CitroTech issues going-concern warning in Q3 2026
Quarterly revenue rose year over year, but nine-month revenue fell and operating cash use increased; management said available cash does not fund stated 12-month needs.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
CitroTech Inc. reported third-quarter revenue of $664,328 for the three months ended September 30, 2026, compared with $288,212 a year earlier, while nine-month revenue was $1,289,909, versus $1,945,232. Third-quarter net loss was $2,279,885, compared with $7,929,208; nine-month net loss was $12,393,003, compared with $30,736,631.
At September 30, 2026, CitroTech had $1,088,701 in cash and a $125.6 million accumulated deficit. It used $5,243,393 of cash in operating activities during the first nine months, versus $3,386,432 in the prior-year period. Management said cash, including October financing proceeds, was insufficient to fund commercial-scale production and related working capital for the next twelve months; these conditions raise substantial doubt about the company’s ability to continue as a going concern.
CitroTech’s October public offering closed October 22, 2026, and involved 2,240,000 common shares at $2.50 per share, producing approximately $5.2 million in net proceeds. Management said continuation depends on scaling commercial sales and that it may seek additional equity or debt financing.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue reached $664,328, versus $288,212 a year earlier.
- Moderate pointNine-month net loss fell to $12,393,003 from $30,736,631.
Negative
- Major pointManagement cited substantial doubt about continuation for one year following issuance.
- Moderate pointNine-month revenue fell to $1,289,909 from $1,945,232.
- Moderate pointOperating cash use rose to $5,243,393 from $3,386,432.
Filing Explained
A further four hundred sixty-seven thousand twelve Series C preferred shares are due to TCSI and may convert into common stock.
At
The filing also reports 467,012 Series C preferred shares payable to TCSI 18 months after
Separately, the report lists 7,606,010 potential common-share equivalents, including warrants, preferred shares, performance stock units and restricted stock units; it excludes them from diluted loss per share because they were anti-dilutive.
Key Figures
Key Terms
going concern financial
working capital financial
deferred revenue financial
anti-dilutive financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was CITR's revenue in Q3 2026?
How much did CITR receive from its October 2026 offering?
Why did CITR report substantial doubt about its ability to continue as a going concern?
How concentrated was CITR's customer revenue in Q3 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the quarterly period ended: |
or
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the transition period from ___________ to ___________ |
Commission File Number:
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
|
|
||
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. ☒
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐Yes
As of November 10, 2026,
TABLE OF CONTENTS
| Page | ||||
| PART I - FINANCIAL INFORMATION | 3 | |||
| Item 1. | Financial Statements | 3 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | ||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 44 | ||
| Item 4. | Controls and Procedures | 44 | ||
| PART II - OTHER INFORMATION | 45 | |||
| Item 1. | Legal Proceedings | 45 | ||
| Item 1A. | Risk Factors | 45 | ||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 45 | ||
| Item 3. | Defaults Upon Senior Securities | 45 | ||
| Item 4. | Mine Safety Disclosures | 45 | ||
| Item 5. | Other Information | 45 | ||
| Item 6. | Exhibits | 46 | ||
| SIGNATURES | 47 | |||
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Index to Unaudited Interim Consolidated Financial Statements
September 30, 2026
| Contents | Page | ||
| Consolidated Balance Sheets at September 30, 2026 and December 31, 2025 | 4 | ||
| Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2026 and 2025 | 5 | ||
| Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025 | 6 | ||
| Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 | 8 | ||
| Notes to Unaudited Interim Consolidated Financial Statements | 9 |
| 3 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Balance Sheets
(Unaudited)
| September 30, | December 31, | ||||||||
| 2026 | 2025 | ||||||||
| Assets | |||||||||
| Current Assets | |||||||||
| Cash | $ | $ | |||||||
| Accounts receivable, net | |||||||||
| Inventory | |||||||||
| Prepaid expenses | |||||||||
| Deferred offering costs | |||||||||
| Total Current Assets | |||||||||
| Non-Current Assets | |||||||||
| Intangible assets, net | |||||||||
| Operating lease right-of-use asset | |||||||||
| Equipment, net | |||||||||
| Security deposit | |||||||||
| Total Non-Current Assets | |||||||||
| Total Assets | $ | $ | |||||||
| Liabilities and Stockholders' Equity | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||
| Deferred revenue | |||||||||
| Convertible notes, net of discount | |||||||||
| Convertible notes, net of discount - related parties | |||||||||
| Due to related parties | |||||||||
| Financing loan - current portion | |||||||||
| Operating lease liability - current portion | |||||||||
| Total Current Liabilities | |||||||||
| Non-Current Liabilities | |||||||||
| Financing loan | |||||||||
| Operating lease liability | |||||||||
| Total Non-Current Liabilities | |||||||||
| Total Liabilities | |||||||||
| Stockholders' Equity | |||||||||
| Preferred Stock, par value $ | |||||||||
| Series A Preferred Stock, par value $ | |||||||||
| Series C Convertible Preferred Stock, par value $ | |||||||||
| Common Stock, par value $ | |||||||||
| Additional paid-in capital | |||||||||
| Accumulated deficit | ( | ) | ( | ) | |||||
| Total Stockholders' Equity | |||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | |||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| 4 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenue, exclusive of amortization and depreciation shown separately below | ||||||||||||||||
| Cost of revenue - related parties | ||||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Advertising and marketing | ||||||||||||||||
| Payroll and management compensation | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Professional fees - related parties | ||||||||||||||||
| Research and development expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - related party | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest income | ||||||||||||||||
| Financing expense | ( | ) | ||||||||||||||
| Financing expense - related party | ( | ) | ( | ) | ||||||||||||
| Gain (loss) on fair value of derivative liability | ( | ) | ||||||||||||||
| Loss on sales of assets | ( | ) | ||||||||||||||
| Loss on settlement of debt | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss before taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted weighted average number of common shares outstanding | ||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| 5 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
For the three and nine months ended September 30, 2026
| Series A | Series C Convertible | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred stock | Preferred stock | Common Stock | Paid-In | Accumulated | Stockholders' | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance - December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for services | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for cashless exercise of warrants | – | – | ( | ) | ||||||||||||||||||||||||||||||||
| Common stock issued for stock payable | – | – | ( | ) | ||||||||||||||||||||||||||||||||
| Management stock compensation | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Contributed capital | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance - March 31, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Series A Preferred Stock exchanged for Series C Preferred Stock and Series C Preferred Stock payable | ( | ) | ( | ) | – | |||||||||||||||||||||||||||||||
| Common stock issued for conversion of Series C Preferred Stock | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Common stock issued for services | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for exercise of warrants | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Management stock compensation | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Warrants issued for services | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance - June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Common stock issued for cashless exercise of warrants | – | – | ( | ) | ||||||||||||||||||||||||||||||||
| Common stock issued for services | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
| Management stock compensation | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Warrants issued for services | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance - September 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| 6 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
For the three and nine months ended September 30, 2025
| Series A | Series C Convertible | Additional | Total | |||||||||||||||||||||||||||||||||
| Preferred stock | Preferred stock | Common Stock | Paid-In | Accumulated | Stockholders' | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Series C Preferred Stock issued for cash | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for services | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for compensation | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for conversion of Series C Preferred Stock | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Common stock warrants issued | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Series C Preferred Stock issued for services | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for compensation | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for conversion of Series C Preferred Stock | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Common stock issued for services | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
| Common stock issued for conversion of debts | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Management stock compensation | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Series C Preferred Stock issued for cash | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for services | – | – | – | – | – | – | ||||||||||||||||||||||||||||||
| Series C Preferred Stock issued for compensation | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Common stock issued for conversion of Series C Preferred Stock | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Common stock issued for services | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Management stock compensation | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Reclassification of derivative liability to equity | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Reverse stock split adjustment | – | – | ||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance - September 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| 7 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Stock-based compensation - related party | ||||||||
| Bad debt expense recovery | ( | ) | ||||||
| Non-cash lease expenses | ||||||||
| Amortization and depreciation | ||||||||
| Amortization of debt discount | ||||||||
| Amortization of debt discount - related party | ||||||||
| Loss on settlement of debt | ||||||||
| Loss on fair value of derivative liability | ||||||||
| Loss on disposal of equipment | ||||||||
| Write off of deferred offering costs | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Security deposit | ( | ) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| Due to related parties | ||||||||
| Accrued interest - related parties | ||||||||
| Deferred revenue | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net Cash used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of equipment | ( | ) | ( | ) | ||||
| Sale of equipment | ||||||||
| Net Cash used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from convertible notes and warrants | ||||||||
| Proceeds from convertible note and warrants - related party | ||||||||
| Payments of deferred offering costs | ( | ) | ( | ) | ||||
| Contributed capital | ||||||||
| Repayment of loan - related party | ( | ) | ||||||
| Proceeds from issuance of Series C Preferred Stock and warrants | ||||||||
| Repayment of financing loan | ( | ) | ( | ) | ||||
| Net Cash provided by Financing Activities | ||||||||
| Change in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental Disclosure Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-Cash Financing Disclosure: | ||||||||
| Series A Preferred Stock exchanged for Series C Preferred Stock and Series C Preferred Stock payable | $ | $ | ||||||
| Common stock issued upon conversion of Series C Preferred stock | $ | $ | ||||||
| Common stock issued for conversion and settlement of debt | $ | $ | ||||||
| Common stock issued for conversion and settlement of related party debt | $ | $ | ||||||
| Common stock issued for cashless exercise of warrants | $ | $ | ||||||
| Common stock issued for stock payable | $ | $ | ||||||
| Debt modification | $ | $ | ||||||
| Warrants issued in conjunction with convertible debts | $ | $ | ||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||
| Recognition of derivative liability as debt discount | $ | $ | ||||||
| Reclassification of derivative liability to additional paid-in capital | $ | $ | ||||||
| Transfer from inventory to property and equipment | $ | $ | ||||||
| Acquisition of property and equipment as financing loan | $ | $ | ||||||
| Offering costs in accounts payable | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
| 8 |
CitroTech Inc.
(formerly General Enterprise Ventures, Inc.)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2026
Note 1 – Organization, Business and Going Concern
CitroTech Inc. was originally incorporated under the laws of the State of Nevada on March 14, 1990 and on June 3, 2021 was redomiciled to the State of Wyoming. Effective on January 22, 2026, the Company changed its name from General Enterprise Ventures, Inc. to CitroTech Inc. When used in these notes, the terms “CITR,” “Company,” “we,” “us” and “our” mean CitroTech Inc. and all entities included in our unaudited interim consolidated financial statements.
Business
We develop and manufacture environmentally sustainable, non-toxic, long-term fire-inhibiting products for use in industrial and wildfire defense applications. The Company’s proprietary formulation, CitroTech®, is derived from food-grade, renewable materials and is designed to provide an alternative to legacy conventional chemical fire retardants. CitroTech is used in the manufacturing of fire-resilient lumber and building materials, enabling integration of flame-inhibiting properties during production or applied in the field to new homes. In addition, it is utilized by fire departments, municipalities, and other public and private sector entities in connection with ground-based wildfire defense and stationary application systems intended to help render vegetation non-flammable, reduce ignition risk and enhance structural protection.
The Company continues to evaluate and develop additional formulations and product treatments to expand the range of potential commercial applications for its technology.
Liquidity and Going Concern
The accompanying unaudited interim consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
At September 30, 2026, the Company had cash of approximately
$
To alleviate these conditions, management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity or debt securities. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry.
| 9 |
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of CitroTech Inc. for the year ended December 31, 2025.
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2026 and its results of operations for the three and nine months ended September 30, 2026 and 2025, and cash flows for the nine months ended September 30, 2026 and 2025. The balance sheet at December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2025, as filed with the SEC on March 30, 2026.
Principles of Consolidation
The consolidated financial statements include the accounts of CitroTech Inc., and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.
Reclassification
Certain amounts have been reclassified to improve the clarity and comparability of the financial statements. These reclassifications had no impact on previously reported total assets, liabilities, equity, net income (loss), or cash flows for any periods presented.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Cash and Cash Equivalents
For purposes of balance sheet presentation and reporting
of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original
maturity of less than 90 days to be cash and cash equivalents. The Company did
| 10 |
Periodically, the Company may carry cash balances
at financial institutions in excess of federally insured limit of $
Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any expected loss on the trade accounts receivable balances and charged to the provision for credit loss. The Company maintains allowances for credit loss for estimated losses resulting from the inability of its customers to make the required payments for products and services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable that the receivable will not be recovered.
During the nine months ended September 30, 2026, the
Company recovered $
Fair Value of Financial Instruments
The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows:
| Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; | |
| Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and | |
| Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.
The Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, deferred revenue and loans payable, are carried at historical cost. As of September 30, 2026 and December 31, 2025, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.
| 11 |
Convertible Notes
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Deferred Offering Costs
Costs directly attributable to an offering of equity
securities are deferred and would be charged against the gross proceeds of the offering as a reduction of additional paid-in capital.
Deferred offering costs consist of underwriting, legal, accounting, and other expenses incurred through the balance sheet date that are
directly related to the proposed public offering. Should the proposed public offering prove to be unsuccessful, these deferred costs,
as well as additional expenses to be incurred, will be expensed. As of September 30, 2026, the Company recorded deferred offering
costs of $
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
Revenue
The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.
Revenue related to contracts with customers is evaluated utilizing the following steps:
| i. | Identify the contract, or contracts, with a customer; | |
| ii. | Identify the performance obligations in the contract; | |
| iii. | Determine the transaction price; | |
| iv. | Allocate the transaction price to the performance obligations in the contract; | |
| v. | Recognize revenue when the Company satisfies a performance obligation. |
For the nine months ended September 30, 2026, the Company’s revenue was generated mainly from sales of two fire-retardant products. The first is applied to vegetation for wildfire prevention and asset protection, and is also used in exterior home-protection systems installed on residential properties. The second is used to treat lumber and engineered wood products so they meet fire-retardant-treated wood standards. Revenue from product sales is recognized at a point in time, when control of the product transfers to the customer.
Deferred revenue
Deferred revenue consists of advanced payments
for our installation service that have not yet been rendered. As of September 30, 2026 and December 31, 2025, total deferred revenue
was $
| 12 |
Cost of Revenue
For the three and nine months ended September 30, 2026 and 2025, cost of revenue consisted of:
| Schedule of cost of revenue | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cost of inventory | $ | $ | $ | $ | ||||||||||||
| Freight and shipping | ||||||||||||||||
| Consulting and advisory-related party | ||||||||||||||||
| Royalty and sales commission-related party | ||||||||||||||||
| Rent expense | ||||||||||||||||
| Total cost of revenue | $ | $ | $ | $ | ||||||||||||
Basic and Diluted Net Loss Per Common Share
Net loss per share of common stock requires presentation of basic and diluted earnings per common share on the face of the Statements of Operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation to diluted earnings per share. In the accompanying financial statements, basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements and warrants unless the result would be antidilutive.
The dilutive effect of share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of common stock are included in the denominator of the diluted calculation for the entire period being presented.
As of September 30, 2026 and 2025, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.
| Schedule of anti-dilutive shares | ||||||||
| September 30, | September 30, | |||||||
| 2026 | 2025 | |||||||
| Shares | Shares | |||||||
| Convertible notes | ||||||||
| Common Stock warrants | ||||||||
| Series C Convertible Preferred Stock | ||||||||
| Series C Convertible Preferred Stock to be issued | ||||||||
| Performance stock units | ||||||||
| Restricted stock units | ||||||||
| 13 |
Stock-Based Compensation
The Company accounts for employee and non-employee stock awards under ASC 718, Compensation – Stock Compensation, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service.
During the three and nine months ended September 30, 2026 and 2025, stock-based compensation was recognized as follows:
| Schedule of stock-based compensation | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Management compensation | $ | $ | $ | $ | ||||||||||||
| Professional fees | ||||||||||||||||
| Professional fees - related party | ||||||||||||||||
| Financing expense | ||||||||||||||||
| Financing expense - related party | ||||||||||||||||
| Stock-based compensation | $ | $ | $ | $ | ||||||||||||
Compensation cost for stock awards, which include common shares, Series C Convertible Preferred Stock, warrants and performance stock units (“PSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. The fair value of stock awards is based on the quoted price of our common stock on the grant date and Series C Convertible Preferred stock as if converted to common stock. We measure the fair value of PSUs using a Monte Carlo valuation model and warrants using a Black-Scholes valuation model. Compensation cost for PSUs is recognized using the derived service period and accelerated if the condition is satisfied at an earlier date.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on our disclosures.
In September 2025, the FASB issued ASU No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).” ASU 2025-06 modernizes the guidance for accounting for internal-use software costs by removing references to project stages and clarifying the threshold applied to begin capitalizing costs. The guidance in ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years, and can be applied prospectively, retrospectively, or using a modified transition approach. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-06 on the Company’s consolidated financial statements and related disclosures.
| 14 |
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective annual periods beginning after December 15, 2026, and interim periods within those years. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.
Recently adopted accounting pronouncement
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. The Company adopted ASU 2025-05, as of January 1, 2026, and applied the new disclosure requirements prospectively to the current annual period. The adoption of this ASU did not have an impact on our consolidated financial statements.
Note 3 – Inventory
As of September 30, 2026 and December 31, 2025, inventory consisted of the following:
| Schedule of inventory | ||||||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Finished goods | $ | $ | ||||||
| Raw materials | ||||||||
| Inventory | $ | $ | ||||||
The Company did
| 15 |
Note 4 – Prepaid Expenses
As of September 30, 2026 and December 31, 2025, prepaid expenses, consisted of the following:
| Schedule of prepaid expenses | ||||||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Insurance | $ | $ | ||||||
| Legal retainer | ||||||||
| Research and development | ||||||||
| Advertising and marketing | ||||||||
| Other prepaid operating expenses | ||||||||
| Deposit on purchase of inventories | ||||||||
| Prepaid expenses | $ | $ | ||||||
Note 5 – Equipment, net
As of September 30, 2026 and December 31, 2025, equipment consisted of the following:
| Schedule of property plant and equipment | ||||||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Cost: | ||||||||
| Equipment | $ | $ | ||||||
| Vehicles | ||||||||
| Software under development | ||||||||
| Equipment gross | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Equipment, net | $ | $ | ||||||
As of September 30, 2026, Software under development represents capitalized costs related to the development of a mobile application system. The system is currently under development and has not been placed in service.
During the three and nine months ended September 30, 2026 and 2025, the Company recorded depreciation as follows.
| Schedule of depreciation | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Depreciation | $ | $ | $ | $ | ||||||||||||
| 16 |
During the nine months ended September 30, 2026, the
Company purchased equipment for $
During the nine months ended September 30, 2026, the
Company sold and disposed of vehicles and equipment with a net book value of $
Financing loan
The Company had a financing loan for the purchase
of a vehicle in September 2025. The loan repayment is $
The Company had a financing loan for the purchase
of a vehicle in September 2025. The loan repayment is $
During the three and nine months ended September 30, 2026 and 2025, the Company recorded interest expense as follows:
| Schedule of interest expense | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Interest expense | $ | $ | $ | $ | ||||||||||||
As of September 30, 2026 and December 31, 2025, the
Company had a financing loan of $
Note 6 – Intangible Assets, net
In 2022, the Company acquired the intellectual property of Mighty Fire Breaker LLC (“MFB California”), 19 patents centered around its MFB Technology for the prevention of the spread of wildfires. The granted patents include MFB California’s main chemistry and applications. MFB California had 21 trademarks and various copyrights. Internally generated patents, trademarks and copyrights, are expensed as incurred.
In December 2025, the Company entered into an Intellectual
Property Purchase Agreement to protect our existing patents. The purchase price is $
| 17 |
As of September 30, 2026 and December 31, 2025, finite-lived intangible assets consisted of the following:
| Schedule of finite lived intangible assets | ||||||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Acquired patents (19) | $ | $ | ||||||
| Patent and technology assets | ||||||||
| Non-compete agreements | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Estimated future amortization expense for finite-lived intangibles is as follows:
| Schedule of estimated future amortization expense | ||||
| Year ending December 31, | ||||
| 2026 (remaining three months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Intangible assets, net | $ | |||
As of September 30, 2026, the weighted-average useful
life is
During the three and nine months ended September 30, 2026 and 2025, the amortization expense was as follows:
| Schedule of amortization expense | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Amortization | $ | $ | $ | $ | ||||||||||||
Note 7 – Lease
In March 2022, the Company entered into an operating lease for a warehouse, with a term of eighteen (18) months. In July 2023, the Company amended the contract and extended the lease term to July 2025. In May 2025, the Company terminated this lease and wrote off the right-of-use asset and lease liability.
In January 2025, the Company entered into an operating
lease for our office and warehouse. The commencement date was April 1, 2025, and the termination date is March 31, 2030. The Company recorded
a security deposit of $
| 18 |
For the three and nine months ended September 30, 2026 and 2025, the components of lease expense were as follows:
| Schedule of right-of-use asset and lease information | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| The components of lease expense were as follows: | ||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||
| Short-term lease cost | ||||||||||||||||
| Variable lease cost | ||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||
Supplemental cash flow information related to leases was as follows:
| Schedule of supplemental cash flow information related to leases | ||||||||
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for operating cash flows from operating leases | $ | $ | ||||||
| Right-of-use asset obtained in exchange for new operating lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term - operating leases (year) | ||||||||
| Weighted-average discount rate — operating leases | ||||||||
The following table outlines maturities of our lease liabilities as of September 30, 2026:
| Schedule of maturities of lease liabilities | ||||
| Year ending December 31, | ||||
| 2026 (remaining three months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Operating leases, future minimum payments due | ||||
| Less: Imputed interest | ( | ) | ||
| Operating lease liabilities | $ | |||
| 19 |
Note 8 – Convertible Notes
The components of convertible notes as of September 30, 2026 and December 31, 2025, were as follows:
| Schedule of components of convertible notes | ||||||||||||||||||
| Principal | Effective Interest | Stated Interest | September 30, | December 31, | ||||||||||||||
| Payment date | Amount | Maturity date | Rate | Rate | 2026 | 2025 | ||||||||||||
| February 15, 2025 | $ | $ | | $ | ||||||||||||||
| Total Convertible notes | ||||||||||||||||||
| Less: Unamortized debt discount | ( | ) | ||||||||||||||||
| Less: Current portion | ( | ) | ||||||||||||||||
| Long-term portion | $ | $ | ||||||||||||||||
During the three and nine months ended September 30, 2026 and 2025, the Company recognized interest expense and amortization of debt discount as follows:
| Schedule of interest expense and amortization of debt | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Interest expense | $ | $ | $ | $ | ||||||||||||
| Amortization of debt discount | $ | $ | $ | $ | ||||||||||||
As of September 30, 2026 and December 31, 2025, the
Company recorded accrued interest of $
Conversion
In February 2026, seven (7) note holders converted
convertible notes issued in February 2025 of $
Note 9 – Accounts Payable and Accrued Liabilities
As of September 30, 2026 and December 31, 2025, accounts payable and accrued liabilities consisted of the following:
| Schedule of accounts payable and accrued liabilities | ||||||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Credit card | ||||||||
| Sales tax payable | ||||||||
| Other liabilities | ||||||||
| Payroll liability | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| 20 |
Note 10 – Related Party Transactions
The related parties that had material transactions for the nine months ended September 30, 2026 and 2025, consist of the following:
| Related Party | Nature of Relationship to the Company | |
| A | An Ohio Corporation - a significant shareholder | |
| B | Owner of A and our Chairman of the Board | |
| C | A California Corporation owned by a related party D | |
| D | Significant shareholder and our Chief Technology Officer through March 31, 2026 | |
| E | Former Director and Chief Executive Officer of GEVI Insurance Holdings Inc. | |
| F | A Delaware limited liability company controlled by a Director and significant shareholder | |
| G | A company controlled by our Chief Financial Officer |
As of September 30, 2026 and December 31, 2025, amounts owing to related parties consisted of:
| Schedule of expenses to related parties and their nature | ||||||||||
| September 30, | December 31, | |||||||||
| Related Party | 2026 | 2025 | Nature of transaction | |||||||
| A | $ | $ | Payment of operating expenses on behalf of the Company | |||||||
| F | Accrued interest related to convertible note related party | |||||||||
| G | Consulting fees | |||||||||
| $ | $ | |||||||||
During the nine months ended September 30, 2026, the
Company repaid $
As of September 30, 2026, deferred offering costs
included $
For the three and nine months ended September 30, 2026 and 2025, expenses to related parties and their nature consisted of:
| Three months ended | ||||||||||||
| September 30, | ||||||||||||
| Related Party | 2026 | 2025 | Nature of transaction | Financial Statement Line Item | ||||||||
| G | $ | $ | Edgar filing expense | General and administrative | ||||||||
| G | $ | $ | Professional service - accounting | Professional fees - related party | ||||||||
| 21 |
| Nine months ended | ||||||||||||
| September 30, | ||||||||||||
| Related Party | 2026 | 2025 | Nature of transaction | Financial Statement Line Item | ||||||||
| A | $ | $ | 150,000 Series C preferred stock for consulting fee | Professional fees - related party | ||||||||
| A | $ | $ | Payment of operating expenses on behalf of the Company | Operating expenses | ||||||||
| A | $ | $ | Repayment of loan | Due to related party | ||||||||
| C | $ | $ | Cash paid for consulting fees | Professional fees - related party | ||||||||
| C | $ | $ | Cash paid for consulting and advisory fees | Cost of revenue - related party | ||||||||
| D | $ | $ | Cash paid for royalty and sales commissions | Cost of revenue - related party | ||||||||
| D | $ | $ | Cash paid for consulting fees | Professional fees - related party | ||||||||
| E | $ | $ | 30,000 Series C preferred stock for management compensation | Management compensation | ||||||||
| F | $ | $ | 69,007 Series C preferred stock for services | Financing expense | ||||||||
| G | $ | $ | EDGAR filing expense | General and administrative | ||||||||
| G | $ | $ | Professional service - accounting | Professional fees - related party | ||||||||
Contributed Capital
In February 2026, the Company received payments from
related party B, totaling $
Convertible note – related party
The components of convertible notes as of September 30, 2026 and December 31, 2025, were as follows:
| Schedule of convertible debt related party | ||||||||||||||||||
| Effective | Stated | |||||||||||||||||
| Principal | Interest | Interest | September 30, | December 31, | ||||||||||||||
| Payment date | Amount | Maturity date | Rate | Rate | 2026 | 2025 | ||||||||||||
| February 2025 | $ | $ | | $ | ||||||||||||||
| Total Convertible notes | $ | $ | ||||||||||||||||
| Less: Unamortized debt discount | ( | ) | ||||||||||||||||
| Less: Current portion | ( | ) | ||||||||||||||||
| Long-term portion | $ | $ | ||||||||||||||||
In February 2025, the Company entered into one (1)
subscription agreement for convertible note ($
| 22 |
The Company evaluated the modification of terms under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension of the maturity dates did not result in a substantial change to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. Accordingly, no gain or loss on debt extinguishment was recorded.
During the three and nine months ended September 30, 2026 and 2025, the Company recognized interest expense and amortization of debt discount as follows:
| Schedule of interest expense and amortization of debt discount | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Interest expense - related party | $ | $ | $ | $ | ||||||||||||
| Amortization of debt discount - related party | $ | $ | $ | $ | ||||||||||||
Conversion
In April 2026, related party F converted a
convertible note with principal of $
As of September 30, 2026 and December 31, 2025, the
Company recorded accrued interest of $
Note 11 – Stockholders’ Equity
Preferred Stock
The Company is authorized to issue up to
Series A Preferred Stock
The Company designated
Dividends. Holders of shares of Series A Preferred Stock are not entitled to receive dividends.
Voting Rights. Each share of Series A Preferred Stock is entitled to 1,000 votes on all matters submitted to a vote of the holders of Common Stock, voting together with the holders of Common Stock as a single class. Holders of shares of Series A Preferred Stock do not have cumulative voting rights.
Other Rights. Shares of Series A Preferred Stock are not entitled to a liquidation preference. The Series A Preferred Stock may not be redeemed without the consent of the holders of the Series A Preferred Stock. The holders of the Series A Preferred Stock are not entitled to pre-emptive rights or subscription rights.
| 23 |
Share exchange
On May 28, 2026, the Company entered into Stock Exchange
and Stockholders Agreements (the “Exchange Agreements”) with the holders (the “Holders”) of the Company’s
outstanding Series A Preferred Stock. Pursuant to the Exchange Agreements, the Company reacquired an aggregate of
As of September 30, 2026 and December 31, 2025, there
were
Series C Convertible Preferred Stock
The Company has designated
Dividends. Holders of shares of Series C Convertible Preferred Stock are not entitled to receive dividends.
Voting Rights. The holders of the Series C Convertible Preferred Stock are not entitled to vote.
Conversion Rights. Each share of Series C Convertible Preferred Stock outstanding shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into 3.3333 shares of the Common Stock of the Company (the “Conversion Ratio”). Such Conversion Ratio, and the rate at which shares of Series C Convertible Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment.
Other Rights. The holders of the Series C Convertible Preferred Stock are not entitled to a liquidation preference. The Series C Convertible Preferred Stock may not be redeemed without the consent of the holders of the Series C Convertible Preferred Stock. The holders of the Series C Convertible Preferred Stock are not entitled to pre-emptive rights or subscription rights.
During the nine months ended September 30, 2026, the
Company issued
During the nine months ended September 30, 2025, the
Company issued
| · | In September 2025, the Company entered into Securities
Purchase Agreements with certain investors for the issuance and sale (the “PIPE Offering”) of (i) | |
| · | ||
| · | ||
| · |
| 24 |
During the nine months ended September 30, 2026, the
holders of the Series C Convertible Preferred Stock converted
As of September 30, 2026 and December 31, 2025, there
were
Common Stock
The Company has authorized
During the nine months ended September 30, 2026, the
Company issued
| · | ||
| · | ||
| · | ||
| · | ||
| · | ||
| · |
During the nine months ended September 30, 2025, the
Company issued
| · | ||
| · | ||
| · | ||
| · | ||
| · |
As of September 30, 2026 and December 31, 2025, there
were
Restricted stock units (RSU)
On June 27, 2025 (the “Effective
Date”), the Company entered into the employment agreement with our Chief Operating Officer (“COO”), commencing on
July 21, 2025. Under this agreement, the Company granted
On September 22, 2025, the Company entered into
the employment agreement with our new Chief Executive Officer (“CEO”), commencing on October 1, 2025 (the
“Effective Date”). Under this agreement, the Company issued
| 25 |
During the three and nine months ended September 30, 2026 and 2025, the Company recognized compensation as follows:
| Schedule of recognized compensation | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Compensation expense | $ | $ | $ | $ | ||||||||||||
As of September 30, 2026, unrecognized compensation
cost for unvested equity awards was $
Management stock compensation (PSU)
During 2025, the Company entered into employment and consulting agreements with our CEO, former CEO, COO and a Director. The stock compensation based on market capitalization condition is as follows:
Market capitalization for 30 consecutive days |
Consulting agreement Former CEO and Chairman |
Consulting agreement Chairman |
Employment agreement COO |
Employment agreement CEO | |||||
| $ | 120,000,000 | 70,000 Series C Convertible Preferred Stock | 70,000 Series C Convertible Preferred Stock | – | – | ||||
| $ | 150,000,000 | 70,000 Series C Convertible Preferred Stock | 70,000 Series C Convertible Preferred Stock | 37,500 common stock | 75,000 common stock | ||||
| $ | 200,000,000 | 70,000 Series C Convertible Preferred Stock | 70,000 Series C Convertible Preferred Stock | 37,500 common stock | 75,000 common stock | ||||
| $ | 250,000,000 | 70,000 Series C Convertible Preferred Stock | 70,000 Series C Convertible Preferred Stock | 37,500 common stock | 75,000 common stock | ||||
| $ | 300,000,000 | – | – | 37,500 common stock | 75,000 common stock | ||||
| Fair value ($) | |||||||||
| Forfeiture Protection | Vests upon completion of Initial Term; awards survive termination | Vests upon completion of Initial Term; awards survive termination | Forfeited if terminated for cause or resignation | Forfeited if terminated for cause or resignation | |||||
The Company used the Monte Carlo model to calculate
the fair value of compensation and estimated a total of the grant date fair value of $
During the three and nine months ended September 30, 2026, the Company recorded compensation expense as follows:
| Schedule of recognized compensation | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Compensation expense | $ | $ | $ | $ | ||||||||||||
| 26 |
As of September 30, 2026, unrecognized compensation
cost for unvested equity awards was $
As of September 30, 2026, market capitalization performance
conditions had been achieved with respect to certain outstanding equity incentive awards. Theodore Ralston, the Company’s former
Chief Executive Officer, and BoltRock Holdings, LLC, a company controlled by a Director, each became eligible to receive
For the year ended December 31, 2025, the estimated fair values of the awards were measured using the following significant assumptions:
| Schedule of significant assumptions | ||||
| Derived service period | ||||
| Risk-free interest rate | ||||
| Stock price at valuation date | $ | |||
| Expected average volatility | ||||
| First Capitalization Threshold per share price | $ | |||
| Second Capitalization Threshold per share price | $ | |||
| Third Capitalization Threshold per share price | $ | |||
| Fourth Capitalization Threshold per share price | $ |
Warrants
In April 2026, the Company issued
In September 2026, the Company issued
We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815. In addition to determining classification, we evaluate these instruments to determine if such instruments meet the definition of a derivative. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
The warrants are valued using a Black Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.
The Company utilized the following assumptions:
| Schedule of assumptions | ||||
| September 30, | ||||
| 2026 | ||||
| Expected term | ||||
| Expected average volatility | ||||
| Risk-free interest rate | ||||
| Expected dividend yield | – | |||
| 27 |
A summary of activity of the warrants during the nine months ended September 30, 2026 is as follows:
| Schedule of activity of the warrants | ||||||||||||
| Warrants Outstanding | ||||||||||||
Weighted Average Exercise | Weighted Average Remaining Contractual life | |||||||||||
| Shares | Price |
(in years) | ||||||||||
| Outstanding, December 31, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | – | |||||||||
| Canceled | – | |||||||||||
| Outstanding, September 30, 2026 | $ | |||||||||||
| Exercisable, September 30, 2026 | $ | |||||||||||
The intrinsic value of the warrants as of September
30, 2026 is approximately $
Note 12 – Disaggregated revenue and Concentration
During the three and nine months ended September 30, 2026 and 2025, disaggregated revenue was as follows:
| Schedule of disaggregated revenue | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Products sale | $ | $ | $ | $ | ||||||||||||
| Product installation service | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
During the three and nine months ended September 30, 2026 and 2025, customer and supplier concentrations (more than 10%) were as follows:
| 28 |
Revenue and accounts receivable
Recurring customers do not represent a material percentage of our revenue for the three and nine months ended September 30, 2026 and 2025 and accounts receivable as of September 30, 2026 and December 31, 2025.
| Schedule of revenue and accounts receivable | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Number of customers (more than 10% revenue) | ||||||||||||||||
| Total revenue of top 5 customers | ||||||||||||||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Number of customers (more than 10% of accounts receivable) | ||||||||
| Total % of accounts receivable balance (more than 10%) | ||||||||
Purchase and accounts payable for Inventory
| Schedule of purchase and accounts payable | ||||||||||||||||||||||||
| Percentage of Purchases | Percentage of Purchases | Percentage of | ||||||||||||||||||||||
| For three months ended | For nine months ended | Accounts payable for purchase | ||||||||||||||||||||||
| September 30, | September 30, | September 30, | December 31, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Supplier A | ||||||||||||||||||||||||
| Supplier B | ||||||||||||||||||||||||
| Supplier C | ||||||||||||||||||||||||
| Supplier D | ||||||||||||||||||||||||
| Supplier E | ||||||||||||||||||||||||
| Supplier F | ||||||||||||||||||||||||
| Total (as a group) | ||||||||||||||||||||||||
To reduce risk, the Company closely monitors the amounts due from its customers and assesses the financial strength of its customers through a variety of methods that include, but are not limited to, engaging directly with customer operations and leadership personnel, visiting customer locations to observe operating activities, and assessing customer longevity and reputation in the marketplace. As a result, the Company believes that its accounts receivable credit risk exposure is limited.
| 29 |
Note 13 – Segment
Our Chief Executive Officer (“CEO”) is the chief operating decision maker who reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we determined we operate in a single reportable segment - environmentally sustainable specialty chemicals for fire prevention and protection in the lumber and wood products, wildland fire and residential home industry.
Our CEO assesses performance and decides how to allocate resources primarily based on consolidated loss from operations, which is reported on our Consolidated Statements of Operations. Total assets on the Consolidated Balance Sheets represent our segment assets.
| Schedule of segment assets | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of revenue, exclusive of amortization and depreciation shown separately below | ||||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Advertising and marketing | ||||||||||||||||
| Payroll and management compensation | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Research and development expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Total Assets | $ | $ | ||||||
Note 14 – Subsequent Events
Management has evaluated subsequent events through November 10, 2026, which is the date these financial statements were issued. Based on our evaluation, no material events have occurred that require disclosure, except as follows:
On October 21, 2026, the Company entered into an underwriting agreement with Univest Securities, LLC, as representative of the underwriters listed on Schedule A thereto in connection with a public offering of 2,240,000 shares of common stock at a public offering price of $2.50 per share. The offering closed on October 22, 2026. The Company received net proceeds of approximately $5.2 million from the offering, after deduction of underwriting discounts and other costs.
| 30 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results.
We caution that the factors described herein, and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Our unaudited financial statements are stated in United States Dollars (USD) and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this Quarterly Report.
In this Quarterly Report, unless otherwise specified, all dollar amounts are expressed in United States Dollars.
As used in this Quarterly Report, the terms “we”, “us”, “our” and “our company” mean CitroTech Inc.
Overview
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.
| 31 |
Since Mighty Fire Breaker LLC (“MFB Ohio”) acquired from 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. Our product is the first and only fire inhibitor recognized by the EPA as safe for the environment. We also 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 42 granted patents (41 of which are granted in the US) and 90 pending applications (72 of which are pending in the US). We continue to evaluate our patent portfolio and technology platform to target 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 products that help achieve Class-A fire rating for lumber and engineered wood products. We are in the initial phases of 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 is the Company’s primary go-to-market channel for this portion of the business. Large scale ASTM burn tests have been performed as part of the joint venture to be able to bring fact-based data to some of the largest lumber and wood product companies for the potential adoption of CitroTech. The joint venture is working through potential revenues and anticipated adoption timelines for calendar year 2027.
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. These systems deploy our fire inhibitor in advance of wildfires to help prevent the advance of fires and reduce structural risk. In addition to protecting property owners from the ravages of wildfires, this offering addresses a significant and growing insurance market disruption across the Western 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 Wildland-Urban Interface (“WUI”). WUI is the transitional zone between undeveloped land and built environments that is at elevated risk of catastrophic wildfire loss. The Company is now in discussions with multiple brokers to offer insurance coverage to customers who install a CitroSafe proactive wildfire system, with policies underwritten by established insurance carriers.
Our management team consists of four individuals: Wesley J. Bolsen, Chief Executive Officer; Andrew Hotsko, Chief Operating Officer; Nanuk Warman, Secretary and Chief Financial Officer; and Anthony Newton, General Counsel.
Known Trends and Uncertainties
Growth in Fire Safety
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 WUI, resulting in increased demand for environmentally safe 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. As of September 30, 2026, our certified partner network consisted of more than 30 organizations that install systems and/or apply CitroTech product around homes and in the community.
| 32 |
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 and potentially drones 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. During 2026, San Diego announced an expansion of its CitroTech treatment program. In addition, certain utilities and railroads began applying CitroTech in pilot applications during Q3 of 2026. Some of these customers have indicated that they are waiting on QPL listing prior to large-scale adoption of the product onto high risk fire threat areas. 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 recommend the customer replace the 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.
We have invested and intend to continue investing in the expansion of our fire retardant and lumber treatment business through product development and business development to grow our customer base.
Weather Conditions and Climate Trends
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, which impacts 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 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 continue through late fall or even into the winter months.
In addition, we believe that there are opportunities to apply CitroTech in the future related to prescribed burns to prevent escape from the intended area or re-ignition of a fire after the prescribed burn is concluded. Any such opportunity would depend in part on the CitroTech product being listed on the federal Qualified Products List (“QPL”), which we are pursuing.
Results of Operations
We are developing and commercializing our product lines. We have been focused historically on obtaining patents and various accreditations. To date, we do not have a large customer base, having relied heavily on a few customers, for the commercialization and testing of our CitroTech product and delivery system. We currently do not have an established retail product line nor recurring significant customer base.
The following summary of our results of operations should be read in conjunction with our unaudited financial statements for nine months ended September 30, 2026 and 2025, which are included herein.
| 33 |
Our results of operations for the three months ended September 30, 2026 and 2025 are summarized below:
| Three Months Ended | ||||||||||||||||
| September 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Revenue | $ | 664,328 | $ | 288,212 | 376,116 | 130% | ||||||||||
| Operating expenses | 2,950,886 | 4,525,910 | (1,575,024 | ) | (35% | ) | ||||||||||
| Other income (expense) | 6,673 | (3,691,510 | ) | 3,698,183 | (100% | ) | ||||||||||
| Net loss | $ | 2,279,885 | $ | 7,929,208 | (5,649,323 | ) | (71% | ) | ||||||||
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 three months ended September 30, 2026, revenue increased $376,000, or 130%, compared to the three months ended September 30, 2025, primarily due to increased sales of products to corporate customers and used in residential installations. In addition, revenue that was booked in the first half of 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. This accounts for some of the change in revenues from the prior year quarter. No revenues were reported from the HexiTech joint venture during Q3, although some CitroTech product was field applied in the lumber and wood industry during the quarter.
Our revenues consisted of the following:
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Products sale | $ | 515,628 | $ | 91,598 | ||||
| Product installation service | 148,700 | 196,614 | ||||||
| $ | 664,328 | $ | 288,212 | |||||
Our revenues from significant customers for the three months ended September 30, 2026 and 2025, are as follows:
| Three months ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Number of customers (more than 10% revenue) | 3 | 6 | ||||||
| Total revenue of top 5 customers | 58.6% | 79.6% | ||||||
Our revenue is currently project- and event-driven rather than subscription- or contract-based, and we do not currently have a meaningful base of recurring customers. The decrease in our top-five customer concentration to 58.6% in the three months ended September 30, 2026, from 79.6% in the comparable 2025 period, reflects the shift of system installation revenues to the Certified Partner network while still attracting the higher margin CitroTech chemical sales. We expect customer concentration to remain elevated until our channel partner program and recurring utility and structural-protection customer relationships further mature.
| 34 |
Operating Expenses
| Three Months Ended | ||||||||||||||||
| September 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Cost of revenue | $ | 474,535 | $ | 575,603 | (101,068 | ) | (18% | ) | ||||||||
| Amortization and depreciation | 120,820 | 90,054 | 30,766 | 34% | ||||||||||||
| General and administrative | 278,894 | 269,703 | 9,191 | 3% | ||||||||||||
| Advertising and marketing | 294,396 | 232,569 | 61,827 | 27% | ||||||||||||
| Payroll and management compensation | 999,271 | 2,437,089 | (1,437,818 | ) | (59% | ) | ||||||||||
| Professional fees | 637,051 | 841,192 | (204,141 | ) | (24% | ) | ||||||||||
| Research and development expense | 145,919 | 79,700 | 66,219 | 83% | ||||||||||||
| Total operating expenses | $ | 2,950,886 | $ | 4,525,910 | (1,575,024 | ) | (35% | ) | ||||||||
The decrease in operating expenses was primarily attributed to decreases in management compensation, professional fees, and cost of revenue, partially offset by increases in research and development and marketing costs.
Cost of revenue
| Three Months Ended | ||||||||||||||||
| September 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Cost of inventory | $ | 415,091 | $ | 494,144 | (79,053 | ) | (16% | ) | ||||||||
| Freight and shipping | 6,376 | 15,665 | (9,289 | ) | (59% | ) | ||||||||||
| Rent expense | 53,068 | 65,794 | (12,726 | ) | (19% | ) | ||||||||||
| Total cost of revenue | $ | 474,535 | $ | 575,603 | (101,068 | ) | (18% | ) | ||||||||
During the three months ended September 30, 2026, the cost of revenue decreased over the three months ended September 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 September 30, 2026, compared to the comparable 2025 period, primarily due to a decrease in outsource labor cost.
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.
| 35 |
General and administrative
General and administrative expenses are office, rent, travel, insurance, website, IT, public listing fees, and other office related expenses.
Advertising and marketing
The increase in advertising and marketing during the three months ended September 30, 2026, over the three months ended September 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. In addition, during Q3 2026, the Company rang the closing bell of the New York Stock Exchange and engaged in additional Company marketing activities for the benefit of shareholders.
Professional fees
The professional fees during the three months ended September 30, 2026, includes stock-based compensation of $82,000 to consultants, 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 September 30, 2025, includes stock-based compensation of $314,000 to consultants and various fees 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 September 30, 2026, payroll and management compensation decreased to $1.0 million from $2.4 million in the prior-year period. This decrease was primarily attributable to lower stock-based compensation. The higher prior-period expense reflected performance stock units (PSUs) granted in 2025 in connection with the buildout of a full executive management team, including the appointment of a Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, and General Counsel. Management compensation for the three months ended September 30, 2026 and 2025 primarily included stock-based management compensation of $0.4 million and $1.8 million, respectively, and payroll to management of $0.4 million in each period. Payroll compensation to employees was approximately $0.3 million as compared to $0.2 million in the prior-year period.
Research and development costs
We continue to invest heavily in the testing and certifications of CitroTech treated products as well as 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 additional products 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 a funded
research program with Texas A&M on new products that were not underway in 2025.
Other Income (Expenses)
For the three months ended September 30, 2026 and 2025, the other income (expenses) consisted of interest income of $9,000 and $4,000, respectively, interest expense of $2,000 and $1.3 million, respectively, with the 2026 amount related to a finance loan and the 2025 amount primarily related to convertible notes payable issued in 2025 and 2024, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $0 and gain of $1.8 million, respectively, and loss on settlement of debt of $0 and $4.1 million, respectively. Settlement of debt in 2025 was the conversion of convertible notes issued in 2025.
| 36 |
Net loss
The net loss for the three months ended September 30, 2026 was approximately $2.3 million, a decrease of approximately $5.6 million as compared to the three months ended September 30, 2025, primarily due to a significant reduction in other expenses and operating expenses as well as an increase in revenue.
Our results of operations for the nine months ended September 30, 2026 and 2025 are summarized below:
| Nine months ended | ||||||||||||||||
| September 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Revenue | $ | 1,289,909 | $ | 1,945,232 | (655,323 | ) | (34% | ) | ||||||||
| Operating expenses | 11,517,762 | 12,659,025 | (1,141,263 | ) | (9% | ) | ||||||||||
| Other expenses | 2,165,150 | 20,022,838 | (17,857,688 | ) | (89% | ) | ||||||||||
| Net loss | $ | 12,393,003 | $ | 30,736,631 | (18,343,628 | ) | (60% | ) | ||||||||
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 nine months ended September 30, 2026, revenue decreased $0.7 million, or 34%, compared to the nine months ended September 30, 2025. This change was primarily seen in shifts that the Company made in the first quarter of the year, while growing revenue during the third quarter over the prior year.
Our revenues consisted of the following:
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Products sale | $ | 924,697 | $ | 1,142,865 | ||||
| Product installation service | 365,212 | 802,367 | ||||||
| $ | 1,289,909 | $ | 1,945,232 | |||||
Our revenues from significant customers for the nine months ended September 30, 2026 and 2025, are as follows:
| Nine months ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Number of customers (more than 10% revenue) | – | 1 | ||||||
| Total revenue of top 5 customers | 38.8% | 37.9% | ||||||
| 37 |
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 38.8% in the nine months ended September 30, 2026, from 37.9% in the comparable 2025 period, reflects 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.
Operating Expenses
| Nine months ended | ||||||||||||||||
| September 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Cost of revenue | $ | 1,201,385 | $ | 1,564,255 | (362,870 | ) | (23% | ) | ||||||||
| Amortization and depreciation | 370,354 | 241,700 | 128,654 | 53% | ||||||||||||
| General and administrative | 907,140 | 743,101 | 164,039 | 22% | ||||||||||||
| Advertising and marketing | 642,788 | 489,673 | 153,115 | 31% | ||||||||||||
| Payroll and management compensation | 5,938,321 | 5,445,210 | 493,111 | 9% | ||||||||||||
| Professional fees | 2,033,263 | 4,046,078 | (2,012,815 | ) | (50% | ) | ||||||||||
| Research and development expense | 424,511 | 129,008 | 295,503 | 229% | ||||||||||||
| Total operating expenses | $ | 11,517,762 | $ | 12,659,025 | (1,141,263 | ) | (9% | ) | ||||||||
The decrease in operating expenses was primarily attributed to decreases in cost of revenue and professional fees offset by an increase in payroll and research and development expense.
Cost of revenue
| Nine months ended | ||||||||||||||||
| September 30, | ||||||||||||||||
| 2026 | 2025 | Change | % | |||||||||||||
| Cost of inventory | $ | 1,017,584 | $ | 1,315,378 | (297,794 | ) | (23% | ) | ||||||||
| Freight and shipping | 14,466 | 21,724 | (7,258 | ) | (33% | ) | ||||||||||
| Consulting and advisory-related party | – | 4,000 | (4,000 | ) | (100% | ) | ||||||||||
| Royalty and sales commission-related party | – | 56,290 | (56,290 | ) | (100% | ) | ||||||||||
| Rent expense | 169,335 | 166,863 | 2,472 | 1% | ||||||||||||
| Total cost of revenue | $ | 1,201,385 | $ | 1,564,255 | (362,870 | ) | (23% | ) | ||||||||
During the nine months ended September 30, 2026, the cost of revenue decreased over the nine months ended September 30, 2025, primarily due to a decrease in cost of inventory and royalty and sales commission payments.
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 nine months ended September 30, 2026, compared to the comparable 2025 period, primarily due to lower product sales volume and a decrease in outsource labor cost.
Freight and shipping relate to costs for shipping products to customers.
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Consulting and advisory services are to a related party company for services related to product installations.
We did not have royalty and sales commissions to a related party in the nine months ended September 30, 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.
Rent expenses are warehouse and facility rent expenses. The increase in rent expense is primarily attributable to our relocation to a larger commercial facility for operations, warehousing, and customer-facing activities beginning in April 2025, along with the cancellation of a prior warehouse lease in May 2025.
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 nine months ended September 30, 2026, we incurred increased expenditures on public listing fee, our website and IT development and travel as well as general office and insurance expenses from expansion of operations.
Advertising and marketing
The increase in advertising and marketing during the nine months ended September 30, 2026, over the nine months ended September 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. 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.
Professional fees
The professional fees during the nine months ended September 30, 2026, primarily included stock-based compensation of $526,000 to advisors and consultants, 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 nine months ended September 30, 2025, primarily included stock-based compensation of $2.7 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.
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 industry experience, who provided guidance and insight to our management and Board of Directors with respect to the fire retardant and fire inhibitor industry, business development connections, and oversight during the testing and recognition processes.
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Payroll and management compensation
During the nine months ended September 30, 2026, payroll and management compensation increased to $5.9 million from $5.4 million in the prior period. This increase was primarily attributable to higher payroll, reflecting a full period of compensation for the executive management team built out during 2025 and higher employee payroll. Management Compensation during 2026, primarily included stock-based management compensation of $3.8 million, and payroll to management of $1.1 million and employees of approximately $0.9 million. Compensation during 2025, primarily included stock-based management compensation of $4.1 million and payroll to management of $0.8 million and employees of $0.5 million.
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 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 nine months ended September 30, 2026 and 2025, the other expenses consisted of interest expense primarily related to convertible notes payable issued in 2025 of $975,000 and convertible notes payable issued in 2025 and 2024 of $2.6 million, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $0 and $2.0 million, respectively, financing expense of $0.4 million and $8.7 million, respectively, and loss on settlement of debt of $847,000 and $6.8 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 2024 and 2025. Financing expense is from 666,668 warrants granted to a financial advisor and 69,007 shares of Series C Convertible Preferred stock issued to BRH in 2025.
Net loss
The net loss for the nine months ended September 30, 2026 was approximately $12.4 million, a decrease of approximately $18.3 million as compared to the nine months ended September 30, 2025, primarily due to a significant reduction in other expenses and operating expenses, partially offset by lower revenue.
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was $12.4 million and $30.7 million for the nine months ended September 30, 2026 and 2025, respectively. In October 2026, we completed an equity offering which generated net proceeds of approximately $5.2 million. During fiscal year 2025, we completed a debt offering in February and an equity offering in September and October which generated net proceeds of approximately $3.7 million and $8.1 million, respectively.
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Working capital
| September 30, | December 31, | |||||||||||
| 2026 | 2025 | Change | ||||||||||
| Current assets | $ | 2,342,767 | $ | 7,415,426 | $ | (5,072,659 | ) | |||||
| Current liabilities | $ | 782,922 | $ | 2,169,626 | $ | (1,386,704 | ) | |||||
| Working capital | $ | 1,559,845 | $ | 5,245,800 | $ | (3,685,955 | ) | |||||
As of September 30, 2026 and December 31, 2025, the current assets consisted of cash of $1.1 million and $6.3 million, respectively, inventory of $542,000 and $621,000, respectively, accounts receivable of $264,000 and $209,000, respectively, and prepaid expenses of $314,000 and $317,000, respectively, and deferred offering costs of $134,000 and $0, respectively.
As of September 30, 2026 and December 31, 2025, the current liabilities consisted of accounts payable and accrued liabilities of $590,000 and $316,000, respectively, deferred revenue of $12,000 and $3,000, respectively, due to related parties of $3,000 and $168,000, respectively, convertible notes net of discount of $0 and $219,000, respectively, convertible note – related party of $0 and $1.3 million, respectively, current portion of financing loan of $17,000 and $30,000 respectively, and current portion of operating lease liability of $162,000 and $148,000, respectively.
The decrease in working capital in 2026 was primarily due to a decrease in cash of $5.2 million for operating activities, offset by a decrease in convertible debt due to conversions into common stock.
Cash Flows
For the nine months ended September 30, 2026 and 2025
| Nine months ended | ||||||||||||
| September 30, | ||||||||||||
| 2026 | 2025 | Change | ||||||||||
| Cash used in operating activities | $ | (5,243,393 | ) | $ | (3,386,432 | ) | $ | (1,856,961 | ) | |||
| Cash used in investing activities | $ | (9,027 | ) | $ | (221,670 | ) | $ | 212,643 | ||||
| Cash provided by financing activities | $ | 72,530 | $ | 9,028,943 | $ | (8,956,413 | ) | |||||
| Net Change in cash | $ | (5,179,890 | ) | $ | 5,420,841 | $ | (10,600,731 | ) | ||||
Operating Activities
We have not generated positive cash flows from operating activities.
For the nine months ended September 30, 2026, net cash flows used in operating activities consisted of a net loss of $12.4 million, reduced by stock-based compensation of $4.7 million, non-cash lease expenses of $117,000, amortization and depreciation of $370,000, amortization of debt discount of $892,000, loss on settlement of debt of $847,000, loss on disposal of equipment of $32,000, and reduced by bad debt recovery of $20,000, and net changes in operating assets and liabilities of $211,000.
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For the nine months ended September 30, 2025, net cash flows used in operating activities consisted of a net loss of $30.7 million, reduced by stock-based compensation of $15.4 million, non-cash lease expenses of $123,000, amortization and depreciation of $242,000, amortization of debt discount of $2.2 million, loss on settlement of debt of $6.8 million, write-off of deferred offering cost of $197,000 and changes in derivative liability of $2.0 million, and reduced by net changes in operating assets and liabilities of $328,000.
Investing Activities
For the nine months ended September 30, 2026 and 2025, the net cash flows used in investing activities consisted of the purchase of equipment of $22,000 and $222,000 and sales of equipment of $12,500 and $0, respectively.
Financing Activities
For the nine months ended September 30, 2026, net cash provided by financing activities consisted of $96,000 capital contribution from a related party and proceeds from the exercise of warrants of $25,000, $15,000 deferred offering cost payment and repayment of a financing loan of $33,000.
For the nine months ended September 30, 2025, net cash provided by financing activities consisted of $5.7 million from the issuance of Series C Convertible Preferred Stock, $3.7 million from the issuance of convertible promissory notes and associated warrants, $71,000 deferred offering cost payment, repayment of a financing loan of $216,000 and repayments to related party of $25,000.
Contractual Obligations
Financing loans
We had a financing loan for the purchase of a vehicle in September 2025. The loan repayment is $2,021 per month for 60 months, beginning October 2025, with an interest rate of 11.33%.
Lease Agreements
We have one lease classified as an operating lease for office and warehouse purposes. The following table outlines maturities of our lease liabilities as of September 30, 2026:
| Year ending December 31, | ||||
| 2026 (remaining three months) | $ | 49,327 | ||
| 2027 | 203,228 | |||
| 2028 | 211,357 | |||
| 2029 | 219,812 | |||
| 2030 | 55,486 | |||
| Thereafter | – | |||
| 739,210 | ||||
| Less: Imputed interest | (83,254 | ) | ||
| Operating lease liabilities | $ | 655,956 | ||
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Liquidity
We have incurred losses since inception and incurred a net loss of $12.4 million during the nine months ended September 30, 2026. As of September 30, 2026, we had cash of $1.1 million. On October 22, 2026, subsequent to the end of the quarter, we closed an underwritten public offering of 2,240,000 shares of common stock at a public offering price of $2.50 per share, which generated net proceeds of approximately $5.2 million after deducting underwriting discounts and commissions and offering expenses payable by us.
We believe that our existing cash resources will be sufficient to fund our planned operations through the majority of 2027, with a high dependency on actual product sales. To more rapidly grow our revenue and continue operations beyond such time frame, we will be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. We may also raise capital through public or private offerings of equity or debt securities or by entering into a credit facility. There can be no assurance that we will be successful in acquiring additional funding, that our projections of our future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. In consultation with its legal counsel as appropriate, our management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluate the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is likely, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which require management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
For a discussion of our critical accounting estimates, refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 30, 2026 (the “Annual Report”). There have been no material changes to our critical accounting estimates as described in that Annual Report.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are not required to provide the information specified under this item.
Item 4. Controls and Procedures.
Management’s Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of September 30, 2026 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the three months ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Management will continue to monitor and evaluate the effectiveness of our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional improvements as necessary.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition, and results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. 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. For a discussion of risks that could affect our business, see the “Risk Factors” section of the Annual Report and the “Risk Factors” section of our prospectus dated October 21, 2026, filed with the SEC pursuant to Rule 424(b)(4). 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three months ended September 30, 2026, the Company issued 205,206 unregistered shares of Common Stock and 25,000 common stock warrants as follows:
| · | 3,000 shares of Common Stock issued to a consultant for services, valued at $16,800; | |
| · | 37,500 shares of Common Stock issued upon vesting of restricted stock; | |
| · | 164,706 shares of Common Stock issued upon the cashless exercise of 166,667 warrants; and | |
| · | 25,000 warrants issued to a consultant for services, valued at $65,677. |
The offer and sale of the above securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuances did not involve a public offering.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
(a) None.
(b) None.
(c) During the quarter ended
September 30, 2026, no director or officer of the Company
| 45 |
Item 6. Exhibits.
| Incorporated by Reference | ||||||||
|
Exhibit Number |
Exhibit Description | Form | Exhibit | Filing Date/ Period End Date | ||||
| 3.1 | Articles of Domestication/Articles of Incorporation | 10-K | 3.1 | 04/15/2024 | ||||
| 3.2 | Amendment to Articles of Incorporation | 10-K | 3.2 | 03/31/2025 | ||||
| 3.3 | Amendment to Articles of Incorporation | 8-K | 3.1 | 09/10/2025 | ||||
| 3.4 | Amended and Restated Bylaws | 10-Q | 3.4 | 11/12/2025 | ||||
| 3.5 | Second Amended and Restated Designations and Preferences of Series A Preferred Stock | 10-K | 3.4 | 03/31/2025 | ||||
| 3.6 | Amended and Restated Designations and Preferences of Series C Convertible Preferred Stock | 10-K | 3.5 | 03/31/2025 | ||||
| 3.7 | Articles of Amendment to the Articles of Incorporation | 8-K | 3.1 | 01/28/2026 | ||||
| 3.8 | Certificate of Name Change | 8-K | 3.2 | 01/28/2026 | ||||
| 10.1 | Amendment No. 1 to Stock Exchange and Stockholders Agreement, dated September 14, 2026, by and between CitroTech Inc. and BoltRock Holdings, LLC | 8-K | 10.1 | 09/14/2026 | ||||
| 10.2 | Amendment No. 1 to Stock Exchange and Stockholders Agreement, dated September 14, 2026, by and between CitroTech Inc. and TC Special Investments LLC | 8-K | 10.2 | 09/14/2026 | ||||
| 31.1* | Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 31.2* | Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.1** | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.2** | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. | |||||||
________
* Filed herewith.
**Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CitroTech Inc. | |||
| Dated: November 10, 2026 | By: | /s/ Nanuk Warman | |
| Nanuk Warman | |||
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
|||
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