investing Activities
Current report
Financing Activities
Current report
The basic terms of the convertible promissory notes issued in 2025 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 5,093,750 shares at an exercise price of $0.50.
Current report
Convertible notes
Current report
In third and fourth quarter 2024 and first quarter 2025, the Company entered into thirty-one (31) subscription agreements for convertible notes ($3,371,000) and warrants (4,213,750 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.
Current report
Convertible notes – related party
Current report
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.
Current report
In February 2025, the Company entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (2,500,000 shares of common stock) with a related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $0.50 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $0.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, related party G could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio.
Current report
Critical Accounting Estimates
Current report
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 Unaudited Consolidated Financial Statements.
Current report
Fair Value of Convertible Notes
Current report
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.
Current report
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.
Current report
Fair Value of Warrant to Purchase Common Stock
Current report
The Company has issued warrants to investors in our debt offerings.
Current report
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.
Current report
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.
Current report
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.
Removed paragraphs (36)
Previous report
General Enterprise Ventures, Inc., (“GEVI,” “we,” “us,” or the “Company”) was originally incorporated in Nevada on March 14, 1990. Our principal executive offices are located at 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009.
Previous report
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”) in connection with the flame retardant and flame suppression segments of the environmental industry, including patents and patents pending. On April 13, 2022, the transaction between the Company, MFB Ohio and MFB California closed. The transaction consideration to the equity holders of MFB California was 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.
Previous report
Steve 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.
Previous report
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 its CitroTech MFB 31 Technology™. Since MFB Ohio acquired the MFB California portfolio of intellectual property, Company management has continued to develop many formulations to achieve the vision. In addition, the Company has been recognized and certified for their achievement. These recognitions and achievements, including twice receiving the EPA Safer Choice award and being the first and only EPA certified fire retardant, UL Certification, GreenGaurd Gold for no VOCs, other accreditations, and adoption by departments throughout the State of California.
Previous report
Our management is comprised of one individual, Joshua Ralston, who is our President, Chief Executive officer, Chief Financial Officer and Chairman of the Board of Directors..** **
Previous report
The decrease in operating expenses was primarily due to decreases in professional fee of $8.7 million and management compensation offset by increases in general and administration expense and management compensation.
Previous report
The increase in professional fees during the three months ended September 30, 2024, over September 30, 2023, is primarily due to stock-base management compensation of $8.6 million. The Company issued 1,200,000 shares of Preferred C stock, for professional fees to a related party consultant, which is valued as if they are fully converted to 24 million shares of common stock on issuance, and based on closing stock prices resulted in an accounting valuation of $8,640,000.
Previous report
Revenue
Previous report
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. During the nine months ended September 30, 2024, the revenue increased $480,000 over the nine months ended September 30, 2023, due to MFB Ohio’s EPA approval and the filing of additional patents. With the EPA approval, MFB Ohio started the marketing phase of the company’s evolution. MFB Ohio started selling directly to fire departments and launched its proactive wild-fire defense systems and is gaining momentum with commercial customers, along with attempting to influence the insurance industry to the benefit of consumers.
Previous report
Operating Expenses
Previous report
The decrease in operating expenses was primarily attributed to decreases in profession fees of $6.1 million, management compensation of $180,000 offset by increases in cost of revenue of $170,000, advertising and marketing of $472,000 and general and administrative expenses of $295,000.
Previous report
Cost of revenue
Previous report
General and administrative
Previous report
Advertising and marketing
Previous report
The increase in advertising and marketing during the nine months ended September 30, 2024, over September 30, 2023, is primarily due to stock-based compensation for services of $160,000 and increased expenses to support revenue growth.
Previous report
Professional fees
Previous report
The decrease in professional fees during the nine months ended September 30, 2024, over September 30, 2023, is primarily due to stock-base management compensation of $1.4 million and stock-based services compensation of $1.2 million in 2024 over stock-base management compensation of $8.6 million in 2023.
Previous report
Other Expenses
Previous report
Net loss
Previous report
The net loss for the nine months ended September 30, 2024, decreased by $4.8 million as compared to the nine months ended September 30, 2023 primarily due to the decrease in operating expenses, primarily from stock-based professional fees.
