CitroTech Inc. 10-K

Item 8. Financial Statements and Supplementary Data. General Enterprise Ventures, Inc. Index to Audited Consolidated Financial Statements December 31, 2024 and 2023 Contents Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 1171 ) F-2 Consolidated Balance Sheets at December 31, 2024 and 2023 F-4 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023 F-5 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 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, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, 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 has suffered recurring losses from operations and has a working capital deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans with regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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 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. F-2 Table of Contents Valuation of Intangible Assets Description of the Matter As described in Notes 2 and 6 to the consolidated financial statements, the Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s intangible assets comprised of patents and totaled $3.7 million as of December 31, 2024. We identified the auditing of the valuation of intangible assets as a critical audit matter because it represents a significant portion of the Company’s total assets, and it requires a significant amount of judgment to evaluate the recoverability of the carrying amount of the intangible assets. The primary procedures we performed to address this critical audit matter included the following, among others: · We obtained an understanding of the process utilized by the Company’s management to evaluate the recoverability of the carrying amount of the intangible assets. · We tested the Company’s process and evaluated the reasonableness of the inputs that management used in its analysis, including the comparison of revenue projections with actual results. Valuation of Derivative Liability Description of the Matter As described in Notes 2, 8 and 9 to the consolidated financial statements, the Company recorded convertible notes that included a conversion feature that was required to be accounted for separately as a derivative liability under ASC 815, Derivatives and Hedging . We identified the auditing of the valuation of derivative liability as a critical audit matter due to the significant judgment and complex estimation required in determining its fair value. The fair value of this derivative liability is estimated using a binomial lattice model, which incorporates assumptions about the Company’s conversion price, volatility, dividend yield, risk-free interest rate, credit risk, and potential early conversion behavior. The primary procedures we performed to address this critical audit matter included the following, among others: · We obtained the Company’s valuation model and obtained an understanding of the process utilized by the Company to determine the fair value of the derivative liability. · We tested the Company’s process and evaluated the reasonableness of the inputs and assumptions used in the Company’s fair value calculation. /s/ WWC, P.C. WWC, P.C. Certified Public Accountants PCAOB ID: 1171 We have served as the Company’s auditor since 2024. San Mateo, California March 31, 2025 F-3 Table of Contents General Enterprise Ventures, Inc. Consolidated Balance Sheets December 31, December 31, 2024 2023 Assets Current Assets Cash $ 775,133 $ 549,755 Accounts receivable 317,455 427,433 Inventory 324,657 230,197 Prepaid expenses 74,129 10,671 Deferred offering costs 126,104 - Total Current Assets 1,617,478 1,218,056 Non-Current Assets Intangible assets, net 3,699,491 3,948,106 Operating lease right-of-use asset 49,347 129,683 Equipment, net 111,374 7,299 Total Assets $ 5,477,690 $ 5,303,144 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ 186,984 $ 54,572 Promissory note - 120,000 Convertibles notes, net of discount 196,077 54,000 Convertibles note - related party 576,693 - Financing loan 96,849 - Due to related parties - 1,309,077 Derivative liability 1,055,233 - Operating lease liability - current portion 50,047 80,136 Total Current Liabilities 2,161,883 1,617,785 Non-current Liability Operating lease liability - 50,047 Total Liabilities 2,161,883 1,667,832 Stockholders' Equity Preferred Stock, par value $ 0.0001 , authorized 30,000,000 shares: 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 10,000,000 shares, 3,001,969 and 2,273,499 issued and outstanding, respectively 300 227 Common Stock par value $ 0.0001 , authorized 1,000,000,000 shares, 36,841,581 and 97,545,388 shares issued and outstanding, respectively 3,684 9,755 Additional paid-in capital 79,676,211 72,427,996 Common Stock to be issued - 0 and 500,000 shares, respectively - 180,000 Subscription received - 0 and 183,333 shares of Series C Preferred stock to be issued, respectively - 500,000 Accumulated deficit ( 76,365,388 ) ( 69,483,666 ) Total Stockholders' Equity 3,315,807 3,635,312 Total Liabilities and Stockholders' Equity $ 5,477,690 $ 5,303,144 See the accompanying Notes, which are an integral part of these consolidated financial