What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-15 · 543 added, 408 removed, 527 unchanged (64% of the section changed)

3 unchanged sentences

Index to Unaudited Interim Consolidated Financial

March 31, 2026

Consolidated Balance Sheets at March 31, 2026 and December 31, 2025

Consolidated Statements of

Operations and Comprehensive Loss for the three months ended March 31, 2026 and 2025

Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2026 and 2025

Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025

Notes to Consolidated Financial Statements

June 30, 2026

Consolidated Balance Sheets at June 30, 2026 and December 31, 2025

Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2026 and 2025

Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025

Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025

Notes to Unaudited Interim Consolidated Financial Statements

CitroTech Inc.

3 unchanged sentences

Accounts receivable, net

Prepaid expenses

Prepaid expenses and other current assets

Total Current Assets

3 unchanged sentences

Equipment, net

Security deposits

Security deposit

Total Non-Current Assets

4 unchanged sentences

Convertible notes, net of discount

Convertible notes, net of discount - related party

Convertible notes, net of discount - related parties

Due to related parties

9 unchanged sentences

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

Series C Convertible Preferred Stock, par value $ 0.0001 , designated 10,000,000 shares, 807,668 shares

issued and shares outstanding

Common Stock, par value $ 0.0001 , authorized 1,000,000,000 shares, 19,116,901 and 18,522,315 issued and outstanding,

Series A Preferred Stock, par value $ 0.0001 , designated 10,000,000 shares, 0 and 1,666,667 shares issued and outstanding, respectively

Series C Convertible Preferred Stock, par value $ 0.0001 , designated 10,000,000 shares, 212,149 and 807,668 shares issued and outstanding, respectively

Common Stock, par value $ 0.0001 , authorized 1,000,000,000 shares, 22,512,974 and 18,522,315 issued and outstanding, respectively

Additional paid-in capital

4 unchanged sentences

Total Liabilities and Stockholders' Equity

The accompanying

notes are an integral part of these unaudited interim consolidated financial statements.

The accompanying notes are an integral part of these

unaudited interim consolidated financial statements.

CitroTech Inc.

2 unchanged sentences

Three Months Ended

Six months ended

Operating expenses

10 unchanged sentences

Loss from operations

( 4,447,146 )

( 3,458,456 )

Other income (expense)

3 unchanged sentences

Financing expense

( 6,167,334 )

Financing expense - related party

Loss on fair value of derivative liability

Loss on sales of assets

Loss on settlement of debt

1 unchanged sentence

(16,331,328 )

( 7,444,948 )

Loss before taxes

1 unchanged sentence

(10,113,118 )

(22,807,422 )

Provision for income taxes

1 unchanged sentence

$ (11,904,018 )

$ (10,113,118 )

$ (22,807,422 )

Comprehensive loss

1 unchanged sentence

$ (11,904,018 )

$ (10,113,118 )

$ (22,807,422 )

Net loss per common share - basic and diluted

Basic and diluted weighted average number of common shares outstanding

The accompanying

notes are an integral part of these unaudited interim consolidated financial statements.

The accompanying notes are an integral part of these

unaudited interim consolidated financial statements.

CitroTech Inc.

1 unchanged sentence

Consolidated Statements of Changes in Stockholders’

For the three months ended March 31, 2026

For the three and six months ended June 30, 2026

Series C Convertible

Stockholders'

Balance - December 31, 2025

- December 31, 2025

$ 124,463,845

$ (113,203,031 )

Common stock issued for conversion of debt

Common stock issued for conversion

Common stock issued for services

Common stock issued for cashless exercise of warrants

Common stock issued for cashless

exercise of warrants

Common stock issued for stock payable

Management stock compensation

Contributed capital

- March 31, 2026

$ 128,096,468

$ (119,413,595 )

Balance - March 31, 2026

Series A Preferred Stock exchanged

for Series C Preferred Stock and Series C Preferred Stock payable

Common stock issued for conversion

of Series C Preferred Stock

Common stock issued for services

Common stock issued for conversion

Common stock issued for exercise

Management stock compensation

Warrants issued for services

- June 30, 2026

$ 132,326,739

$ (123,316,149 )

For the three months ended March 31, 2025

Convertible Series A

The accompanying notes are an integral part of these

unaudited interim consolidated financial statements.

CitroTech Inc.

(formerly General Enterprise Ventures, Inc.)

Consolidated Statements of Changes in Stockholders’

For the three and six months ended June 30, 2025

Convertible Series C

11 unchanged sentences

(87,268,792 )

The accompanying

notes are an integral part of these unaudited interim consolidated financial statements.

Series C Preferred Stock issued for services

Series C Preferred Stock for compensation

Common stock issued for conversion of Series C Preferred Stock

Common stock issued for services

Common stock issued for conversion of debts

Management stock compensation

(11,904,018 )

Balance - June 30, 2025

$ 101,361,931

$ (99,172,810 )

The accompanying notes are an integral part of these

unaudited interim consolidated financial statements.

CitroTech Inc.

(formerly General Enterprise Ventures, Inc.)

Consolidated Statement of Cash Flows

Three months ended

Consolidated Statements of Cash Flows

Six months ended

Cash Flows from Operating Activities:

4 unchanged sentences

Stock-based compensation - related party

Bad debt expense recovery

Non-cash lease expenses

3 unchanged sentences

Loss on fair value of derivative liability

Loss on disposal of equipment

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses

Security deposits

Prepaid expenses and other current assets

Security deposit

Accounts payable and accrued liabilities

Due to related parties

Accrued interest - related parties

2 unchanged sentences

Net Cash used in Operating Activities

( 2,059,341 )

Cash Flows from Investing Activities:

Purchase of equipment

Net Cash used in Investing Activities

Sale of equipment

Net Cash provided by (used in) Investing Activities

Cash Flows from Financing Activities:

Proceeds from exercise of warrants

Proceeds from convertible notes and warrants

1 unchanged sentence

Payments of deferred offering costs

Proceeds from capital contribution

Contributed capital

Repayment of loan - related party

Proceeds from issuance of Series C Preferred Stock and warrants

1 unchanged sentence

Net Cash provided by Financing Activities

Change in cash for the period

( 1,981,694 )

Change in cash

Cash, beginning of period

4 unchanged sentences

Non-Cash Financing Disclosure:

Series A Preferred Stock exchanged for Series C Preferred Stock and Series C Preferred Stock payable

Common stock issued upon conversion of Series C Preferred stock

Common stock issued for conversion and settlement of debt

Debt modification – related party

Debt modification

Warrants issued in conjunction with convertible debts

Right-of-use assets obtained in exchange for new operating lease liabilities

Recognition of derivative liability as debt discount

1 unchanged sentence

Acquisition of property and equipment as financing loan

The accompanying

notes are an integral part of these unaudited interim consolidated financial statements.

The accompanying notes are an integral part of these

unaudited interim consolidated financial statements.

CitroTech Inc.

1 unchanged sentence

Notes to Unaudited Interim Consolidated Financial

March 31, 2026

Note 1 – Organization, Business

and Going Concern

June 30, 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.

January 22, 2026, the Company changed its name from 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.

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.

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.

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.

We develop and manufacture environmentally

sustainable, non-toxic, long-term fire-inhibiting products for use in industrial and wildfire defense applications.

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

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

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 June 30, 2026, the Company had cash of approximately

$ 2.5 million, working capital of $ 3.3 million, and an accumulated deficit of $ 123.3 million.

For the six months ended June

30, 2026, the Company incurred a net loss of $ 10.1 million and used approximately $ 3.8 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.

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.

Note 2 – Summary of Significant

Accounting Policies

evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity or debt securities.

seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at

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.

Note 2 – Summary of Significant Accounting

Basis of Presentation

8 unchanged sentences

for the year ended December 31,

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.

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 June 30, 2026 and its results of operations for the three and six months ended June 30, 2026

and 2025, and cash flows for the six months ended June 30, 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 audited 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.

