CITR 10-K & 10-Q changes, risk factors and insider trading
CitroTech Inc. · NYSE · Chemicals & Allied Products · CIK 894556 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Relating to Our Business”
New heading “We have incurred losses since inception and cannot assure that we will ever achieve or sustain profitability.”
New heading “We are controlled by one principal stockholder who serves as our Chairman of the Board.”
New heading “If we are unable to expand our base of customers, our future growth and operating results could be adversely affected.”
New heading “If we are unable to expand our base of materials suppliers, our future growth and operating results could be adversely affected.”
New heading “Various factors outside our direct control may adversely affect suppliers and distribution of our product.”
New heading “We are subject to the seasonality of wildfires that may occur and acts of God that are inconsistent and unpredictable.”
New heading “We rely on a small management team, and the loss of key personnel or their limited availability could materially and adversely affect our business”
New heading “Since we have a limited operating history, it is difficult for potential investors to evaluate our business.”
New heading “Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our raw materials and support services contracts may constrain our ability to make a profit.”
New heading “If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.”
New heading “Our failure to maintain effective internal controls over financial reporting could have an adverse impact on us.”
New heading “Changes in consumer preferences or discretionary consumer spending could harm our performance.”
New heading “We may become subject to potential claims for product liability.”
New heading “Increases in prices of commodities needed to manufacture our product could adversely affect profitability.”
New heading “Risks Related to Regulatory and Legal Matters”
New heading “Our product is provided to emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability and reputational risks if our product fails to provide such protection as intended.”
New heading “Our product is subject to extensive government scrutiny and regulations, including the EPA and USDA Forest Service. There can be no assurance that such regulations will not change and that our product will continue to be approved for usage.”
New heading “Our product or facility could have environmental impacts and side effects.”
New heading “Legal and regulatory claims, investigations and proceedings may be initiated against us in the ordinary course of business. The outcomes and the amounts of any damages awarded, or fines or penalties assessed, cannot be predicted, and could have a material adverse effect on our reputation as well as our business, financial condition and results of operations.”
New heading “Risks Relating to Our Indebtedness”
New heading “We are highly leveraged.”
New heading “We could incur additional indebtedness in the future. If new indebtedness is added to our current debt levels, the related risks we now face could increase.”
New heading “Risks Relating to our Common Stock and Securities”
New heading “Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our Common Stock could incur substantial losses.”
New heading “General Business Risks”
New heading “We will be increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.”
New heading “We could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products.”
New heading “We could become subject to patent litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products.”
New heading “Our operating results and stock price may be volatile, and the market price of our Common Stock may decline.”
New heading “The availability of shares for sale in the future could reduce the market price of our Common Stock.”
New heading “The indemnification provisions in our Articles of Incorporation and bylaws under Wyoming law may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers, and employees.”
New heading “We are classified as a “smaller reporting company,” and we cannot be sure if the reduced disclosure requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors.”
New heading “Because directors and officers currently and for the foreseeable future will continue to control the Company, you will not likely be able to elect directors or have any say in the Company’s policies.”
New heading “We are a “controlled company” within the meaning of the NYSE American listing standards and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements. As a result, you do not and may not in the future have the same protections afforded to shareholders of companies that are subject to such requirements.”
New heading “We do not expect to pay dividends in the future; any return on investment may be limited to our Common Stock’s value.”
New heading “Because our Company has anti-takeover mechanisms through the issuance of our Series A Preferred Stock, which votes with the Common Stock together as a single class, this preference could have a negative impact on other stockholders in voting on matters of the Company.”
New heading “Our Series A Preferred Stock may lead to conflicts of interest and could negatively impact the price of our securities.”
Largest changes
“Legal and regulatory claims, investigations and proceedings may be initiated against us in the ordinary course of business. The outcomes and the amounts of any damages awarded, or fines or penalties assessed, cannot be predicted, and could have a material adverse effect on our reputation as well as our business, financial condition and results of operations.”see in full comparison
“These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for our shares to fluctuate substantially. Fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. …”see in full comparison
“We may be the subject of litigation by customers, suppliers and other third parties. A significant judgment against us, the loss of a significant permit, license or other approval, or a significant fine, penalty or contractual dispute could have a material adverse effect on our business, financial condition and results of operations. Litigation is expensive, time consuming and may divert management’s attention away from the operation of the business. …”see in full comparison
“We could become subject to patent litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products.”see in full comparison
“Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. …”see in full comparison
“We could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products.”see in full comparison
Full comparison: every changed paragraph (97)
An investment in our Common Stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this Annual Report before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Forward-Looking Statements.”
Risks Relating to Our Business
We have incurred losses since inception and cannot assure that we will ever achieve or sustain profitability.
The Company has incurred losses since inception and has been dependent on related parties to fund operations. The Company incurred a net loss of $36.8 million during the year ended December 31, 2025, resulting in an accumulated deficit of $113.2 million. In September and October 2025, the Company completed an equity offering which generated net proceeds of $8.1 million.
The Company’s existing cash resources are expected to be sufficient to fund its planned operations through fiscal year 2026. To support operations beyond such time frame, the Company may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
There can be no assurance that funds will be available from external sources, such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations, or to raise capital from external sources, would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.
Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of the Company’s Common Stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights.
We are controlled by one principal stockholder who serves as our Chairman of the Board.
As of the date of this Annual Report, Mr. Theodore Ralston holds 1,364,141 shares of the Series A Preferred Stock. Each share of the Series A Preferred Stock is entitled to vote 1,000 votes per share, and as such Mr. Ralston controls approximately 81% of the vote, and the ability to control all other matters requiring the approval of our stockholders, including the election of all of our directors.
If we are unable to expand our base of customers, our future growth and operating results could be adversely affected.
We have committed and continue to commit resources to the expansion and increased marketing of our CitroTech™ product. If we are unable to market and sell our product to new customers, our ability to grow revenue and achieve profitability could be negatively impacted.
If we are unable to expand our base of materials suppliers, our future growth and operating results could be adversely affected.
We currently compound our product in-house with materials supplied from manufacturers. There are no contracts in place with the suppliers. We have committed resources to expanding our supplier base. If we are unable to obtain additional sources for our materials, it could limit our ability to grow revenue and achieve profitability.
Various factors outside our direct control may adversely affect suppliers and distribution of our product.
Changes that our suppliers may make outside the purview of our direct control can have an impact on our processes, quality of our product, and the successful delivery of our product to our customers. Mistakes and mishandling are not uncommon and can affect supply and delivery. Some of these risks include:
If any of these risks were to materialize, our ability to provide our product to customers on a timely basis would be adversely impacted.
We are subject to the seasonality of wildfires that may occur and acts of God that are inconsistent and unpredictable.
Our business is highly dependent on the needs of commercial property owners, residential homeowners and government agencies to prevent fires and protect assets. As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Historically, sales of our product have been higher in the summer season of each calendar year due to weather patterns which we believe are generally correlated to a higher prevalence of wildfires; however, one example of an exception to this seasonality is the wildfires in Los Angeles, California during January 2025.
We rely on a small management team, and the loss of key personnel or their limited availability could materially and adversely affect our business
We rely heavily on the skills, experience, and continued services of a five-person management team to conduct and manage our business operations. Our management team consists of Wesley Bolsen, a member of our board of directors and our Chief Executive Officer, Andrew Hotsko, our Chief Operating Officer, Nanuk Warman, our Chief Financial Officer, Stephen Conboy, our Chief Technology Officer, and Anthony Newton, our General Counsel. Of these individuals, only Mr. Bolsen and Mr. Hotsko devote substantially all of their working time to the Company.
Our Chief Financial Officer, Chief Technology Officer, and General Counsel are not full-time employees and devote only a portion of their professional time to managing the Company’s affairs. As a result, we are particularly dependent on the continued availability and performance of a limited number of individuals, and we may experience difficulties in executing our business strategy, maintaining operational continuity, or responding effectively to unexpected challenges.
