CitroTech Inc. 10-Q

Item 1. Financial Statements General Enterprise Ventures, Inc. Consolidated Balance Sheets (Unaudited) March 31, December 31, 2023 2022 Assets Current Assets Cash $ 63,529 $ 55,434 Prepaid expenses 6,540 240 Inventory 102,268 114,645 Total Current Assets 172,337 170,319 Intangible assets 4,195,353 4,195,353 Operating lease right-of-use asset 24,773 39,367 Equipment, net 4,283 4,547 Total Assets $ 4,396,746 $ 4,409,586 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ 121,861 $ 87,398 Convertible note payable 35,000 35,000 Due to related party 1,133,205 899,153 Operating lease liability - current portion 24,773 39,367 Total Current Liabilities 1,314,839 1,060,918 Total Liabilities 1,314,839 1,060,918 Stockholders' Equity Convertible Series A Preferred Stock, par value $ 0.001 , authorized 10,000,000 shares, 10,000,000 shares issued and outstanding 10,000 10,000 Convertible Series C Preferred Stock, par value $ 0.001 , authorized 5,000,000 shares, 950,000 issued and outstanding, respectively 950 950 Common Stock par value $ 0.001 , authorized 1,000,000,000 shares, 94,245,388 and 93,945,388 shares issued and outstanding, respectively 94,245 93,945 Additional paid-in capital 62,711,723 62,625,173 Accumulated deficit ( 59,735,011 ) ( 59,381,400 ) Total Stockholders' Equity 3,081,907 3,348,668 Total Liabilities and Stockholders' Equity $ 4,396,746 $ 4,409,586 See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 3 Table of Contents General Enterprise Ventures, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2023 2022 Revenue $ 55,595 $ - Cost of revenue 13,854 - Gross Profit 41,741 - Operating Expenses General and administration 99,784 2,595 Depreciation 264 - Professional fees 295,129 40,171 Total operating expenses 395,177 42,766 Loss from Operations ( 353,436 ) ( 42,766 ) Other Income (Expense) Interest expense ( 175 ) - Total other expense ( 175 ) - Loss from continuing operations $ ( 353,611 ) $ ( 42,766 ) Discontinued operations: Income from discontinued operations $ - $ 13,016 Income from discontinued operations, net of tax $ - $ 13,016 Net Loss $ ( 353,611 ) $ ( 29,750 ) Loss from continuing operations Per Common Share – Basic $ ( 0.00 ) $ ( 0.00 ) Income from discontinuing operations Per Common Share– Basic $ ( 0.00 ) $ 0.00 Net loss per common share - Basic $ ( 0.00 ) $ ( 0.00 ) Loss from continuing operations Per Common Share – Diluted $ ( 0.00 ) $ ( 0.00 ) Income from discontinuing operations Per Common Share– Diluted $ ( 0.00 ) $ 0.00 Net loss per common share - Diluted $ ( 0.00 ) $ ( 0.00 ) Basic Weighted Average Number of Common Shares Outstanding 94,165,388 22,945,388 Diluted Weighted Average Number of Common Shares Outstanding 113,165,388 22,945,388 See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 4 Table of Contents General Enterprise Ventures, Inc. Consolidated Statements of Change in Stockholders’ Equity (Deficit) (Unaudited) For the three months ended March 31, 2023 Convertible Series A Convertible Series C Additional Total Preferred stock Preferred stock Common Stock Paid-In Accumulated Stockholders' Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance - December 31, 2022 10,000,000 $ 10,000 950,000 $ 950 93,945,388 $ 93,945 $ 62,625,173 $ ( 59,381,400 ) $ 3,348,668 Common stock issued for services - - - - 300,000 300 86,550 - 86,850 Net loss - - - - - - - ( 353,611 ) ( 353,611 ) Balance - March 31, 2023 10,000,000 $ 10,000 950,000 $ 950 94,245,388 $ 94,245 $ 62,711,723 $ ( 59,735,011 ) $ 3,081,907 For the three months ended March 31, 2022 Convertible Series A Additional Total Stockholders' Preferred stock Common Stock Paid-In Accumulated Equity Shares Amount Shares Amount Capital Deficit (Deficit) Balance - December 31, 2021 10,000,000 $ 10,000 22,945,388 $ 22,945 $ 56,387,768 $ ( 56,473,572 ) $ ( 52,859 ) Debt forgiveness - former related party - - - - 9,355 - 9,355 Net loss - - - - - ( 29,750 ) ( 29,750 ) Balance - March 31, 2022 10,000,000 $ 10,000 22,945,388 $ 22,945 $ 56,397,123 $ ( 56,503,322 ) $ ( 73,254 ) See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 5 Table of Contents General Enterprise Ventures, Inc. Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2023 2022 Cash Flows from Operating Activities: Net loss $ ( 353,611 ) $ ( 29,750 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 86,850 - Impairment loss on digital assets - 6,125 Non-cash lease expense 15,000 - Depreciation and amortization 264 15,059 Changes in operating assets and liabilities: Inventory 12,377 - Digital currency - 374 Prepaid expense ( 6,300 ) - Related party advances funding operating expense 49,052 40,171 Accounts payable and accrued liabilities 34,463 1,545 Fixed cash payments related to operating leases ( 15,000 ) - Net Cash Provided by (Used in) Operating Activities ( 176,905 ) 33,524 Cash Flows from Financing Activities: Proceeds from loan - related party 185,000 55,000 Repayment of loan- related party - ( 47,323 ) Net Cash Provided by Financing Activities 185,000 7,677 Change in cash 8,095 41,201 Cash, beginning of period 55,434 5,469 Cash, end of period $ 63,529 $ 46,670 Supplemental Disclosure Information: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - Non-Cash Financing Disclosure: Issuance of common stock for services $ 86,850 $ - Debt forgiveness - related party $ - $ 9,355 See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 6 Table of Contents General Enterprise Ventures, Inc. Notes to Unaudited Consolidated Financial Statements March 31, 2023 Note 1 – Nature of Operations and Going Concern General Enterprise Ventures, Inc., (the “Company” or “GEVI”), was originally incorporated under the laws of the State of Nevada on March 14, 1990. Business We are a fully integrated technology company structured to provide mergers and acquisitions of new and available technology. Through our services, we incubate first-to-market products and help existing companies accelerate their product development within all regulatory requirements. Going Concern The accompanying consolidated financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has 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. Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited interim financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2022, as filed with the SEC on March 31, 2023. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments. 7 Table of Contents Cash and Cash Equivalents For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company did not have any cash equivalents. The Company had $ 63,529 and $ 55,434 cash equivalents at March 31, 2023 and December 31, 2022, respectively. Inventory Inventories consist of raw materials which are stated at lower cost or net realizable value, with cost being determined on the weighted average method. As of March 31, 2023, and December 31, 2022, the Company held inventories of $ 102,268 and $ 114,645 , respectively. During the three months ended March 31, 2023, and 2022, the Company recorded cost of goods sold of $ 13,854 and $ 0 associated with the cost of inventories sold, respectively. The Company did not write-off any inventories as unsalable during the three months ended March 31, 2023 and 2022. Property and Equipment Property and equipment are stated at cost. Depreciation is computed on the straight-line method. Currently our assets consist solely of furniture and equipment which we amortize over a useful life of 5 years. Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income. Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. Fair Value of Financial Instruments The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: ● Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and ● Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. The Company’s financial instruments, including cash, prepaid expenses, inventory, accounts payable and accrued liabilities, and due to related party, are carried at amortized cost. At March 31, 2023 and December 31, 2022, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Related Parties The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 8). 8 Table of Contents Basic and Diluted Net Loss Per Common Share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. For the three months ended March 31, 2023, and 2022, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive. March 31, March 31, 2023 2022 Convertible notes 194,444 - Revenue We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers . The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation. Our revenues currently consist of products used for lumber products for fire prevention. Revenue is recognized at a point in time that is which the risks and rewards of ownership of the products transfer from the Company to the customer. Note 2 – Discontinued Operations Crypto mining On April 1, 2022, the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition (see Note 3). The Company recognized a loss of $ 2,030 from the disposition of its crypto mining operations, which consisted of the relinquishment of the digital currency assets in exchange for settlement of the related party note payable associated with the acquisition of the equipment. Note 3 – Equipment, net At March 31, 2023 and December 31, 2022, equipment consisted of the following: March 31, December 31, 2023 2022 Cost: Furniture and equipment $ 5,350 $ 5,350 Less: accumulated depreciation ( 1,067 ) ( 803 ) Property and equipment, net $ 4,283 $ 4,547 During the three months ended March 31, 2023, the Company recorded a depreciation of $ 264 . 9 Table of Contents During the three months ended March 31, 2022, the Company recorded a depreciation of $ 15,059 for digital currency equipment, which is included within the Company’s income from discontinued operations. Note 4 – Intangible Assets The Company has capitalized the costs associated with acquiring the intellectual property of MFB at a value of $ 4,195,353 as of March 31, 2023, and December 31, 2022, respectively. The amount capitalized consisted of a portion of the fair value of 1,000,000 shares of Convertible Preferred C stock of $ 4,200,000 . During the three months ended March 31, 2023, no additional costs met the criteria for capitalization as an intangible asset. Note 5 – Lease The following summarizes right-of-use asset and lease information about the Company’s operating lease as of March 31, 2023: Three Months Ended March 31, 2023 Lease cost: Operating lease cost $ 15,000 Other information: Cash paid for operating cash flows from operating leases $ 15,000 Right -of-use assets obtained upon acquisition $ 81,967 Weighted-average remaining lease term - operating leases (year) 0.42 Weighted-average discount rate — operating leases 5.50 % Future minimum lease payments under the operating lease liability have the following non-cancellable lease payments as of March 31, 2023: 2023 (remaining nine months) $ 25,000 Thereafter - 25,000 Less: Imputed interest ( 227 ) Operating lease liabilities $ 24,773 Operating lease liabilities - current $ 24,773 Operating lease liabilities- non-current $ - Note 6 – Convertible Note On September 30, 2022, the Company entered into a convertible note agreement for the amount of $ 54,000 , with term of six (6) months from the date of receipt of the funds, at interest rate of 2 % per annum, currently the note is in default. At the sole option of the Lender, all or part of unpaid principal then outstanding may be converted into shares of common stock at any time starting from 24 hours after payment at a fixed conversion price of $ 0.18 per share. As of March 31, 2023, following is the summary of funds received from the lender: Principal Maturity Interest Payment date Amount date Rate Balance August 11, 2022 $ 18,000 2/11/2023 2 % $ 18,000 September 2, 2022 $ 17,000 3/2/2023 2 % 17,000 Total Convertible notes $ 35,000 Current portion ( 35,000 ) Long -term portion $ - 10 Table of Contents During the three months ended March 31, 2023, the Company recognized $ 175 interest. As of March 31, 2023, and December 31,2022, the Company owed principal of $ 35,000 and $ 35,000 and accrued interest of $ 430 and $ 255 , respectively. Note 7 – Stockholders’ Equity Preferred Shares The Company’s preferred shares consist of the following: · 10,000,000 authorized shares of Convertible Series A Preferred Stock, par value $ 0.001 . The Series A Preferred Stock are convertible into common stock of the Corporation at a conversion rate of one thousand ( 1,000 ) shares of common stock and entitled to one thousand (1,000) votes of common stock for each share of Series A Preferred Stock. The holders of the Convertible Series A Preferred Stock shall not be entitled to receive dividends. Issued and outstanding Convertible Series A Preferred stock as of March 31, 2023, and December 31, 2022, was 10,000,000 , respectively. · 5,000,000 authorized shares of non-voting Convertible Series C Preferred Stock, par value $ 0.001 . The