CitroTech Inc. 10-K/A

Item 8. Financial Statements and Supplementary Data. General Enterprise Ventures, Inc. Index to Audited Consolidated Financial Statements December 31, 2023 and 2022 Contents Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 1171 ) F-2 Consolidated Balance Sheets at December 31, 2023 and 2022 F-4 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022 F-5 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 F-7 Notes to Audited Consolidated Financial Statements F-8 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To: The Board of Directors and Stockholders of General Enterprises Ventures, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of General Enterprises Ventures, Inc. (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the years ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred substantial losses during the year ended December 31, 2023. As of December 31, 2023, the Company had a working capital deficit. Accordingly, these factors give rise to substantial doubt that the Company will be able to continue as a going concern. Management closely monitors the Company’s financial position and has prepared a plan that is found in Note 1 that addresses this substantial doubt. These financial statements do not include any adjustments that might result from the outcome of this uncertainly. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, audits of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal controls over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. F-2 Table of Contents Emphasis of Matter — Reclassification of Previously Issued Financial Statements As discussed in Note 2 to the financial statements, the Company has reclassified certain amounts in its financial statements as of and for the years ended December 31, 2022 and 2023 to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. The reclassifications were made to improve the clarity and comparability of the financial statements. . Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. The engagement team determined that the Company’s intangible assets and related impairment met the criteria to be considered a critical audit matter because the intangible assets comprised a material portion of the Company’s total assets, and they require a significant amount of judgment to estimate the carrying value and ensure the intangible assets are not impaired, and those assets are expected to contribute to the Company’s ability generate future profit. In order to the address this critical audit matter, we first gained an understanding of how management values these assets and reperformed the valuation on those assets, and considered the reasonableness of the inputs that management is using for their valuation. The engagement team determined that the preferred stock, especially those with conversion features, met the criteria of a critical audit matter because it is substantial relative to the Company’s shareholders’ equity, and determining their valuation and allocation requires the engagement team to identify and understand the attributes of the securities, understand how those attributes go towards determining the value of those securities. Additionally, the disclosure regarding these securities is extensive and quite complex. The engagement team addressed the critical audit matters by gaining an understanding of management’s valuation, allocation, recognition and approach towards disclosure, and then vouched certain details of those securities and reperformed the valuation and allocation of such preferred stock to determine if management had properly accounted for those securities. /s/ WWC, P.C. WWC, P.C. Certified Public Accountants PCAOB ID: 1171 We have served as the Company’s auditor since 2023. San Mateo, California July 30, 2024 F-3 Table of Contents General Enterprise Ventures, Inc. Consolidated Balance Sheets December 31, December 31, 2023 2022 Assets Current Assets Cash $ 549,755 $ 55,434 Prepaid expenses 10,671 240 Accounts receivable 427,433 - Inventory 230,197 114,645 Total Current Assets 1,218,056 170,319 Intangible assets 3,948,106 4,195,353 Operating lease right-of-use asset 129,683 39,367 Equipment, net 7,299 4,547 Total Assets $ 5,303,144 $ 4,409,586 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ 54,572 $ 87,398 Promissory note 120,000 - Convertible note payable 54,000 35,000 Due to related parties 1,309,077 899,153 Operating lease liability - current portion 80,136 39,367 Total Current Liabilities 1,617,785 1,060,918 Operating lease liability – noncurrent 50,047 - Total Liabilities 1,667,832 1,060,918 Commitments and contingencies Stockholders' Equity Series A Preferred Stock, par value $ 0.0001 , authorized 10,000,000 shares, 10,000,000 shares issued and outstanding 1,000 1,000 Series C Convertible Preferred Stock, par value $ 0.0001 , authorized 5,000,000 shares, 2,273,499 and 950,000 shares issued and outstanding, respectively 227 95 Common Stock par value $ 0.0001 , authorized 1,000,000,000 shares, 97,545,388 and 93,945,388 shares issued and outstanding, respectively 9,755 9,395 Additional paid-in capital 72,427,996 62,719,578 Common Stock to be issued - 500,000 shares 180,000 - Subscription received – 183,333 shares of Series C Convertible Preferred stock to be issued 500,000 - Accumulated deficit ( 69,483,666 ) ( 59,381,400 ) Total Stockholders' Equity 3,635,312 3,348,668 Total Liabilities and Stockholders' Equity $ 5,303,144 $ 4,409,586 See the accompanying Notes, which are an integral part of these Financial Statements. F-4 Table of Contents General Enterprise Ventures, Inc. Consolidated Statement of Operations and Comprehensive Loss Years Ended December 31, 2023 2022 Revenue $ 520,645 $ 62,732 Operating Expenses Cost of revenue (exclusive of amortization and depreciation shown separately below) 193,876 56,338 Amortization and depreciation 248,510 803 General and administration 322,860 256,686 Marketing 148,289 96,553 Management compensation 180,000 2,100,000 Professional fees- related party 8,899,596 188,036 Professional fees 625,452 282,875 Total operating expenses 10,618,583 2,981,291 Loss from Operations ( 10,097,938 ) ( 2,918,559 ) Other Expense Interest expense ( 4,328 ) ( 255 ) Total other income expense ( 4,328 ) ( 255 ) Loss from continuing operations before taxes ( 10,102,266 ) ( 2,918,814 ) Provision for income taxes - - Loss from continuing operations $ ( 10,102,266 ) $ ( 2,918,814 ) Discontinued operations: Income from discontinued operations $ - $ 13,016 Loss on disposition of digital currency and digital currency assets - ( 2,030 ) Income from discontinued operations $ - $ 10,986 Net loss $ ( 10,102,266 ) $ ( 2,907,828 ) Comprehensive loss $ ( 10,102,266 ) $ ( 2,907,828 ) Loss from continuing operations per common share – basic and diluted $ ( 0.10 ) $ ( 0.05 ) Income from discontinued operations per common share – basic $ - $ 0.00 Income from discontinued operations per common share – diluted $ - $ 0.00 Net loss per common share - basic and diluted $ ( 0.10 ) $ ( 0.05 ) Basic and diluted weighted average number of common shares outstanding 96,663,470 62,254,977 See the accompanying Notes, which are an integral part of these Financial Statements. F-5 Table of Contents General Enterprise Ventures , Inc. Consolidated Statements of Change in Stockholders’ Equity (Deficit) Series A Series C Additional Preferred Common Total Preferred stock Preferred stock Common Stock Paid-In Stock Stock to Accumulated Stockholders' Shares Amount Shares Amount Shares Amount Capital to be issued be issued Deficit Equity (Deficit) Balance - December 31, 2021 10,000,000 $ 1,000 - $ - 22,945,388 $ 2,295 $ 56,417,418 $ - $ - $ ( 56,473,572 ) $ ( 52,859 ) - - Debt forgiveness - former related party - - - - 9,355 - - - 9,355 Shares issued for intellectual property purchase - - 1,000,000 100 - - 4,199,900 - - - 4,200,000 Conversion of Convertible Series C Preferred stock of Common stock - - ( 50,000 ) ( 5 ) 1,000,000 100 ( 95 ) - - - - Stock based compensation - - - - 70,000,000 7,000 2,093,000 - - - 2,100,000 Net loss - - - - - - - - ( 2,907,828 ) ( 2,907,828 ) Balance - December 31, 2022 10,000,000 $ 1,000 950,000 $ 95 93,945,388 9,395 62,719,578 - - ( 59,381,400 ) 3,348,668 Subscription received – Series C Preferred stock to be issued - - - - - - - 500,000 - - 500,000 Common stock to be issued - management - - - - - - - - 180,000 - 180,000 Issuance Series C Preferred Stock for cash - - 273,499 27 - - 907,573 - - - 907,600 Common stock issued for services - - - - 600,000 60 146,790 - - - 146,850 Conversion of Convertible Series C Preferred Stock in Common stock - - ( 150,000 ) ( 15 ) 3,000,000 300 ( 285 ) - - - - Issuance Series C Preferred Stock for services - related party - - 1,200,000 120 - - 8,639,880 - - - 8,640,000 Contribution inventory - related party - - - - - - 14,460 - - - 14,460 Net loss - - - - - - - - - ( 10,102,266 ) ( 10,102,266 ) Balance - December 31, 2023 10,000,000 $ 1,000 2,273,499 $ 227 97,545,388 $ 9,755 $ 72,427,996 $ 500,000 $ 180,000 $ ( 69,483,666 ) $ 3,635,312 See the accompanying Notes, which are an integral part of these Financial Statements. F-6 Table of Contents General Enterprise Ventures , Inc. Consolidated Statement of Cash Flows Years Ended December 31, 2023 2022 Cash Flows from Operating Activities: Net loss $ ( 10,102,266 ) $ ( 2,907,828 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 8,966,850 2,100,000 Loss on disposition of digital currency and digital currency assets - 2,029 Impairment loss on digital assets - 6,125 Non-cash lease expenses 71,349 44,647 Depreciation and amortization 248,510 15,862 Changes in operating assets and liabilities: Accounts receivable ( 427,433 ) - Inventory ( 101,092 ) ( 114,645 ) Digital currency - ( 46,976 ) Prepaid expense ( 10,431 ) ( 240 ) Related party advances funding operating expense 246,425 155,919 Accounts payable and accrued liabilities ( 32,827 ) 76,657 Operating lease liabilities ( 70,849 ) ( 40,000 ) Net Cash used in Operating Activities ( 1,211,764 ) ( 708,450 ) Cash Flows from Investing Activities: Purchase of equipment ( 4,015 ) ( 5,350 ) Share capital - Mighty Fire Breaker UK Limited - 1 Net Cash used in Investing Activities ( 4,015 ) ( 5,349 ) Cash Flows from Financing Activities: Proceed from convertible note - 35,000 Proceeds from loan - related party 307,500 784,484 Repayment of loan- related party ( 125,000 ) ( 55,720 ) Proceed from issuance Series C Preferred Stock 907,600 - Proceed from stock subscription 500,000 - Proceeds from promissory note 120,000 - Net Cash provided by Financing Activities 1,710,100 763,764 Change in cash 494,321 49,965 Cash, beginning of period 55,434 5,469 Cash, end of period $ 549,755 $ 55,434 Supplemental Disclosure Information: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - Non-Cash Financing Disclosure: Issuance of common stock for services $ 146,850 $ 70,000 Common stock to be issued - management $ 180,000 $ - Issuance of Series C Convertible Preferred stock for intellectual property purchase $ - $ 4,200,000 Common stock issued upon conversion of Series C Convertible Preferred stock $ 300 $ 1,000 Debt forgiveness - related party $ - $ 9,355 Reclassification of due to related party to convertible note $ 19,000 $ - Contribution inventory - related party $ 14,460 $ - Issuance Series C Convertible Preferred stock for services - related party $ 8,640,000 $ - Right -of-use assets obtained in exchange for new operating lease liabilities $ 161,665 $ - Repayments of related party loans using digital currency $ - $ 47,350 See the accompanying Notes, which are an integral part of these Financial Statements. F-7 Table of Contents General Enterprise Ventures, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 Note 1 – Organization, Business and Going Concern General Enterprise Ventures, Inc., was originally incorporated under the laws of the State of Nevada on March 14, 1990. When used in these notes, the terms “GEVI,” “Company,” “we,” “us” and “our” mean General Enterprise Ventures, Inc. and all entities included in our consolidated financial statements. In January 2021, Board of Directors of the Company approved redomiciling the Company in Delaware. On March 31, 2021, the Company formed General Entertainment Ventures, Inc. in Delaware as a wholly owned subsidiary of the Company. 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 October 17, 2021, the Board of Directors approved the corporate name change from General Entertainment Ventures, Inc. to General Enterprise Ventures, Inc. Corporate Changes On May 10, 2021, GEVI acquired all the issued and outstanding equity of Strategic Asset Holdings, LLC (“SAH”), a Wyoming limited liability company, for $ 50,000 , pursuant to a promissory note dated as of the same date. Effective October 19, 2021, Strategic Asset Holdings, LLC., was divested completely as a wholly owned subsidiary of General Enterprise Ventures, Inc. 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 January 3, 2022, the Company formed Mighty Fire Breaker, LLC, an Ohio limited liability company (“MFB Ohio”), to acquire all the intellectual property of Mighty Fire Breaker, LLC, a California limited liability company (“MFB California”) pertaining to the fire suppression segment of the environmental industry, including patents and patents pending. On April 13, 2022, the transaction between the Company, MFB Ohio and MFB California closed. Effective April 1, 2022, the Company implemented a plan to divest its Crypto Mining operations and focus resources on the operations of MFB Ohio. Effective November 20, 2022, General Enterprise Ventures Inc. formed a UK branch of its US subsidiary Mighty Fire Breaker LLC, named Mighty Fire Breaker UK Limited. The new 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. F-8 Table of Contents Change of Control On April 14, 2021, Jan Ralston acquired 10,000,000 Series A Convertible Preferred Stock from the Company’s former Chief Executive Officer, in a private transaction. The transaction constituted a change of control in the Company, due to the preferred shares super voting and conversion rights, entitling the holder to one thousand (1,000) shares and votes of common stock for every one (1) share of Series A Convertible Preferred Stock owned. On April 28, 2022, Jan Ralston transferred ownership of 10,000,000 Preferred A shares to CEO, Joshua Ralston, making Mr. Ralston the new Majority Shareholder. Business We are an environmentally sustainable flame retardant and flame suppression company for the residential home industry throughout the United States and international markets. Management is experienced at business integration and branding potential. The Company is bringing to the marketplace unique, disruptive products with significant environmental impact potential. The Company holds various intellectual property in the form of patents and trademarks in the fields of fire suppression, mapping and tracking of fire retardant dispersion and fire inhibition chemistry and technology. The Company has obtained multiple certification and accreditations in this industry, such as being the only EPA Safer Choice approved, long-term fire retardant, UL GreenGaurd Gold, California Bioassay water approval, LENS, and in the process of USDA approval. Going Concern Our condensed consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred losses since inception and has a net loss of approximately $10 million and $521,000 in revenues for the year ended December 31, 2023 and has a working capital deficiency of approximately $400,000 as of December 31, 2023. In addition, the Company has been dependent on related parties to fund operations and has an amount owing to related parties of $1.3 million outstanding at December 31, 2023. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. Management recognizes that the Company must obtain additional resources to successfully implement its business plans. During the year ended December 31, 2023, the Company completed financings from the issuance of Series C preferred stock, common stock, promissory notes and relate party loans, generating net proceeds of approximately $1.7 million. However, the Company’s existing cash resources and income from operations, are not expected to provide sufficient funds to carry out the Company’s operations and business development through the next twelve (12) months. Management plans to continue to raise funds and complete an Initial Public Offering (IPO) to support our operations in 2024 and beyond. However, no assurances can be given that we will be successful. If management is not able to timely and successfully raise additional capital and/or complete an IPO, the implementation of the Company’s business plan, financial condition and results of operations will be materially affected. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. F-9 Table of Contents Note 2 – Summary of Significant Accounting Policies Basis of Presentation The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. The Company’s fiscal year is December 31. Principles of Consolidation The consolidated financial statements include the accounts of General Enterprise Ventures, Inc., and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. Reclassification For the years ended December 31, 2023 and 2022, certain amounts have been reclassified to improve the clarity and comparability of the financial statements. An adjustment has been made to the consolidated statements of operations and comprehensive loss and cash flows for year ended December 31,2023 and 2022, to reclassify partial operating expenses to cost of revenue, and to separately disclose professional service provided by related party from line-item professional service to professional fees- related party. The Company reclassified the following amounts, with no change to loss from operations or net loss, as follows: December 31, 2023 December 31, 2022 As Filed Adjustment As Reclassified As Filed Adjustment As Reclassified Cost of revenue $ 133,508 $ ( 133,508 ) $ - $ 1,893 $ ( 1,893 ) $ - Operating Expenses Cost of revenue (exclusive of amortization and depreciation shown separately below) - 193,876 193,876 - 56,338 56,338 Amortization and depreciation - 248,510 248,510 - 803 803 General and administration 584,434 ( 261,574 ) 322,860 281,970 ( 25,284 ) 256,686 Marketing 148,289 - 148,289 96,553 - 96,553 Management compensation 180,000 - 180,000 2,100,000 - 2,100,000 Professional fees- related party 8,640,000 259,596 8,899,596 - 188,036 188,036 Professional fees 932,352 ( 306,900 ) 625,452 500,875 ( 218,000 ) 282,875 Total operating expenses $ 10,485,075 $ 133,508 $ 10,618,583 $ 2,979,398 $ 1,893 $ 2,981,291 For the years ended December 31, 2022, the Company reclassified the following cash flow amounts as follows: Year Ended December 31, 2022 As Filed Adjustment As Reclassified Cash Flows from Operating Activities: Net loss $ ( 2,907,828 ) $ - $ ( 2,907,828 ) Changes in operating assets and liabilities: Digital currency 374 ( 47,350 ) ( 46,976 ) Related party advances funding operating expense 108,569 47,350 155,919 Net Cash used in Operating Activities $ ( 708,450 ) $ - $ ( 708,450 ) Use of Estimates The preparation of financial statements in conformity with 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. F-10 Table of Contents Business Combinations In accordance with ASC 805-10, “Business Combinations”, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets. 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 at December 31, 2023 and 2022. The Company had cash of $ 549,755 and $ 55,434 at December 31, 2023 and 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 December 31, 2023 and 2022, the Company held inventories of $ 230,197 and $ 114,645 , respectively. The Company did not write-off any inventories as unsalable during the years ended December 31, 2023 and 2022. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make the required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable that the receivable will not be recovered. During the years ended December 31, 2023 and 2022, the Company had no allowance for doubtful accounts. Intangible Assets Intangible assets with an indefinite life are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired. Intangible assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Acquired intangible assets from business combinations and asset acquisitions are recognized and measured at fair value at the time of acquisition. Those assets represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of the respective assets. F-11 Table of Contents 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 the income. Impairment of Long-lived Assets Other Than Goodwill Long-lived assets with finite lives, primarily property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. Digital Assets We account for all digital assets held as a result of these transactions as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other . We have ownership of and control over our digital assets and we may use third-party custodial services to secure it. The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheet at cost, net of any impairment losses incurred since acquisition. We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement , based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. If the current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined. Impairment losses are recognized within other income (expense) on the statements of operations and comprehensive loss in the period in which the impairment is identified. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same digital assets held within other income (expense). In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale. During the year ended December 31, 2022, the Company recorded an impairment loss of $ 6,125 associated with market value of digital currencies in excess of the Company’s cost basis. As of December 31, 2022, the Company has divested all of its digital currency holdings and the impairment loss has been recorded within the Company’s income from discontinued operations. Leases ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term. F-12 Table of Contents The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. As of December 31, 2023 and 2022, the Company’s lease agreement is accounted for as operating leases. 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, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2023 and 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 10). Segments Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one operating segment and all of the Company’s revenues and operations are currently in the United States. Revenue The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract. Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation. For the year ended December 31, 2023, 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. F-13 Table of Contents During the year ended December 31, 2022, the Company earned cryptocurrency mining revenues. The Company earned its cryptocurrency mining revenues by providing transaction verification services within the digital currency networks of cryptocurrencies, for Bitcoin, Litecoin, and Dogecoin. The Company satisfied its performance obligations at the point in time that the Company was awarded a unit of digital asset through its participation in the applicable network and network participants benefit from the Company’s verification service. In consideration for these services, the Company received Bitcoin, Litecoin, and Dogecoin, net of applicable network fees, which was recorded as revenue using the closing U.S. dollar price of the digital asset on the date of receipt. Expenses associated with running the cryptocurrency mining operations, which consisted of utilities, equipment depreciation and monitoring services were recorded as cost of revenues. There is currently no specific definitive guidance in GAAP or alternative accounting frameworks for the accounting for the production and mining of digital assets and management has exercised significant judgment in determining appropriate accounting treatment for the recognition of revenue for mining of digital assets. Management has examined various factors surrounding the substance of the Company’s operations and the guidance in ASC 606, including identifying the transaction price, when performance obligations are satisfied, and collectability is reasonably assured being the completion and addition of a block to a blockchain and the award of a unit of digital currency to the Company. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies which could result in a change in the Company’s financial statements. On April 1, 2022, the Company implemented a plan to discontinue its crypto mining operations and divest all related assets. As of December 31, 2022, all of the crypto mining assets had been discarded and as the Company no longer engages in crypto mining all revenue during the year ended December 31, 2022, has been reclassified to income from discontinued operations (see Note 4). Cost of Revenue For the years ended December 31, 2023 and 2022, cost of revenue consists of: Years Ended December 31, 2023 2022 Cost of inventory $ 101,978 $ 21,431 Freight and shipping 14,494 8,674 Consulting and advisory 30,100 21,569 Royalty and sales commission 47,304 4,664 $ 193,876 $ 56,338 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 years ended December 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. December 31 December 31 2023 2022 Shares Shares Convertible notes 300,000 194,444 Convertible Series C Preferred Stock 25,957,712 650,959 Convertible Series A Preferred Stock (1) 10,000,000,000 10,000,000,000 10,026,257,712 10,000,845,403 (1) Series A Preferred Stock was amended in March 2024 to remove the conversion feature (Note 11). For the years ended December 31, 2023 and 2022 the reconciliation to net loss per common share basic and the anti-dilutive impact on net loss per share, are as follows: Years Ended December 31, 2023 2022 Numerator: Net Loss $ ( 9,855,019 ) $ ( 2,907,828 ) Net Loss - diluted $ ( 9,855,019 ) $ ( 2,907,828 ) Denominator: Weighted average common shares outstanding 96,663,470 62,254,977 Effect of dilutive shares Convertible notes 273,683 69,954 Preferred stock 10,025,957,712 10,013,019,178 Diluted 10,122,894,865 10,075,344,109 Net loss per common share: Basic $ ( 0.10 ) $ ( 0.05 ) Diluted $ ( 0.00 ) $ ( 0.00 ) F-14 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized. Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. This ASU is currently not expected to have a material impact on our financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ending December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements and whether we will apply the standard prospectively or retrospectively. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. Note 3 – Asset Acquisition On January 3, 2022, the Company formed Mighty Fire Breaker, LLC, an Ohio limited liability company (“MFB Ohio”), to acquire all the intellectual property of Mighty Fire Breaker, LLC, a California limited liability company (“MFB California”) pertaining to the fire suppression segment of the environmental industry, including patents and patents pending. On April 13, 2022, the transaction between the Company, MFB Ohio and MFB California closed. The transaction consideration to the equity holders of MFB California was 1,000,000 shares of the Series C Convertible Preferred Stock of the Company with a value at closing of $ 4,200,000 , and a 10 % royalty on gross sales before taxes of the MFB Ohio family of products. MFB Ohio has 19 patents centred around its MFB Technology for the prevention and spread of wildfires. Its core products can be used for lumber treatments for fire prevention. It has been widely tested and is currently in testing at 3 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. The following table summarizes the consideration paid for the assets acquired and liabilities assumed, at the acquisition date of April 13, 2022: Consideration: Convertible Series C Preferred stock $ 4,200,000 Assets acquired and liabilities assumed: Intangible assets $ 4,195,353 Operating lease right-of-use assets $ 81,967 Operating lease liabilities $ ( 77,320 ) Note 4 – Discontinued Operations On April 1, 2022, the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition and development of its CitroTech MFB 31 Technology business. The Company had expanded its 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. 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. F-15 Table of Contents The following is a summary of the assets and liabilities of the Company’s crypto mining operations as of April 1, 2022: April 1, 2022 Digital currency $ 26,825 Digital currency equipment, net 276,380 Total assets from discontinued operations $ 303,205 Due to related party 301,175 Total liabilities from discontinued operations $ 301,175 The following is a summary of discontinued operations for the period ended April 1, 2022: April 1, 2022 Revenue $ 46,976 Operating expenses: Cost of revenue 27,835 Impairment loss 6,125 Total operating expenses 33,960 Income from discontinued operations $ 13,016 The following is a summary of discontinued cash flows for the period ended April 1, 2022 April 1, 2022 Cash Flows from Operating Activities: Net income $ 13,016 Adjustments to reconcile net loss to net cash used in operating activities: Impairment loss on digital assets 6,125 Depreciation and amortization 15,059 Changes in operating assets and liabilities: Digital currency ( 46,976 ) Accounts payable and accrued liabilities ( 27 ) Related party advances funding operating expense 12,803 Net Cash provided by Operating Activities - Change in cash - Cash, beginning of period - Cash, end of period $ - Non-Cash Financing Disclosure: Repayments of related party loans using digital currency $ 47,350 F-16 Table of Contents Note 5 – Equipment, net At December 31, 2023 and 2022, equipment consisted of the following: December 31, December 31, 2023 2022 Cost: Furniture and equipment $ 9,365 $ 5,350 Less: accumulated depreciation ( 2,066 ) ( 803 ) Property and equipment, net $ 7,299 $ 4,547 During the years ended December 31, 2023 and 2022, the Company recorded depreciation of $ 1,263 and $ 15,862 , respectively. Note 6 – Intangible Assets, net The Company has capitalized the costs associated with acquiring the intellectual property of MFB (see Note 3) at a value of $ 4,195,353 as of December 31, 2023 and 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 year ended December 31, 2023, no additional costs met the criteria for capitalization as an intangible asset. As of December 31, 2023 and 2022, finite lived intangible assets consisted of the following: December 31 December 31 2023 2022 Patents $ 4,195,353 $ 4,195,353 Accumulated amortization ( 247,247 ) - Intangible assets, net $ 3,948,106 $ 4,195,353 Estimated future amortization expense for finite lived intangibles are as follows: Year ended December 31, 2024 $ 247,931 2025 247,931 2026 247,931 2027 247,931 2028 247,931 Thereafter 2,708,451 $ 3,948,106 As of December 31, 2023, the weighted-average useful life is 16.11 years. During the year ended December 31, 2023 and 2022, the amortization expense was $ 247,247 and $ 0 , respectively. The Company commenced with amortization during 2023, when we started operations using the acquired assets. F-17 Table of Contents Note 7 – Lease In March 2022, the Company has entered into an operating lease for the office, with the term of 18 months. In July 2023, the Company amended the contract and extended the lease term to July 2025. The following summarizes right-of-use asset and lease information about the Company’s operating lease as of December 31, 2023 and 2022: Years Ended December 31, 2023 2022 The components of lease expense were as follows: Operating lease cost $ 70,830 $ 40,000 Supplemental cash flow information related to leases was as follows: Cash paid for operating cash flows from operating leases $ 79,528 $ 40,000 Right -of-use assets obtained upon acquisition $ 161,665 $ 81,967 Supplemental balance sheet information related to leases was as follows: December 31, December 31, 2023 2022 Operating lease right-of-use asset $ 129,683 $ 39,367 December 31, December 31, 2023 2022 Operating lease liabilities: Current portion $ 80,136 $ 39,367 Non-current portion 50,047 - $ 130,183 $ 39,367 Weighted-average remaining lease term - operating leases (year) 1.58 0.67 Weighted-average discount rate — operating leases 6.5 % 5.5 % The following table outlines maturities of our lease liabilities as of December 31, 2023: Year ended December 31, 2024 $ 85,792 2025 50,862 Thereafter - 136,654 Less: Imputed interest ( 6,471 ) Operating lease liabilities $ 130,183 F-18 Table of Contents Note 8 – Convertible Notes 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. 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 24 hours after payment at a fixed conversion price of $ 0.18 per share. As of December 31, 2023 and 2022, following is the summary of funds received from the lender: Principal Interest December 31, December 31, Payment date Amount Maturity date Rate 2023 2022 August 11, 2022 $ 18,000 2/11/2023 2 % $ 18,000 $ 18,000 September 2, 2022 $ 17,000 3/2/2023 2 % 17,000 17,000 April 1, 2023 $ 19,000 Due on demand 2 % 19,000 - Total Convertible notes $ 54,000 $ 35,000 Current portion ( 54,000 ) ( 35,000 ) Long -term portion $ - $ - On June 9, 2022, the lender paid $ 19,000 to the Company and it was recorded as an advance from a related party. On April 1, 2023, an amount owing to related party was reclassified to convertible note for $ 19,000 . During the years ended December 31, 2023 and 2022, the Company recognized interest expense of $ 1,311 and $ 255 , respectively. As of December 31, 2023 and 2022, the Company owned principal of $ 54,000 and $ 35,000 and accrued interest of $ 1,567 and $ 255 , respectively. Note 9 – Promissory Note On June 7, 2023, the Company entered into a promissory note agreement for the amount of $ 120,000 , in terms of twelve (12) months and interest rate of 5 % per annum. During the year ended December 31, 2023, the Company recognized $ 3,017 interest. As of December 31, 2023, the Company owed principal of $ 120,000 and accrued interest of $ 3,017 . Note 10 – Related Party Transactions During the year ended December 31, 2022, our former officer forgave $ 9,355 in accrued salary and the Company recognized it as additional paid-in-capital. During the year ended December 31, 2022, as part of the Company’s divestiture of its digital asset operations, a related party forgave loans payable of $ 301,175 in exchange for digital asset equipment with a net book value of $ 276,379 and digital currency intangible assets of $ 26,825 , of which the Company recorded a loss on disposition of $ 2,030 . During the year ended December 31, 2022, a related party paid $ 1 for share capital - Mighty Fire Breaker UK Limited. On June 13, 2022, the Company issued 70,000,000 Restricted Stock Award to a member of the board of directors and President of the Company. 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. On November 1, 2022, the Company’s Board of Directors approved the issuance of 250,000 shares of common stock to each of the two independent directors for their board services in support of the Company. As of December 31, 2023, the shares have not been issued, and the Company valued the 500,000 shares of common stock at market price on approval date and accrued $ 180,000 . On October 23, 2021, the Company entered into a consulting agreement with a related party. The consultant shall render to the Company, upon the request of any members of Board of Directors or the President of the Company, consulting services on matters relating to the business affairs of the Company. The agreement shall take effect of the date of agreement and shall terminate upon mutual agreement of the parties. The compensation of consultant is a number of Convertible Series C Preferred Shares which the Board of Directors of the Company may determine at its discretion. On November 1, 2022, the Company’s Board of Directors approved issuance of 1,200,000 shares of Convertible Series C Preferred Stock to consultant - related party for their past consulting services and continuing to July 2023. On September 5, 2023. the Company issued 1,200,000 shares of Convertible Series C Preferred Stock for consulting services rendered to the Company. The Company valued the 1,200,000 shares of Convertible Preferred Stock at $ 8,640,000 . On June 9, 2022, the Company received $ 19,000 cash from a third party, and it was recorded as an advance from a related party. On April 1, 2023, the Company recognized the error and the amount owing to the related party was reclassified to convertible note related to a lender for $19,000 (see Note 8). During the years ended December 31, 2023 and 2022, a related party advanced to the Company an amount of $ 307,500 and $ 784,484 for working capital propose, respectively. During the years ended December 31, 2023 and 2022, a related party advanced to the Company an amount of $ 246,425 and $ 108,569 for operating expenses on behalf of the Company, respectively. During the years ended December 31, 2023 and 2022, the Company repaid to a related party $ 125,000 and $ 55,720 owing of the loan, respectively. During the years ended December 31, 2023 and 2022, the Company paid $ 150,500 and $ 126,500 consulting fee to an entity under common control of a related party and $ 186,500 and $ 91,500 commission to a related party. As of December 31, 2023 and 2022, the Company was obliged to related parties, for unsecured, non-interest-bearing demand loans with a balance of $ 1,309,077 and $ 899,153 , respectively. F-19 Table of Contents Note 11 – Stockholders’ Equity Preferred Shares Shares Outstanding The Company is authorized to issue up to 15,000,000 shares of Preferred Stock, par value $ 0.0001 per share. Series A Preferred Stock The Company originally designated 10,000,000 shares of its Preferred Stock as Series A Convertible Preferred Stock. Issued and outstanding Series A Convertible Preferred stock as of December 31, 2023 and 2022, was 10,000,000 , respectively. On March 29, 2024, the Company amended and restated its Series A Convertible Preferred Stock to designate 10,000,000 shares of its Preferred Stock as Series A Preferred Stock, par value $0.0001, with the following rights and privileges . Dividends . Holders of shares of Series A Preferred Stock are not entitled to receive dividends. Voting Rights . Each share of Series A Preferred Stock is entitled to 1,000 votes on all matters submitted to a vote of stockholders. Holders of shares of Series A Preferred Stock do not have cumulative voting rights. This means a holder of a single share of Series A Preferred Stock cannot cast more than one vote for each position to be filled on the Board. Other Rights . Shares of Series A Preferred Stock are not entitled to a liquidation preference. The holders of the Series A Preferred Stock may not be redeemed without the consent of the holders of the Series A Preferred Stock. The holder of the Series A Preferred Stock are not entitled to pre-emptive rights or subscription rights. The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of its Charter and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of the Series A Preferred Stock against impairment. So long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by the Wyoming Business Corporations Act) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series A Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series A Preferred Stock; (c) increase the authorized number of shares of Series A Preferred Stock; or (d) authorize or issue any shares of senior securities. Fully Paid . The issued and outstanding shares of Series A Preferred Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Series A Preferred Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares. Series C Convertible Preferred Stock The Company has designated 5,000,000 shares of its Preferred Stock as Series C Convertible Preferred Stock with the following rights and privileges. Dividends . Holders of shares of Series C Convertible Preferred Stock are not entitled to receive dividends. Voting Rights . The holders of the Series C Convertible Preferred Stock are not entitled to vote. Conversion Rights . Each share of Series C Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into 20 shares of the Common Stock of the Company (the “ Conversion Ratio ”). Such Conversion Ratio, and the rate at which shares of Series C Convertible Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment. If at any time or from time to time there shall be (i) a merger or consolidation of the Company with or into another corporation, (ii) the sale of all or substantially all of the Company’s capital stock or assets to any other person, (iii) any other form of business combination or reorganization in which the Company shall not be the continuing or surviving entity of such business combination or reorganization, or (iv) any transaction or series of transactions by the Company in which more than 50 percent (50%) of the Company’s voting power is transferred (each a “ Reorganization ”) then as a part of such Reorganization, the provision shall be made so that the holders of the Series C Convertible Preferred Stock shall thereafter be entitled to receive the same kind and amount of stock or other securities or property (including cash) of the Company, or the successor corporation resulting from such Reorganization. Other Rights . The holders of the Series C Convertible Preferred Stockare not entitled to a liquidation preference. The holders of the Series C Convertible Preferred Stock may not be redeemed without the consent of the holders of the Series C Convertible Preferred Stock. The holder of the Series C Convertible Preferred Stock are not entitled to pre-emptive rights or subscription rights. The Company will not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of its Charter and in the taking of all such action as may be necessary or appropriate to protect the rights of the holders of the Series C Convertible Preferred Stock against impairment. F-20 Table of Contents So long as any shares of Series C Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by the Wyoming Business Corporations Act) of the holders of at least a majority of the then outstanding shares of Series C Convertible Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series C Convertible Preferred Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely the Series C Convertible Preferred Stock; (c) increase the authorized number of shares of Series C Convertible Preferred Stock; or (d) authorize or issue any shares of senior securities. Fully Paid . The issued and outstanding shares of Series A Convertible Preferred Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Series C Convertible Preferred Stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares. On April 13, 2022, the Company’s board of directors approved the issuance of 1,000,000 Convertible Series C Preferred Stock, with a value of $ 4,200,000 as consideration for the acquisition of the entity and intellectual property (see Note 3). The holder may exercise shares after an initial lock up period of six (6) months following the date of the agreement and may only exchange a maximum of four (4) million shares in a twelve (12) month period and may not hold or beneficially hold more than 10% of outstanding at any time. On June 7, 2022, the holder of the Convertible Series C Preferred Stock converted 50,000 shares of the Company’s Convertible Series C Preferred Stock into 1,000,000 shares of the Company’s common shares. On April 5, 2023, the holder of the Convertible Series C Preferred Stock converted 150,000 shares of the Company’s Convertible Series C Preferred Stock into 3,000,000 shares of the Company’s common shares. During the year ended December 31, 2023, the Company issued 273,499 shares of Convertible Series C Preferred Stock in connection with subscription agreements signed with investors at prices of $ 2.40 and $ 4.00 per share for total amount of $ 907,600 . During the year ended December 31, 2023, the Company received $ 500,000 for stock subscriptions. As of December 31, 2023, 183,333 shares were not yet issued and are recorded as preferred stock to be issued in equity. During the year ended December 31, 2023, the Company issued 1,200,000 shares of Convertible Series C Preferred Stock to a related party for consulting services rendered to the Company from October 2021 through July 2023. The Company valued the 1,200,000 shares of Convertible Preferred Stock, as if converted to 24,000,000 shares of common stock, using the quoted stock price of the Company’s common stock at approval date (November 1, 2022), resulting in a value of $8,640,000 . As of December 31, 2023 and 2022, there were 2,273,499 and 950,000 shares of the Company’s Convertible Series C Preferred Stock issued and outstanding, respectively. Common Stock The Company has authorized 1,000,000,000 shares of common stock with a par value of $ 0.0001 . Each share of 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. During the years ended December 31, 2023 and 2022, the holder of the Convertible Series C Preferred Stock converted 150,000 and 50,000 shares of the Company’s Convertible Series C Preferred Stock into 3,000,000 and 1,000,000 shares of the Company’s common stock, respectively. During the year ended December 31, 2023, the company issued 600,000 shares of common stock for services valued at $ 146,850 . As of December 31, 2023 and 2022, there were 97,545,388 and 93,945,388 shares of the Company’s common stock issued and outstanding, respectively. Stock-Based Compensation On June 13, 2022, the Company issued 70,000,000 Restricted Stock Awards (“RSAs”) 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 year ended December 31, 2023 and 2022: Restricted Stock Award Weighted-Average Grant Price Balance, December 31, 2021 - $ - Granted 70,000,000 0.03 Vested - - Forfeited - - Balance, December 31, 2022 70,000,000 $ 0.03 Granted - - Vested - - Forfeited - - Balance, December 31, 2023 70,000,000 $ 0.03 As of December 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. F-21 Table of Contents Common Stock to be Issued On November 1, 2022, the Company’s Board of Directors approved the issuance of 250,000 shares of common stock to each of the two independent directors for their board services in support of the Company. As of December 31, 2023, the Company has not issued the shares. The Company valued the 500,000 shares of common stock at the market value of the Company’s common stock at approval date for the amount of $ 180,000 . Note 12 - Income Taxes Components of income tax expense (benefit) are as follows for the years ended December 31, 2023 and 2022: 2023 2022 Current tax expense: Current Income Tax Expense - federal $ - $ - Current Income Tax Expense - state $ - $ - The tax effects of temporary differences which give rise to the significant portions of deferred tax assets or liabilities are as follows at December 31, 2023 and 2022: 2023 2022 Deferred tax assets and liabilities Net Operating loss Carryforward $ 5,780,000 $ 3,770,000 Amortization $ ( 103,000 ) $ ( 44,000 ) Less: valuation allowance $ ( 5,677,000 ) $ ( 3,726,000 ) Net deferred tax assets $ - $ - The Company will have approximately $ 27.5 and $ 17.9 million of gross net operating loss carry-forwards at December 31, 2023 and 2022, respectively. Federal NOLs do not expire, but are subject to 80% income limitation on use; state and local laws may vary by jurisdiction. Net deferred tax assets are mainly comprised of temporary differences between financial statement carrying amount and tax basis of assets and liabilities. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2023 and 2022, respectively, a full valuation allowance was recognized. In addition, the Company performed a comprehensive review of its uncertain tax positions and determined that no adjustments were necessary relating to unrecognized tax benefits at December 31, 2023 and 2022. The Company’s federal and state income tax returns are subject to examination by taxing authorities for three years after the returns are filed, and as such the Company’s federal and state income tax returns remain open to examination. The reconciliation of the income tax benefit is computed at the U.S. federal statutory rate as follows: 2023 2022 Federal statutory income tax at 21% 21 .00 % 21 .00 % Application of a full valuation allowance ( 21 .00) % ( 21 .00) % Provision for income taxes 0 .00 % 0 .00 % F-22 Table of Contents Note 13 – Commitments and Contingencies As part of the intellectual asset purchase agreement with MFB California, the Company is subject to royalties of 10.0% derived from gross invoiced sales of MFB products excluding funds received for sales and use tax (see Note 3). Note 14 – Concentration During years ended December 31, 2023 and 2022, customer and supplier concentrations (more than 10%) were as follows: Revenue and accounts receivable Percentage of Revenue Percentage of For Years ended Accounts Receivable December 31, December 31, 2023 2022 2023 2022 Customer A 32.65 % - 39.78 % - Customer B 44.19 % - 53.82 % - Customer C - 19.61 % - - Customer D - 19.61 % - - Customer E - 17.17 % - - Total (as a group) 76.84 % 56.39 % 93.60 % - Purchase and accounts payable Percentage of Purchase Percentage of For Years ended Accounts Payable December 31, December 31, 2023 2022 2023 2022 Supplier A 77.01 % 96.67 % - - Total (as a group) 77.01 % 96.67 % - - To reduce risk, the Company closely monitors the amounts due from its customers and assesses the financial strength of its customers through a variety of methods that include, but are not limited to, engaging directly with customer operations and leadership personnel, visiting customer locations to observe operating activities, and assessing customer longevity and reputation in the marketplace. As a result, the Company believes that its accounts receivable credit risk exposure is limited. Note 15 – 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: The Company received subscriptions of $ 165,000 in cash for 50,000 shares of Convertible Series C Preferred Stock in connection with subscription agreements signed with investors at prices of $2.40 and $6.00 per share . The company had the following transactions in the Common stock as follows: · 250,000 shares issued to a director of the Company. · 1,150,000 shares issued for MFB Ohio board advisory fees. · 456,762 shares for conversion of debt and accrued interest. · 1,900,000 shares issued to consultants for services. · 65,000,000 shares were cancelled by our Chief Executive Officer. The Company had the following transactions in the Series C Preferred shares · 108,333 shares for stock payable. · 40,000 shares issued to consultants for services F-23 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. On January 29, 2024, the Company’s Board of Directors selected WWC, P.C. (the “New Accountant”) to serve as the Company’s independent registered public accounting firm for the review of its Annual Report on Form 10-K for the year ending December 31, 2023. As a result, the Board of Directors determined that BF Borgers CPA PC (the “Former Accountant”) would no longer serve as the Company’s independent registered public accounting firm, effective as of March 21, 2023. On January 31, 2024, the Company filed a Current Report on Form 8-K (the “Form 8-K”) with the SEC disclosing the changes in its certifying accountant. As disclosed in the Form 8-K, the Former Accountant’s audit report on our financial statements for the years ended December 31, 2022 and 2021 contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report on the financial statements of the Company for the year ended December 31, 2022 and 2021 contained an uncertainty about the Company’s ability to continue as a going concern (the “Going Concern Opinion”). For the years ended December 31, 2022 and 2021 and through the date of the Form 8-K, the Company had no “disagreements” (as defined in Regulation S-K, Item 304(a)(1)(iv) and the related instructions) with the Former Accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to the satisfaction of the Former Accountant would have caused them to make reference thereto in their reports on the financial statements for such periods. There were no reportable events for the years ended December 31, 2022 or 2021 and through the date of the Form 8-K, there were no reportable events as defined in item 304(a)(1)(v) of Regulation S-K. As also disclosed in the Form 8-K, prior to retaining the New Accountant, the Company did not consult with the New Accountant regarding either: (i) the application of accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements; or (ii) any matter that was the subject of a “disagreement” or a “reportable event” (as those terms are defined in Item 304(a)(1)(iv) and (a)(1)(v) of Regulation S-K, respectively). On January 29, 2024, the Company provided the Former Accountant with the disclosures contained in the Form 8-K disclosing the dismissal of the Former Accountant and requested in writing that the Former Accountant furnish the Company with a letter addressed to the SEC stating whether or not they agree with such disclosures. The Former Accountant’s response was filed as Exhibit 16.1 to the Form 8-K.