The loss of any member of our management team, the inability to attract and retain qualified replacement personnel on acceptable terms, or a reduction in the time commitment of any of our key personnel could materially and adversely affect our business, financial condition, and results of operations. In addition, our limited management resources may constrain our ability to scale our operations, implement internal controls and compliance functions, or pursue strategic opportunities. We do not maintain “key person” insurance for any member of our management team, and there can be no assurance that we will be able to mitigate the impact of any such loss or unavailability in a timely manner.
Since we have a limited operating history, it is difficult for potential investors to evaluate our business.
Our limited operating history makes it difficult for potential investors to evaluate our business or prospective operations. Since our formation in March of 1990, we have not generated enough revenues to exceed our expenses. MFB Ohio acquired MFB California’s portfolio of intellectual property in April 2022 and entered the fire retardant and fire suppression industry as of that date. As a result, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications, and delays inherent in new business lines. Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. Our business is dependent upon the implementation of our business plan. We may not be successful in implementing such a plan and cannot guarantee that, if implemented, we will ultimately be able to attain profitability.
Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our raw materials and support services contracts may constrain our ability to make a profit.
Our profitability can be adversely affected to the extent we are faced with cost increases for raw materials, wages, or other labor-related expenses, especially when we cannot recover such increased costs through increases in the prices for our product and services. In some cases, we will have to absorb any cost increases, which may adversely impact our operating results.
If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.
The Company currently has product liability insurance. However, in the event of major claims from the use of our product, it is possible that our product liability insurance will not be sufficient to cover claims against us. We cannot assure you that we will not face liability arising out of the use of our product which is significantly in excess of the limits of our product liability insurance. In such event, if we do not have the funds or access to the funds necessary to satisfy such liability, we may be unable to continue in business.
Our failure to maintain effective internal controls over financial reporting could have an adverse impact on us.
We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition, or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Presently, we have identified financial reporting internal control weaknesses relating to segregation of duties and various accounting processes. While we have improved our organizational capabilities, we still may not have a sufficient number of employees to segregate responsibilities and may be unable to afford further enhancements to our staff or engaging outside consultants or professionals further to fully mitigate these internal control deficiencies. During the course of our testing, we may identify other deficiencies that we may not be able to timely remediate. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Changes in consumer preferences or discretionary consumer spending could harm our performance.
The success of our business depends, in part, upon the continued popularity of our product, and shifts in these consumer preferences could negatively affect our future profitability.
Negative publicity over certain environmental products may adversely affect demand for our product and could result in a decrease in our revenues, which could materially harm our business. Additionally, our success depends, in part, on a builder preference for our product and, to an extent, on numerous factors affecting operational budgeting, including economic conditions and customer confidence.
A decline in operational budgeting or economic conditions could reduce guest traffic or impose practical limits on pricing, either of which could harm our business, financial condition, operating results, or cash flow.
We may become subject to potential claims for product liability.
Our business could expose us to claims for personal injury from contamination of our product. We believe that our product’s quality is carefully monitored through regular product testing, but we may be subject to liability as a result of customer or distributor misuse or storage. The Company maintains product liability insurance against certain types of claims in amounts which it believes to be adequate. The Company also maintains an umbrella insurance policy that it considers to be sufficient to cover claims made above its product liability insurance limits. Although no claims have been made against the Company or its distributors to date and the Company believes its current level of insurance to be adequate for its current business operations, it is possible that such claims will arise in the future, and the Company’s policies may not be sufficient to pay for such claims.
Increases in prices of commodities needed to manufacture our product could adversely affect profitability.
The ingredients and materials needed to manufacture and package our product are subject to the commodities markets’ normal price fluctuations. Any increase in the price of those ingredients and materials that cannot be passed along to the consumer will adversely affect our profitability. Any prolonged or permanent increase in the cost of the raw ingredients to manufacture our product may in the long term make it more difficult for us to earn a profit.
Risks Related to Regulatory and Legal Matters
Our product is provided to emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability and reputational risks if our product fails to provide such protection as intended.
Our fire retardant product is provided to, among other customers, emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability risks if our product fails to provide such protection. While our product is effective in retarding fires, there is no guarantee such product will be able to stop all fires due to their unpredictability and variation in size and/or speed in which a fire is burning. In addition, fires need to be fought with the cooperation and assistance of local fire authorities as well as the additional tools and resources that they bring. Therefore, while we recognize the importance of the role our product plays in these critical efforts, our product is not the only factor in fighting fires and therefore we cannot guarantee that our product will always be able to protect life and property. Any failure to do so could have an adverse effect on our business.
We manufacture a product used to help prevent fires from starting and protect assets. The product we manufacture may be used in applications and situations that involve high levels of risk of personal injury. Failure to use our product for its intended purpose, failure to use our product properly or the malfunction of our product could result in serious bodily injury or death of the user. In such cases, we may be subject to product liability claims arising from the design, manufacture or sale of our product. If these claims are decided against us, and we are found to be liable, we may be required to pay substantial damages, and our insurance costs may increase significantly as a result. We cannot assure you that our indemnity and insurance coverage would be sufficient to cover the payment of any potential claim. In addition, we cannot assure you that this or any other indemnity or insurance coverage will continue to be available or, if available, that we will be able to obtain insurance at a reasonable cost. Any material uninsured loss could have a material adverse effect on our business, financial condition and results of operations.
Our product is subject to extensive government scrutiny and regulations, including the EPA and USDA Forest Service. There can be no assurance that such regulations will not change and that our product will continue to be approved for usage.
We are subject to regulations by federal government authorities. We need to pass the EPA audit process every three years, which is a rigorous process. In addition, we have to get listed on the USFS QPL list, which requires the product passing several tests and standards, including toxicity, corrosion and stability. We are also subject to ongoing reviews of our product, manufacturing processes and facilities by government authorities, and such agencies may at times be involved in challenges by outside groups, and as a result, the Company may be required to produce product data and comply with detailed regulatory requirements.
The Frank R. Lautenberg Chemical Safety for the 21st Century Act modified the Toxic Control Substances Act (“TSCA”), by requiring the EPA, to prioritize and evaluate the environmental and health risks of existing chemicals and provided the EPA with greater authority to regulate chemicals posing unreasonable risks. According to this statute, the EPA is required to make an affirmative finding that a new chemical will not pose an unreasonable risk before such chemical can go into production. These laws and regulations increase the complexity and costs of transporting our product to our customers. Further changes to these and similar regulations could restrict our ability to expand, build or acquire new facilities, require us to acquire costly control equipment, cause us to incur expenses associated with remediation of contamination, cause us to modify our manufacturing or shipping processes or otherwise increase our cost of doing business and have a negative impact on our business, financial condition and results of operations. In addition, the adoption of new laws, rules or regulations related to climate change poses risks that could harm our results of operations or affect the way we conduct our businesses. For example, new or modified regulations could require us to make substantial expenditures to enhance our environmental compliance efforts. New or stricter laws and regulations may be introduced that could result in additional compliance costs and prevent or inhibit the development, manufacture, distribution and sale of our product. Such outcomes could adversely impact our business, financial condition and results of operations.
Our product or facility could have environmental impacts and side effects.
If the product we sell does not have the intended effects, our business may suffer and it may be subject to product liability or other legal actions. Our product contains innovative combinations of materials. We have received third-party testing demonstrating the reduced toxicity and flammability of our product, however, this is limited in scope and therefore, does not present all the potential side effects and/or the product’s interaction with animal biochemistry. In a UL GreenGuard Certification Program Profile Study Test Report dated June 21, 2022, UL determined that our product contained less than 0.001 parts per million of formaldehyde and total aldehydes. As a result, while our product could have minimal impact on the environment, the scope of that impact is currently unknown.
