CitroTech Inc. 10-Q

Item 1. Financial Statements. CitroTech Inc. (formerly General Enterprise Ventures, Inc.) Index to Unaudited Interim Consolidated Financial Statements March 31, 2026 Contents Page Consolidated Balance Sheets at March 31, 2026 and December 31, 2025 4 Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2026 and 2025 5 Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2026 and 2025 6 Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 7 Notes to Consolidated Financial Statements 8 3 CitroTech Inc. (formerly General Enterprise Ventures, Inc.) Consolidated Balance Sheets (Unaudited) March 31, December 31, 2026 2025 Assets Current Assets Cash $ 4,286,897 $ 6,268,591 Accounts receivable, net 130,314 209,047 Inventory 696,142 620,768 Prepaid expenses 512,309 317,020 Total Current Assets 5,625,662 7,415,426 Non-Current Assets Intangible assets, net 5,231,495 5,326,960 Operating lease right-of-use asset 714,898 753,363 Equipment, net 610,787 630,279 Security deposits 57,491 57,491 Total Non-Current Assets 6,614,671 6,768,093 Total Assets $ 12,240,333 $ 14,183,519 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ 414,261 $ 316,321 Deferred revenue 24,192 3,000 Convertible notes, net of discount – 219,321 Convertible notes, net of discount - related party 2,211,484 1,285,400 Due to related parties 19,172 167,971 Financing loan - current portion 30,837 30,000 Operating lease liability - current portion 152,130 147,613 Total Current Liabilities 2,852,076 2,169,626 Non-Current Liabilities Financing loan 124,660 133,381 Operating lease liability 578,565 617,598 Total Non-Current Liabilities 703,225 750,979 Total Liabilities 3,555,301 2,920,605 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, 1,666,667 shares issued and outstanding 167 167 Series C Convertible Preferred Stock, par value $ 0.0001 , designated 10,000,000 shares, 807,668 shares issued and shares outstanding 81 81 Common Stock, par value $ 0.0001 , authorized 1,000,000,000 shares, 19,116,901 and 18,522,315 issued and outstanding, respectively 1,911 1,852 Additional paid-in capital 128,096,468 124,463,845 Accumulated deficit ( 119,413,595 ) ( 113,203,031 ) Total Stockholders' Equity 8,685,032 11,262,914 Total Liabilities and Stockholders' Equity $ 12,240,333 $ 14,183,519 The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 4 CitroTech Inc. (formerly General Enterprise Ventures, Inc.) Consolidated Statements of Operations and Comprehensive Loss (Unaudited) Three months ended March 31, 2026 2025 Revenue $ 344,915 $ 969,382 Operating expenses Cost of revenue, exclusive of amortization and depreciation shown separately below 225,577 556,970 Cost of revenue - related parties – 60,290 Amortization and depreciation 125,684 74,539 General and administrative 409,956 203,171 Advertising and marketing 137,600 104,496 Payroll and management compensation 3,107,367 673,423 Professional fees 679,842 627,318 Professional fees - related parties 24,510 2,119,600 Research and development expense 81,525 8,031 Total operating expenses 4,792,061 4,427,838 Loss from operations ( 4,447,146 ) ( 3,458,456 ) Other income (expense) Interest expense ( 164,833 ) ( 410,791 ) Interest expense - related party ( 777,285 ) ( 62,056 ) Interest income 26,066 – Financing expense – ( 6,167,334 ) Loss on fair value of derivative liability – ( 804,767 ) Loss on settlement of debt ( 847,366 ) – Total other expense ( 1,763,418 ) ( 7,444,948 ) Loss before taxes ( 6,210,564 ) ( 10,903,404 ) Provision for income taxes – – Net loss $ ( 6,210,564 ) $ ( 10,903,404 ) Comprehensive loss $ ( 6,210,564 ) $ ( 10,903,404 ) Net loss per common share - basic and diluted $ ( 0.33 ) $ ( 1.37 ) Basic and diluted weighted average number of common shares outstanding 18,833,068 7,981,641 The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 5 CitroTech Inc. (formerly General Enterprise Ventures, Inc.) Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) For the three months ended March 31, 2026 Series A Series C Convertible Additional Total Preferred stock Preferred stock Common Stock Paid-In Accumulated Stockholders' Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance - December 31, 2025 1,666,667 $ 167 807,668 $ 81 18,522,315 $ 1,852 $ 124,463,845 $ ( 113,203,031 ) $ 11,262,914 Common stock issued for conversion of debt – – – – 171,878 17 1,259,849 – 1,259,866 Common stock issued for services – – – – 22,000 2 160,378 – 160,380 Common stock issued for cashless exercise of warrants – – – – 180,708 18 ( 18 ) – – Common stock issued for stock payable – – – – 220,000 22 ( 22 ) – – Management stock compensation – – – – – – 2,116,178 – 2,116,178 Contributed capital – – – – – – 96,258 – 96,258 Net loss – – – – – – – ( 6,210,564 ) ( 6,210,564 ) Balance - March 31, 2026 1,666,667 $ 167 807,668 $ 81 19,116,901 $ 1,911 $ 128,096,468 $ ( 119,413,595 ) $ 8,685,032 For the three months ended March 31, 2025 Convertible 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, 2024 10,000,000 $ 1,000 3,001,969 $ 300 36,841,581 $ 3,684 $ 79,676,211 $ ( 76,365,388 ) $ 3,315,807 Series C Preferred Stock issued for cash – – 27,500 3 – – 259,997 – 260,000 Series C Preferred Stock issued for services – – 167,500 17 – – 2,349,003 – 2,349,020 Series C Preferred Stock issued for compensation – – 30,000 3 – – 420,717 – 420,720 Common stock issued for conversion of Series C Preferred Stock – – ( 776,831 ) ( 78 ) 15,536,620 1,554 ( 1,476 ) – – Common stock warrants issued – – – – – – 8,649,503 – 8,649,503 Net loss – – – – – – – ( 10,903,404 ) ( 10,903,404 ) Balance - March 31, 2025 10,000,000 $ 1,000 2,450,138 $ 245 52,378,201 $ 5,238 $ 91,353,955 $ ( 87,268,792 ) $ 4,091,646 The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 6 CitroTech Inc. (formerly General Enterprise Ventures, Inc.) Consolidated Statement of Cash Flows (Unaudited) Three months ended March 31, 2026 2025 Cash Flows from Operating Activities: Net loss $ ( 6,210,564 ) $ ( 10,903,404 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 2,276,558 6,833,474 Stock-based compensation - related party – 2,103,600 Non-cash lease expenses 38,465 20,917 Amortization and depreciation 125,684 74,539 Amortization of debt discount 881,763 376,678 Loss on settlement of debt 847,366 – Loss on fair value of derivative liability – 804,767 Changes in operating assets and liabilities: Accounts receivable 78,733 ( 428,314 ) Inventory ( 75,374 ) ( 83,124 ) Prepaid expenses ( 195,289 ) 21,933 Security deposits – ( 36,991 ) Accounts payable and accrued liabilities 135,440 334,782 Accrued interest - related parties 51,201 31,206 Deferred revenue 21,192 157,236 Operating lease liabilities ( 34,516 ) ( 21,217 ) Net Cash used in Operating Activities ( 2,059,341 ) ( 713,918 ) Cash Flows from Investing Activities: Purchase of equipment ( 10,727 ) ( 26,988 ) Net Cash used in Investing Activities ( 10,727 ) ( 26,988 ) Cash Flows from Financing Activities: Proceeds from convertible notes and warrants – 1,909,000 Proceeds from convertible note and warrants - related party – 1,776,082 Payments of deferred offering costs – ( 23,348 ) Proceeds from capital contribution 96,258 – Proceeds from issuance of Series C Preferred Stock and warrants – 260,000 Repayment of financing loan ( 7,884 ) ( 215,625 ) Net Cash provided by Financing Activities 88,374 3,706,109 Change in cash for the period ( 1,981,694 ) 2,965,203 Cash, beginning of period 6,268,591 775,133 Cash, end of period $ 4,286,897 $ 3,740,336 Supplemental Disclosure Information: Cash paid for interest $ 12,957 $ 5,584 Cash paid for taxes $ – $ – Non-Cash Financing Disclosure: Common stock issued upon conversion of Series C Preferred stock $ – $ 1,553 Common stock issued for conversion and settlement of debt $ 1,259,866 $ – Debt modification – related party $ 200,000 $ – Warrants issued in conjunction with convertible debts $ – $ 2,482,169 Recognition of derivative liability as debt discount $ – $ 1,027,000 Transfer from inventory to property and equipment $ – $ 74,827 Acquisition of property and equipment as financing loan $ – $ 118,776 The accompanying notes are an integral part of these unaudited interim consolidated financial statements. 7 CitroTech Inc. (formerly General Enterprise Ventures, Inc.) Notes to Unaudited Interim Consolidated Financial Statements March 31, 2026 Note 1 – Organization, Business and Going Concern CitroTech 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. Effective on January 22, 2026, the Company changed its name from General Enterprise Ventures, Inc. to CitroTech Inc. When used in these notes, the terms “CITR,” “Company,” “we,” “us” and “our” mean CitroTech Inc. and all entities included in our unaudited interim consolidated financial statements. Business We develop and manufacture environmentally sustainable, non-toxic, long-term fire-inhibiting products for use in industrial and wildfire defense applications. The Company’s proprietary formulation, CitroTech®, is derived from food-grade, renewable materials and is designed to provide an alternative to legacy conventional chemical fire retardants. CitroTech™ is used in the manufacturing of fire-resilient lumber and building materials, enabling integration of flame-inhibiting properties during production or applied in the field to new homes. In addition, it is utilized by fire departments, municipalities, and other public and private sector entities in connection with ground-based wildfire defense and stationary application systems intended to help render vegetation non-flammable, reduce ignition risk and enhance structural protection. The Company