What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-15 compared with 2023-08-16 · 66 added, 39 removed, 88 unchanged (54% of the section changed)

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Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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”).

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.

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(the “Company”) was originally incorporated under the laws of the State of Nevada on March 14, 1990.

On April 13, 2022, the Company acquired Mighty Fire Breaker LLC and all associated intellectual property, in exchange for 1,000,000 shares of Series C Convertible Preferred Stock.

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

Delaware recognized this domestication of the Company.

On March 31, 2021, the Company formed General Entertainment Ventures, Inc.

(“GEVI”) in Delaware as a wholly owned subsidiary of the Company.

The purpose of the formation of GEVI was to merge the Company into GEVI pursuant to Section 251(g) of the General Corporation Law of the State of Delaware.

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

GEVI is the accounting and legal acquiror of the Company.

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

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

On April 13, 2022, the Company acquired Mighty Fire Breaker LLC ("MFB”), in exchange for 1,000,000 shares of Series C Convertible Preferred Stock.

MFB was formed to hold intellectual property pertaining to the fire suppression segment of the environmental industry, which included patents and patents pending,

On April 13, 2022, The Company designated 5,000,000 shares of Series C Convertible Preferred Stock (“Series C Preferred Stock”).

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On April 28, 2022, Jan Ralston transferred ownership of 10,000,000 shares of Series A Convertible Preferred Stock to CEO, Joshua Ralston, making Mr.

Ralston the new Majority Shareholder.

Ralston the Shareholder with majority voting control.

Current Operations

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Corporate changes

On April 13, 2022, the Company acquired Mighty Fire Breaker, LLC, an Ohio limited liability company (“MFB”) and all associated intellectual property, in exchange for 1,000,000 shares of Series C Convertible Preferred Stock and a 10% royalty on the gross sales before taxes of products sold under the MFB family of products.

MFB has 18 granted patents as well as 17 worldwide patents pending centered around it’s CitroTech MFB 31 Technology for the prevention and spread of wildfires, mapping and tracking and other associated technologies.

On April 13, 2022, the Company acquired Mighty Fire Breaker LLC ("MFB”), in exchange for 1,000,000 shares of Series C Convertible Preferred Stock.

MFB was formed to hold intellectual property pertaining to the fire suppression segment of the environmental industry, which included patents and patents pending,.

MFB has 18 granted patents as well as 17 U.S.

and worldwide patents pending centered around it’s CitroTech MFB 31 Technology for the prevention and spread of wildfires, mapping and tracking and other associated technologies.

Its core products can be used as vegetation and lumber treatments for fire prevention and is in development of uses for it’s green technologies.

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During the third quarter of 2022, MFB received EPA Safer Choice status and UL Green-Guard Gold approval on its CitroTech fire inhibitor as well as California Aquatic approval as non-toxic and non-hazardous.

MFB continues to pursue additional accreditations, such as Missoula Testing approval, for selling products to governmental entities.

MFB continues to pursue additional accreditations, such as USDA Missoula Testing approval, for selling products to governmental entities.

Currently, MFB is involved in installing large home and facility Proactive Wildfire Prevention Systems as well as providing it’s products to various entities for proactive wildfire defense spraying.

MFB continues to pursue and do business with retail chains selling both DIY home systems and its CitroTech non-toxic non-hazardous chemistry.

On October 2 nd 2023 Mighty Fire Breaker LLC won the EPA Safer Choice Partner of the Year Award.

The Company continues to work towards a revenue model and advancements in IP.

Effective April 1, 2022, the Company implemented a plan to divest its Crypto Mining operations and focus resources on the operations of MFB.

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Results of Operations

Results of Operations for the three months ended June 30, 2023 and the three months ended June 30,2022

Our results of operations for the three months ended June 30, 2023 and 2022 are summarized below:

The following summary of our results of operations should be read in conjunction with our unaudited interim financial statements for the period ended September 30, 2023, which are included herein.

Our operating results for the three and nine months ended September 30, 2023 and 2022 and the changes between those periods for the respective items are summarized as follows:

Results of Operations for the three months ended September 30, 2023 and the three months ended September 30, 2022

Three Months Ended

September 30,

Operating expenses

Other expense

Net loss from continuing operations

$ (9,023,003 )

Loss on disposition of digital currency and digital currency assets

Net loss from discontinued operations

$ (8,725,938 )

Our Company generated $28,355 and $41,468 revenue for the three months ended June 30, 2023 and 2022, respectively.

The Company’s revenue is associated with revenue from MFB which was acquired in April 2022.

Our Company generated $174,710 and $19,033 revenue for the three months ended September 30, 2023 and 2022, respectively.

The Company’s revenue is associated with revenue from MFB which acquired intellectual property to fire suppression in April 2022.

