CitroTech Inc.
For the period ended Dec 31, 2025. Filed Mar 30, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 30, 2026
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-K
Period ended 2024-12-31; filed 2025-03-31.
0001640334-25-000558
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-30.
0001683168-26-002356
Item 7. 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 93 previous paragraphs and 102 current paragraphs.
50 unchanged; 27 reworded; 23 added; 15 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 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 (23)
Current report
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Current report
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See the section titled “Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this Annual Report.
Current report
We are a specialty chemical company that manufactures environmentally sustainable fire inhibitors and fire retardants as well as home systems for their deployment. Management is highly experienced at building and running companies, as well as commercializing and executing on strategic partnerships for the sale of products and services.
Current report
Since MFB Ohio acquired the MFB portfolio of intellectual property on April 13, 2022, our management team has continued to develop and refine our product formulations. The Company has received significant third-party recognition for these efforts, including twice receiving the EPA Safer Choice designation, being the first and only fire inhibitor recognized by the EPA as safe for the environment, and receiving UL GREENGUARD Gold certification, which reflects minimal impact on indoor air quality from toxic smoke over extended exposure. Our products have been adopted by fire departments throughout the State of California.
Current report
We are expanding our patent portfolio and technology platform into additional markets that can benefit from environmentally safe alternatives to legacy fire retardant and fire retardant-treated wood products. CitroTech has developed wood coating products utilizing this technology and is in the initial phases of commercialization.
Current report
The Company is also actively deploying proactive wildfire defense systems on residential and commercial properties under the CitroSafe Systems brand. CitroSafe Systems are self-contained sprinkler installations that utilize our patented CitroTech product and are deployed in advance of wildfires to reduce structural risk. This offering addresses a significant and growing insurance market disruption across eleven western states, where carriers have curtailed or declined to write wildfire coverage on new construction and existing policies in the Wildland-Urban Interface, the transitional zone between undeveloped land and built environments that is at elevated risk of catastrophic wildfire loss. The Company is working with a large insurance broker to offer insurance coverage to customers who install a CitroSafe proactive wildfire system, with policies underwritten by established insurance carriers. This program is currently in the proof-of-concept phase.
Current report
Our management team consists of five individuals: Wesley J. Bolsen, Chief Executive Officer; Andrew Hotsko, Chief Operating Officer; Nanuk Warman, Secretary and Chief Financial Officer; Steve Conboy, Chief Technical Officer and Anthony Newton, General Counsel.
Current report
Results of Operations
Current report
Our revenue is associated with revenue from Mighty Fire Breaker LLC (“MFB Ohio”) which acquired intellectual property to fire suppression in April 2022. During the year ended December 31, 2025, revenue increased $1.6 million, or 195%, over the year ended December 31, 2024. This growth was driven by broader market adoption of our CitroTech product line, including sales of residential CitroSafe systems, commercial and fire department specialty chemical sales into municipalities such as San Diego, and direct spray application services for residential properties in response to heightened wildfire concerns following the January 2025 Los Angeles wildfires. Notably, customer concentration improved significantly, with no single customer representing more than 10% of revenue in 2025 compared to four customers exceeding that threshold in 2024, and our top five customers declining from 79.5% to 32.0% of total revenue. This diversification reflects our transition from early-stage project-based sales toward broader market penetration.
Current report
Product installation services commenced in the second quarter of 2024.
Current report
We do not have major sales from recurring customers for the years ended December 31, 2025 and 2024.
Current report
Rent expenses are warehouse and facility rent expenses. The increase in rent expense is primarily attributable to our relocation to a larger commercial facility for operations, warehousing, and customer-facing activities beginning in April 2025, along with the cancellation of a prior warehouse lease in May 2025.
Current report
Payroll and management compensation
Current report
During the year ended December 31, 2025, management compensation increased to $9.9 million from $75,000 in the prior year. This increase was primarily attributable to the buildout of a full executive management team during 2025, including the appointment of a Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel. Compensation primarily included stock-based management compensation of $7.8 million, cash payments of $1.3 million to management, and payroll to employees of $745,000. The significant increase in stock-based compensation reflects the transition from a single-executive structure in 2024, when management compensation consisted solely of a $75,000 cash payment to our former CEO, to a fully staffed leadership team necessary to support our growth and commercialization objectives.
Current report
Research and development costs
Current report
We continue to invest heavily in the testing and certifications of CitroTech treated products as well as in advance of submitting formulas for approval to apply product onto federal lands. We expect to continue growing R&D spend over historical spend as we add additional product lines and invests in the future of the company.
Current report
The increase in working capital in 2025 was primarily due to an increase in cash from equity and debt offering offset by an increase in convertible notes.
Current report
Subsequent to December 31, 2025 and through the date of this annual report, the note holders have converted all of their notes into shares of common stock.
Current report
We had a financing loan for the purchase of vehicle in September 2025. The loan repayment is $2,021 per month for 60 months, beginning October 2025, with an interest rate of 11.33%.
Current report
We had a financing loan for the purchase of vehicle in September 2025. The loan repayment is $2,083 per month for 48 months, beginning October 2025, with an interest rate of 11.90%.
Current report
Liquidity
Current report
We have incurred losses since inception and incurred a net loss of $36.8 million during the year ended December 31, 2025. However, in September 2025, we completed an equity offering which generated net proceeds of $5.4 million. Additionally, in October 2025, we completed an equity offering which generated net proceeds of $2.7 million.
Current report
Our existing cash resources are expected to provide sufficient funds to carry out our planned operations through fiscal year 2026. To more rapidly grow, our revenue and continue operations beyond such time frame, we may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. We have had multiple conversations with banks who are willing to assist us with additional capital raises if necessary, which helps to minimize the risk. There can be no assurance that we will be successful in acquiring additional funding, that our projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
Removed paragraphs (15)
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
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 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.
Previous 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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
Year ended December 31,
Previous report
Going Concern
Previous report
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.
Previous report
Future Capital Requirements
Previous report
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.
Reworded paragraphs (27)
Previous wording
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.
Current wording
We believe that fire safety benefits from several growth drivers, including increasing fire severity, as measured by higher acres burned, longer fire seasons and a growing urban component moving into the Wildland Urban Interface (WUI), resulting in a need for higher quantity of specialty chemical fire inhibitors, thereby increasing production. We believe these trends are prevalent in North America, as well as globally, and we expect these trends to continue driving growth in demand for fire retardants and fire-retardant-treated lumber products.
Previous wording
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.
Current wording
We are working to grow our fire prevention and protection business, which is primarily focused on expanding use of ground-applications for long-term fire retardants. This growth includes use of ground assets in response to active fires (protection), as well as proactive treatments around critical infrastructure and known high-risk areas (prevention). Fire prevention products can be used to help prevent fire ignitions and protect property from potential fire danger by providing proactive retardant treatment in high-risk areas such as along roadsides, under power lines, along railroad rights-of-way, and around residential neighborhoods and commercial infrastructure. Treating these areas ahead of the fire season can help to prevent ignitions from equipment failures or sparks until a significant rainfall occurs. Although there is no certainty in wildfire defense, when our CitroSafe system is installed, we fill it with our CitroTech product. Thereafter, we will conduct an annual inspection of the system to help ensure it is ready to help defend against a wildfire. While there is no specific useful life for our product, if the system has not been deployed since the third anniversary of the initial installation, or three years following an annual inspection, in an abundance of caution we will remove and replace the CitroTech. In addition, we suggest spraying CitroTech in areas surrounding the property that pose the greatest risk to help reduce the risk posed by dry vegetation, decks, garden bark, and fences.
Previous wording
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.
Current wording
We have invested and intend to continue investing in the expansion of our fire retardant and lumber treatment business through product development and business development to grow our customer base.
Previous wording
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.
Current wording
Our business is highly dependent on the needs of commercial entities, residential homeowners and fire departments to prevent fires and protect assets, as well as the use and expansion of Class A Fire Retardant Treated lumber and wood products. As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Typically, sales of our product is higher during the summer months in the United States of America due to weather patterns that are generally correlated to a higher prevalence of wildfires. We believe orders will generally peak during the summer months, but with expanded fire seasons in the United States, ignitions may start in the late Spring and continue through late Fall of calendar year 2026.