statements. F-4 Table of Contents General Enterprise Ventures, Inc. Consolidated Statements of Operations and Comprehensive Loss Years Ended December 31, 2024 2023 Revenue $ 808,372 $ 520,645 Operating expenses Cost of revenue, exclusive of amortization and depreciation shown separately below 554,182 182,730 Cost of revenue - related parties 101,317 77,404 Amortization and depreciation 264,696 248,510 General and administration 498,445 256,602 Advertising and marketing 1,005,504 148,289 Management compensation 75,000 180,000 Professional fees 1,935,900 625,452 Professional fees - related parties 1,664,004 8,899,596 Research and development expense 14,002 - Total operating expenses 6,113,050 10,618,583 Loss from operations ( 5,304,678 ) ( 10,097,938 ) Other expense Interest expense ( 257,782 ) ( 4,328 ) Change in fair value of derivative liability ( 409,776 ) - Loss on settlement of debt ( 909,486 ) - Total other expense ( 1,577,044 ) ( 4,328 ) Loss from operations before taxes ( 6,881,722 ) ( 10,102,266 ) Provision for income taxes - - Net loss $ ( 6,881,722 ) $ ( 10,102,266 ) Comprehensive loss $ ( 6,881,722 ) $ ( 10,102,266 ) Net loss per common share - basic and diluted $ ( 0.14 ) $ ( 0.10 ) Basic and diluted weighted average number of common shares outstanding 50,296,518 96,663,470 See the accompanying Notes, which are an integral part of these consolidated financial statements. F-5 Table of Contents General Enterprise Ventures, Inc. Consolidated Statements of Change in Stockholders’ Equity Convertible Series A Convertible Series C Additional Preferred Stock Common Stock Total Preferred stock Preferred stock Common Stock Paid-In to be to be Accumulated Stockholders' Shares Amount Shares Amount Shares Amount Capital issued issued Deficit Equity 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 .0 Subscription received - Series C Preferred shares to be issued - - - - - - - 500,000 - - 500,000 Common stock to be issued - management - - - - - - - - 180,000 - 180,000 Issuance Series C Preferred Stock in 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 Series C Preferred Stock issued for preferred stock to be issued - - 183,332 18 - - 499,982 ( 500,000 ) - - - Series C Preferred Stock issued in cash - - 421,805 43 - - 1,844,957 - - - 1,845,000 Series C Preferred Stock issued for services - - 123,333 12 - - 1,195,988 - - - 1,196,000 Common stock issued for stock to be issued - management - - - - 500,000 50 179,950 - ( 180,000 ) - - Common stock issued for conversion and settlement of debt - - - - 1,546,193 154 1,112,201 - - - 1,112,355 Cancellation of comment stock -related party - - - - ( 65,000,000 ) ( 6,500 ) 6,500 - - - - Common stock issued for compensation - - - - 1,250,000 125 1,074,625 - - - 1,074,750 Common stock issued for services - - - - 1,000,000 100 787,149 - - - 787,249 Common stock warrants issued - - - - - - 546,863 - - - 546,863 Net loss - - - - - - - - - ( 6,881,722 ) ( 6,881,722 ) Balance - December 31, 2024 10,000,000 $ 1,000 3,001,969 $ 300 36,841,581 $ 3,684 $ 79,676,211 $ - $ - $ ( 76,365,388 ) $ 3,315,807 See the accompanying Notes, which are an integral part of these consolidated financial statements. F-6 Table of Contents General Enterprise Ventures, Inc. Consolidated Statement of Cash Flows Years Ended December 31, 2024 2023 Cash Flows from Operating Activities: Net loss $ ( 6,881,722 ) $ ( 10,102,266 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 1,861,999 8,966,850 Series C Preferred stock-based compensation 1,196,000 - Bad debt expense 22,774 - Non-cash lease expenses 80,336 71,349 Depreciation and amortization 264,696 248,510 Amortization debt discount 196,077 - Loss on settlement of debt 909,486 - Change in fair value of derivative 409,776 - Changes in operating assets and liabilities: Accounts receivable 87,204 ( 427,433 ) Inventory ( 94,460 ) ( 101,092 ) Prepaid expense ( 63,458 ) ( 10,431 ) Related party advances funding operating expense 6,496 246,425 Accounts payable and accrued liabilities 147,281 ( 32,827 ) Operating lease liabilities ( 80,136 ) ( 70,849 ) Net Cash used in Operating Activities ( 1,937,651 ) ( 1,211,764 ) Cash Flows from Investing Activities: Purchase of equipment - ( 4,015 ) Net Cash used in Investing Activities - ( 4,015 ) Cash Flows from Financing Activities: Proceeds from convertible notes 1,206,320 - Deferred offering cost ( 126,104 ) - Proceeds from loan - related party 2,000 307,500 Repayments of loan- related party ( 740,880 ) ( 125,000 ) Proceeds from issuance Series C Preferred Stock 1,845,000 907,600 Proceeds from stock subscription - 500,000 Proceeds from promissory note - 120,000 Repayments of financing loan ( 23,307 ) - Net Cash provided by Financing Activities 2,163,029 1,710,100 Change in cash 225,378 494,321 Cash, beginning of period 549,755 55,434 Cash, end of period $ 775,133 $ 549,755 Supplemental Disclosure Information: Cash paid for interest $ 9,157 $ - Non-Cash Financing Disclosure: Common stock issued for services $ 1,861,999 $ 146,850 Common stock to be issued for management $ - $ 180,000 Series C Preferred stock issued for services $ 1,196,000 $ - Common stock issued upon conversion of Series C Preferred stock $ - $ 300 Common stock issued for conversion and settlement of debt $ 1,112,355 $ - Common stock issued for stock to be issued - management $ 180,000 $ - Series C Preferred stock issued for subscription received $ 500,000 $ - Cancellation comment stock - related party $ 6,500 $ - Warrants issued in conjunction with convertible debts $ 546,863 $ - Reclassification of due to related party to convertible note $ - $ 19,000 Contribution inventory - related party $ - $ 14,460 Issuance Series C Preferred stock for services -related party $ - $ 8,640,000 Right -of-use assets obtained in exchange for new operating lease liabilities $ - $ 161,665 Recognition of derivative liability as debt discount $ 645,457 $ - Acquisition of property and equipment as financing loan $ 120,155 $ - See the accompanying Notes, which are an integral part of these consolidated financial statements. F-7 Table of Contents General Enterprise Ventures, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 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 and on June 3, 2021 was redomiciled to the State of Wyoming. 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. Business We are an environmentally sustainable flame retardant and flame suppression company for the residential home industry throughout the United States and Canada markets. Management is experienced at business integration and branding potential. The Company is bringing to the marketplace unique, disruptive product 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, awarded UL GreenGuard Gold status, California Bioassay water approval, and LENS. 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 approximately $ 6.9 million and revenue of $ 0.8 million for the year ended December 31, 2024. The Company also has a working capital deficiency of approximately $ 0.5 million as of December 31, 2024. In addition, the Company has been dependent on related parties to fund operations and has an amount owing to related parties of $ 0.6 million outstanding at December 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 year ended December 31, 2024, the Company completed financings from the issuance of Series C preferred stock, common stock, promissory notes and related party loans, generating net proceeds of approximately $ 3.1 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 2025. 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-8 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 subsidiary. Intercompany transactions and balances have been eliminated. Reclassification Certain amounts have been reclassified to improve the clarity and comparability of the financial statements. These reclassifications had no impact on previously reported total assets, liabilities, equity, net income (loss), or cash flows for any periods presented. 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. Segment Information Our Chief Executive Officer (“CEO”) is the chief operating decision maker who reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we determined we operate in a single reporting segment - environmentally sustainable flame retardant and flame suppression company for the residential home industry. Our CEO assesses performance and decides how to allocate resources primarily based on consolidated net income, which is reported on our Consolidated Statements of Operations. Total assets on the Consolidated Balance Sheets represent our segment assets. F-9 Table of Contents Cash and Cash Equivalents For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company did not have any cash equivalents at December 31, 2024 and 2023. The Company had cash of $ 775,133 and $ 549,755 at December 31, 2024 and 2023, respectively. Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $ 250,000 per institution. The amount in excess of the FDIC insurance as of December 31, 2024, was approximately $ 387,000 . The Company has not experienced losses on account balances and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. Inventory Inventories consist of finished goods and raw materials which are stated at lower cost or net realizable value, with cost being determined on the weighted average method. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any expected loss on the trade accounts receivable balances and charged to the provision for doubtful accounts.. 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, 2024 and 2023, the Company recorded bad debt expense of $ 22,774 and $ 0 , respectively, and no allowance for credit losses as of December 31, 2024 and 2023. Intangible Assets 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. These assets are patents and represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of 20 years for these acquired patents. Property and Equipment Property and equipment are stated at cost. Depreciation is computed on the straight-line method. Currently our assets consist of furniture and equipment and vehicle which we amortize over a useful life of 5 and 7 years. F-10 Table of Contents 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. 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. 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, 2024 and 2023, 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. F-11 Table of Contents The Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2024 and 2023, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Convertible Notes The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For our derivative financial instruments, the Company used a Binomial Lattice model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date. Warrant For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities. Related Parties The Company follows ASC 850 , “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. 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; F-12 Table of Contents 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, 2024, our revenues currently consist of a sale of product used for lumber products for fire prevention and an installation of self-contained sprinkler systems. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the product transfer from the Company to the customer. Cost of Revenue For the years ended December 31, 2024 and 2023, cost of revenue consisted of: Years Ended December 31, 2024 2023 Cost of inventory $ 407,334 $ 101,978 Freight and shipping 9,321 14,494 Consulting and advisory-related party 19,400 30,100 Royalty and sales commission-related party 81,917 47,304 Rent expense 137,527 66,258 Total cost of revenue $ 655,499 $ 260,134 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, 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. December 31, December 31, 2024 2023 Shares Shares Convertible notes 3,240,000 300,000 Common stock warrants 1,620,000 - Convertible Series C Preferred Stock 51,923,443 19,347,886 Convertible Series A Preferred Stock (1) - 10,000,000,000 56,783,443 10,019,647,886 (1) Series A Preferred Stock was amended in March 2024 to remove the conversion feature (Note 12). F-13 Table of Contents For the years ended December 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: Years Ended December 31, 2024 2023 Numerator: Net loss $ ( 6,881,722 ) $ ( 10,102,266 ) Change in fair value of derivatives 409,776 - Interest on convertible debts 50,723 1,311 Net loss - diluted $ ( 6,421,223 ) $ ( 10,100,955 ) Denominator: Weighted average common shares outstanding 50,296,518 96,663,470 Effect of dilutive shares Convertible notes 1,273,490 300,000 Preferred stock 51,923,443 10,019,347,886 Common stock warrants 195,286 - Diluted 103,688,737 10,116,311,356 Net income per common share: Basic $ ( 0.14 ) $ ( 0.10 ) Diluted $ ( 0.06 ) $ ( 0.00 ) Deferred Offering Costs Pursuant to ASC 340-10-S99-1, costs directly attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the offering as a reduction of additional paid-in capital. Deferred offering costs consist of underwriting, legal, accounting, and other expenses incurred through the balance sheet date that are directly related to the proposed public offering. Should the proposed public offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be expensed. As of December 31, 2024 and 2023, deferred offering costs consisted of the following: December 31, December 31 2024 2023 Legal fees $ 52,131 $ - General and administrative expenses 73,973 - Total $ 126,104 $ - Share-Based Compensation The Company accounts for employee and non-employee stock awards under ASC 718, Compensation – Stock Compensation, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. During the years ended December 31, 2024 and 2023, stock-based compensation was recognized as follows: Years Ended December 31, 2024 2023 Management compensation $ - $ 180,000 Professional fees 975,249 146,850 Professional fees - related party 1,422,750 8,640,000 Advertising and marketing 660,000 - $ 3,057,999 $ 8,966,850 The Company valued common stock based on the quoted stock price on a date of issuance and Series C Preferred stock as if converted to common stock, using the quoted stock price of the Company’s common stock on a date of issuance. 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. F-14 Table of Contents Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. In March 2024, the FASB issued ASU 2024-02 " Codification Improvements – Amendments to Remove References to the Concepts Statements " ("ASU 2024-02"), which contains amendments to the Codification to remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. Generally, ASU 2024-02 is not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective for the Company for fiscal years beginning after December 15, 2024. The Company does not expect this update to have a material impact on its 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. Recently Adopted Accounting Pronouncement In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires additional disclosures around significant segment expenses and disclosures to identify the title and position of the chief operating decision maker (“CODM”). ASU 2023-07 was effective for the year ended December 31, 2024 and interim periods thereafter. Note 3 – Inventory At December 31, 2024 and 2023, inventory consisted of the following: December 31, December 31, 2024 2023 Finished goods $ 50,469 $ 14,950 Raw materials 274,188 215,247 $ 324,657 $ 230,197 The Company did not write-off any inventories as unsalable for the years ended December 31, 2024 and 2023. Note 4 – Prepaid expenses At December 31, 2024 and 2023, equipment consisted of the following: December 31, December 31, 2024 2023 Insurance $ 19,807 $ 10,431 Legal retainer 30,000 - Security deposit 7,819 - Other prepaid operating expenses 16,503 240 $ 74,129 $ 10,671 F-15 Table of Contents Note 5 – Equipment, net At December 31, 2024 and 2023, equipment consisted of the following: December 31, December 31, 2024 2023 Cost: Equipment $ 9,366 $ 9,365 Vehicle 120,155 - 129,521 9,365 Less: accumulated depreciation ( 18,147 ) ( 2,066 ) Equipment, net $ 111,374 $ 7,299 During the years ended December 31, 2024 and 2023, the Company recorded depreciation of $ 16,081 and $ 1,263 , respectively. During the year ended December 31, 2024, the Company purchased a vehicle for $ 120,155 , with a financing loan. Financing loan The Company had financing loan for a purchase of vehicle for the year ended December 31, 2024. A repayment of loan schedule is $1,898 per month for the first 36 months and then $2,590 per months for 30 months with an interest rate of $11.54% . For the year ended December 31, 2024, the Company repaid $ 32,462 , of which $ 9,157 is for interest. As of December 31, 2024, the Company had a financing loan of $ 96,849 and disclosed it as current liability as the Company fully paid off this financing loan in March 2025. Note 6 – Intangible Assets, net In 2022, the Company acquired the intellectual property of MFB California, 19 patents centered around its MFB Technology for the prevention and spread of wildfires. As of December 31, 2024 and 2023, finite lived intangible assets consisted of the following: December 31, December 31 2024 2023 Patents $ 4,195,353 $ 4,195,353 Accumulated amortization ( 495,862 ) ( 247,247 ) Intangible assets, net $ 3,699,491 $ 3,948,106 F-16 Table of Contents Estimated future amortization expense for finite lived intangibles are as follows: December 31, 2025 $ 247,931 2026 247,931 2027 247,931 2028 247,931 2029 247,931 Thereafter 2,459,836 $ 3,699,491 As of December 31, 2024, the weighted-average useful life is 15.12 years. During the year ended December 31, 2024 and 2023, the amortization expense was $ 248,615 and $ 247,247 , respectively. The Company commenced with amortization during 2023, when we started operations using the acquired assets. 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. For the years ended December 31, 2024 and 2023, right-of-use asset and lease information about the Company’s operating lease consist of: Year Ended December 31, 2024 2023 The components of lease expense were as follows: Operating lease cost $ 85,992 $ 70,830 Short-term lease cost 75,252 8,816 Variable lease cost 22,125 8,698 Total lease cost $ 183,369 $ 88,344 Supplemental cash flow information related to leases was as follows: Year Ended December 31, 2024 2023 Cash paid for operating cash flows from operating leases $ 98,917 $ 79,528 Right-of-use asset obtained in exchange for new operating lease liabilities $ - $ 161,665 Weighted-average remaining lease term - operating leases (year) 0.58 1.58 Weighted-average discount rate — operating leases 6.50 % 6.50 % Supplemental balance sheet information related to leases was as follows: December 31, December 31, 2024 2023 Operating lease right-of-use asset $ 49,347 $ 129,683 Operating lease liabilities: Current portion $ 50,047 $ 80,136 Non-current portion - 50,047 $ 50,047 $ 130,183 F-17 Table of Contents The following table outlines maturities of our lease liabilities as of December 31, 2024: Year ended December 31, 2025 $ 50,862 Thereafter - 50,862 Less: Imputed interest ( 815 ) Operating lease liabilities $ 50,047 Note 8 – Convertible Notes The components of convertible notes as of December 31, 2024 and 2023, were as follows: Principal Interest December 31, December 31, Payment date Amount Maturity date Rate 2024 2023 August 11, 2022 $ 18,000 February 11, 2023 2 % $ - $ 18,000 September 2, 2022 $ 17,000 March 2, 2023 2 % - 17,000 April 1, 2023 $ 19,000 Due on demand 2 % - 19,000 July 15, 2024 $ 795,000 July 15, 2025 10 % 795,000 - August 15, 2024 $ 326,000 August 15, 2025 10 % 326,000 - November 15, 2024 $ 100,000 November 15, 2025 10 % 100,000 - December 15, 2024 $ 75,000 December 15, 2025 10 % 75,000 - Total Convertible notes $ 1,296,000 $ 54,000 Less: Unamortized debt discount ( 1,099,923 ) - 196,077 54,000 Less: Current portion ( 196,077 ) ( 54,000 ) Long -term portion $ - $ - 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. During the year ended December 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 496,193 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 $ 130,462 . On July 15, 2024 and August 15, 2024, the Company entered into seventeen (17) subscription agreements for convertible notes ($ 1,121,000 ) and warrants ( 1,401,250 shares of common stock). The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $ 0.50 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at conversion price of the lesser of (i) $0.40 or (ii) a 30% discount to the price of shares issued in connection with a qualified financing. In November and December, additionally, the Company entered into three (3) subscription agreements for convertible notes ($ 175,000 ) and warrants ( 218,750 shares of common stock). The Company paid 8% financing fee of $ 89,680 , accrued fee of $ 14,000 and recorded financing fee as debt discount. F-18 Table of Contents During the year ended December 31, 2024, the Company recognized the debt discount of $ 1,296,000 (Original Issued Discounts of $ 103,680 , warrants discount of $ 546,863 and derivative liability of $ 645,457 ) and amortized debt discount of $ 196,077 . During the year ended December 31, 2024 and 2023, the Company recognized interest expenses of $ 50,723 and $ 1,311 and amortization of debt discount of $ 196,077 and $ 0 , respectively. As of December 31, 2024 and 2023, the Company recorded accrued interest of $ 50,723 and $ 1,567 , respectively. The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note. Note 9 – Derivative Liability Fair Value Assumptions Used in Accounting for Derivative Liabilities ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Binomial Lattice model to calculate the fair value as of issuance and December 31, 2024. The underlying assumptions of Binomial Lattice model are as follows: 1. The short-term interest rates, including risk-free rate, are known and remain constant over time. 2. The absence of any arbitrage opportunities is assumed. 3. The stock price follows a continuous-time random walk, with the rate of variance proportional to the square of the stock price. 4. The distribution of possible stock prices at the end of any given finite interval is assumed to be lognormal. 5. The variance of the rate of return on the stock is constant. 6. No commissions or transaction costs are incurred when buying or selling the stock or option. 7. The option's early exercise value is evaluated at each node of the lattice. 8. If applicable, the tax rate remains consistent for all transactions and market participants. For the year ended December 31, 2024, the estimated fair values of the liabilities measured on a recurring basis are as follows: December 31 2024 Expected term 0.29 years Total Nodes 72 Risk-free interest rate 4.15 % Stock price at valuation date $ 0.73 Adjusted stock price at valuation date $ 7.30 Expected average volatility 95.41 % F-19 Table of Contents The following table summarizes the changes in the derivative liabilities during the year ended December 31, 2024: Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance - December 31, 2023 $ - Addition of new derivatives recognized as debt discounts 645,457 Addition of new derivatives recognized as loss on derivatives 409,776 Balance - December 31, 2024 $ 1,055,233 Note 10 – 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 years ended December 31, 2024 and 2023, the Company recognized $ 750 and $ 3,017 interest, respectively. As of December 31, 2023, the Company owed principal of $ 120,000 and accrued interest of $ 3,017 . During the year ended December 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 11 – Related Party Transactions The related parties that had material transactions for the years ended December 31, 2024 and 2023, consist of the following: Related Party Nature of Relationship to the Company A An Ohio Corporation – a significant shareholder B Owner of related party A C Chief Executive Officer (CEO) of the Company D A California Corporation owned by related party E E Significant shareholder F Former MFB Ohio board advisor, resigned during 2024 G MFB Ohio board advisor H MFB Ohio board advisor I MFB Ohio board advisor J Director and Chief Executive Officer of GEVI Insurance Holdings Inc. K Former MFB Ohio board advisor, resigned during 2024 F-20 Table of Contents As of December 31, 2024 and 2023, amounts owing to related parties consists as follows: December 31, December 31, Related Party 2024 2023 A $ - $ 897,197 B - 411,880 $ - $ 1,309,077 During the years ended December 31, 2024 and 2023, related party A advanced to the Company an amount of $ 2,000 and $ 307,500 for working capital proposes and $ 6,495 and $ 246,425 for operating expenses paid directly to vendors, on behalf of the Company, respectively. During the years ended December 31, 2024 and 2023, the Company repaid $ 330,000 and $ 125,000 owing to the related party A and $ 410,880 and $ 0 owing to the related party B, respectively. On December 31, 2024, the Company issued a $ 576,693 convertible note to related party A in exchange for the amount due to related party A and B of $ 576,693 . For the years ended December 31, 2024 and 2023, expenses to related parties and their nature consists of: Year Ended December 31 Related Party 2024 2023 Nature of transaction Financial Statement Line Item C $ 75,000 $ - Cash paid for management fee General and administration D $ 77,600 $ 120,400 Cash paid for consulting fees Professional fees - related party D $ 19,400 $ 30,100 Cash paid for consulting and advisory fees Cost of revenue – related party E $ 163,654 $ 139,196 Cash paid for management fee Professional fees - related party E $ 81,917 $ 47,304 Cash paid for royalty and sales commissions (See Note14) Cost of revenue – related party 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 Convertible note – related party On December 31, 2024, the Company issued convertible note of $576,693, to related party A, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $0.36. The conversion price is a fixed price and the Company determined that conversion feature did not need to be bifurcated. The Company has accounting for the convertible debt at amortized cost under ASC 470-20. As of December 31, 2024, the Company recorded convertible note – related party of $ 576,693 . Note 12 – Stockholders’ Equity Amended Articles of Incorporation Effective on March 17, 2025, the Company amended its Articles of Incorporation to increase the authorized shares to 1,030,000,000 shares, of which 1,000,000,000 shares are common stock and 30,000,0000 shares are preferred stock . F-21 Table of Contents Preferred Shares Shares Outstanding The Company is authorized to issue up to 30,000,000 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. 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. As of December 31, 2024 and 2023, there were 10,000,000 shares of Series A Preferred stock issued and outstanding. F-22 Table of Contents Series C Convertible Preferred Stock The Company originally designated 5,000,000 shares of its Preferred Stock as Series C Convertible Preferred Stock. On March 17, 2025, the Company amended and restated its Series C Convertible Preferred Stock to designate 10,000,000 shares of its Preferred Stock as Series C Convertible Preferred Stock, par value $0.0001, 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 is 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. 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. F-23 Table of Contents During the year ended December 31, 2024, the Company issued 728,470 shares of Series C Preferred Stock as follow; · 183,332 shares issued for stock payable of $ 500,000 . · 421,805 shares for purchase subscriptions of $ 1,845,000 , at prices of $ 4.00 to $ 6.00 per share. · 123,333 issued for services, valued at $ 1,196,000 at market price on issuance dates. During the year ended December 31, 2023, the Company issued 1,473,499 shares of Series C Preferred Stock as follows: · 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 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 . 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. As of December 31, 2024 and 2023, there were 3,001,969 and 2,273,499 shares of the Company’s Series C Convertible Preferred Stock issued and outstanding, respectively. Subscription Received During the year ended December 31, 2023, the Company received $ 500,000 for subscriptions of 183,332 shares of Series C Convertible Preferred Stock. As of December 31, 2023, 183,332 shares were not issued and are recorded as preferred stock to be issued with value of $ 500,000 in equity. During the year ended December 31, 2024, the Company issued the 183,332 shares of Series C Convertible Preferred Stock. 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 year ended December 31, 2024, the Company issued 4,296,193 shares of Common Stock and cancelled 65,000,000 shares as follow: · 1,250,000 shares issued for compensation, valued at $ 1,074,750 at market price on issuance date. · 1,000,000 shares issued for services, valued at $ 787,249 at market price on issuance date. · 1,546,193 shares for conversion and settlement of debt of $ 1,112,355 at market price on issuance date. · 500,000 shares issued for common stock to be issued from fiscal year ended 2023 – to two directors of the Company. · 65,000,000 shares were cancelled by the Company's President, valued $ 6,500 at par value. F-24 Table of Contents During the year ended December 31, 2023, the Company issued 3,600,000 shares of common stock as follows: · 600,000 shares issued for services valued at $ 146,850 . · 3,000,000 shares issued for conversion of 150,000 shares of Series C Preferred Stock As of December 31, 2024 and 2023, there were 36,841,581 and 97,545,388 shares of the Company’s common stock issued and outstanding, respectively. Restricted Stock Awards 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, 2024 and 2023: Restricted Stock Award Weighted -Average Grant Price Balance, December 31, 2022 70,000,000 $ 0.03 Granted - - Vested - - Forfeited - - Balance, December 31, 2023 70,000,000 $ 0.03 Granted - - Vested - - Cancelled ( 65,000,000 ) 0.03 Balance, December 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. During the year ended December 31, 2024, 65,000,000 shares were cancelled. 