Previous report
2024 versus 2023
Previous report
Cash Flows from Operating Activities
Previous report
Cash Flows from Investing Activities
Previous report
Cash Flows from Financing Activities
Previous report
Future Capital Requirements
Previous report
Our current available cash and cash equivalents are insufficient to satisfy our liquidity requirements. Our capital requirements for the fiscal year ending December 31, 2024, will depend on numerous factors, including management’s evaluation of the timing of projects to pursue. Subject to our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through possible joint ventures or partnerships), we expect to incur substantial expenditures to carry out our business plan, as well as costs associated with our capital raising efforts and being a public company.
Previous report
Our plans to finance our operations include seeking equity and debt financing, alliances or other partnership agreements, or other business transactions that would generate sufficient resources to ensure the continuation of our operations.
Previous report
The sale of additional equity or debt securities may result in further dilution to our stockholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our Common Stock and could contain covenants that would restrict our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities and limit our operations, which could have a material adverse effect on our business, financial condition, and operations results.
Previous report
Critical Accounting Policies
Previous report
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.
Previous report
Revenue Recognition
Previous report
Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally of product used for lumber product for fire prevention. 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. All of our performance obligations under the terms of contracts with our customers have an original duration of one year or less.
Previous report
Incremental borrowing rate for Right of Use Assets
Previous report
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.
Previous report
Share-Based Compensation
Previous report
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.
Reworded paragraphs (23)
Previous wording
Our audited financial statements are stated in United States Dollars (USD) and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Current wording
Our unaudited financial statements are stated in United States Dollars (USD) and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Previous wording
The following summary of our results of operations should be read in conjunction with our unaudited interim financial statements for the three and nine months ended September 30, 2024 and 2023, which are included herein.
Current wording
The following summary of our results of operations should be read in conjunction with our unaudited interim financial statements for the three months ended March 31, 2025 and 2024, which are included herein.
Previous wording
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. Although overall, the Company’s revenue has increased year to date, during the three months ended September 30, 2024, revenue decreased $68,000 over the three months ended September 30, 2023, due to decreased wildfire activity associated with cooler temperatures during the summer months of July 2024 and August 2024.
Current wording
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. During the three months ended March 31, 2025, the revenue increased $536,000 from the three months ended March 31, 2024, largely due to the adoption of our technology by the marketplace, including the sale of homebased wildfire defense systems, commercial and fire department chemical sales, and directly spraying residential properties due to the wildfire concerns.
Previous wording
During the nine months ended September 30, 2024, the cost of revenue increased over the nine months ended September 30, 2023, primarily due to an increase in cost of inventory and royalty and sales commissions.
Current wording
During the three months ended March 31, 2025, the cost of revenue increased over the three months ended March 31, 2024, primarily due to an increase in cost of inventory and royalty and sales commissions.
Previous wording
Cost of inventory consists of the sales of product, related supplies and direct testing our CitroTechproduct and various components required to for installation of Mighty Fire Breaker proactive wildfire defense systems. Cost of inventory increased during the three months ended September 30, 2024, primarily due to an increase in product sales and supplies and royalty and commission, from increased sales.
Current wording
Cost of inventory consists of product costs, related supplies and direct testing of our CitroTech product and various components required to for installation of Mighty Fire Breaker proactive wildfire defense systems. Cost of inventory increased during the three months ended March 31, 2025, primarily due to an increase in product sales and supplies from increased sales.
Previous wording
Freight and shipping relate to product shipped to customers.
Current wording
Freight and shipping relate to costs for shipping products to customers.
Previous wording
Royality and sales commissions increased in the nine months ended September 30, 2024 from more revenue. The Company recognizes an allocated portion of consulting and direct labor costs associated with our revenue.
Current wording
Royalty and sales commissions increased in the three months ended March 31, 2025 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. In March 2025, the Company entered int new contract and there is no longer royalty.
Previous wording
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the three months ended September 30, 2024, the Company incurred increased expenditures on their website and IT development and travel as well as general office and insurance expenses from expansion of operations.