Previous wording
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.
Current wording
We are developing and commercializing our product lines. We have been focused historically on obtaining patents and various accreditations. To date, we do not have a large customer base, having relied heavily on a few customers, for the commercialization and testing of our CitroTech product and delivery system. We currently do not have an established retail product line nor recurring significant customer base. Therefore, period over period comparisons of our results of operations are not indicative of future results.
Previous wording
Our revenues from significant customers for the year ended December 31, 2024 and 2023, are as follows:
Current wording
Our revenues from significant customers for the years ended December 31, 2025 and 2024, are as follows:
Previous wording
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.
Current wording
The increase in operating expenses was primarily attributed to increases in cost of revenue and payroll and management compensation.
Previous wording
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.
Current wording
During the year ended December 31, 2025, the cost of revenue increased over the year ended December 31, 2024, primarily due to an increase in cost of inventory and rent.
Previous wording
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.
Current wording
Cost of inventory consists of product costs, direct labor, related supplies and direct testing of our CitroTech product and various components required for installation of CitroSafe(TM) systems. Cost of inventory increased during the year ended December 31, 2025, primarily due to an increase in product sales and supplies from increased sales.
Previous wording
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.
Current wording
Royalty and sales commissions increased in the year ended December 31, 2025, from more revenue. We recognized an allocated portion of consulting and direct labor costs associated with our revenue as royalty and sales cost of revenue in 2024 and during the first quarter of 2025. In March 2025, we entered into a new contract and there is no longer consulting and advisory royalty.
Previous wording
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.
Current wording
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the year ended December 31, 2025, we incurred increased expenditures on consulting and payroll fees, bad debt expenses, our website and IT development and travel as well as general office and insurance expenses from expansion of operations.
Previous wording
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.
Current wording
The decrease in advertising and marketing during the year ended December 31, 2025, over the year ended December 31, 2024, is primarily due to 83,333 shares of Series C Convertible Preferred Stock, valued at $500,000 for a NASCAR sponsorship in 2024. Other than this NASCAR expense, the advertising and marketing increased to support revenue growth.
Previous wording
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.
Current wording
The professional fees during the year ended December 31, 2025, primarily included stock-based compensation to consultants of $2.6 million, of which $2.1 million was to a related party consultant (TC Special Investments, LLC (“TCSI”)), and various professional fees for accounting and audit related to SEC filings, legal on patents and other consulting services in 2025. The professional fees during the year ended December 31, 2024, primarily included stock-based management compensation of $1.4 million to advisors to our subsidiary MFB and stock-based compensation of $1.0 million to various consultants for IT service for software development, legal related to patents and other consulting services in 2024.
Previous wording
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 wording
TCSI’s consulting services to us include sales and business development, customer relationship management, strategy optimization, investor relations, underwriter interface, coordinating outside counsel and other business aspects at the request of the Board of Directors. In addition to TCSI, stock-based compensation was remitted to certain individuals with fire retardant and industry experience, who provided guidance and insight to our management and Board of Directors with respect to the fire retardant and fire inhibitor industry, business development connections, and oversight during the testing and recognition processes.
Previous wording
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.
Current wording
For the years ended December 31, 2025 and 2024, the other expenses consisted of interest expense related to convertible notes payable issued in 2025 and 2024 of $2.8 million and convertible notes payable issued in 2024 of $258,000, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $2.0 million and $410,000, respectively, financing expense of $8.7 million and $0, respectively, and loss on settlement of debt of $6.8 million and $909,000, respectively. Settlement of debt in 2025 is the conversion of convertible notes issued in 2024 and 2025. The settlement of debt in 2024 is settlement of notes payable and convertible note issued in 2022. Financing expense is from 4 million warrants granted to a financial advisor and 69,007 shares of Series C Convertible Preferred stock issued to a Series A Preferred shareholder in 2025.
Previous wording
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.
Current wording
The net loss for the year ended December 31, 2025, increased by approximately $30.0 million as compared to the year ended December 31, 2024 primarily due to the increase in operating expenses and other expense offset by the increase in revenue.
Previous wording
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.
Current wording
Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was $36.8 and $6.9 million for the years ended December 31, 2025 and 2024, respectively. During fiscal year 2025, we completed a debt offering in February and an equity offering in September and October which generated net proceeds of approximately $3.7 million and $8.1 million, respectively.
Previous wording
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.
Current wording
As of December 31, 2025 and 2024, the current assets consisted of cash of $6.3 million and $775,000, respectively, inventory of $621,000 and $325,000, respectively, accounts receivable of $209,000 and $317,000, respectively, prepaid expenses and other current assets of $317,000 and $74,000, respectively, and deferred offering costs of $0 and $126,000, respectively.
Previous wording
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.
Current wording
As of December 31, 2025 and 2024, the current liabilities consisted of accounts payable and accrued liabilities of $316,000 and $187,000, respectively, due to related parties of $168,000 and $0, respectively, convertible notes net of discount of $219,000 and $196,000, respectively, convertible note – related party of $1.3 million and $577,000, respectively, current portion of financing loan of $30,000 and $97,000, respectively, derivative liability of $0 and $1.1 million, respectively, and current portion of operating lease liability of $148,000 and $50,000, respectively.
Previous wording
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.
Current wording
For the year ended December 31, 2025, net cash flows used in operating activities consisted of a net loss of $36.8 million, reduced by stock-based compensation of $19.1 million, non-cash lease expenses of $161,000, amortization and depreciation of $329,000, bad debt expense of $346,000, amortization of debt discount of $2.4 million, loss on settlement of debt of $6.8 million, write-off of deferred offering costs of $197,000 and changes in derivative liability of $2.0 million, and increased by net changes in operating assets and liabilities of $464,000.
Previous wording
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.
Current wording
For the year ended December 31, 2025, the cash flows used in investing activities consisted of the purchase of property and equipment of $194,000 and acquisition of intangible assets of $100,000.
Previous wording
The Company did not use any funds for investing activities during the year ended December 31, 2024.
Current wording
We did not use any funds for investing activities during the year ended December 31, 2024.
Previous wording
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.
Current wording
For the year ended December 31, 2024, net cash provided by financing activities consisted of $1.8 million in proceeds from the issuance of Series C Convertible Preferred Stock, $1.2 million from the issuance of convertible promissory notes and associated warrants in fourth quarter of 2024, $2,000 received from a related party, $126,000 deferred offering cost payment, repayment of a financing loan of $23,000, and $741,000 from a repayment of loan from a related party.
Previous wording
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. .
Current wording
In first quarter 2025, we entered into eleven (11) subscription agreements for convertible notes ($2,075,000) and warrants (432,296 shares of common stock). The material terms of this convertible note indebtedness are, (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, either (x) divided by 2.40 or (y) a 30% discount to the sale price of its Common Stock pursuant to a registration statement filed with the SEC and listing of the Common Stock on national securities exchange; and (iv) warrant coverage for five years at the rate of 1.25 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
Previous wording
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 wording
In February 2025, we entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. Our obligations under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, the related party could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns our intellectual property portfolio.
Previous wording
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:
Current wording
We have one lease classified as an operating lease for an office and warehouse purpose. The following table outlines maturities of our lease liabilities as of December 31, 2025:
Previous wording
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.
Current wording
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. In consultation with its legal counsel as appropriate, our management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluate the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is likely, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
For the years ended December 31, 2025 and 2024
Current report — wording carried from elsewhere
For the year ended December 31, 2025, net cash provided by financing activities consisted of $8.3 million from the issuance of Series C Convertible Preferred Stock and warrants, $3.7 million from the issuance of convertible promissory notes and associated warrants, $71,000 deferred offering cost payment, repayment of a financing loan of $265,000 and repayments to related party of $25,000.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the year ended December 31, 2024 and 2023