Series C Preferred Stock shares are convertible into common stock of the Corporation at a conversion rate of one ( 1 ) Preferred C share for twenty (20) shares of common stock. Issued and outstanding Convertible Series A Preferred stock as of March 31, 2023 and December 31, 2022, were 950,000 , respectively. Common Shares The Company has authorized 1,000,000,000 shares of common stock with a par value of $ 0.001 . Each common stock entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought. As of March 31, 2023, 70,000,000 shares issued to a member of the board of directors and President of the Company are restricted (the “Restricted Stock Award”) and shall be released only upon the Company achieving gross revenue in each of the calendar years ended December 31, 2023, 2024, 2025 and 2026, of not less than $100,000,000. The holder of the Restricted stock shall be entitled to vote but is not entitled to dividends or disposal. The Company valued the voting rights associated with the awards at $ 2,100,000 which is recorded as stock-based compensation during the year ended December 31, 2022. During the three months ended March 31, 2023, the company issued 300,000 shares of common stock for services valued at $ 86,850 . Common shares issued and outstanding as of March 31, 2023 and December 31, 2022, were 94,245,388 and 93,945,388 , respectively. Restricted Stock Award On June 13, 2022, the Company issued a 70,000,000 Restricted Stock Award (“RSA”) to a member of the board of directors and President of the Company. Set out below is a summary of the changes in the Restricted Shares during the three months ended March 31, 2023: Three Months Ended March 31, 2023 RSA Weighted -Average Grant Price Balance, December 31, 2022 70,000,000 $ 0.03 Granted - - Vested - - Forfeited - - Balance, March 31, 2023 70,000,000 $ 0.03 11 Table of Contents Note 8 – Related Party Transactions During the three months ended March 31, 2022, our former officer forgave $ 9,355 in accrued salary and the Company recognized it as additional paid-in-capital. During the three months ended March 31, 2023, and 2022, a related party advanced to the Company an amount of $ 185,000 and $ 55,000 and paid $ 49,052 and $ 40,171 for operating expenses on behalf of the Company, respectively. During the three months ended March 31,2023 and 2022, the Company repaid $ 0 and $ 47,323 owing of the loan. During the three months ended March 31, 2023, the Company paid $ 45,000 consulting to an entity under common control of a related party and $ 40,000 commission to a related party. As of March 31, 2023, and December 31, 2022, the Company was obliged to related parties, for unsecured, non-interest-bearing demand loans with a balance of $ 1,133,205 and $ 899,153 , respectively. Note 9 – Commitments and Contingencies On November 9, 2022, the Company entered into a consulting agreement with Duchess Group LLC. for propose of obtaining corporate consulting services so as to better serve its shareholders and investment community. The agreement shall be for period of nine months and corporate consulting services to be settled by issuing 300,000 shares of common stock upon execution agreement, 150,000 shares of common stock due three months after execution of agreement and 150,000 shares of common stock due six months after execution of agreement. On January 25, 2023, the Company issued 300,000 shares of common stock for first commitment and it was valued based on valuation of common stock price on issuance date for amount of $ 86,850 . As of March 31, 2023, the Company recognized commitment for consulting services based on valuation of common stock price on March 31,2023 for outstanding common shares. As part of the consideration for the Company’s acquisition of MFB (see Note 4), the vendor will be entitled to a ten (10%) percent royalty on the gross sales before taxes of products sold under the MFB family of products, to be paid on or before the fifteenth (15 th ) day of the following month. Note 10 – Subsequent Events Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure, except as follows: On April 5, 2023, the holder of the Convertible Series C Preferred Stock converted 150,000 shares of the Company’s Series C Preferred Stock into 3,000,000 shares of the Company’s common shares. 12 Table of Contents