The consolidated financial statements include the

accounts of CitroTech Inc., and its wholly owned subsidiaries.

Intercompany transactions and balances have been eliminated.

11 unchanged sentences

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 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.

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.

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 June 30, 2026 and

December 31, 2025.

The Company had cash of $ 2.5 million and $ 6.3 million at June 30, 2026 and December 31, 2025, respectively.

Periodically, the Company may carry cash balances

1 unchanged sentence

The amount in excess of the FDIC insurance

as of March 31, 2026, was approximately $ 3.2 million.

as of June 30, 2026, was approximately $ 1.9 million.

The Company has not experienced losses on account balances and management believes,

1 unchanged sentence

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.

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.

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 June 30, 2026, the Company

recovered $ 20,000 of previously reserved accounts receivable.

Accordingly, the Company reversed the related allowance for credit losses,

which was recorded as a reduction of general and administrative expenses.

As of June 30, 2026, the Company determined that the remaining

reserved accounts receivable balance was uncollectible and wrote it off against the existing allowance for credit losses.

The allowance

for credit losses was $ 0 and $ 340,950 as of June 30, 2026 and December 31, 2025, respectively.

Fair Value of Financial Instruments

8 unchanged sentences

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.

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

1 unchanged sentence

at historical cost.

As of March 31, 2026 and December 31, 2025, the carrying amounts of these instruments approximated their fair values

As of June 30, 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.

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.

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.

The Company follows ASC 850 , “Related Party

Disclosures,” for the identification of related parties and disclosure of related party transactions.

The Company recognizes revenue from its contracts

3 unchanged sentences

the terms of the contract.

Revenue related to contracts with customers is

evaluated utilizing the following steps:

Revenue related to contracts with customers is evaluated

utilizing the following steps:

Identify the contract, or contracts, with a customer;

3 unchanged sentences

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

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.

For the six months ended June 30, 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.

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.

As of June 30, 2026 and December 31, 2025, total

deferred revenue was $ 21,394 and $ 3,000 , respectively.

Deferred revenue is expected to be recognized as revenue within the third

and fourth quarters of 2026.

Cost of Revenue

For the three months ended March 31, 2026 and

2025, cost of revenue consisted of:

For the three and six months ended June 30, 2026

and 2025, cost of revenue consisted of:

Schedule of cost of revenue

Three Months Ended

Six months ended

Cost of inventory

19 unchanged sentences

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.

For the six months ended June 30, 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

11 unchanged sentences

previously recognized compensation cost is reversed in the period related to the termination of service.

During the three months ended March 31, 2026

During the three and six months ended June 30, 2026

and 2025, stock-based compensation was recognized as follows:

1 unchanged sentence

Three Months Ended

Six months ended

Management compensation

2 unchanged sentences

Financing expense

Financing expense - related party

Stock-based compensation

8 unchanged sentences

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 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

14 unchanged sentences

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.

adoption method of this ASU may vary, on an issue-by-issue basis.

Early adoption is permitted.

1 unchanged sentence

of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

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

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.

Financial Instruments—Credit Losses (Topic 326):

2025-05, Financial

Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

6 unchanged sentences

Note 3 – Inventory

As of March 31, 2026 and December 31, 2025, inventory

As of June 30, 2026 and December 31, 2025, inventory

consisted of the following:

3 unchanged sentences

The Company did no t write-off any inventories

as unsalable for the three months ended March 31, 2026 and 2025.

as unsalable for the six months ended June 30, 2026 and 2025.

Note 4 – Prepaid expenses

As of March 31, 2026 and December 31, 2025, prepaid

As of June 30, 2026 and December 31, 2025, prepaid

expenses consisted of the following:

Schedule of prepaid expenses

Legal retainer

Research and development expense

4 unchanged sentences

Note 5 – Equipment, net

As of March 31, 2026 and December 31, 2025, equipment

As of June 30, 2026 and December 31, 2025, equipment

consisted of the following:

3 unchanged sentences

Equipment, net

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

During the three and six months ended June 30, 2026

and 2025, the Company recorded depreciation as follows.

Schedule of depreciation

Three Months Ended

Six months ended

During the six months ended June 30, 2026, the

Company purchased equipment for $ 10,727 .

During the six months ended June 30, 2025, the Company purchased vehicles and equipment for $ 381,817 ,

of which $ 118,776

were purchased with a financing loan, and transferred vehicles from inventory of $7 4,827 due

to a change of use in 2025.

During the six months ended June 30, 2026, the Company

sold and disposed of vehicles and equipment with a net book value of $ 98,353 .

In connection with these dispositions, the Company received

cash from sale of equipment of $ 12,500 , settled the related finance loan of $ 67,725 and paid $ 15,051 for settlement of finance loan, and

settled other current liability of $ 922 , resulting in a loss on disposal of $ 32,257 .

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.

Note 6 – Intangible Assets,

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 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 %.

In June 2026, the Company sold the vehicle with a net book value of $ 83,489

and paid $ 15,051

to settle finance loan of $ 67,725 .

As a result, the Company recorded loss on disposal of $ 30,815 .

During the three and six months ended June 30, 2026

and 2025, the Company recorded interest expense as follows:

Schedule of interest expense

Three Months Ended

Six months ended

Interest expense

As of June 30, 2026 and December 31, 2025, the Company

had a financing loan of $ 81,113 and $ 163,381 , respectively.

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.

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 ,

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

As of June 30, 2026 and December 31, 2025, finite

lived intangible assets consisted of the following:

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Intangible assets, net

Estimated future amortization expense for finite

lived intangibles are as follows:

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)

2026 (remaining six months)

Intangible assets, net

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.

As of June 30, 2026, the weighted-average useful life

is 13.59 years.

During the three and six months ended June 30,

2026 and 2025, the amortization expense was as follows:

Schedule of amortization expense

Three Months Ended

Six months ended

Note 7 – Lease

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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:

For the three and six months ended June 30, 2026 and

2025, the components of lease expense were as follows:

Schedule of right-of-use asset and lease information

Three Months Ended

The components of lease expense were as follows:

Six months ended

Operating lease cost

2 unchanged sentences

Total lease cost

Supplemental cash flow information related to

leases was as follows:

Supplemental cash flow information related to leases

was as follows:

Schedule of supplemental cash flow information related to leases

Three months ended

Six months ended

Cash paid for operating cash flows from operating leases

Right-of-use asset obtained in exchange for new operating lease liabilities

Weighted-average remaining lease term - operating leases (year)

Weighted-average discount rate — operating leases

The following table outlines maturities of our

lease liabilities as of March 31, 2026:

The following table outlines maturities of our lease

liabilities as of June 30, 2026:

Schedule of maturities of lease liabilities

Year ending December 31,

2026 (remaining nine months)

2026 (remaining six months)

Operating leases, future minimum payments due

2 unchanged sentences

Note 8 – Convertible Notes

The components of convertible notes as of March

The components of convertible notes as of June 30,

2026 and December 31, 2025, were as follows:

7 unchanged sentences

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.

During the three and six months ended June 30, 2026

and 2025, the Company recognized interest expense and amortization of debt discount as follows:

Schedule of interest expense and amortization of debt

Three Months Ended

Six months ended

Interest expense

Amortization of debt discount

As of June 30, 2026 and December 31, 2025, the Company

recorded accrued interest of $ 0 and $ 32,773 , respectively.

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.

converted convertible notes issued in February 2025 of $ 375,000

and accrued interest of $ 37,500

shares of common stock with a conversion price of $2.40.

As a result, the Company settled convertible notes and accrued interest of

1 unchanged sentence

Note 9 – Accounts payable and accrued

As of March 31, 2026 and December 31, 2025, accounts

As of June 30, 2026 and December 31, 2025, accounts

payable and accrued liabilities consisted of the following:

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The related parties that had material transactions

for the three months ended March 31, 2026 and 2025, consist of the following:

for the six months ended June 30, 2026 and 2025, consist of the following:

Related Party

3 unchanged sentences

A California Corporation owned by a related party D

shareholder and our Chief Technology Officer through March 31, 2026

Director and Chief Executive Officer of GEVI Insurance Holdings Inc.

limited liability company controlled by a Director and significant shareholder

Significant shareholder and our Chief Technology Officer through March 31, 2026

Former Director and Chief Executive Officer of GEVI Insurance Holdings Inc.

A Delaware limited liability company controlled by a Director and significant shareholder

A company controlled by our Chief Financial Officer

As of March 31, 2026 and December 31, 2025, amounts

As of June 30, 2026 and December 31, 2025, amounts

owing to related parties consists as follows:

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Accrued interest related to convertible note related party

For the three months ended March 31, 2026 and

2025, expenses to related parties and their nature consists of:

Three months ended March 31,

Consulting fees

For the three and six months ended June 30, 2026

and 2025, expenses to related parties and their nature consists of:

Three Months Ended

Related Party

1 unchanged sentence

Financial Statement Line Item

Payment of operating expenses on behalf of the Company

Due to related party

Repayment of loan

Due to related party

Cash paid for consulting fees

Professional fees - related party

Cash paid for royalty and sales commissions

Cost of revenue - related party

Cash paid for consulting fees

Professional fees - related party

69,007 Series C preferred stock for services

Financing expense

Professional service - accounting

Professional fees - related party

Six Months Ended

Related Party

Nature of transaction

Financial Statement Line Item

150,000 Series C preferred stock for consulting fee

Professional fees - related party

Payment of operating expenses on behalf of the Company

Operating expenses

Repayment of loan

Due to related party

Cash paid for consulting fees

4 unchanged sentences

Cost of revenue - related party

Cash paid for consulting fees

Professional fees - related party

30,000 Series C preferred stock for management compensation

Management compensation

20,000 shares of Series C preferred stock for advisory fee

Professional fees - related party

69,007 Series C preferred stock for services

Financing expense

Edgar filing expense

General and administrative

Professional service - accounting

2 unchanged sentences

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.

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.

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.

Convertible note – related party

The components of convertible notes as of March

The components of convertible notes as of June 30,

2026 and December 31, 2025, were as follows:

6 unchanged sentences

Current portion

( 2,211,484 )

( 1,285,400 )

Long-term portion

1 unchanged sentence

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

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 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

9 unchanged sentences

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.

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).

During the three and six months ended June 30, 2026

and 2025, the Company recognized interest expense and amortization of debt discount as follows:

Schedule of interest expense and amortization of debt discount

Three Months Ended

Six months ended

Interest expense - related party

Amortization of debt discount - related party

In April 2026, related party F converted a convertible

note with accrued interest of $ 35,917 into 940,799 shares of common stock with a conversion price of $ 2.40 .

As of June 30, 2026 and December 31, 2025, the Company

recorded accrued interest of $ 0 and $ 167,671 , respectively.

Note 11 – Stockholders’ Equity

6 unchanged sentences

of its Preferred Stock as Series A Preferred Stock, par value $ 0.0001 , with the following rights and privileges.

Holders of shares of

Series A Preferred Stock are not entitled to receive dividends.

Holders of shares of Series

A Preferred Stock are not entitled to receive dividends.

Voting Rights .

6 unchanged sentences

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.

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.

Share exchange

On May 28, 2026, the Company entered into Stock Exchange

and Stockholders Agreements (the “Exchange Agreements”) with the holders (the “Holders”) of the Company’s

outstanding Series A Preferred Stock.

Pursuant to the Exchange Agreements, the Company reacquired an aggregate of 1,666,667 shares of

Series A Preferred Stock.

At closing, the Company issued 103,558 shares of Series C Convertible Preferred Stock to BoltRock Holdings,

LLC (“BRH”), and agreed to issue 467,012 shares of Series C Preferred Stock to TC Special Investments LLC (“TCSI”)

on the date that is 18 months after closing, unless issued earlier in connection with a change of control of the Company which, under

the TCSI Exchange Agreement, includes the appointment of Theodore S.

