CitroTech Inc. 10-Q/A

Item 1. Financial Statements General Enterprise Ventures, Inc. Consolidated Balance Sheets (Unaudited) March 31, December 31, 2024 2023 Assets Current Assets Cash $ 371,095 $ 549,755 Accounts receivable 680,965 427,433 Inventory 188,791 230,197 Prepaid expenses 11,463 10,671 Total Current Assets 1,252,314 1,218,056 Equipment, net 6,639 7,299 Intangible assets 3,884,931 3,948,106 Operating lease right-of-use asset 110,081 129,683 Total Assets $ 5,253,965 $ 5,303,144 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ 70,257 $ 54,572 Promissory note - 120,000 Convertible note payable - 54,000 Due to related parties 1,309,077 1,309,077 Operating lease liability - current portion 82,051 80,136 Total Current Liabilities 1,461,385 1,617,785 Operating lease liability 28,830 50,047 Total Liabilities 1,490,215 1,667,832 Commitment and contingencies - - Stockholders' Equity Series A Preferred Stock, par value $ 0.0001 , designated 10,000,000 shares, 10,000,000 shares issued and outstanding 1,000 1,000 Series C Convertible Preferred Stock, par value $ 0.0001 , designated 5,000,000 shares, 2,471,832 and 2,273,499 issued and outstanding, respectively 247 227 Common Stock par value $ 0.0001 , authorized 1,000,000,000 shares, 36,302,150 and 97,545,388 shares issued and outstanding, respectively 3,630 9,755 Additional paid-in capital 76,492,249 72,427,996 Common Stock to be issued - 250,000 and 500,000 shares, respectively 90,000 180,000 Subscription received - 75,000 and 183,333 shares of Series C Preferred stock to be issued, respectively 180,000 500,000 Accumulated deficit ( 73,003,376 ) ( 69,483,666 ) Total Stockholders' Equity 3,763,750 3,635,312 Total Liabilities and Stockholders' Equity $ 5,253,965 $ 5,303,144 See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 3 Table of Contents General Enterprise Ventures, Inc. Consolidated Statement of Operations and Comprehensive Loss (Unaudited) Three Months Ended March 31, 2024 2023 Revenue $ 433,018 $ 55,595 Operating Expenses Cost of revenue (includes payments to related parties of $47,346 and $12,530, respectively and exclusive of amortization and depreciation shown separately below) 126,072 39,774 Amortization and depreciation 63,835 62,076 General and administration 140,468 74,802 Marketing 110,206 11,592 Professional fees- related party 1,468,404 72,470 Professional fees 1,160,579 210,129 Total operating expenses 3,069,564 470,843 Loss from Operations ( 2,636,546 ) ( 415,248 ) Other Income (Expense) Interest expense ( 885 ) ( 175 ) Loss on settlement of debt by issuing common stock ( 882,279 ) - Total other income (expense) ( 883,164 ) ( 175 ) Loss from operations before taxes ( 3,519,710 ) ( 415,423 ) Provision for income taxes - - Net Loss $ ( 3,519,710 ) $ ( 415,423 ) Comprehensive Loss $ ( 3,519,710 ) $ ( 415,423 ) Net loss per common share - Basic and diluted $ ( 0.04 ) $ ( 0.00 ) Basic and Diluted Weighted Average Number of Common Shares Outstanding 92,232,946 94,165,388 See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 4 Table of Contents General Enterprise Ventures, Inc. Consolidated Statements of Change in Stockholders’ Deficit (Unaudited) For the three months ended March 31, 2024 Series A Convertible Series C Additional Total Preferred stock Preferred stock Common Stock Preferred Stock Common Stock Paid-In Accumulated Stockholders' Shares Amount Shares Amount Shares Amount to be issued to be issued Capital Deficit Equity Balance - December 31, 2023 10,000,000 $ 1,000 2,273,499 $ 227 97,545,388 $ 9,755 $ 500,000 $ 180,000 $ 72,427,996 $ ( 69,483,666 ) $ 3,635,312 Series C Preferred Stock issued for cash - - 158,333 16 - - ( 320,000 ) - 484,984 - 165,000 Series C Preferred Stock issued for services - - 40,000 4 - - - - 695,996 - 696,000 Common stock issued for stock to be issued - management - - - - 250,000 25 - ( 90,000 ) 89,975 - - Common stock issued for conversion and settlement of debt - - - - 1,506,762 150 - - 1,084,998 - 1,085,148 Cancellation of comment stock -related party - - - - ( 65,000,000 ) ( 6,500 ) - - 6,500 - - Common stock issued for services - - - - 2,000,000 200 - - 1,701,800 - 1,702,000 Net loss - - - - - - - - - ( 3,519,710 ) ( 3,519,710 ) Balance - March 31, 2024 10,000,000 $ 1,000 2,471,832 $ 247 36,302,150 $ 3,630 $ 180,000 $ 90,000 $ 76,492,249 $ ( 73,003,376 ) $ 3,763,750 For the three months ended March 31, 2023 Series A Convertible Series C Additional Total Preferred stock Preferred stock Common Stock Paid-In Accumulated Stockholders' Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance - December 31, 2022 10,000,000 $ 10,000 950,000 $ 950 93,945,388 $ 93,945 $ 62,625,173 $ ( 59,381,400 ) $ 3,348,668 Common stock issued for services - - - - 300,000 300 86,550 - 86,850 Net loss - - - - - - - ( 415,423 ) ( 415,423 ) Balance - March 31, 2023 10,000,000 $ 10,000 950,000 $ 950 94,245,388 $ 94,245 $ 62,711,723 $ ( 59,796,823 ) $ 3,020,095 See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 5 Table of Contents General Enterprise Ventures, Inc. Consolidated Statement of Cash Flows (Unaudited) Three months ended March 31, 2024 2023 Cash Flows from Operating Activities: Net loss $ ( 3,519,710 ) $ ( 415,423 ) Adjustments to reconcile net loss to net cash used in operating activities: Common stock-based compensation 1,702,000 86,850 Series C Preferred stock-based compensation 696,000 - Non-cash lease expenses 19,602 15,000 Depreciation and amortization 63,835 62,076 Loss on settlement of debt 882,279 - Changes in operating assets and liabilities: Accounts receivable ( 253,532 ) - Inventory 41,406 12,377 Prepaid expense ( 792 ) ( 6,300 ) Related party advances funding operating expense - 49,052 Accounts payable and accrued liabilities 44,554 34,463 Operating lease liabilities ( 19,302 ) ( 15,000 ) Net Cash used in Operating Activities ( 343,660 ) ( 176,905 ) Cash Flows from Financing Activities: Proceeds from loan - related party - 185,000 Proceed from issuance Series C Preferred Stock 165,000 - Net Cash provided by Financing Activities 165,000 185,000 Change in cash ( 178,660 ) 8,095 Cash, beginning of period 549,755 55,434 Cash, end of period $ 371,095 $ 63,529 Supplemental Disclosure Information: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - Non-Cash Financing Disclosure: Common stock issued for conversion and settlement of debt $ 1,085,148 $ - Common stock issued for stock to be issued - management $ 90,000 $ - Series C Preferred stock issued for subscription received $ 320,000 $ - Cancellation comment stock -related party $ 6,500 $ - See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 6 Table of Contents General Enterprise Ventures, Inc. Notes to (Unaudited) Consolidated Financial Statements March 31, 2024 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 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”) in connection with the flame retardant and flame suppression segments 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. In addition, on November 14, 2022, the Company formed Mighty Fire Breaker UK Limited (“MFB UK” and together with MFB Ohio, collectively, “MFB”). MFB has 56 patents pertaining to its CitroTech MFB 31 Technology™ (“CitroTech” or the “MFB Technology”) for the prevention and spread of wildfires. . When CitroTech is applied it converts flammable fuels like dry native vegetation and wood into non-combustible materials. During the third quarter of 2022 the Company received EPA Safer Choice status and UL Green-Guard Gold approval on its CitroTech fire inhibitor. The Company continues to pursue accreditations such as the Missoula Testing approval for selling products to the government. Currently. MFB Ohio is involved in installing commercial and large residential Proactive Wildfire Prevention Systems. 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 in 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 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 3,519,710 and $ 433,018 in revenues for the three months ended March 31, 2024, and has a working capital deficiency of $ 209,071 as of March 31, 2024. In addition, the Company has been dependent on related parties to fund operations and has an amount owing to related parties of $ 1,309,077 outstanding at March 31, 2024. 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 three months ended March 31, 2024, the Company completed financings from the issuance of Series C preferred stock, generating net proceeds of $ 165,000 . 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. Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. 7 Table of Contents In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited interim financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K/A, for the year ended December 31, 2023, as filed with the SEC on July 30, 2024. Principles of Consolidation The consolidated financial statements include the accounts of General Enterprise Ventures, Inc., and its wholly owned subsidiary, Mighty Fire Breaker, LLC, an Ohio Limited Liability company. Intercompany transactions and balances have been eliminated. Restatement For the three months ended March 31, 2023, the company restated the consolidated financial statements for the calculation of amortization on intangible assets. The impact on the Consolidated Statement of Operations and Comprehensive Loss of the restatement is as follows: Three Months Ended March 31, 2023 As Filed Adjustment As Restated Amortization and depreciation $ - $ 61,812 $ 61,812 Total operating expense $ 395,177 $ 61,812 $ 456,989 Loss from operations $ ( 353,436 ) $ ( 61,812 ) $ ( 415,248 ) Net loss and comprehensive loss $ ( 353,611 ) $ ( 61,812 ) $ ( 415,423 ) The impact on the Consolidated Statement of Cash Flows of the restatement is as follows: Three months ended March 31, 2023 As Filed Adjustment As Restated Cash Flows from Operating Activities: Net loss $ ( 353,611 ) $ ( 61,812 ) $ ( 415,423 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization $ 264 $ 61,812 $ 62,076 The impact on the Consolidated Statement of Stockholders’ Equity of the restatement is as follows: March 31,2023 As Filed Adjustment As Restated Stockholders' Equity: Accumulated deficit $ ( 59,735,011 ) $ ( 61,812 ) $ ( 59,796,823 ) Total Stockholders' Equity: $ 3,081,907 $ ( 61,812 ) $ 3,020,095 Reclassification For the three months ended March 31,2024 and 2023, certain amounts have been reclassified to improve the clarity and comparability of the Consolidated Financial Statements. An adjustment has been made to the Consolidated Statements of Operations and Comprehensive Loss and for the three ended March 31,2024 and 2023, 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 impact on the Consolidated Statement of Operations and Comprehensive Loss, with no change to the restated loss from operations or net loss, respectively, as follows: Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 As Filed Adjustment As Reclassified As Filed and Restated(*) Adjustment As Reclassified Cost of revenue $ 89,872 $ ( 89,872 ) $ - $ 13,854 $ ( 13,854 ) $ - Operating Expenses Cost of revenue (exclusive of amortization and depreciation shown separately below) - 126,072 126,072 - 39,774 39,774 Amortization and depreciation - 63,835 63,835 61,812 264 62,076 General and administration 197,357 ( 56,889 ) 140,468 88,456 ( 13,654 ) 74,802 Marketing 110,206 - 110,206 11,592 - 11,592 Professional fees- related party - 1,468,404 1,468,404 - 72,470 72,470 Professional fees 2,672,129 ( 1,511,550 ) 1,160,579 295,129 ( 85,000 ) 210,129 Total operating expenses $ 2,979,692 $ 89,872 $ 3,069,564 $ 456,989 $ 13,854 $ 470,843 (*) Originally as filed for March 31, 2023 and restated for the change for amortization of intangible assets. 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. 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 March 31, 2024 and December 31, 2023. The Company had cash of $ 371,095 and $ 549,755 at March 31, 2024 and December 31, 2023, respectively. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $ 250,000 per institution. The amount in excess of the FDIC insurance as of March 31, 2024 was approximately $ 112,000 . The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. 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. As of March 31, 2024 and December 31, 2023, the Company had no allowance for doubtful accounts. Inventory Inventories consist of raw materials which are stated at lower cost or net realizable value, with cost being determined on the weighted average method. As of March 31, 2024 and December 31, 2023, the Company held inventories of $ 188,791 and $ 230,197 , respectively. The Company did not write-off any inventories as unsalable during the three months ended March 31, 2024 and 2023. 8 Table of Contents 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 receivable, prepaid expenses, accounts payable and accrued liabilities, due to related parties and loans payable, are carried at historical cost. At March 31, 2024 and December 31, 2023, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. 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. 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. Cost of Revenue For the three months ended March 31, 2024, and 2023, cost of revenue consists of: Three Months Ended March 31, 2024 2023 Cost of inventory $ 76,196 $ 26,154 Freight and shipping 2,530 1,090 Consulting and advisory - related party 4,200 9,000 Royalty and sales commission - related party 43,146 3,530 Total cost of revenue $ 126,072 $ 39,774 Basic and Diluted Net Loss Per Common Share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. For the three months ended March 31, 2024, and 2023, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive. March 31, March 31, 2024 2023 Shares Shares Convertible notes - 194,444 Convertible Series C Preferred Stock 47,562,284 19,002,023 Convertible Series A Preferred Stock (1) - 10,000,000,000 47,562,284 10,019,196,467 (1) Series A Preferred Stock was amended in March 2024 to remove the conversion feature (Note 9). 9 Table of Contents For the three months ended March 31, 2024 and 2023 the reconciliation to net loss per common share basic and the anti-dilutive impact on net loss per share, are as follows: Three months ended March 31, 2024 2023 Numerator: Net Loss $ ( 3,519,710 ) $ ( 415,423 ) Net Loss - diluted $ ( 3,519,710 ) $ ( 415,423 ) Denominator: Weighted average common shares outstanding 92,232,946 94,165,388 Effect of dilutive shares Convertible notes - 194,444 Preferred stock 47,562,284 10,019,002,023 Diluted 139,795,231 10,113,361,855 Net income per common share: Basic $ ( 0.04 ) $ ( 0.00 ) Diluted $ ( 0.03 ) $ ( 0.00 ) Recently Issued Accounting Pronouncements 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 – Equipment At March 31, 2024 and December 31, 2023, equipment consisted of the following: March 31, December 31, 2024 2023 Cost: Furniture and equipment $ 9,365 $ 9,365 Less: accumulated depreciation ( 2,726 ) ( 2,066 ) Property and equipment, net $ 6,639 $ 7,299 During the three months ended March 31, 2024, and 2023, the Company recorded depreciation of $ 660 and $ 264 , respectively. 10 Table of Contents Note 4 – Intangible Assets The Company has capitalized the costs associated with acquiring the intellectual property of MFB at a value of $ 4,195,353 as of March 31, 2024 and December 31, 2023, 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 and three months ended March 31, 2024, no additional costs met the criteria for capitalization as an intangible asset. As of March 31, 2024 and December 31, 2023, finite lived intangible assets consisted of the following: March 31, December 31, 2024 2023 Patents $ 4,195,353 $ 4,195,353 Accumulated amortization ( 310,422 ) ( 247,247 ) Intangible assets, net $ 3,884,931 $ 3,948,106 Estimated future amortization expense for finite lived intangibles are as follows: Year Ending December 31, 2024 (excluding the three months ended March 31, 2024) $ 185,440 2025 247,931 2026 247,931 2027 247,931 2028 247,931 Thereafter 2,707,767 $ 3,884,931 As of March 31, 2024, the weighted-average useful life is 16 .00 years. During the three months ended March 31, 2024 and 2023, the amortization expense was $ 63,175 and $ 61,812 , respectively. Note 5 – 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 for the three months ended March 31, 2024 and 2023: Three months ended March 31, 2024 2023 The components of lease expense were as follows: Operating lease expense $ 21,498 $ 15,000 Short-term lease expense 2,393 6,651 Total lease expense $ 23,891 $ 21,651 Supplemental cash flow information related to leases was as follows: Cash paid for operating cash flows from operating leases $ 21,198 $ 15,000 Weighted-average remaining lease term - operating leases (year) 1.33 0.42 Weighted-average discount rate — operating leases 6.50 % 5.50 % 11 Table of Contents Supplemental balance sheet information related to leases was as follows: March 31, December 31, 2024 2023 Operating lease right-of-use asset $ 110,081 $ 129,683 March 31, December 31, 2024 2023 Operating lease liabilities: Current portion $ 82,051 $ 80,136 Non-current portion 28,830 50,047 $ 110,881 $ 130,183 The following table outlines maturities of our lease liabilities as of March 31, 2024: Year ending December 31, 2024 (excluding the three months ended March 31, 2024) $ 64,594 2025 50,862 Thereafter - 115,456 Less: Imputed interest ( 4,575 ) Operating lease liabilities $ 110,881 Note 6 – Convertible Note On September 30, 2022, the Company entered into a convertible note agreement for the amount of $ 54,000 , with term of six (6) months from the date of receipt of the funds, at interest rate of 2 % per annum. 