Current wording
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the three months ended March 31, 2025, 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.
Previous wording
The increase in advertising and marketing during the three months ended September 30, 2024, over September 30, 2023, is primarily due to increased marketing expenses to support revenue growth.
Current wording
The increase in advertising and marketing during the three months ended March 31, 2025, over the three months ended March 31, 2024, is primarily due to an increase in expenses to support revenue growth.
Previous wording
For the three months ended September 30, 2024 and 2023, the other expenses consisted of $93,875 and $1,760 interest related to convertible notes payable, respectively.
Current wording
For the three months ended March 31, 2025 and 2024, the other expenses consisted of $473,000 and $1,000 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 $805,000 and $0, respectively, financing expense of $6.2 million and $0, respectively, and loss on settlement of notes payable and convertible note issued in 2022 of $0 and $882,000, respectively. Financing expense is 4 million warrants granted to a financial advisor in 2025.
Previous wording
The net loss for the three months ended September 30, 2024, decreased by $8.6 million as compared to the three months ended September 30, 2023 primarily due to the decrease in operating expenses, primarily stock based professional fees.
Current wording
The net loss for the three months ended March 31, 2025, increased by approximately $7.4 million as compared to the three months ended March 31, 2024 primarily due to the increase in operating expenses and other expense offset by the increase in revenue.
Previous wording
Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was $0.9 million and $10.1 million for the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. During July and August 2024, we completed a debt offering which generated net proceeds of $1.1 million, of which $0.75 million was advanced on or before June 30, 2024.
Current wording
Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was $10.9 million and $3.5 million for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, we completed a debt offering and an equity offering which generated net proceeds of approximately $3.7 million and $0.3 million respectively.
Previous wording
As of September 30, 2024 and December 31, 2023, the current assets consisted of cash of $309,000 and $550,000, inventory of $271,000 and $230,000, accounts receivable of $430,000 and $427,000, prepaid expenses of $43,000 and $11,000, and deferred offering costs of $57,000 and $0, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, the current assets consisted of cash of $3.7 million and $775,000, respectively, inventory of $312,000 and $325,000, respectively accounts receivable of $746,000 and $317,000, respectively, prepaid expenses and other current assets of $61,000 and $74,000, respectively, and deferred offering costs of $149,000 and $126,000, respectively.
Previous wording
As of September 30, 2024 and December 31, 2023, the current liabilities consisted of accounts payable and accrued liabilities of $154,000 and $55,000, due to related parties of $1.3 million and $1.3 million, convertible notes of $633,000 and $54,000, and current portion of operating lease liability of $71,000 and $80,000, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, the current liabilities consisted of accounts payable and accrued liabilities of $530,000 and $187,000, respectively, convertible notes net of discount of $542,000 and $196,000, respectively, convertible note – related parties of $783,000 and $577,000, respectively, accrued interest – related parties of $31,000 and $0, respectively financing loan of $0 and $97,000, respectively, derivative liability of $2.9 million and $1.1 million, respectively, and current portion of operating lease liability of $29,000 and $50,000, respectively.
Previous wording
The increase in working capital deficiency in 2024 was primarily the result of advances for 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.
Current wording
The increase in working capital in 2025 was primarily due to an increase in cash and accounts receivable offset by an increase in the convertible notes and derivative liability related to convertible notes. The Company had net loss and negative cash flows from our operations. In 2025, the Company generated funds from more debt financing than equity financing, however, the carrying value of convertible notes included of unamortized debt discount of $4.6 million. Considering this unamortized discount, the Company still had capital deficiency of $4.6 million as of March 31, 2025.
Previous wording
For the nine months ended September 30, 2023, net cash flows used in operating activities consisted of a net loss of $9.9 million, reduced by stock-based compensation of $9.0 million, amortization and depreciation of $186,000, non-cash lease expenses of $52,000 and reduced by net changes in operating assets and liabilities of $107,000.
Current wording
For the three months ended March 31, 2025, net cash flows used in operating activities consisted of a net loss of $10.9 million, reduced by stock-based compensation of $2.8 million, financing expense of $6.2 million, non-cash lease expenses of $21,000, amortization and depreciation of $75,000, amortization of debt discount of $377,000, and changes in derivative liability of $805,000, which were increased by net changes in operating assets and liabilities of $24,000.
Previous wording
For the nine months ended September 30, 2024, net cash flows used in operating activities consisted of a net loss of $5.1 million, reduced by stock-based compensation of $2.6 million , non-cash lease expenses of $60,000, amortization and depreciation of $190,000, loss on settlement of debt of $882,000 and increased by net changes in operating assets and liabilities of $1.
Current wording
For the three months ended March 31, 2024, net cash flows used in operating activities consisted of a net loss of $3.5 million, reduced by stock-based compensation of $1.7 million, non-cash lease expenses of $20,000, amortization and depreciation of $64,000, loss on settlement of debt of $882,000 and increased by net changes in operating assets and liabilities of $188,000.
Previous wording
For the nine months ended September 30, 2023, the cash flows used in investing activities were $2,231, which was related to the purchase of equipment.
Current wording
For the three months ended March 31, 2025, the cash flows used in investing activities were $27,000, which was related to the purchase of equipment.
Previous wording
The Company did not use any funds for investing activities during the nine months ended September 30, 2024.
Current wording
The Company did not use any funds for investing activities during the three months ended March 31, 2024.
Previous wording
For the nine months ended September 30, 2024, net cash provided by financing activities consisted of $165,000 proceed from issuance Series C Preferred Stock, $1.0 million from convertible promissory notes and warrants, $57,000 deferred offering cost payment and $60,000 repayment of loan - related party.
Current wording
For the three months ended March 31, 2025, net cash provided by financing activities consisted of $260,000 proceeds from the issuance of Series C Convertible Preferred Stock, $3.7 million from the issuance of convertible promissory notes and associated warrants, $23,000 deferred offering cost payment, and repayment of a financing loan of $216,000.
Previous wording
For the nine months ended September 30, 2023, net cash provided by financing activities consisted of $305,000 received from a related party, $907,600 from preferred stock subscriptions and $120,000 from promissory note.
Current wording
For the three months ended March 31, 2024, net cash provided by financing activities consisted of $165,000 proceed from issuance Series C Preferred Stock.
Previous wording
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.
Current wording
The accompanying unaudited 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.
Previous wording
Our most critical accounting policies and estimates relate to the following:
Current wording
Our unaudited 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 unaudited consolidated financial statements and accompanying notes. We believe our most critical accounting estimates relate to the following:
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The following summary of our results of operations should be read in conjunction with our audited financial statements for the three months ended March 31, 2025 and 2024, which are included herein.
Current report — wording carried from elsewhere
For the three months ended March 31, 2025 and 2024
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
During the three months ended September 30, 2024, the cost of revenue slightly increased over the three months ended September 30, 2023, primarily due to an increase in cost of inventory.
Previous report — wording carried elsewhere
Royality and sales commissions decreased during the three months ended September 30, 2024 due to a decrease in revenue. The Company recognizes an allocated portion of consulting and direct labor costs associated with our revenue.
Previous report — wording carried elsewhere
Our results of operations for the nine months ended September 30, 2024 and 2023 are summarized below:
Previous report — wording carried elsewhere
Cost of inventory consists of the sales of product, related supplies and direct testing our CitroTech product and various components required to for installation of Mighty Firebreaker proactive wildfire defense systems. Cost of inventory increased during the nine months ended September 30, 2024, primarily due to an increase in product sales and supplies and royalty and commission, from increased sales.
Previous report — wording carried elsewhere
Consulting and advisory services are to a related party company for services related to product installations.
Previous report — wording carried elsewhere
Freight and shipping relate to product shipped to customers.
Previous report — wording carried elsewhere
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the nine months ended September 30, 2024, the Company incurred increased expenditures on their website and IT development and travel as well as general office and insurance expenses from expansion of operations.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, the other expenses consisted of $94,760 and $2,519 interest related to convertible notes payable and loss on settlement of debt of $882,279 and $0, respectively.