Ralston to the Company’s board of directors (collectively,

the “Exchange Shares”).

As a result, the Company recorded the 103,558 shares of Series C Preferred Stock issued to BRH, and

the Series C Preferred Stock payable representing the 467,012 shares to be issued to TCSI, as additional paid-in capital.

As of June 30, 2026 and December 31, 2025, there

and 1,666,667 ,

respectively, shares of Series A Preferred stock issued and outstanding.

Series C Convertible Preferred Stock

1 unchanged sentence

of its Preferred Stock as Series C Convertible Preferred Stock with the following rights and privileges.

Holders of shares of

Series C Convertible Preferred Stock are not entitled to receive 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.

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.

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.

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 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.

During the six months ended June 30, 2026, the Company

issued 103,558 shares of Series C Convertible Preferred Stock to BRH and 467,012 shares to be issued to TCSI.

During the six months ended June 30, 2025, the Company

issued 344,007 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

· 236,507 shares for services, valued at $ 4,860,875

at market price on issuance dates.

· 80,000 shares for compensation, valued at $ 1,520,720

at market price on issuance dates.

During the six months ended June 30, 2026, the holders

of the Convertible Series C Preferred Stock converted 699,077 shares of the Company’s Convertible Series C Preferred Stock

into 2,330,273 shares of the Company’s common stock, respectively.

As of June 30, 2026 and December 31, 2025, there were 212,149

and 807,668 shares of the Company’s Series C Convertible Preferred Stock issued and outstanding, respectively.

The Company has authorized 1,000,000,000 shares

2 unchanged sentences

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:

During the six months ended June 30, 2026, the Company

issued 3,990,659 shares of Common Stock as follows:

· 2,330,273 shares for conversion of 699,077 shares

of Series C Preferred Stock

· 1,112,677 shares for conversion of debt of $ 3,517,783

· 55,333 shares for service, valued at $ 443,377

· 180,708 shares for cashless exercise of warrants

· 189,042 shares for cash and cashless exercise

of warrants, for cash proceeds of $ 25,002

· 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

· 83,334 shares for management compensation valued

During the six months ended June 30, 2025, the Company

issued 29,245,272 shares of common stock as follows:

shares for conversion of Series C Preferred Stock.

shares for conversion of debt of $ 5,604,442 .

shares for services, valued at $ 19,000 .

As of June 30, 2026 and December 31, 2025, there were 22,512,974 and 18,522,315 shares

of the Company’s common stock issued and outstanding, respectively.

Restricted stock units (RSU)

On June 27, 2025 (the “Effective Date”),

4 unchanged sentences

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

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.

shall vest one-fourth on first anniversary of the Effective Date and the remaining three-fourths on monthly basis over the following 36

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 .

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 three and six months ended June 30, 2026,

the Company recorded compensation expense of $ 218,623 and $ 437,246 , respectively.

As of June 30, 2026, unrecognized compensation cost

for unvested equity awards was $ 2,729,603 .

Management stock compensation (PSU)

3 unchanged sentences

is as follows:

capitalization

30 consecutive

capitalization for

30 consecutive days

Consulting agreement

CEO and current

CEO and Chairman

Consulting agreement

3 unchanged sentences

Series C Convertible Preferred Stock

70,000 Series

C Convertible Preferred Stock

70,000 Series

C Convertible Preferred Stock

37,500 common

75,000 common

70,000 Series

C Convertible Preferred Stock

70,000 Series

C Convertible Preferred Stock

37,500 common

75,000 common

70,000 Series

C Convertible Preferred Stock

70,000 Series

C Convertible Preferred Stock

37,500 common

75,000 common

37,500 common

75,000 common

upon completion of Initial Term;

Series C Convertible Preferred Stock

completion of Initial Term;

awards survive termination

upon completion of Initial Term;

completion of Initial Term;

awards survive termination

3 unchanged sentences

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

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.