Legal and regulatory claims, investigations and proceedings may be initiated against us in the ordinary course of business. The outcomes and the amounts of any damages awarded, or fines or penalties assessed, cannot be predicted, and could have a material adverse effect on our reputation as well as our business, financial condition and results of operations.
We may be the subject of litigation by customers, suppliers and other third parties. A significant judgment against us, the loss of a significant permit, license or other approval, or a significant fine, penalty or contractual dispute could have a material adverse effect on our business, financial condition and results of operations. Litigation is expensive, time consuming and may divert management’s attention away from the operation of the business. The outcome of litigation can never be predicted with certainty and an adverse outcome in any of these matters could have a material adverse effect on our reputation as well as our business, financial condition and results of operations.
Risks Relating to Our Indebtedness
We are highly leveraged.
As of December 31, 2025, our outstanding indebtedness was $3,022,673. This indebtedness includes: (i) principal amount of $375,000 ($219,321, net of discount of $155,679) incurred in connection with convertible notes issued during July 2024 to February 2025; (ii) a $2,000,000 ($1,285,400, net of discount of $714,600) convertible note issued to a related party; (iii) $163,281 incurred in connection with financing loans for the purchase of work vehicles; (iv) $167,971 for accrued interest related party; and (v) $316,321 recorded as accounts payable and accrued liabilities.
The material terms of the convertible notes issued during July 2024 to February 2025: (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, divided by a fixed conversion rate of 2.40; and (iv) warrant coverage at the rate of 0.20834 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
The convertible note to a related party was issued in February 2025 to BoltRock Holdings, LLC. The convertible note was amended in February 2026 and extended to April 28, 2026, including an amendment fee of 1% added to principal and accrued interest, and the termination of the pledge agreement on certain intellectual property held by the Company. The material terms of this convertible note are: (i) April 28, 2026 maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, divided by a fixed conversion rate of 2.40; and (iv) warrant coverage at the rate of 0.20834 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industries, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations. This degree of leverage could have significant consequences, including:
We could incur additional indebtedness in the future. If new indebtedness is added to our current debt levels, the related risks we now face could increase.
If due to such a deterioration in our financial performance, our cash flows and capital resources were to be insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In addition, if we were required to raise additional capital in the current financial markets, the terms of such financing, if available, could result in higher costs and greater restrictions on our business. If we were to need to refinance our existing indebtedness, the conditions in the financial markets at that time could make it difficult to refinance our existing indebtedness on acceptable terms or at all. If such alternative measures proved unsuccessful, we could face substantial liquidity problems.
Risks Relating to our Common Stock and Securities
Management's Discussion & Analysis (MD&A)
New heading “The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See the section titled “Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this Annual Report.”
New heading “Advertising and marketing”
New heading “Professional fees”
New heading “Payroll and management compensation”
New heading “Research and development costs”
Removed heading “Future Capital Requirements”
Largest changes
“In February 2025, we entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. Our obligations under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. …”see in full comparison
“The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See the section titled “Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this Annual Report.”see in full comparison
“The accompanying consolidated financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant income to date. The Company is subject to the risks and uncertainties associated with a business with no substantive revenue, as well as limitations on its operating capital resources. …”see in full comparison
“Since MFB Ohio acquired the MFB portfolio of intellectual property on April 13, 2022, our management team has continued to develop and refine our product formulations. The Company has received significant third-party recognition for these efforts, including twice receiving the EPA Safer Choice designation, being the first and only fire inhibitor recognized by the EPA as safe for the environment, and receiving UL GREENGUARD Gold certification, which reflects minimal impact on indoor air quality from toxic smoke over extended exposure. …”see in full comparison
Full comparison: every changed paragraph (70)
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See the section titled “Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this Annual Report.
The Company was originally incorporated in Nevada on March 14, 1990. Our offices are located at 1740H Del Range Blvd, Suite 166, Cheyenne, Wyoming 82009. Our telephone number is (800) 401-4535, and our email address is welcome@generalenterpriseventures.com. Our website is www.generalenterpriseventures.com and www.mightyfirebreaker.com. We do not incorporate the information on or accessible through our website into this Registration Statement, and you should not consider any information on, or that can be accessed through, our website a part of this Registration Statement.
We are ana specialty chemical company that manufactures
environmentally sustainable fire retardantinhibitors and fire suppressionretardants companyas throughoutwell theas Unitedhome States.systems for their deployment. Management is highly experienced
at business integrationbuilding and re-brandingrunning potential. Our brand will be uniquecompanies, as wewell focusas commercializing and executing on marketsstrategic inpartnerships needfor the sale of development.products and services.
Since MFB Ohio acquired the MFB portfolio of intellectual property on April 13, 2022, our management team has continued to develop and refine our product formulations. The Company has received significant third-party recognition for these efforts, including twice receiving the EPA Safer Choice designation, being the first and only fire inhibitor recognized by the EPA as safe for the environment, and receiving UL GREENGUARD Gold certification, which reflects minimal impact on indoor air quality from toxic smoke over extended exposure. Our products have been adopted by fire departments throughout the State of California.
We are expanding our patent portfolio and technology platform into additional markets that can benefit from environmentally safe alternatives to legacy fire retardant and fire retardant-treated wood products. CitroTech has developed wood coating products utilizing this technology and is in the initial phases of commercialization.
The Company is also actively deploying proactive wildfire defense systems on residential and commercial properties under the CitroSafe Systems brand. CitroSafe Systems are self-contained sprinkler installations that utilize our patented CitroTech product and are deployed in advance of wildfires to reduce structural risk. This offering addresses a significant and growing insurance market disruption across eleven western states, where carriers have curtailed or declined to write wildfire coverage on new construction and existing policies in the Wildland-Urban Interface, the transitional zone between undeveloped land and built environments that is at elevated risk of catastrophic wildfire loss. The Company is working with a large insurance broker to offer insurance coverage to customers who install a CitroSafe proactive wildfire system, with policies underwritten by established insurance carriers. This program is currently in the proof-of-concept phase.
We operate one line of business, which is sales and services relating to the CitroTech flame retardant and flame suppression product. Since MFB Ohio acquired the MFP portfolio of intellectual property on April 13, 2022 (“MFB”). MFB owns 33 patents and has 49 patents pending in and for the flame retardant and flame suppression industry. Our fire retardant and fire suppression product helps slow, stop and prevent wildfires. This product is typically applied ahead of an active wildfire to stop or slow its spread. Our product is differentiated by a high level of retardant and suppression effectiveness. While fire retardant and is primarily used to stop or slow the spread of wildfires, our product is also utilized in a fire preventative capacity. Since the wildfires in Los Angeles, California during January 2025, western U.S. states are becoming diligent in wildfire prevention efforts and increasing investments to prevent wildfire risk.
Our management isteam comprised consists
of twofive individuals,individuals: JoshuaWesley Ralston,J. who is our President,Bolsen, Chief Executive officer,Officer; Andrew Hotsko, Chief Operating Officer; Nanuk Warman, Secretary and Chief
Financial Officer; Steve Conboy, Chief Technical Officer and ChairmanAnthony ofNewton, theGeneral Board of Directors, and Stepheon Conboy, our Chief Technology Officer.Counsel.
We believe that fire safety benefits from several
growth drivers, including increasing fire severity, as measured by higher acres burned, longer fire seasons and a growing urban component,component
moving into the Wildland Urban Interface (WUI), resulting in a need for higher quantity of firespecialty retardant andchemical fire suppression use per acre,inhibitors, thereby
increasing production. We believe these trends are prevalent in North America, as well as globallyglobally, and we expect these trends to continue and drive
driving growth in demand for fire retardantretardants and firefire-retardant-treated suppressionlumber products.