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 March 31, 2024 and December 31, 2023, following is the summary of funds received from the lender: Principal Interest March 31, December 31, Payment date Amount Maturity date Rate 2024 2023 August 11, 2022 $ 18,000 2/11/2023 2 % $ - $ 18,000 September 2, 2022 $ 17,000 3/2/2023 2 % - 17,000 April 1, 2023 $ 19,000 Due on demand 2 % - 19,000 Total Convertible notes $ - $ 54,000 Current portion - ( 54,000 ) Long -term portion $ - $ - 12 Table of Contents During the three months ended March 31, 2024, the Company settled liabilities of $ 23,400 and converted notes with principal amounts of $54,000 and accrued interest of $ 1,702 into 456,762 shares of common stock. The fair market value of the common shares converted was $126,655 at the issuance date, as a result, the Company recognized a loss on debt settled by common stock of $ 103,255 . During the three months ended March 31, 2024, and 2023, the Company recognized interest expenses of $ 135 and $ 175 , respectively. As of March 31, 2024 and December 31, 2023, the Company owned principal of $ 0 and $ 54,000 and accrued interest of $ 0 and $ 1,567 , respectively. Note 7 – 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 three months ended March 31, 2024, the Company recognized $ 750 interest. During the three months ended March 31, 2024, the Company settled the promissory note with principal amount of $ 120,000 and accrued interest of $ 3,767 into 1,050,000 shares of common stock. The fair market value of the common shares converted was $902,790 at the issuance date, as a result, the Company recognized a loss on debt settled by common stock of $ 779,024 . Note 8 – Related Party Transactions The related parties had material transactions for the three months ended March 31, 2024 and 2023, consist of the following: Related Party Nature of Relationship to the Company A Significant shareholdings owned by a corporation (greater than 10%) B Owner of related party A C Chief Executive Officer (CEO) of the Company D Company owned by related party E E Significant shareholder (greater than 10%) F MFB Ohio board advisor G MFB Ohio board advisor H MFB Ohio board advisor I MFB Ohio board advisor J MFB Ohio board advisor K MFB Ohio board advisor As of March 31, 2024 and December 31, 2023, amounts owing to related parties consists as follows: March 31, December 31, Related Party 2024 2023 A $ 897,197 $ 897,197 B 411,880 411,880 $ 1,309,077 $ 1,309,077 During the three months ended March 31, 2024 and 2023, related party A advanced to the Company an amount of $ 0 and $ 185,000 for working capital proposes and $ 0 and $ 49,052 for operating expenses paid directly to vendors, on behalf of the Company, respectively. As of March 31, 2024 and December 31, 2023, the Company was obliged to related parties A and B, for unsecured, non-interest-bearing demand loans with a balance of $ 1,309,077 . For the three months ended March 31, 2024 and 2023, expenses to related parties and their nature, consists as follows: Three months ended March 31, Financial Statement Related Party 2024 2023 Nature of Transaction Line Items C $ 25,000 $ - Cash paid for management fee General and administration D $ 16,800 $ 36,000 Cash paid for consulting fees Professional fees - related party D $ 4,200 $ 9,000 Cash paid for consulting and advisory fees Cost of revenue E $ 28,854 $ 36,470 Cash paid for management fee Professional fees - related party E $ 43,146 $ 3,530 Cash paid for royalty and sales commissions Cost of revenue F $ 214,950 $ - 250,000 shares of common stock issued for advisory fee Professional fees - related party G $ 429,900 $ - 500,000 shares of common stock issued for advisory fee Professional fees - related party H $ 128,970 $ - 150,000 shares of common stock issued for advisory fee Professional fees - related party I $ 214,950 $ - 250,000 shares of common stock issued for advisory fee Professional fees - related party J $ 348,000 $ - 20,000 shares of Series C preferred stock for advisory fee Professional fees - related party K $ 85,980 $ - 100,000 shares of common stock issued for advisory fee Professional fees - related party Note 9 – 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 March 31, 2024 and December 31, 2023, was 10,000,000 . 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 . 13 Table of Contents 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 Stock are 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. 14 Table of Contents 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. 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 C 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. During the three months ended March 31, 2024, the Company issued 198,333 shares of Series C Preferred Stock as follow; · 108,333 shares issued for stock payable of $ 320,000 . · 50,000 shares for $ 165,000 cash subscription. · 40,000 issued for services, valued at $ 696,000 at market price on issuance date. Subscription received During the year ended December 31, 2023, the Company received $500,000 for stock subscriptions. As of March 31, 2024 and December 31, 2023, 75,000 and 183,333 shares were not issued and are recorded as preferred stock to be issued with value of $180,000 and $ 500,000 in equity, respectively. Subsequently on April 24, 2024, the Company issued 74,999 shares of Convertible Series C Preferred Stock. As of March 31, 2024, and December 31, 2023, there were 2,471,832 and 2,273,499 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 three months ended March 31, 2024, the Company issued 3,756,762 shares of Common Stock and cancelled 65,000,000 shares as follow; · 2,000,000 shares issued for services, valued at $ 1,702,000 at market price on issuance date. · 1,506,762 shares for conversion and settlement of debt of $ 1,085,148 at market price on issuance date. · 250,000 shares for stock to be issued, to a company director, originally valued at $ 90,000 . · 65,000,000 shares were cancelled by the Company's President, valued $6,500 at par value. As of March 31, 2024 and December 31, 2023, there were 36,302,150 and 97,545,388 shares of the Company’s common stock issued and outstanding, respectively. 15 Table of Contents 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 three months ended March 31, 2024: Restricted Stock Award Weighted-Average Grant Price Balance, December 31, 2023 70,000,000 $ 0.03 Granted - - Vested - - Cancelled ( 65,000,000 ) 0.03 Balance, March 31, 2024 5,000,000 $ 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. 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. 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. As of March 31, 2024, and December 31, 2023, 250,000 and 500,000 shares were not yet issued and are recorded as common stock to be issued of $ 90,000 and $ 180,000 in equity, respectively. Note 10– 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 Notes 1 and 4). Note 11 – Concentration As of March 31, 2024 and December 31, 2023 and for three months ended March 31, 2024 and 2023, customer and supplier concentrations (more than 10%) were as follows: Revenue and accounts receivable Percentage of Revenue Percentage of For Three Months ended Accounts receivable March 31, March 31, December 31 2024 2023 2024 2023 Customer A 28.17 % - 17.92 % - Customer B 25.55 % - 16.25 % - Customer C 36.49 % - 23.20 % 39.77 % Customer D - - 33.78 % 53.83 % Total (as a group) 90.21 % - 91.15 % 93.60 % 16 Table of Contents Purchase and accounts payable Percentage of Purchase Percentage of For Three Months ended Accounts Payable March 31, March 31, December 31 2024 2023 2024 2023 Supplier A 34.04 % - - - Supplier B 9.90 % - - - Supplier C 37.61 % - - - Supplier D 18.45 % - - - Supplier E - 100 % - - Total (as a group) 100 % 100 % - - 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 12 – Subsequent Events Management evaluated all additional events through May 15, 2024, which is the date the financial statements were available to be issued. Based upon this review, unless noted below, the Company did not identify any material subsequent events that would have required adjustment or disclosure in the financial statements. 17 Table of Contents