The Company records

compensation expense over the term of a derived service period unless the condition is satisfied at an earlier date.

three and six months ended June 30, 2026, the Company recorded compensation expense of $ 517,372 and $ 2,414,927 , respectively.

June 30, 2026, unrecognized compensation cost for unvested equity awards was $ 192,671 which is expected to be recognized over a

remaining weighted-average period of 0.24 years.

As of June 30, 2026, market capitalization performance

conditions had been achieved with respect to certain outstanding equity incentive awards.

Theodore Ralston, the Company’s former

Chief Executive Officer, and BoltRock Holdings, LLC, a Company controlled by the Company’s Chairman, each became eligible to receive

140,000 shares of Series C Convertible Preferred Stock, but each has elected to defer receipt of such shares.

In addition, Wesley Bolsen,

the Company’s Chief Executive Officer, and Andrew Hotsko, the Company’s Chief Operating Officer, became eligible to receive

75,000 and 37,500 shares of common stock, respectively, subject to approval by the Compensation Committee.

No shares underlying these

awards had been issued as of June 30, 2026.

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

fair values of the awards were measured using the following significant assumptions:

Schedule of significant assumptions

Derived service period

11 unchanged sentences

14.27 - 28.56

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.

In April 2026, the Company issued 46,250

warrants to a related party F for services.

The warrant is for a period of five

years at an exercise price per share of $ 3.00 .

The Company recorded the warrants value of $ 361,801

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

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.

A summary of activity of the warrants during

the three months ended March 31, 2026 as follows:

Any change to these inputs could produce significantly

higher or lower fair value measurements.

The Company utilized the following assumptions:

Schedule of assumptions

Expected term

Expected average volatility

Risk-free interest rate

Expected dividend yield

A summary of activity of the warrants during the six

months ended June 30, 2026 is as follows:

Schedule of activity of the warrants

Warrants Outstanding

Weighted Average Remaining

Weighted Average

Weighted Average Remaining Contractual Life

Exercise Price

Contractual life

Outstanding, December 31, 2025

Outstanding, March 31, 2026

Exercisable, March 31, 2026

The intrinsic value of the warrants as of March

31, 2026 is approximately $ 12.9

Note 12 – Disaggregated revenue

and Concentration

During the three months ended March 31, 2026

Outstanding, June 30, 2026

Exercisable, June 30, 2026

The intrinsic value of the warrants as of June 30,

2026 is approximately $ 5 .0 million.

Note 12 – Disaggregated revenue and

Concentration

During the three and six months ended June 30, 2026

and 2025, disaggregated revenue was as follows:

1 unchanged sentence

Three Months Ended

Six months ended

Products sale

Product installation service

During the three months ended March 31, 2026

During the three and six months ended June 30, 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.

Recurring customers do not represent a material percentage

of our revenue for the three and six months ended June 30, 2026 and 2025 and accounts receivable as of June 30, 2026 and December 31,

Schedule of revenue and accounts receivable

Three months ended

Number of customers (more than 10% revenue)

Total revenue of top five (5) customers

Six months ended

Number of customers (more than 10% of revenue)

Total revenue of top 5 customers

Number of customers (more than 10% of accounts receivable)

Total % of accounts receivable balance (more than 10%)

Purchase and accounts payable

Purchase and accounts payable for Inventory

Schedule of purchase and accounts payable

Percentage of Purchases

Percentage of

For three months ended

For six months ended

Accounts payable for purchase

Total (as a group)

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

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.

1 unchanged sentence

credit risk exposure is limited.

Note 13 – Segment

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.

Schedule of segment assets

Three Months Ended

Six months ended

Operating expenses

Cost of revenue, exclusive of amortization and depreciation shown separately below

Cost of revenue - related parties

Amortization and depreciation

General and administrative

Advertising and marketing

Payroll and management compensation

Professional fees

Professional fees - related parties

Research and development expense

Total operating expenses

Loss from operations

Note 14 – 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

· 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.

August 7, 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:

· Issuance of 37,500 common shares to our

COO for RSU vesting

· Issuance of 3,000 common shares to a consultant

valued at $16,800

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements