What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-15 compared with 2023-11-15 · 44 added, 95 removed, 59 unchanged (70% of the section changed)

18 unchanged sentences

General Overview

General Enterprise Ventures, Inc.

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

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”).

The Series C Preferred Stock is convertible into twenty (20) shares of Common Stock for each share of Series C Preferred Stock at the option of the stockholder.

The Series C Preferred Stock does not have voting rights and is not eligible to receive dividends.

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 Shareholder with majority voting control.

Current Operations

Fully Integrated Services

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.

Corporate changes

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.

It has been widely tested and approved by three major US government agencies.

When CitroTech is sprayed and applied it takes flammable fuels like dry native vegetation and wood and makes them non-combustible.

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 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.

We expanded our services by building upon its foundation of emerging technology development, by creating a Crypto-Currency mining operation (farm).

Previously, the Company had 20 Bitmain Antminer SJ19 PRO 104t/h and 99 Mini-Doge 185 m/h miners deployed, which are mining, Bitcoin, Doge, and Litecoin through the F2Pool and utilized its 8,000 Sq Ft Commercial space to house these ASIC Miners.

Effective November 20, 2022, the Company formed a UK branch of its US subsidiary MFB, named Mighty Fire Breaker UK Limited.

The subsidiary headquartered in the United Kingdom, will be used to direct the sales of the Mighty Fire Breaker line of products and technologies in Europe, the Middle East and Africa.

The Company’s U.S.

subsidiary, Mighty Fire Breaker LLC (“MFB”) is engaged in developing solutions to support the resolution of the insurance crisis in the western United States by use of its EPA approved CitroTech products.

MFB has developed and patented additional intellectual property in this regard, such as a system for commercial properties and homes that puts a fire inhibiting buffer zone around a property, blocking blown-in embers from igniting.

The technology continues to work dry, which unlike other products allows for early deployment and evacuation of people.

MFB also has developed a job site trailer allowing for the fire protection of property during the construction phase and fire hardening of the inner construction and installation of our patented system during that phase.

The intent is for the home owner to be able to bind insurance to start a construction project.

The Company has achieved USDA approval.

It has sold products to various fire departments and continues to demonstrate a market for its products.

Results of Operations

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

The following summary of our results of operations should be read in conjunction with our unaudited interim financial statements for the period ended March 31, 2024, which are included herein.

Our operating results for the three months ended March 31, 2024, and 2023 and the changes between those periods for the respective items are summarized as follows:

Results of Operations for the three months ended March 31, 2024, and the three months ended March 31, 2023

Three Months Ended

September 30,

Operating expenses

2 unchanged sentences

$ (3,166,099)

$ (8,725,938 )

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 $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 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

Other expenses

Net loss from continuing operations

$ (9,732,672 )

$ (2,658,904 )

Income from discontinued operations

Loss on disposition of digital currency and digital currency assets

Net income from discontinued operations, net of tax

$ (9,732,672 )

$ (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.

The cost of revenue was $89,872 and 13,854 for three months ended March 31, 2024 and 2023, respectively.

Operating Expenses

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.

Three months ended

Stock-based management compensation

Stock -based compensation

Professional fees -related party

Professional fees

Marketing expenses

General and administrative expenses

The increase in operating expenses was primarily attributed to stock -base management compensation of $1,422,750, stock-based services companion of $975,250, marketing expenses of $98,603, depreciation of $63,571 and general and administrative expenses of $45,340.

Other Expenses

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 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.

For the three months ended March 31, 2024, and 2023, the other expenses consisted of $885 and $175 interest related to convertible note payable and loss on settlement of debt of $882,279 and $0, respectively.

As a result of the foregoing, we incurred a net loss of $3,519,710, for the three months ended March 31, 2024, compared to a net loss of $353,611 for the corresponding three months ended March 31, 2023.

Liquidity and Capital Resources

September 30,

Current Assets

1 unchanged sentence

Working Capital (Deficiency)

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,

The increase in working capital in 2024 was primarily the result of an increase in accounts receivable of $253,532, prepaid expenses of $792 and a decrease in cash of $178,660 and inventory of 41,406 offset by an increase in accounts payable and accrued liabilities of $15,685, operating lease liability -current portion of $1,915, a decrease in promissory note of $120,000 and convertible note of $54,000.

As of March 31, 2024, and December 31, 2023, the current assets consisted primarily of cash of $371,095 and $549,755, inventory of $188,791 and $230,197, accounts receivable of $680,965 and $427,433, and prepaid expenses of $11,463 and 10,671, respectively.

As of March 31, 2024, and December 31, 2023, the current liabilities consisted of accounts payable and accrued liabilities of $70,257 and $54,572, due to related party of $1,309,077 and $1,309,077, convertible note of $0 and $54,000, promissory note of $0 and $120,000 and current portion of operating lease liability of $82,051 and $80,136, respectively.

Three months ended

Cash used in operating activities

Cash used in Investing Activities

Cash provided by investing activities

Cash provided by financing activities

2 unchanged sentences

We have not generated positive cash flows from operating activities.

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.

For the three months ended March 31, 2023, net cash flows used in operating activities was $343,660, consisting of a net loss of $3,519,710, reduced by stock-based compensation of $2,398,000, non-cash lease expenses of $19,602, depreciation of $63,835, loss on settlement of debt of $882,279 and increased by changes in operating assets and liabilities of $187,666.

For the three months ended March 31, 2023, net cash flows used in operating activities was $176,905, consisting of a net loss of $353,611, reduced by stock-based compensation of $86,850, depreciation of $264, non-cash lease expenses of $15,000 and reduced by changes in operating assets and liabilities of $75,592.

Cash Flows from Investing Activities

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.

The Company did not use any funds for investing activities during the three months ended March 31, 2024, and 2023.

Cash Flows from Financing Activities

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.

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.

For the three months ended March 31, 2023, net cash provided by financing activities consisted of $185,000 received from a related party.

Going Concern

10 unchanged sentences

We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

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

Revenue Recognition

Incremental borrowing rate for Right of Use Assets

Share based compensation

Revenue Recognition

Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied.

Our 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.

All of our performance obligations under the terms of contracts with our customers have an original duration of one year or less.

Incremental borrowing rate for Right of Use Assets

As the Company’s operating leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate.

The assessment of the Company’s incremental borrowing rate involves judgment regarding the cost of borrowing funds on a collateralized basis over a similar term and in a similar economic environment.

Share-Based Compensation

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

6 unchanged sentences

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