continues to evaluate and develop additional formulations and product treatments to expand the range of potential commercial applications for its technology. Liquidity and Going Concern The accompanying unaudited interim consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. At March 31, 2026, the Company had cash of approximately $ 4.3 million, working capital of $ 2.8 million , and an accumulated deficit of $ 119.4 million. For the three months ended March 31, 2026, the Company incurred a net loss of $ 6.2 million and used approximately $ 2.1 million of cash in operating activities. The Company's ability to continue as a going concern depends on its ability to scale commercial sales. Management believes that current cash is not sufficient to fund commercial-scale production and the related working capital requirements for the next twelve months. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year following the issuance date of these unaudited interim consolidated financial statements. To alleviate these conditions, management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity or debt securities, through arrangements with strategic partners. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. 8 Note 2 – Summary of Significant Accounting Policies Basis of Presentation Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of CitroTech Inc. for the year ended December 31, 2025. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2026 and its results of operations for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025. The balance sheet at December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the unaudited interim consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2025, as filed with the SEC on March 30, 2026. Principles of Consolidation The consolidated financial statements include the accounts of CitroTech Inc., and its wholly owned subsidiaries. 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. 9 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 specialty chemicals for fire prevention and protection in the lumber and wood products, wildland fire and 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. 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 no t have any cash equivalents at March 31, 2026 and December 31, 2025. The Company had cash of $ 4.3 million and $ 6.3 million at March 31, 2026 and December 31, 2025, 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 March 31, 2026, was approximately $ 3.2 million. 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. 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 credit loss. The Company maintains allowances for credit loss 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 three months ended March 31, 2026 and 2025, the Company recorded no bad debt expense, and recorded an allowance for credit losses of $ 340,534 and $ 345,950 as of March 31, 2026 and December 31, 2025, respectively. 10 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. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, deferred revenue and loans payable, are carried at historical cost. As of March 31, 2026 and December 31, 2025, 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. Related Parties The Company follows ASC 850 , “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. 11 Revenue The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract. Revenue related to contracts with customers is evaluated utilizing the following steps: i. Identify the contract, or contracts, with a customer; ii. Identify the performance obligations in the contract; iii. Determine the transaction price; iv. Allocate the transaction price to the performance obligations in the contract; v. Recognize revenue when the Company satisfies a performance obligation. For the three months ended March 31, 2026, our revenues currently consist of a sale of product used for lumber products for fire prevention and on installation of self-contained sprinkler systems. Revenue is recognized at a point in time when the risks and rewards of ownership of the product transfer from the Company to the customer. Deferred revenue Deferred revenue consists of advanced payments for our service that have not been rendered. Revenue is recognized when service is rendered. As of March 31, 2026 and December 31, 2025, total deferred revenue was $ 24,192 and $ 3,000 , respectively. Deferred revenue is expected to be recognized as revenue within the second and third quarters of 2026. Cost of Revenue For the three months ended March 31, 2026 and 2025, cost of revenue consisted of: Schedule of cost of revenue Three months ended March 31, 2026 2025 Cost of inventory $ 165,430 $ 516,443 Freight and shipping 2,461 160 Consulting and advisory-related party – 4,000 Royalty and sales commission-related party – 56,290 Rent expense 57,686 40,367 Total cost of revenue $ 225,577 $ 617,260 12 Basic and Diluted Net Loss Per Common Share Net loss per share of common stock requires presentation of basic and diluted earnings per common share on the face of the Statements of Operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation to diluted earnings per share. In the accompanying financial statements, basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements and warrants unless the result would be antidilutive. The dilutive effect of share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of common stock are included in the denominator of the diluted calculation for the entire period being presented. For the three months ended March 31, 2026 and 2025, 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. Schedule of antidilutive securities March 31, March 31, 2026 2025 Shares Shares Convertible notes 925,833 2,504,904 Common Stock warrants 2,716,725 1,897,521 Series C Convertible Preferred Stock 2,692,227 8,167,127 6,334,785 12,569,552 13 Stock-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 three months ended March 31, 2026 and 2025, stock-based compensation was recognized as follows: Schedule of stock-based compensation Three months ended March 31, 2026 2025 Management compensation $ 2,116,178 $ 420,720 Professional fees 160,380 245,420 Professional fees - related party – 2,103,600 Financing expense – 6,167,334 Stock-based compensation $ 2,276,558 $ 8,937,074 Compensation cost for stock awards, which include common shares, Series C Convertible Preferred Stock, warrants and performance stock units (“PSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. The fair value of stock awards is based on the quoted price of our common stock on the grant date and Series C Convertible Preferred stock as if converted to common stock. We measure the fair value of PSUs using a Monte Carlo valuation model and warrants using a Black Scholes valuation model. Compensation cost for PSUs are recognized using the derived service period and accelerated if the condition is satisfied at an earlier date. 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 this standard on our disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11. In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements. 14 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 July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. The Company adopted ASU 2025-05, as of January 1, 2026, and applied the new disclosure requirements prospectively to the current annual period. The adoption of this ASU did not have an impact on our consolidated financial statements. Note 3 – Inventory As of March 31, 2026 and December 31, 2025, inventory consisted of the following: Schedule of inventory March 31, December 31, 2026 2025 Finished goods $ 148,817 $ 185,310 Raw materials 547,325 435,458 Inventory $ 696,142 $ 620,768 The Company did no t write-off any inventories as unsalable for the three months ended March 31, 2026 and 2025. Note 4 – Prepaid expenses As of March 31, 2026 and December 31, 2025, prepaid expenses consisted of the following: Schedule of prepaid expenses March 31, December 31, 2026 2025 Insurance $ 183,427 $ 180,970 Research and development expense 119,123 – Advertising and marketing 44,975 18,345 Other prepaid operating expenses 148,609 94,705 Deposit on purchase of inventories 16,175 23,000 Prepaid expenses $ 512,309 $ 317,020 15 Note 5 – Equipment, net As of March 31, 2026 and December 31, 2025, equipment consisted of the following: Schedule of property plant and equipment March 31, December 31, 2026 2025 Cost: Equipment $ 54,122 $ 43,396 Vehicles 686,434 686,434 Equipment gross 740,556 729,830 Less: accumulated depreciation ( 129,769 ) ( 99,551 ) Equipment, net $ 610,787 $ 630,279 During the three months ended March 31, 2026 and 2025, the Company recorded depreciation of $ 30,219 and $ 12,556 , respectively. During the three months ended March 31, 2026, the Company purchased equipment for $ 10,727 . During the three months ended March 31, 2025, the Company purchased vehicles and equipment for $ 145,764 , of which $ 118,776 were purchased with a financing loan, and transferred vehicles from inventory of $ 74,827 due to a change of use in 2025. Financing loan The Company had a financing loan for the purchase of vehicle in September 2025. The loan repayment is $ 2,021 per month for 60 months , beginning October 2025, with an interest rate of 11.33 %. The Company had a financing loan for the purchase of vehicle in September 2025. The loan repayment is $ 2,083 per month for 48 months , beginning October 2025, with an interest rate of 11.90 %. During the three months ended March 31, 2026 and 2025, the Company recorded interest expense of $ 4,427 and $ 5,584 , and repaid $ 7,884 and $ 215,625 , of which $ 4,427 and $ 5,584 are for interest, respectively. As of March 31, 2026 and December 31, 2025, the Company had a financing loan of $ 155,497 and $ 163,381 , respectively. 16 Note 6 – Intangible Assets, net In 2022, the Company acquired the intellectual property of Mighty Fire Breaker LLC (“MFB California”), 19 patents centered around its MFB Technology for the prevention and spread of wildfires. The granted patents include MFB California’s main chemistry and applications. MFB California had 21 trademarks and various copyrights. Internally generated patents, trademarks and copyrights, are expensed as incurred. In December 2025, the Company entered into an Intellectual Property Purchase Agreement to protect our existing patents. The purchase price is $ 100,000 in cash and 220,000 shares of Common stock valued at $ 1,775,400 , which shall be issued within 30 days of the closing date. The common stock was issued in January 2026. As of March 31, 2026 and December 31, 2025, finite lived intangible assets consisted of the following: Schedule of finite lived intangible assets March 31, December 31, 2026 2025 Acquired patents (19) $ 4,195,353 $ 4,195,353 Patent and technology assets 1,243,000 1,243,000 Non-compete agreements 632,400 632,400 Accumulated amortization ( 839,258 ) ( 743,793 ) Intangible assets, net $ 5,231,495 $ 5,326,960 Estimated future amortization expense for finite lived intangibles are as follows: Schedule of estimated future amortization expense Year ending December 31, 2026 (remaining nine months) $ 286,423 2027 381,888 2028 381,888 2029 381,888 2030 381,888 Thereafter 3,417,520 Intangible assets, net $ 5,231,495 As of March 31, 2026, the weighted-average useful life is 13.84 years. During the three months ended March 31, 2026 and 2025, the amortization expense was $ 95,465 and $ 61,983 , respectively. 17 Note 7 – Lease In March 2022, the Company entered into an operating lease for a warehouse, with a term of eighteen (18) months. In July 2023, the Company amended the contract and extended the lease term to July 2025. In May 2025, the Company terminated this lease and wrote off the right-of-use asset and lease liability. In January 2025, the Company entered into an operating lease for our office and warehouse. The commencement date was April 1, 2025, and the termination date is March 31, 2030. The Company recorded a security deposit of $ 36,991 . For the three months ended March 31, 2026 and 2025, right-of-use asset and lease information about the Company’s operating lease consists of: Schedule of right-of-use asset and lease information Three months ended March 31, 2026 2025 The components of lease expense were as follows: Operating lease cost $ 51,379 $ 21,498 Short-term lease cost 7,773 29,593 Variable lease cost 17,369 2,732 Total lease cost $ 76,521 $ 53,823 Supplemental cash flow information related to leases was as follows: Schedule of supplemental cash flow information related to leases Three months ended March 31, 2026 2025 Cash paid for operating cash flows from operating leases $ 47,430 $ 33,530 Weighted-average remaining lease term - operating leases (year) 4.25 0.33 Weighted-average discount rate — operating leases 7.00 % 6.50 % The following table outlines maturities of our lease liabilities as of March 31, 2026: Schedule of maturities of lease liabilities Year ending December 31, 2026 (remaining nine months) $ 147,982 2027 203,228 2028 211,357 2029 219,812 2030 55,486 Operating leases, future minimum payments due 837,865 Less: Imputed interest ( 107,170 ) Operating lease liabilities $ 730,695 18 Note 8 – Convertible Notes The components of convertible notes as of March 31, 2026 and December 31, 2025, were as follows: Schedule of components of convertible notes Effective Stated Principal Interest Interest March 31, December 31, Payment date Amount Maturity date Rate Rate 2026 2025 February 15, 2025 $ 575,000 February 15, 2026 510 % 10 % $ – $ 375,000 Total Convertible notes – 375,000 Less: Unamortized debt discount – ( 155,679 ) – 219,321 Less: Current portion – ( 219,321 ) Long-term portion $ – $ – During the three months ended March 31, 2026 and 2025, the Company recognized interest expense of $ 4,726 and $ 60,258 and amortization of debt discount of $ 155,679 and $ 345,828 , respectively. As of March 31, 2026 and December 31, 2025, the Company recorded accrued interest of $ 0 and $ 32,773 , respectively. Conversion In February 2026, seven (7) note holders converted convertible notes issued in February 2025 of $ 375,000 and accrued interest of $ 37,500 into 171,878 shares of common stock with a conversion price of $2.40. As a result, the Company settled convertible notes and accrued interest of $ 412,500 , and recorded loss on settlement of debt of $ 847,366 . Note 9 – Accounts payable and accrued liabilities As of March 31, 2026 and December 31, 2025, accounts payable and accrued liabilities consisted of the following: Schedule of accounts payable and accrued liabilities March 31, December 31, 2026 2025 Accounts payable $ 317,505 $ 169,278 Accrued interest – 32,773 Credit card 19,113 19,953 Sales tax payable 14,466 27,675 Other liabilities 6,666 53,280 Payroll liability 56,511 13,362 Accounts payable and accrued liabilities $ 414,261 $ 316,321 19 Note 10 – Related Party Transactions The related parties that had material transactions for the three months ended March 31, 2026 and 2025, consist of the following: Related Party Nature of Relationship to the Company A An Ohio Corporation - a significant shareholder B Owner of A and our Chairman of the Board C A California Corporation owned by a related party D D Significant shareholder and our Chief Technology Officer through March 31, 2026 E Former Director and Chief Executive Officer of GEVI Insurance Holdings Inc. F A Delaware limited liability company controlled by a Director and significant shareholder G A company controlled by our Chief Financial Officer As of March 31, 2026 and December 31, 2025, amounts owing to related parties consists as follows: Schedule of expenses to related parties and their nature March 31, December 31, Related Party 2026 2025 Nature of transaction A $ 300 $ 300 Operating expenses paid on behalf of the Company F 18,872 167,671 Accrued interest related to convertible note related party $ 19,172 $ 167,971 For the three months ended March 31, 2026 and 2025, expenses to related parties and their nature consists of: Three months ended March 31, Related Party 2026 2025 Nature of transaction Financial Statement Line Item A $ – $ 2,103,600 150,000 Series C preferred stock for consulting fee Professional fees - related party C $ – $ 16,000 Cash paid for consulting fees Professional fees - related party C $ – $ 4,000 Cash paid for consulting and advisory fees Cost of revenue - related party D $ – $ 56,290 Cash paid for royalty and sales commissions Cost of revenue - related party E $ – $ 420,720 30,000 Series C preferred stock for management compensation Management compensation G $ 24,510 $ – Professional service - accounting Professional fees - related party Contributed Capital In February 2026, the Company received payments from related party B, totaling $ 96,258 related to disgorgement of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company recognized these proceeds as a capital contribution and the amounts were recorded as an increase to additional paid-in capital on the unaudited interim consolidated balance sheets. 20 Convertible note – related party The components of convertible notes as of March 31, 2026 and December 31, 2025, were as follows: Schedule of convertible debt related party Effective Stated Principal Interest Interest March 31, December 31, Payment date Amount Maturity date Rate Rate 2026 2025 February 2025 $ 2,222,000 April 28, 2026 16 % 10 % $ 2,222,000 $ 2,000,000 Total Convertible notes 2,222,000 2,000,000 Less: Unamortized debt discount ( 10,516 ) ( 714,600 ) 2,211,484 1,285,400 Less: Current portion ( 2,211,484 ) ( 1,285,400 ) Long-term portion $ – $ – In February 2025, the Company entered into one (1) subscription agreement for convertible note ($ 2,000,000 ) and warrants (416,667 shares of common stock) with related party F. The convertible note has 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 $3.00 per share. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $2.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, related party F could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio. On February 27, 2026, related party F extended their convertible promissory note until April 28, 2026. Pursuant to the extension, they charged a 1% amendment fee and agreed to release their security pledge against certain intangible assets of the Company. As a result, the principal amount became $ 2,222,000 , including accrued interest of $ 200,000 and 1% fee of $ 22,000 . The Company evaluated the modification of terms under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension of the maturity dates did not result in a substantial change and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. Accordingly, no gain or loss on debt extinguishment was recorded. During the three months ended March 31, 2026 and 2025, the Company recognized interest expenses of $ 51,201 and $ 31,206 and amortization of debt discount of $ 726,084 and $ 30,850 , respectively. As of March 31, 2026 and December 31, 2025, the Company recorded accrued interest of $ 18,872 and $ 167,671 , respectively. The note and accrued interest were fully converted into common shares in April 2026 (Note 13). 21 Note 11 – Stockholders’ Equity Preferred Stock 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 designated 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 the holders of Common Stock, voting together with the holders of Common Stock as a single class. 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 of Directors. 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 holders of the Series A Preferred Stock are not entitled to pre-emptive rights or subscription rights. As of March 31, 2026 and December 31, 2025, there were 1,666,667 shares of Series A Preferred stock issued and outstanding. Series C Convertible Preferred Stock The Company has designated 10,000,000 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 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 3.3333 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. 22 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 holders of the Series C Convertible Preferred Stock are not entitled to pre-emptive rights or subscription rights. During the three months ended March 31, 2025, the Company issued 225,000 shares of Series C Convertible Preferred Stock as follows: · 27,500 shares for purchase subscriptions of $ 260,000 , at prices of $4.00 or $6.00 per share · 167,500 shares for services, valued at $ 2,349,020 at market price on issuance dates. · 30,000 shares for compensation, valued at $ 420,720 at market price on issuance dates. As of March 31, 2026 and December 31, 2025, there were 807,668 shares of the Company’s Series C Convertible Preferred Stock issued and outstanding. 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, 2026, the Company issued 594,586 shares of Common Stock as follows: · 171,878 shares for conversion of debt of $ 1,259,866 · 22,000 shares for service, valued at $ 160,380 · 180,708 shares for cashless exercise of warrants · 220,000 shares for stock payable for acquisition of IP, valued at $ 1,775,400 , which was recorded as additional paid in capital as of December 31, 2025. During the three months ended March 31, 2025, the Company issued 15,536,620 shares of Common Stock for conversion of Series C Preferred Stock. As of March 31, 2026 and December 31, 2025, there were 19,116,901 and 18,522,315 shares of the Company’s common stock issued and outstanding, respectively. Restricted stock On June 27, 2025 (the “Effective Date”), the Company entered into the employment agreement with our Chief Operating Officer (“COO”), commencing on July 21, 2025. Under this agreement, the Company issued 150,000 restricted shares of the Common Stock as stock bonus. Shares shall vest one-fourth each anniversary of the Effective Date. The grant date fair value of shares is $ 1,799,970 . On September 22, 2025, the Company entered into the employment agreement with our new Chief Executive Officer (“CEO”), commencing on October 1, 2025 (the “Effective Date”). Under this agreement, the Company issued 300,000 restricted shares of the Common Stock as stock bonus. Shares shall vest one-fourth on first anniversary of the Effective Date and the remaining three-fourths on monthly basis over the following 36 months. The grant date fair value of shares is $ 1,698,000 . During the year ended December 31, 2025, the Company recorded compensation expense of $ 331,120 . As of December 31, 2025, unrecognized compensation cost for unvested equity awards was $ 3,166,850 . 23 Management stock compensation (PSU) During 2025, the Company entered into employment and consulting agreements with our CEO, former CEO, COO and a Director. The stock compensation based on market capitalization condition is as follows: Market capitalization for 30 consecutive days Consulting agreement Former CEO and current Chairman Consulting agreement Director Employment agreement COO Employment agreement CEO $ 120,000,000 70,000 Series C Convertible Preferred Stock 70,000 Series C Convertible Preferred Stock – – $ 150,000,000 70,000 Series C Convertible Preferred Stock 70,000 Series C Convertible Preferred Stock 37,500 common stock 75,000 common stock $ 200,000,000 70,000 Series C Convertible Preferred Stock 70,000 Series C Convertible Preferred Stock 37,500 common stock 75,000 common stock $ 250,000,000 70,000 Series C Convertible Preferred Stock 70,000 Series C Convertible Preferred Stock 37,500 common stock 75,000 common stock $ 300,000,000 – – 37,500 common stock 75,000 common stock Fair value ($) 1,932,000 3,165,000 1,740,000 1,580,000 Forfeiture Protection Vests upon completion of Initial Term; awards survive termination Vests upon completion of Initial Term; awards survive termination Forfeited if terminated for cause or resignation Forfeited if terminated for cause or resignation The Company used the Monte Carlo model to calculate the fair value of compensation and estimated a total of the grant date fair value of $ 8,417,000 . The Company records compensation expense over the term of a derived service period unless the condition is satisfied at an earlier date. During the three months ended March 31, 2026, the Company recorded compensation expense of $ 2,116,178 . As of March 31, 2026, unrecognized compensation cost for unvested equity awards was $ 710,043 , which is expected to be recognized over a remaining weighted-average period of 0.34 years. As of March 31, 2026, the $120,000,000 market capitalization condition had been achieved , but the 140,000 shares of Series C Convertible Preferred Stock, that become issuable upon achievement of that condition, have not yet been issued. For the year ended December 31, 2025, the estimated fair values of the compensation measured used the following significant assumptions: Significant assumptions used for valuation of compensation Derived service period 0.51 - 1.05 year Risk-free interest rate 3.62% - 3.97% Stock price at valuation date $ 5.66 - 12.00 Expected average volatility 108.5% - 151.0% First Capitalization Threshold per share price $ 6.85 - 14.28 Second Capitalization Threshold per share price $ 8.56 - 19.02 Third Capitalization Threshold per share price $ 11.42 - 23.82 Fourth Capitalization Threshold per share price $ 14.27 - 28.56 Warrants 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. 24 A summary of activity of the warrants during the three months ended March 31, 2026 as follows: Schedule of activity of the warrants Warrants Outstanding Weighted Average Remaining Shares Weighted Average Exercise Price Contractual life (in years) Outstanding, December 31, 2025 2,909,434 $ 3.66 4.37 Exercised ( 192,709 ) 0.46 – Outstanding, March 31, 2026 2,716,725 $ 3.63 4.13 Exercisable, March 31, 2026 2,383,391 $ 4.43 4.17 The intrinsic value of the warrants as of March 31, 2026 is approximately $ 12.9 million. Note 12 – Disaggregated revenue and Concentration During the three months ended March 31, 2026 and 2025, disaggregated revenue was as follows: Schedule of disaggregated revenue Three months ended March 31, 2026 2025 Products sale $ 203,396 $ 604,482 Product installation service 141,519 364,900 $ 344,915 $ 969,382 During the three months ended March 31, 2026 and 2025, customer and supplier concentrations (more than 10%) were as follows: Revenue and accounts receivable Recurring customers do not represent a material percentage of our revenue and accounts receivable for the three months ended March 31, 2026 and 2025. Schedule of revenue and accounts receivable Three months ended March 31, 2026 2025 Number of customers (more than 10% revenue) 3 3 Total revenue of top five (5) customers 67.8 % 48.1 % March 31, December 31, 2026 2025 Number of customers (more than 10% of accounts receivable) 5 3 Total % of accounts receivable balance (more than 10%) 69.0 % 61.1 % 25 Purchase and accounts payable Schedule of purchase and accounts payable Percentage of Purchases Percentage of For three months ended Accounts payable for purchase March 31, March 31, December 31, 2026 2025 2026 2025 Supplier A 86.5 % 46.2 % – 98.8 % Supplier B – 28.1 % – – Total (as a group) 86.5 % 74.3 % – 98.8 % 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 13 – Subsequent Events Management has evaluated subsequent events through May 14, 2026, 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: The Company issued common stock as follows: · 940,799 shares of common stock for conversion of related party debt and accrued interest, valued at $2,257,917. · 2,258,045 shares of common stock for conversion of 677,409 shares of Series C Preferred Stock. · 33,333 shares of common stock for services, valued at $282,997. · 8,334 shares of common stock upon exercise of 8,334 warrants, for proceeds of $25,002. The Company issued 46,250 warrants to a related party F for services. The Company and Hexion Inc., a New Jersey corporation (“Hexion”), formed HexiTech LLC, a Delaware limited liability company (“HexiTech”), to facilitate a joint venture to develop, manufacture, commercialize and sell products incorporating the Company’s fire-retardant intellectual property within a defined field of use, utilizing Hexion’s manufacturing and commercialization capabilities. On April 17, 2026, the Company and Hexion entered into a limited liability company agreement governing HexiTech, pursuant to which the Company and Hexion were admitted as 50% members of HexiTech. On April 17, 2026, the Company also entered into an Intellectual Property License Agreement with HexiTech pursuant to which the Company granted HexiTech a defined license to the Company’s fire-retardant intellectual property within a defined field of use. 26