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. During the year ended December 31, 2024, the Company issued 500,000 shares of common stock and settled common stock to be issued of $ 180,000 . On April 22, 2024, the Company entered into an advisory and consulting agreement for a period of twelve (12) months with share compensation of 250,000 shares of common stock upon signing the agreement. The Company valued the 250,000 shares based on market value at signing of the agreement, in the amount of $ 200,000 and recorded as common stock to be issued as a component of stockholders’ equity. On July 1, 2024, the Company terminated the agreement due to a lack of service performance by a contractor and 250,000 shares to be issued were cancelled. As of December 31, 2024 and 2023, 0 and 500,000 shares were not yet issued and are recorded as common stock to be issued of $ 0 and $ 180,000 in equity, respectively. Warrants The Company issued a total of 1,620,000 warrants for a period of five years at an exercise price per share of $ 0.50 in connection with convertible notes for the year ended December 31, 2024. The Company recorded the warrants of $ 546,863 to additional paid in capital. We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815. In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period. The warrants are valued using a Black Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements. The Company utilized the following assumptions: 2024 Expected term 5 .00 years Expected average volatility 239 - 251 % Expected dividend yield - Risk-free interest rate 3.79 – 4.30 % A summary of activity of the warrants during the year ended December 31, 2024 as follows: Warrants Outstanding Weighted Average Weighted Average Remaining Shares Exercise Price Contractual life (in years) Outstanding, December 31, 2023 - $ - - Granted 1,620,000 0.50 5 .00 Exercised - - - Forfeited/canceled - - - Outstanding, December 31, 2024 1,620,000 $ 0.50 4.61 The intrinsic value of the warrants as of December 31, 2024 is $ 372,276 . F-25 Table of Contents Note 13 - Income Taxes Components of income tax expense (benefit) are as follows for the years ended December 31, 2024 and 2023: 2024 2023 Current $ - $ - Deferred - - Income tax benefit $ - $ - 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, 2024 and 2023: 2024 2023 Deferred tax assets and liabilities Net operating losses carried forward $ 7,148,000 $ 5,780,000 Intangibles ( 57,000 ) ( 103,000 ) Total deferred tax asset 7,091,000 5,677,000 Less: valuation allowance ( 7,091,000 ) ( 5,677,000 ) Net deferred tax asset $ - $ - The Company will have approximately $ 34.4 million and $ 27.5 million of gross net operating loss carry-forwards at December 31, 2024 and 2023, 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, 2024 and 2023, 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, 2024 and 2023. 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: 2024 2023 Statutory tax rate 21.0 % 21.0 % State tax rate 8.8 % 8.8 % Effect of change in income tax rate for deferred tax assets Effect of expenses not deductible for tax purpose ( 1.8 )% 0.0 % Amortization 0.5 % 0.5 % Change in valuation allowance ( 28.5 )% ( 30.3 )% Effective income tax rate 0.0 % 0.0 % F-26 Table of Contents Note 14 – Commitments and Contingencies As part of the intellectual asset purchase agreement with MFB California, the Company is subject to royalties of 10 % derived from gross invoiced sales of the MFB product excluding funds received for sales and use tax (Note 11). Note 15 – Disaggregated revenue and Concentration During years ended December 31, 2024 and 2023, disaggregated revenue was as follows: Years Ended December 31, 2024 2023 Products sale $ 626,389 $ 452,285 Product installation service 181,983 68,360 $ 808,372 $ 520,645 During years ended December 31, 2024 and 2023, customer and supplier concentrations (more than 10%) were as follows: Revenue and accounts receivable Percentage of Revenue Percentage of For Year Ended Accounts Receivable December 31 December 31 December 31 2024 2023 2024 2023 Customer A 30.20 % - - - Customer B 13.68 % - 21.08 % - Customer C 10.30 % - - - Customer D 19.55 % 32.65 % 49.77 % 39.77 % Customer E - 44.19 % - 53.82 % Customer F 5.79 % - 15.44 % - Total (as a group) 79.52 % 76.84 % 86.29 % 93.59 % Purchase and accounts payable Percentage of Purchase Percentage of For Year Ended Accounts payable for purchase December 31 December 31 December 31 2024 2023 2024 2023 Supplier A 33.09 % 77.01 % - - Supplier B 12.25 % - 74.46 % - Supplier C 23.80 % - - - Supplier D 8.25 % 4.41 % 25.54 % - Total (as a group) 77.39 % 81.42 % 100.00 % - 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. F-27 Table of Contents Note 16 – Subsequent Events Management has evaluated subsequent events through March 31, 2025, which is 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: · 15,536,620 shares of common stock issued for conversion of 776,831 shares of Series C Convertible Preferred Stock · 225,000 shares of Series C Convertible Preferred stock were issued as follows; o 197,500 shares for services, valued at $ 2,769,740 o 275,000 shares for cash of $ 160,000 at prices of $ 4.00 and $ 6.00 per share · In February 2025, the Company entered into twelve (12) subscription agreements for convertible notes ($ 4,075,000 ) and warrants ( 5,093,750 shares of common stock). The convertible notes have a term of twelve ( 12 ) months, at an interest rate of 10 % per annum and warrants are with a term of five ( 5 ) years, at an exercise price of $ 0.50 per share. F-28 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.