We are working to grow our fire prevention and protection
business, which is primarily focused on expanding use of ground-applications for long-term fire retardant.retardants. This growth includes use of
ground assets in response to active fires (protection), as well as proactive treatments around critical infrastructure and known high-risk
areas (prevention). Fire prevention products can be used to help prevent fire ignitions and protect property from potential fire danger
by providing proactive retardant treatment in high-risk areas such as along roadsides, under power lines, along railroad rights-of-way,
and around residential neighborhoods and commercial infrastructure. Treating these areas ahead of the fire season can potentiallyhelp stopto prevent
ignitions from equipment failures or sparks.sparks until a significant rainfall occurs. Although there is no certainty in wildfire defense, when
our CitroSafe system is installed, we fill it with our CitroTech product. Thereafter, we will conduct an annual inspection of the system
to help ensure it is ready to help defend against a wildfire. While there is no specific useful life for our product, if the system has
not been deployed since the third anniversary of the initial installation, or three years following an annual inspection, in an abundance
of caution we will remove and replace the CitroTech. In addition, we suggest spraying CitroTech in areas surrounding the property that
pose the greatest risk to help reduce the risk posed by dry vegetation, decks, garden bark, and fences.
We have invested and intend to continue investing
in the expansion of our fire retardant and firelumber suppressiontreatment business through product development and business development to grow our
customer base.
Our business is highly dependent on the needs of commercial
entities, residential homeowners and fire departments to prevent fires and suppressprotect fires.assets, as well as the use and expansion of Class A
Fire Retardant Treated lumber and wood products. As such, our financial condition and results of operations are significantly impacted
by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given
year. Typically, sales of our product is higher during the summer months in the United States of America due to weather patterns that
are generally correlated to a higher prevalence of wildfires. We believe,believe however,orders thatwill duegenerally to the effect of the wildfires in Los Angeles, California during January 2025, and the more common wildfire seasonpeak during the summer monthsmonths, thatbut productwith
expanded ordersfire willseasons in the United States, ignitions may start in the late Spring and continue atthrough thelate currentFall rate throughoutof calendar year 2025.2026.
TheWe Company is in the early stage ofare developing and commercializing theirour product
lines. TheWe Company hashave been focused historically on obtaining patents and various accreditations. To date, thewe Company doesdo not have a large customer
base, having relied heavily on a few customers, for the commercialization and testing of our CitroTech productsproduct and delivery systems.system. The Company We
currently doesdo not have an established retail product line nor recurring significant customer base. Therefore, period over period comparisons
of our results of operations are not indicative of future results.
Revenue
Our revenue is associated with revenue from Mighty Fire Breaker LLC (“MFB Ohio”) which acquired intellectual property to fire suppression in April 2022. During the year ended December 31, 2025, revenue increased $1.6 million, or 195%, over the year ended December 31, 2024. This growth was driven by broader market adoption of our CitroTech product line, including sales of residential CitroSafe systems, commercial and fire department specialty chemical sales into municipalities such as San Diego, and direct spray application services for residential properties in response to heightened wildfire concerns following the January 2025 Los Angeles wildfires. Notably, customer concentration improved significantly, with no single customer representing more than 10% of revenue in 2025 compared to four customers exceeding that threshold in 2024, and our top five customers declining from 79.5% to 32.0% of total revenue. This diversification reflects our transition from early-stage project-based sales toward broader market penetration.
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. During the year ended December 31, 2024, the revenue increased $290,000 from the year ended December 31, 2023, largely due to the commercialization of our CitroTech products following entry into a Partnership Agreement with the EPA, dated August 22, 2022 (the “EPA Agreement”). After entering into the EPA Agreement and the granting of many of our patents, the Company commenced more on the commercialization of our CitroTech products. Through a few concentrated customers we sold more of our product as customers bought our systems and CitroTech products for their own internal testing and product usage.
Product installation services commenced in the second quarter of 2024.
Our revenues from significant customers for the year years
ended December 31, 20242025 and 2023,2024, are as follows:
We do not have major sales from recurring customers for the years ended December 31, 2025 and 2024.
The increase in operating expenses was primarily attributed to increases in cost of revenue and payroll and management compensation.
The decrease in operating expenses was primarily attributed to decreases in profession fees of $5.9 million, management compensation of $105,000, partially offset by increases in cost of revenue of approximately $395,000, advertising and marketing of approximately $857,000 and general and administrative expenses of approximately $242,000.
During the year ended December 31, 2024,2025, the cost
of revenue increased over the year ended December 31, 2023,2024, primarily due to an increase in cost of inventory and royalty and sales commissions.rent.
Cost of inventory consists of product costs, direct
labor, related supplies and direct testing of our CitroTech product and various components required to for installation of Mighty Fire Breaker proactive wildfire defence CitroSafe(TM)
systems. Cost of inventory increased during the year ended December 31, 2024,2025, primarily due to an increase in product sales and supplies
from increased sales.
Royalty and sales commissions increased in the year
ended December 31, 20242025, from more revenue. TheWe Company recognizesrecognized an allocated portion of consulting and direct labor costs associated with our
revenue as royalty and sales cost of revenue.revenue in 2024 and during the first quarter of 2025. In March 2025, we entered into a new contract
and there is no longer consulting and advisory royalty.
Rent expenses are warehouse and facility rent expenses.
The increase in rent expense is becauseprimarily attributable to our relocation to a larger commercial facility for operations, warehousing,
and customer-facing activities beginning in April 2025, along with the Companycancellation leased commercial space for office, retail and warehousing from March 2024 underof a oneprior yearwarehouse contract.lease in May 2025.
Amortization and depreciation expenses are an amortization
of patents and a depreciation of vehiclevehicle, and furniture and equipment.
General and administrative expenses are office,
rent, travel, insurance, website, IT and other office related expenses. For the year ended December 31, 2024,2025, the Companywe incurred increased
expenditures on consulting and payroll fees, bad debt expenses, our website and IT development and travel as well as general office and
insurance expenses from expansion of operations.
Advertising and marketing
The increasedecrease in advertising and marketing during the
year ended December 31, 2025, over the year ended December 31, 2024, over December 31, 2023, is primarily stock-based compensation for marketing and services of $660,000 and increased expensesdue to support revenue growth. The Company issued 83,333 shares of Series C Convertible Preferred
Stock, valued at $500,000 for a NASCAR sponsorship in 2024. Other than this NASCAR expense, the advertising and 250,000 shares of Common Stock, valued at $160,000 for compensation of marketing servicesincreased provided.to
support revenue growth.
Professional fees
The professional fees during the year ended December 31, 2025, primarily included stock-based compensation to consultants of $2.6 million, of which $2.1 million was to a related party consultant (TC Special Investments, LLC (“TCSI”)), and various professional fees for accounting and audit related to SEC filings, legal on patents and other consulting services in 2025. The professional fees during the year ended December 31, 2024, primarily included stock-based management compensation of $1.4 million to advisors to our subsidiary MFB and stock-based compensation of $1.0 million to various consultants for IT service for software development, legal related to patents and other consulting services in 2024.
The professional fees during the year ended December 31, 2024 primarily included stock-based management compensation of $1.4 million to advisors to our subsidiary MFB and stock-based compensation of $1.0 million to various consultants for IT service for software development, legal on patents and other consulting services in 2024. During 2023, the Company issued 1,200,000 shares of Series C Preferred Stock for professional fees to a related party consultant (TC Special Investments, LLC (“TCSI”)), which is valued as if they are fully converted to 24 million shares of common stock upon issuance, using the quoted stock price of the Company’s common stock at approval date (November 1, 2022), resulted in an accounting valuation of $8,640,000. TCSI’s consulting services to the Company include sales and business development, customer relationship management, strategy optimization, investor relations, underwriter interface, coordinating outside counsel and other business aspects at the request of the Board of Directors.
TCSI’s consulting services to us include sales
and business development, customer relationship management, strategy optimization, investor relations, underwriter interface, coordinating
outside counsel and other business aspects at the request of the Board of Directors. In addition to TCSI, stock-based compensation was
remitted to certain individuals with fire retardant and flame suppression industry experience, who provided guidance and insight to the Company’sour management and Board
of Directors with respect to the fire retardant and flamefire suppressioninhibitor industry, business development connections, and oversight during the
testing and recognition processes.
Payroll and management compensation
During the year ended December 31, 2025, management compensation increased to $9.9 million from $75,000 in the prior year. This increase was primarily attributable to the buildout of a full executive management team during 2025, including the appointment of a Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel. Compensation primarily included stock-based management compensation of $7.8 million, cash payments of $1.3 million to management, and payroll to employees of $745,000. The significant increase in stock-based compensation reflects the transition from a single-executive structure in 2024, when management compensation consisted solely of a $75,000 cash payment to our former CEO, to a fully staffed leadership team necessary to support our growth and commercialization objectives.
Research and development costs
We continue to invest heavily in the testing and certifications of CitroTech treated products as well as in advance of submitting formulas for approval to apply product onto federal lands. We expect to continue growing R&D spend over historical spend as we add additional product lines and invests in the future of the company.
For the yearyears ended December 31, 20242025 and 2023, 2024,
the other expenses consisted of $258,000interest and $4,000 interestexpense related to convertible notes payable issued in 2024,2025 and 2024 of $2.8 million and convertible
notes payable issued in 2024 of $258,000, respectively, change in fair value of derivative liability related to convertible notes payable
issued in 2025 and 2024 of $410,000$2.0 million and $410,000, respectively, financing expense of $8.7 million and $0, respectively, and loss on
settlement of debt of $6.8 million and $909,000, respectively. Settlement of debt in 2025 is the conversion of convertible notes
issued in 2024 and 2025. The settlement of debt in 2024 is settlement of notes payable and convertible note issued in 20222022. Financing
expense is from 4 million warrants granted to a financial advisor and 69,007 shares of $909,000Series andC $0,Convertible respectively.Preferred stock issued to
a Series A Preferred shareholder in 2025.
Net loss
The net loss for the year ended December 31, 2024, decreased2025,
increased by approximately $3.2$30.0 million as compared to the year ended December 31, 20232024 primarily due to the decreaseincrease in operating expenses,expenses
and primarilyother from stock-based professional fees, partiallyexpense offset by anthe increase in other expenses.revenue.
Since our inception, we have incurred significant
operating losses and negative cash flows from our operations. Our net loss was $6.9 million$36.8 and $10.1$6.9 million for the years ended December
31, 20242025 and 2023,2024, respectively. During fiscal year 2024,2025, we completed a debt offering in February and an equity offering in September
and October which generated net proceeds of approximately $1.2$3.7 million and $1.8$8.1 millionmillion, respectively.
As of December 31, 20242025 and 2023,2024, the current assets
consisted of cash of $$775,000$6.3 million and $550,000,$775,000, respectively, inventory of $325,000$621,000 and $230,000,$325,000, respectivelyrespectively, accounts receivable of
$209,000 and $317,000, respectively, prepaid expenses and other current assets of $317,000 and $427,000, respectively, prepaid expenses of $74,000 and $11,000,$74,000, respectively, and deferred offering
costs of $126,000$0 and $0,$126,000, respectively.
As of December 31, 20242025 and 2023,2024, the current liabilities
consisted of accounts payable and accrued liabilities of $187,000$316,000 and $55,000,$187,000, respectively, due to related parties of $0$168,000 and $1.3 million, respectively, promissory note of $0 and $120,000, $0,
respectively, convertible notes net of discount of $196,000$219,000 and $54,000,$196,000, respectively, convertible note – related party of $577,000$1.3
million and $0,$577,000, respectively, current portion of financing loan of $97,000$30,000 and $0,$97,000, respectively, derivative liability of $1,055,000 $0
and $0,$1.1 million, respectively, and current portion of operating lease liability of $50,000$148,000 and $80,000,$50,000, respectively.
The increase in working capital in 2025 was primarily due to an increase in cash from equity and debt offering offset by an increase in convertible notes.
The increase in working capital deficiency in 2024 was primarily due to the convertible notes and derivative liability related to convertible notes. The Company had net loss and negative cash flows from our operations. In 2024, the Company generated funds from more debt financing than equity financing, therefore, current liabilities increased more than current assets.
For the yearyears ended December 31, 20242025 and 20232024
For the year ended December 31, 2025, net cash flows used in operating activities consisted of a net loss of $36.8 million, reduced by stock-based compensation of $19.1 million, non-cash lease expenses of $161,000, amortization and depreciation of $329,000, bad debt expense of $346,000, amortization of debt discount of $2.4 million, loss on settlement of debt of $6.8 million, write-off of deferred offering costs of $197,000 and changes in derivative liability of $2.0 million, and increased by net changes in operating assets and liabilities of $464,000.
For the year ended December 31, 2023, net cash flows used in operating activities was $1.2 million, consisting of a net loss of $10 million, reduced by stock-based compensation of $9 million, non-cash lease expenses of $71,000, and amortization and depreciation of $249,000, which were increased by net changes in operating assets and liabilities of $396,000.
The Company did not use any funds for investing activities during the year ended December 31, 2024.
For the year ended December 31, 2023,2025, the cash flows
used in investing activities wereconsisted $4,015, which was related toof the purchase of equipment.property and equipment of $194,000 and acquisition of intangible assets of $100,000.
We did not use any funds for investing activities during the year ended December 31, 2024.
For the year ended December 31, 2024,2025, net cash provided
by financing activities consisted of $1.8$8.3 million proceeds from the issuance of Series C Convertible Preferred Stock,Stock $1.2and warrants, $3.7 million
from the issuance of convertible promissory notes and associated warrantswarrants, in fourth quarter of 2024, $2,000 received from a related party, $126,000$71,000 deferred offering cost payment, repayment of a financing
loan of $23,000,$265,000 and $741,000repayments fromto arelated repaymentparty of loan from a related party.$25,000.
The basic terms of the convertible promissory notes issued in third and fourth quarter of 2024 are: (i) a 12-month term; (ii) interest of 10% per annum, compounded annually; and (iii) voluntary conversion during the term at a conversion price of $0.40 for each dollar of principal amount. The associated warrants are exercisable for a period of 5 years from the issuance date, for an aggregate of up to 1,620,000 shares at an exercise price of $0.50.
For the year ended December 31, 2023,2024, net cash provided
by financing activities consisted of $308,000$1.8 receivedmillion in proceeds from a related party for funding operating costs without interest and due on demand, $908,000 fromthe issuance of Series C Convertible Preferred Stock, $500,000$1.2 million
from stockthe subscriptions,issuance $120,000of fromconvertible promissory notes and repaymentsassociated warrants in fourth quarter of $125,0002024, to$2,000 received from a related party,
$126,000 deferred offering cost payment, repayment of a financing loan of $23,000, and $741,000 from a repayment of loan from a related
party.
In third and fourthfirst quarter 2024,2025, the Companywe entered into twenty eleven
(2011) subscription agreements for convertible notes ($1,296,000$2,075,000) and warrants (1,620,000432,296 shares of common stock). The material
terms of this convertible note indebtedness are, (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity
date; (iii) conversion rights in the amount of the principal, either (x) divided by 0.402.40 or (y) a 30% discount to the sale price sale of
its Common Stock pursuant to a registration statement filed with the SEC and listing of the Common Stock on national securities
exchange; and (iv) warrant coverage for five years at the rate of 1.25 shares of Common Stock for each dollar of principal, at an
exercise price of $0.50$3.00 per share. .
Subsequent to December 31, 2025 and through the date of this annual report, the note holders have converted all of their notes into shares of common stock.
In February 2025, we entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. Our obligations under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, the related party could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns our intellectual property portfolio.
On December 31, 2024, the Company issued convertible note of $577,000 to a related party, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $0.36.
The CompanyWe had a financing loan for athe purchase of vehicle
in ofSeptember $97,0002025. asThe of December 31, 2024. Aloan repayment of loan schedule is $1,898$2,021 per month for the60 firstmonths, 36beginning monthsOctober and then $2,590 per month for the remaining 30 months2025, with an interest rate of $11.54%. The Company fully settled this financing loan in March 2025.11.33%.
We 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%.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Quarterly Report. However, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in the “Risk Factors” section of the Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Operating Expenses”
New heading “Cost of revenue”
New heading “Amortization and depreciation”
New heading “General and administrative”
New heading “Advertising and marketing”
New heading “Professional fees”
New heading “Payroll and management compensation”
New heading “Research and development costs”
New heading “Our results of operations for the six months ended June 30, 2026 and 2025 are summarized below:”
Removed heading “Convertible notes – related party”
Largest changes
“In February 2025, we entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. Our obligations under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. …”see in full comparison
“Our results of operations for the six months ended June 30, 2026 and 2025 are summarized below:”see in full comparison
Full comparison: every changed paragraph (69)
We are a specialty chemical company focused on environmentally friendly fire inhibitor products serving the wildland fire, residential and commercial property protection, and wood products industries across the United States and Canada. Our fire inhibitor formulations are also used by the lumber and building materials industry for fire retardant treatment applications.
The Company’s management team is highly experienced at building and running companies, as well as commercializing and executing on strategic partnerships for the sale of products and services.
We are a specialty, non-toxic chemical company
that formed a 50/50 global joint venture with Hexion on April 17, 2026 for the production and sale of CitroTech into the fire retardant
treated wood market. In addition, the Company manufactures environmentally sustainable fire inhibitors and fire retardants to help prevent
wildland fires and protect assets, as well as putting the fire inhibitors into home systems for their deployment. Management is highly
experienced at building and running companies, as well as commercializing and executing on strategic partnerships for the sale of products
and services.
Since Mighty Fire Breaker LLC (“MFB Ohio”)
acquired acquiredfrom Mighty Fire Breaker LLC (“MFB California”) the MFB portfolio of intellectual
property on April 13, 2022, our
management team has continued to develop and refine our product formulations. The Company has received
significant third-party recognition
for these efforts, including twice receiving the EPA Safer Choice designation,designation. beingOur product is the first and
only fire inhibitor recognized
by the EPA as safe for the environment,environment. andWe receivingalso are the first fire inhibitor to receive UL GREENGUARD Gold certification, which reflects
minimal impact on indoor air quality from toxic smoke over extended exposure. Our products have been adopted by fire departments throughout
the State of California.
CitroTech has been issued 31 patents and has 56
patents pending. We are expanding our patent portfolio and
technology platform into additional markets that can benefit from environmentally
safe alternatives to legacy fire retardant and fire
retardant-treated wood products. Using this technology, CitroTech has developed woodproducts
that coatinghelp productsachieve utilizingClass-A thisfire technologyrating for lumber and isengineered wood products. We are in the initial phases
of commercialization.commercializing this product.
In April 2026, CitroTech and Hexion Inc. formed a 50/50 global joint venture named HexiTech LLC, a Delaware limited liability company
that will work to commercialize the CitroTech product into factory applied lumber and wood products. This venture will be the Company’s
primary go-to-market channel for this portion of the business.
The Company is also actively deploying proactive
wildfire wildfire
defense systems on residential and commercial properties under the CitroSafe Systems brand. CitroSafe Systems are self-contained
sprinkler sprinkler
installations that utilize our patented CitroTech productproduct. andThese aresystems deployeddeploy our fire inhibitor in advance of wildfires to
help prevent the advance of fires and reduce structural risk. ThisIn addition to protecting property owners from the ravages of wildfires,
this offering
addresses a significant and growing insurance market disruption across eleventhe westernWestern states,United States, where carriers have curtailed
or declined
to write wildfire coverage on new construction and are cancelling or not renewing existing policies in the WildlandWildland-Urban
Interface Urban(“WUI”). Interface,WUI is the transitional zone between undeveloped
land and built environments that is at elevated risk of
catastrophic wildfire loss. The Company is working with a large insurance broker
to offer insurance coverage to customers who install
a CitroSafe proactive wildfire system, with policies underwritten by established
insurance carriers. This program is currently in the
proof-of-concept phase.
We believe that fire safety benefits from several
growth drivers, including increasing fire severity, as measured by higher acres burned, longer fire seasons and a growing urban component
moving into the Wildland Urban Interface,WUI, resulting in aincreased needdemand for higher quantity of specialty chemical fire inhibitors, thereby increasing
production. We believe these
trends are prevalent in North America, as well as globally, and we expect these trends to continue driving
growth in demand for fire retardants
and fire retardant treated lumber products. We have expanded our certified partner network to more than 20 organizations in the second
quarter of 2026 that will install systems and/or apply CitroTech product around homes and in the community.
We are working to grow our fire prevention and
protection business, which is primarily focused on expanding use of ground-applications for long-term fire retardants. This growth includes
use of ground assets in response to active fires (protection), as well as proactive treatments around critical infrastructure and known
high-risk areas (prevention). Fire prevention products can be used to help prevent fire ignitions and protect property from potential
fire danger by providing proactive retardant treatment in high-risk areas such as along roadsides, under power lines, along railroad rights-of-way,
and around residential neighborhoods and commercial infrastructure. Treating these areas ahead of the fire season can help to prevent
ignitions from equipment failures or sparks until a significant rainfall occurs. This prevention effort was proven by San Diego announcing
an expansion of their CitroTech treatment program during 2026 based on success seen in 2025. Although there is no certainty in wildfire
defense, when
our CitroSafe system is installed, we fill it with our CitroTech product. Thereafter, we will conduct an annual inspection
of the system
to help ensure it is ready to help defend against a wildfire. While there is no specific useful life for our product, if
the system has
not been deployed since the third anniversary of the initial installation, or three years following an annual inspection,
in an abundance
of caution we will removerecommend andthe customer replace the CitroTech.CitroTech product. In addition, we suggest spraying CitroTech in
areas surrounding the property that
pose the greatest risk to help reduce the risk posed by dry vegetation, decks, garden bark, and fences.
Our business is highly dependent on the needs
of commercial entities, residential homeowners and fire departments to prevent fires and protect assets, as well as the use and expansion
of Class A Fire Retardant Treated lumber and wood products. As such, our financial condition and results of operations are significantly
impacted by weather as well as environmental and other factors affecting climate change,weather, which impact the number and severity of fires
in any given year. Typically, sales of our product are higher during
the summer months in the United States due to weather patterns that
are generally correlated to a higher prevalence of wildfires.wildfires due to
drought. We believe orders will generally peak during the late summer months, but with
expanded fire seasons in the United States, ignitions
may start in the late Spring and continue through late Fallfall ofor calendareven yearinto 2026.the winter months.
The following summary of our results of operations
should be read in conjunction with our unaudited financial statements for the threesix months ended MarchJune 31,30, 2026 and 2025, which are included
herein.
Our results of operations for the three months
months ended MarchJune 31,30, 2026 and 2025 are summarized below:
Our revenue is generated through our subsidiary
Mighty Fire Breaker LLC ("MFB Ohio"), which acquired our fire suppression intellectual property portfolio in April 2022. Our
revenue is highly seasonal and event-driven, with demand concentrated in the Western United States during the traditional May to October
fire season, and is materially influenced by wildfire activity in any given period. During the three months ended MarchJune 31,30, 2026, revenue
decreased $624,000,$407,000, or 64%,59%, compared to the three months ended MarchJune 31,30, 2025. The rare situation of a devastating fire in both the Pacific
Palisades and Eaton Canyon firesCanyon, in the first quarter of 2025 added to system revenue in the first quarter of 2025 that was not seen in 2026.
In addition, revenue that was booked in the first quarterhalf of 2026.2025 related to CitroSafe systems is being shifted to our Certified Partners
for the installation of systems, with higher margin CitroTech chemical sales that are being put into the system mostly starting after
the end of the second quarter. This strategic shift will drive the installation of more systems with more CitroTech product and recurring
income in the future from a redeveloped control system. This accounts for some of the change in revenues from the prior year quarter.
Although the 50/50 joint venture with Hexion was formed in Q2 2026, no revenues were generated from the joint venture in the early days
of getting it established.
Our revenues from significant customers for the three
three months ended MarchJune 31,30, 2026 and 2025, are as follows:
Our revenue is currently project- and event-driven
rather rather
than subscription- or contract-based, and we do not currently have a meaningful base of recurring customers. The increasedecrease in our
top-five top-five
customer concentration to 67.8%71.9% in the three months ended MarchJune 31,30, 2026, from 48.1%78.4% in the comparable 2025 period, reflects both
the the
absence of the Pacific Palisades and Eaton Canyon fire deployments that drove revenue in the prior period and the early-stage nature
of of
our commercial customer base. We expect customer concentration to remain elevated until our channel partner program and recurring utility
and structural-protection customer relationships further mature.
Operating Expenses
The increase in operating expenses was primarily attributed to increases in professional fees, research and development costs, and advertising and marketing, partially offset by decreases in management compensation and cost of revenue.
Cost of revenue
During the three months ended June 30, 2026, the cost of revenue decreased over the three months ended June 30, 2025, primarily due to a decrease in cost of inventory.
Cost of inventory consists of product costs, direct labor, related supplies, and direct testing of our CitroTech product and the various components required for installation of CitroSafe™ systems. Cost of inventory decreased during the three months ended June 30, 2026, compared to the comparable 2025 period, primarily due to lower product sales volume.
Freight and shipping relate to costs for shipping products to customers.
Rent expenses are warehouse and facility rent expenses.
Amortization and depreciation
Amortization and depreciation expenses are from the amortization of patents and technology and the depreciation of vehicles, furniture and equipment.
General and administrative
General and administrative expenses are office, rent, travel, insurance, website, IT, public listing fees, and other office related expenses. For the three months ended June 30, 2026, we incurred decreased expenditures on our website and IT development and general office offset by an increase in insurance and public listing fees.
Advertising and marketing
The increase in advertising and marketing during the three months ended June 30, 2026, over the three months ended June 30, 2025, is primarily due to supporting revenue growth in addition to investor relations activities after being uplisted to the NYSE American. This includes rebranding efforts around the official company name change to CitroTech Inc. from General Enterprise Ventures Inc as well as the product labels moving from Mighty Fire Breaker to CitroTech and the conversion of relevant website and marketing materials.
Professional fees
The professional fees during the three months ended June 30, 2026, primarily included stock-based compensation of $283,000 to advisors to our subsidiary MFB, and various professional fees for accounting and audit related to SEC filings, legal on patents and other consulting services in 2026. The professional fees during the three months ended June 30, 2025, did not include stock-based compensation. Professional fees were for accounting and audit related to SEC filings, legal on patents and other consulting services in 2025.
Payroll and management compensation
During the three months ended June 30, 2026, management compensation decreased to $2.1 million from $2.3 million in the prior period. This decrease was primarily attributable to the buildout of a full executive management team during 2025, including the appointment of a Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel. Compensation during 2026 and 2025, primarily included stock-based management compensation of $1.3 million and $1.9 million, respectively. Payroll compensation to employees during 2026, was approximately $0.8 million as compared to $0.4 million during 2025.
Research and development costs
We continue to invest heavily in the testing and certifications of CitroTech treated products as well as in advance of submitting formulas for approval to apply product onto federal lands. We are spending on outside testing to ensure that our products can pass the rigorous US Forest Service QPL testing as well as funding an additional product to be submitted to the US Forest Service for testing. We expect to continue growing R&D spend over historical spend as we add additional product lines and invest in the future of the company. This includes funded research programs with Texas A&M on new products that were not underway in 2025.
Other Expenses
For the three months ended June 30, 2026 and 2025, the other expenses consisted of interest expense primarily related to convertible notes payable issued in 2025 of $31,000 and convertible notes payable issued in 2025 and 2024 of $764,000, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $0 and $3.0 million, respectively, financing expense of $361,000 and $2.5 million, respectively, and loss on settlement of debt of $0 and $2.6 million, respectively. Settlement of debt in 2025 was the conversion of convertible notes issued in 2024. Financing expense is from 69,007 shares of Series C Convertible Preferred stock issued to BoltRock Holdings, LLC (“BRH”) in 2025.
Net loss
The net loss for the three months ended June 30, 2026 was approximately $3.9 million, a decrease of approximately $8.0 million as compared to the three months ended June 30, 2025, primarily due to a significant reduction in other expenses, partially offset by lower revenue and higher operating expenses.
Our results of operations for the six months ended June 30, 2026 and 2025 are summarized below:
Revenue
Our revenue is generated through our subsidiary Mighty Fire Breaker LLC ("MFB Ohio"), which acquired our fire suppression intellectual property portfolio in April 2022. Our revenue is highly seasonal and event-driven, with demand concentrated in the Western United States during the traditional May to October fire season, and is materially influenced by wildfire activity in any given period. During the six months ended June 30, 2026, revenue decreased $1.0 million, or 62%, compared to the six months ended June 30, 2025. The rare situation of a devastating fire in both the Pacific Palisades and Eaton Canyon in the first six months of 2025 added to system revenue in the first half of 2025 that was not seen in the first half of 2026.
Our revenues consisted of the following:
Our revenues from significant customers for the six months ended June 30, 2026 and 2025, are as follows:
Our revenue is project- and event-driven rather than subscription- or contract-based, and we do not currently have a meaningful base of recurring customers. The increase in our top-five customer concentration to 52.5% in the six months ended June 30, 2026, from 40.7% in the comparable 2025 period, reflects both the absence of the Pacific Palisades and Eaton Canyon deployments that drove revenue in the prior period and the early-stage nature of our commercial customer base. We expect customer concentration to remain elevated until our channel partner program and recurring utility and structural-protection customer relationships further mature.
During the threesix months ended MarchJune 31,30, 2026,
the cost
of revenue decreased over the threesix months ended MarchJune 31,30, 2025, primarily due to a decrease in cost of inventory.
Cost of inventory consists of product costs, direct
labor, related supplies, and direct testing of our CitroTech product and the various components required for installation of CitroSafe™
systems. Cost of inventory decreased during the threesix months ended MarchJune 31,30, 2026, compared to the comparable 2025 period, primarily due
to lower product sales volume.
RoyaltyWe did not have royalty and sales commissions to a
related party
decreased to zero in the threesix months ended MarchJune 31,30, 2026, from $56,290 in the comparable 2025 period.2026. During the first quarter of 2025,
we recognized $56,000 as an allocated portion of
consulting and direct labor costs associated with our revenue as royalty and sales cost of revenue.
In March 2025, we entered into a new
contract under which the consulting and advisory royalty arrangement was terminated.
General and administrative expenses are office, rent,
rent, travel, insurance, website, ITIT, public listing fees, and other office related expenses. For the threesix months ended MarchJune 31,30, 2026, we
incurred increased
expenditures on consultingpublic andlisting payroll fees,fee, our website and IT development and travel as well as general office and insurance
expenses expenses
from expansion of operations.
The increase in advertising and marketing during the
the threesix months ended MarchJune 31,30, 2026, over the threesix months ended MarchJune 31,30, 2025, is primarily due to supporting revenue growth in addition to
to investor relations activities after being uplisted to the NYSE American. This includes rebranding efforts around the official company
name change to CitroTech Inc. from General Enterprise Ventures Inc as well as the product labels moving from Mighty Fire Breaker to CitroTech
and the conversion of relevant website and marketing materials. We attended and helped to fund events in the wildfire industry to expose
leaders in the fire industry to the CitroTech product, which we believe will lead to sales in the future.
The professional fees during the threesix months ended
endedJune March 31,30, 2026, primarily included stock-based compensation of $160,000$443,000 to advisors to our subsidiary MFB, and various professional
fees for accounting and audit related to SEC filings, legal on patents and other consulting services in 2026. The professional fees during
the three months ended March 31, 2025, primarily included stock-based management compensation of $2.3 million, of which $2.1 million was
to a related party consultant (TC Special Investments, LLC (“TCSI”))advisors, and various professional fees for accounting and audit
related to SEC filings, legal on patents and other consulting services in 2026. In addition, we had expenses related to the formation
of the HexiTech Joint Venture between CitroTech and Hexion that were a one-time expense. The professional fees during the six months ended
June 30, 2025, primarily included stock-based management compensation of $2.3 million, of which $2.1 million was to a related party consultant
(TC Special Investments, LLC (“TCSI”)) and various professional fees for accounting and audit related to SEC filings, legal
on patents and other consulting services in 2025.
During the threesix months ended MarchJune 31,30, 2026, management
management compensation increased to $3.1$5.2 million from $673,000$3.0 million in the prior period. This increase was primarily attributable to the buildout
of a full executive management team during 2025, including the appointment of a Chief Operating Officer, Chief Financial Officer, Chief
Technology Officer, and General Counsel. Compensation during 2026, primarily included stock-based management compensation of $2.1$3.4 million,
and payroll to management of $0.8 million and employees of approximately $1$1.1 million. The significant increase in stock-based compensation
reflects the
transition from a single-executive structure in the first quarter of 2025. Compensation during 2025, whenprimarily included stock-based
management compensation consistedof $2.3 million and payroll to management of a$0.5 stock-basedmillion management
compensationand employees of $420,000$0.2 and a $142,000 cash payment to our former CEO, to a fully staffed leadership team necessary to support our growth
and commercialization objectives.million.
For the threesix months ended MarchJune 31,30, 2026
and 2025, the other expenses consisted of interest expense primarily related to convertible notes payable issued in 2025 of $942,000 $973,000
and convertible
notes payable issued in 2025 and 2024 of $473,000,$1.2 million, respectively, change in fair value of derivative liability
related to convertible notes
payable issued in 2025 and 2024 of $0 and $805,000,$3.8 million, respectively, financing expense of $0$0.4 million
and $6.2$8.7 million, respectively, and loss on
settlement of debt of $847,000 and $0,$2.6 million, respectively. Settlement of debt in
2026 is the conversion of convertible notes issued in 2025. Settlement of debt in 2025 is conversion of convertible notes issued in
2025.2024. Financing expense is from 4 million warrants granted to a financial advisor.advisor and 69,007 shares of Series C Convertible
Preferred stock issued to BRH in 2025.
The net loss for the threesix months ended March
31,June 30, 2026
was approximately $6.2$10.1 million, a decrease of approximately $4.7$12.7 million as compared to the threesix months ended MarchJune 31,30, 2025, primarily
primarily due to a significant reduction in other expenses, partially offset by lower revenue and higher operating expenses.
Since our inception, we have incurred significant
operating losses and negative cash flows from our operations. Our net loss was $6.2$10.1 million and $10.9$22.8 million for the threesix months
ended MarchJune 31,30, 2026 and 2025, respectively. During fiscal year 2025, we completed a debt offering in February and an equity offering in
in September and October which generated net proceeds of approximately $3.7 million and $8.1 million, respectively.
As of MarchJune 31,30, 2026 and December 31, 2025, the
current assets consisted of cash of $4.3$2.5 million and $6.3 million, respectively, inventory of $696,000$579,000 and $621,000, respectively, accounts
receivable of $130,000$165,000 and $209,000, respectively, and prepaid expenses and other current assets of $512,000$419,000 and $317,000, respectively.
As of MarchJune 31,30, 2026 and December 31, 2025, the
current liabilities consisted of accounts payable and accrued liabilities of $414,000$222,000 and $316,000, respectively, deferred revenue of
$21,000 and $3,000, respectively, due to related parties
of $19,000$5,000 and $168,000, respectively, convertible notes net of discount of $0
and $219,000, respectively, convertible note – related
party of $2.2 million$0 and $1.3 million, respectively, current portion of financing
loan of $31,000$15,000 and $30,000,$30,000 respectively, and current
portion of operating lease liability of $152,000$157,000 and $148,000, respectively.
The decrease in working capital in 2026 was primarily
due to an increase in convertible note- related party and a decrease in cash of $3.7 million for operating activities.activities, offset by a decrease in convertible debt due to conversions into common
stock.
For the threesix months ended MarchJune 31,30, 2026 and
2025
For the threesix months ended MarchJune 31,30, 2026, net
cash flows
used in operating activities consisted of a net loss of $6.2$10.1 million, reduced by stock-based compensation of $2.3$4.2 million,
non-cash lease
expenses of $38,000,$78,000, amortization and depreciation of $126,000,$250,000, amortization of debt discount of $882,000 and$892,000, loss on settlement of debt
of debt$847,000, loss on disposal of $847,000,equipment of $32,000, and increased by bad debt recovery of $20,000, and net changes in operating assets
and liabilities of $19,000.$33,000.
For the threesix months ended MarchJune 31,30, 2025, net
cash flows
used in operating activities consisted of a net loss of $10.9$22.8 million, reduced by stock-based compensation of $2.8 million,
financing expense of $6.2$13.3 million, non-cash
lease expenses of $21,000,$86,000, amortization and depreciation of $75,000,$151,000, amortization of debt
discount of $377,000,$1.0 million, loss on settlement
of debt of $2.6 million and changes in derivative liability of $805,000,$3.8 million, and increased by net changes in operating assets and liabilities
of $24,000.$110,000.
For the threesix months ended MarchJune 31,30, 2026 and
2025, the
net cash flows provided by (used in) investing activities consisted of the purchase of equipment of $11,000 and $27,000,$168,000 and sales of
equipment of $12,500 and $0, respectively.
CITR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 275,001 shares, about $825.0K). Net open-market shares: -275,001 (purchases minus sales); net value about -$825.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-04 | Conboy Stephen |
Open-market sale | 275,001 | $3.00 | $825.0K |
| 2026-07-24 | Conboy Stephen |
Gift | 150,000 | — | — |
| 2026-05-29 | Ralston Theodore |
Conversion | 44,447 | — | — |
| 2026-05-29 | Ralston Theodore |
Gift | 105,000 | — | — |
| 2026-05-29 | Ralston Theodore |
Other | 600,000 | — | — |
| 2026-05-28 | Ralston Theodore |
Disposition to issuer | 1,364,141 | — | — |
| 2026-05-28 | Boltrock Holdings Llc |
Disposition to issuer | 302,526 | — | — |
| 2026-04-28 | Huff Craig A |
Conversion | 940,799 | $2.40 | $2.3M |
| 2026-04-21 | Newton Anthony F |
Conversion | 166,667 | — | — |
| 2026-04-16 | Conboy Stephen |
Conversion | 2,224 | — | — |
| 2026-04-16 | Warman Nanuk |
Conversion | 177,794 | — | — |
| 2026-03-16 | Calinawan Lorenzo |
Grant/award | 41,667 | — | — |
| 2026-03-16 | Huff Craig A |
Grant/award | 41,667 | — | — |
| 2025-10-01 | Bolsen Wesley James |
Grant/award | 300,000 | — | — |
| 2025-10-01 | Bolsen Wesley James |
Grant/award | 300,000 | — | — |
| 2025-10-01 | Bolsen Wesley James |
Grant/award | 300,000 | — | — |
Well-known investors holding CITR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 56,321 | $486.1K | — | Sold out |