Operating Expenses

Operating expenses consisted of professional fees of $264,518, depreciation of $267 and general and administrative expenses of $114,151 in the three months ended June 30,2023, compared to professional fees of $182,295, depreciation expenses of $135, general and administrative of $78,111 and management compensation of $2,100,000 associated with the issuance of 70,000,000 restricted stock units as compensation in the three months ended June 30, 2022.

Operating expenses consisted of $189,508 cash paid for professional fees and $146,562 for general and administrative expenses and non-cash stock-based compensation of $8,820,000 in the three months ended September 30, 2023.

Whereas, for the three months ended September 30, 2022, we paid cash for professional fees of $111,783 and general and administrative expenses of $202,441 and had no stock-based compensation expenses.

The increase in operating expenses during the three-month period ended 2023, is due to the valuations of preferred and common stock issued to a consultant and directors of the Company, respectively, and using quoted closing common stock prices from the OTCMarkets.

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.

The Company issued 250,000 shares of common stock to each of the two directors of the Company and using quoted stock values resulted in a non-cash compensation expense of $180,000.

Other Expenses

For the three months ended June 30, 2023, the other expenses consisted of $584 interest related to convertible note payable to lender.

Discontinuing Operating Expenses

During the three months ended June 30, 2022, loss on discontinued operations of $2,030 was the result of a loss on disposition of the Company’s digital currency assets, including equipment and digital currency, against a note payable issued as consideration for the equipment when it was previously acquired.

As a result of the foregoing, we incurred a net loss of $356,058, for the three months ended June 30, 2023, compared to a net loss of $2,321,103 for the corresponding three months ended June 30, 2022.

Results of Operations for the six months ended June 30, 2023 and the six months ended June 30, 2022

Our results of operations for the six months ended June 30, 2023 and 2022 are summarized below:

Six Months Ended

For the three months ended September 30, 2023 and 2022, the other expenses consisted of $1,760 and $76 interest related to convertible note payable, respectively.

As a result of the foregoing, we incurred a net loss of $9,023,003, for the three months ended September 30, 2023, compared to a net loss of $297,065 for the corresponding three months ended September 30, 2022.

Results of Operations for the nine months ended September 30, 2023 and the nine months ended September 30, 2022

Nine Months Ended

September 30,

Operating expenses

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Loss on disposition of digital currency and digital currency assets

Net income from discontinued operations

Net income from discontinued operations, net of tax

$ (9,732,672 )

Our Company generated $83,950 and $41,468 revenue for the six months ended June 30, 2023 and 2022, respectively.

The Company’s revenue is associated with revenue from MFB which was acquired in April 2022.

$ (2,647,918 )

$ (7,084,754 )

Our Company generated $258,660 and $60,501 revenue for the nine months ended September 30,2023 and 2022, respectively.

The Company’s revenue is associated with the commencement of revenue from MFB, which acquired intellectual property to fire suppression in April 2022.

Operating Expenses

Operating expenses consisted of professional fees of $559,647, depreciation of $531 and general and administrative expenses of $213,935 in the six months ended June 30,2023, compared to professional fees of $222,466, depreciation expenses of $135, general and administrative of $80,706 and management compensation of $2,100,000 associated with the issuance of 70,000,000 restricted stock units as compensation in the six months ended June 30, 2022.

Operating expenses consisted of $749,155 cash paid for professional fees and $361,028 for general and administrative expenses and non-cash stock-based compensation of $8,966,850 in the nine months ended September 30, 2023.

Whereas, for the nine months ended September 30, 2022, we paid cash for professional fees of $334,249 and general and administrative expenses of $283,282 and calculated $2,100,00 in stock-based compensation expenses.

The increase in operating expenses during the period ended 2023, is due to the valuations of preferred and common stock issued to a consultant and directors of the Company, respectively, and using quoted closing prices from the OTCMarkets.

The Company issued 1,200,000 shares of Preferred C stock, for professional fees to a related party consultant, which is valued as if it is fully converted to 24 million shares of Common stock on issuance, and based on closing prices, resulted in an accounting valuation of $8,640,000.

The Company issued 250,000 common shares to each of the two directors of the Company using quoted values resulted in a non-cash stock-based compensation expense of $180,000.

The 2022 stock-based compensation expenses were associated with the issuance of 70,000,000 restricted common stock units as compensation.

Other Expenses

For the six months ended June 30, 2023, the other expenses consisted of $759 interest related to convertible note payable.

For the nine months ended September 30, 2023 and 2022, the other expenses consisted of $1,760 and $76 interest related to convertible note payable, respectively.

Discontinuing Operating Expenses

During the six months ended June 30, 2022, loss on discontinued operations of $2,030 was the result of a loss on disposition of the Company’s digital currency assets, including equipment and digital currency, against a note payable issued as consideration for the equipment when it was previously acquired.

During the six months ended June 30, 2022, income from discontinued operations of $13,016 was the result of the net income from the operations of crypto mining and the disposition of crypto mining which the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition.

As a result of the foregoing, we incurred a net loss of $709,669, for the six months ended June 30, 2023, compared to a net loss of $2,350,853 for the corresponding six months ended June 30, 2022.

During the nine months ended September 30, 2022, loss on discontinued operations of $2,030 was the result of a loss on disposition of the Company’s digital currency assets, including equipment and digital currency, against a note payable issued as consideration for the equipment when it was previously acquired.

During the nine months ended September 30, 2022, income from discontinued operations of $13,016 was the result of the net income from the operations of crypto mining and the disposition of crypto mining which the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB operations.

As a result of the foregoing, we incurred a net loss of $9,732,672, for the nine months ended September 30, 2023, compared to a net loss of $2,647,918 for the corresponding nine months ended September 30, 2022.

Liquidity and Capital Resources

September 30,

Current Assets

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Working Capital (Deficiency)

$ (1,243,897 )

The increase in working capital deficiency in 2023 was primarily the result of an increase in due to related party of $456,836, a decrease in accounts payable and accrued liabilities of $53,248 offset by an increase in cash of $30,710.

As of June 30, 2023 and December 31, 2022, the current assets consisted primarily of cash of $86,144 and $55,434, inventory of $103,736 and $114,645 and prepaid expenses of $20,339 and 240, respectively.

As of June 30, 2023, and December 31, 2022, the current liabilities consisted of accounts payable and accrued liabilities of $34,150 and $87,398, due to related party of $1,355,989 and $899,153, convertible note of $54,000 and $35,000, and current portion of operating lease liability of $9,977 and $39,367, respectively.

Six Months Ended

The increase in working capital in 2023 was primarily the result of an increase in cash of $510,433, accounts receivable of $182,308, inventory of $70,033 and prepaid expenses of $14,590 offset by an increase due to related party of $508,528, promissory note of $120,000, convertible note of $19,000.

As of September 30, 2023, and December 31, 2022, the current assets consisted primarily of cash of $565,867 and $55,434, inventory of $184,678 and $114,645, accounts receivable of $182,308 and $0, and prepaid expenses of $14,830 and 240, respectively.

As of September 30, 2023, and December 31, 2022, the current liabilities consisted of accounts payable and accrued liabilities of $62,156 and $87,398, due to related party of $1,407,681 and $899,153, convertible note of $54,000 and $35,000, promissory note of $120,000 and $0 and current portion of operating lease liability of $78,250 and $39,367, respectively.

Nine Months Ended

September 30,

Cash used in operating activities

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We have not generated positive cash flows from operating activities.

For the six months ended June 30, 2023, net cash flows used in operating activities was $423,890, consisting of a net loss of $709,669, reduced by stock-based compensation of $146,850, non-cash lease expenses of $30,000, depreciation $531 and reduced by changes in operating assets and liabilities of $108,395.

For the six months ended June 30, 2022, net cash flows used in operating activities was $274,274, consisting of a net loss of $2,350,853, reduced by management compensation of $2,100,000 associated with the issuance of 70,000,000 shares of common stock as compensation, loss on disposition of digital currency and digital currency assets of $2,029, impairment loss on digital assets of $6,125, depreciation of $15,194, non-cash lease expenses of $14,647 and increased by changes in operating assets and liabilities of $61,416.

For the nine months ended September 30, 2023, net cash flows used in operating activities was $819,936, consisting of a net loss of $9,732,672, reduced by stock-based compensation of $8,966,850, non-cash lease expenses of $52,058, depreciation $871 and increased by changes in operating assets and liabilities of $107,043.

For the nine months ended September 30, 2022, net cash flows used in operating activities was $506,731, consisting of a net loss of $2,647,918, reduced by management compensation of $2,100,000 associated with the issuance of 70,000,000 shares of common stock as compensation, loss on disposition of digital currency and digital currency assets of $2,030, impairment loss on digital assets of $6,125, depreciation of $15,326, non-cash lease expenses of $29,647 and increased by changes in operating assets and liabilities of $11,941.

Cash Flows from Investing Activities

Cash flows used in investing activities of $2,707 during the six months ended June 30, 2022, was $2,707 which related to the purchase of equipment.

For the nine months ended September 30, 2023 and 202, the cash flows used in investing activities were $2,231 and $5,350, which was related to the purchase of equipment, respectively.

Cash Flows from Financing Activities

For the six months ended June 30, 2023, net cash provided by financing activities consisted of $275,000 received from a related party and $179,000 from stock subscription.

For the six months ended June 30, 2022 net cash provided by financing activities consisted of $429,484 received from a related party and $55,720 repaid to a related party.

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.

For the nine months ended September 30, 2022 net cash provided by financing activities consisted of $584,484 received from a related party, $35,000 from convertible note and $55,720 repaid to a related party.

Going Concern

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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.

Share-Based Compensation

The Company accounts for employee and non-employee stock awards under ASC 718, Compensation – Stock Compensation, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.

Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period.

If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service.

Off-balance sheet arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis