[10-Q] General Enterprise Ventures, Inc. Quarterly Earnings Report
General Enterprise Ventures (GEVI)$288,212 for the quarter (vs. $107,042 a year ago) and reached $1,945,232 for the first nine months (vs. $738,729). Operating expenses were $4,525,910 in Q3, driving a loss from operations of $4,237,698. The company reported a Q3 net loss of $7,929,208 and a nine‑month net loss of $30,736,631.
Cash increased to $6,195,974 as of September 30, 2025 (from $775,133 at year‑end), supported by equity financings, including September 2025 proceeds of about $5.4 million and an additional October 2025 raise of about $2.7 million. The company withdrew a registration statement on August 19, 2025 and reclassified $1,604,000 of derivative liability to equity. A 1‑for‑6 reverse stock split became effective on August 27, 2025. Common shares outstanding were 17,552,912 as of November 12, 2025.
- None.
- None.
Insights
Revenue grew, losses widened; cash bolstered by equity raises.
GEVI showed higher year-to-date revenue while reporting substantial operating and net losses. The cash balance of
Capital structure shifted during Q3: the company withdrew a registration statement on
Management states existing cash resources are expected to fund operations through
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
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 | |
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| 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) | (IRS Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
___________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of November 12, 2025,
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION |
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Item 1. | Financial Statements |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. | Controls and Procedures |
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PART II - OTHER INFORMATION |
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Item 1. | Legal Proceedings |
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Item 1A. | Risk Factors |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. | Defaults Upon Senior Securities |
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Item 4. | Mine Safety Disclosures |
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Item 5. | Other Information |
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Item 6. | Exhibits |
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SIGNATURES |
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
GENERAL ENTERPRISE VENTURES, INC.
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
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Consolidated Balance Sheets (unaudited) |
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Consolidated statements of Operations and Comprehensive Loss (unaudited) |
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Consolidated Statements of Changes in Stockholders’ Equity (unaudited) |
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Consolidated Statements of Cash Flows (unaudited) |
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Consolidated Notes to Financial Statements (unaudited) |
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General Enterprise Ventures, Inc.
Consolidated Balance Sheets
(Unaudited)
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Assets |
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Current Assets |
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Cash |
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Inventory |
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Prepaid expenses and other current assets |
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Deferred offering costs |
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Total Current Assets |
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Non-Current Assets |
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Intangible assets, net |
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Equipment, net |
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Security deposit |
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Total Non-Current Assets |
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Total Assets |
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Liabilities and Stockholders' Equity |
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Current liabilities |
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Accounts payable and accrued liabilities |
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Deferred revenue |
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Convertibles notes, net of discount |
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Convertibles notes, net of discount - related parties |
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Due to related parties |
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Financing loan - current portion |
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Derivative liability |
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Operating lease liability - current portion |
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Total Current Liabilities |
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Non-current liabilities |
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Financing loan |
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Operating lease liability |
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Total Liabilities |
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Stockholders' Equity |
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Preferred Stock, par value $ |
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Series A Preferred Stock, par value $ |
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Series C Convertible Preferred Stock, par value $ |
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Common Stock, par value $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity |
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See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.
| 4 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
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Revenue |
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Operating expenses |
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Cost of revenue, exclusive of amortization and depreciation shown separately below |
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Cost of revenue - related parties |
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Amortization and depreciation |
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General and administration |
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Advertising and marketing |
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Payroll and management compensation |
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Professional fees |
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Professional fees - related parties |
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Total operating expenses |
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Loss from operations |
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Other income (expense) |
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Interest expense |
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Interest expense - related party |
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Interest income |
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Financing expense |
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Gain (loss) on fair value of derivative liability |
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Loss on settlement of debt |
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Total other expense |
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Loss before taxes |
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Provision for income taxes |
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Net loss |
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Comprehensive loss |
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Net loss per common share - basic and diluted |
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Basic and diluted weighted average number of common shares outstanding |
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See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.
| 5 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Change in Stockholders’ Equity
(Unaudited)
For the three and nine months ended September 30, 2025
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| Additional |
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Balance - December 31, 2024 |
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Series C Preferred Stock issued for cash |
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Series C Preferred Stock issued for services |
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Series C Preferred Stock issued for compensation |
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Common stock issued for conversion of Series C Preferred Stock |
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Common stock warrants issued |
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Net loss |
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Balance - March 31, 2025 |
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Series C Preferred Stock issued for services |
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Series C Preferred Stock for compensation |
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Common stock issued for conversion of Series C Preferred Stock |
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Common stock issued for services |
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Common stock issued for conversion of debts |
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Management stock compensation |
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Net loss |
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Balance - June 30, 2025 |
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Series C Preferred Stock issued for cash |
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Series C Preferred Stock issued for services |
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Series C Preferred Stock issued for compensation |
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Common stock issued for conversion of debt |
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Common stock issued for conversion of Series C Preferred Stock |
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Common stock issued for services |
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Management stock compensation |
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Reclassification of derivative liability to equity |
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Reverse stock split adjustment |
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Net loss |
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Balance - September 30, 2025 |
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| $ |
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| $ | ( | ) |
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See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.
| 6 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Change in Stockholders’ Equity
(Unaudited)
For the three and nine months ended September 30, 2024
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| Series A |
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| Series C Convertible |
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| Preferred Stock |
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| Common Stock |
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| Additional |
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| Total |
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| Preferred stock |
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| Preferred stock |
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| Common Stock |
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| to be |
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| to be |
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| Paid-In |
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| Accumulated |
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| Stockholders' |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| issued |
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| issued |
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| Capital |
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| Deficit |
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| Equity |
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Balance - December 31, 2023 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
| ||||||||||
Series C Preferred Stock issued for preferred stock to be issued |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Series C Preferred Stock issued for cash |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Series C Preferred Stock issued for services |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Common stock issued for stock to be issued - management |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||||
Common stock issued for conversion and settlement of debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Cancellation of common stock -related party |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Common stock issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance - March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
| $ |
| ||||||||||
Series C Preferred Stock issued for preferred stock to be issued |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Common stock to be issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance - June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||||||
Warrants issued in conjunction with convertible debts |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common Stock issued for common stock to be issued |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||||
Cancellation of stock to be issued for non performance of services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance - September 30, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||||||
See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.
| 7 |
| Table of Contents |
General Enterprise Ventures, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
|
| Nine months ended |
| |||||
|
| September 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Cash Flows from Operating Activities: |
|
|
|
|
|
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
|
|
|
| ||
Financing expense |
|
|
|
|
|
| ||
Non-cash lease expenses |
|
|
|
|
|
| ||
Depreciation and amortization |
|
|
|
|
|
| ||
Amortization of debt discount |
|
|
|
|
|
| ||
Loss on settlement of debt |
|
|
|
|
|
| ||
Loss on fair value of derivative |
|
|
|
|
|
| ||
Write off of deferred offering costs |
|
|
|
|
|
| ||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| ( | ) |
|
| ( | ) |
Inventory |
|
| ( | ) |
|
| ( | ) |
Prepaid expenses and other current assets |
|
| ( | ) |
|
| ( | ) |
Security deposit |
|
| ( | ) |
|
|
| |
Accounts payable and accrued liabilities |
|
|
|
|
|
| ||
Related party advances funding operating expense |
|
|
|
|
|
| ||
Accrued interest - related parties |
|
|
|
|
|
| ||
Deferred revenue |
|
|
|
|
|
| ||
Operating lease liabilities |
|
| ( | ) |
|
| ( | ) |
Net Cash used in Operating Activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchase of equipment |
|
| ( | ) |
|
|
| |
Net Cash used in Investing Activities |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from convertible notes |
|
|
|
|
|
| ||
Proceeds from convertible note - related party |
|
|
|
|
|
| ||
Payment of deferred offering costs |
|
| ( | ) |
|
| ( | ) |
Repayment of loan - related party |
|
| ( | ) |
|
| ( | ) |
Proceeds from issuance of Series C Preferred Stock |
|
|
|
|
|
| ||
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: |
|
|
|
|
|
|
|
|
Common stock issued for services |
| $ |
|
| $ |
| ||
Series C Preferred stock issued for services |
| $ |
|
| $ |
| ||
Common stock issued upon conversion of Series C Preferred stock |
| $ |
|
| $ |
| ||
Common stock issued for conversion and settlement of debt |
| $ |
|
| $ |
| ||
Common stock issued for stock to be issued - management |
| $ |
|
| $ |
| ||
Series C Preferred stock issued for subscription received |
| $ |
|
| $ |
| ||
Cancellation of common stock - related party |
| $ |
|
| $ |
| ||
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 |
| $ |
|
| $ |
| ||
See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.
| 8 |
| Table of Contents |
General Enterprise Ventures, Inc.
Notes to Unaudited Consolidated Financial Statements
September 30, 2025
Note 1 – Organization, Business and Liquidity
General Enterprise Ventures, Inc., was originally incorporated under the laws of the State of Nevada on March 14, 1990. On June 3, 2021, after approval by the board of directors and shareholders of the Company, the Company was redomiciled to the State of Wyoming. On October 11, 2021, after approval by the board of directors and shareholders of the Company, the Company was renamed General Enterprise Ventures, Inc., in the State of Wyoming.
When used in these notes, the terms “General Enterprise Ventures, Inc.,” “Company,” “we,” “us” and “our” mean General Enterprise Ventures, Inc. and all entities included in our unaudited interim consolidated financial statements.
Corporate Changes
Effective June 25, 2024, the Company formed and organized a wholly owned subsidiary, GEVI Insurance Holdings Inc., an Ohio corporation (“GEVI Insurance”), to enter the wildfire insurance markets utilizing the Company’s flame retardant and flame suppression product. Effective February 21, 2025, the Company formed MFB Insurance Company, Inc., a Hawaii corporation (“MFBI”) and organized it as a wholly owned subsidiary of GEVI Insurance to act as a captive insurance company to enter the wildfire insurance market. MFBI was formed to act as a captive insurance company to reinsure real property protected with the Company’s CitroTech product. MFBI is not currently able to reinsure real property.
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.
Reverse stock split
On April 15, 2025, our Board of Directors and our stockholders that have a majority of our voting power approved an amendment to our articles of incorporation (as amended, the “Articles of Incorporation”) to effect the reverse stock split (which includes the outstanding Series A Preferred Stock and Common Stock of the Company at a 1-for-6 ratio). The reverse stock split was effective on August 27, 2025.
All share and per share information in these financial statements retroactively reflect this reverse stock split.
| 9 |
| Table of Contents |
Liquidity
The Company has incurred losses since inception and incurred a net loss of $
The Company’s existing cash resources are expected to provide sufficient funds to carry out the Company’s planned operations through fiscal year 2026. To continue operations beyond such time frame, the Company may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
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 General Enterprise Ventures, Inc. for the year ended December 31, 2024.
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, 2025, and its results of operations for the three months and nine months ended September 30, 2025, and 2024, and cash flows for the nine months ended September 30, 2025, and 2024. The balance sheet at December 31, 2024, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
The accompanying unaudited interim consolidated financial statements should be read in conjunction with the unaudited interim consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2024, as filed with the SEC on March 31, 2025.
Principles of Consolidation
The consolidated financial statements include the accounts of General Enterprise Ventures, 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.
| 10 |
| Table of Contents |
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Segment Information
Our Chief Executive Officer (“CEO”) is the chief operating decision maker who reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we operate in a single reporting segment focused on sustainable long-term flame-retardants and wood treatment technologies.
Our CEO assesses performance and decides how to allocate resources primarily based on consolidated net income, which is reported on our Consolidated Statements of Operations. Total assets on the Consolidated Balance Sheets represent our segment assets.
Cash and Cash Equivalents
For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company did not have any cash equivalents as of September 30, 2025 and December 31, 2024. The Company had cash of $
Periodically, the Company may carry cash balances at financial institutions more than the 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 doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make the required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable that the receivable will not be recovered.
During the three and nine months ended September 30, 2025 and 2024, the Company recorded no bad debt expense, and no allowance for credit losses as of September 30, 2025 and December 31, 2024.
| 11 |
| Table of Contents |
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.
Recurring Fair Value Measurements
The following table summarizes the liabilities measured at fair value on a recurring basis:
There were no liabilities measured at fair value on a recurring basis as of September 30, 2025.
December 31, 2024 |
| Level 3 |
| |
Liabilities |
|
|
| |
Derivative Liability – conversion feature |
| $ |
| |
Nonrecurring Fair Value Measurements
The valuation of warrants and market based compensation awards, were derived using Level 2 inputs.
Other Fair Value Disclosures
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, 2025 and December 31, 2024, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.
Convertible Notes
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
| 12 |
| Table of Contents |
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For our derivative financial instruments, the Company used a Binomial Lattice model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.
Warrants
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities.
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, 2025, our revenues currently consist of a sale of product used for lumber products for fire prevention and on installation of self-contained sprinkler systems. Revenue is recognized at a point in time, that is which the risks and rewards of ownership of the product transfer from the Company to the customer.
Deferred revenue
Deferred revenue consists of advanced payments for our service that have not been rendered. Revenue is recognized when service is rendered. As of September 30, 2025 and December 31, 2024, total deferred revenue was $
| 13 |
| Table of Contents |
Cost of Revenue
For the three and nine months ended September 30, 2025 and 2024, cost of revenue consisted of:
|
| Three Months Ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
| ||||
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
Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued.
For the nine months ended September 30, 2025 and 2024, 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.
|
| September 30, |
|
| September 30, |
| ||
|
| 2025 |
|
| 2024 |
| ||
|
| Shares |
|
| Shares |
| ||
Convertible notes |
|
|
|
|
|
| ||
Common Stock warrants |
|
|
|
|
|
| ||
Series C Convertible Preferred Stock |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
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. On August 19, 2025, the Company withdrew the registration statement, as a result, the Company expensed deferred offering costs within professional and general and administrative expenses.
As of September 30, 2025 and December 31, 2024, deferred offering costs consisted of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
Professional fees |
| $ |
|
| $ |
| ||
General and administrative expenses |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| 14 |
| Table of Contents |
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, 2025 and 2024, stock-based compensation was recognized as follows:
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| Three Months Ended |
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| Nine months ended |
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| September 30, |
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| September 30, |
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| 2025 |
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| 2024 |
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| 2025 |
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| 2024 |
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Management compensation |
| $ |
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| $ |
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| $ |
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| $ |
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Professional fees (*) |
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Professional fees - related party |
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Advertising and marketing |
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Financing expense |
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| $ |
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| $ | ( | ) |
| $ |
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| $ |
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(*) for the three months ended September 30, 2024, the Company recognized negative expense due to a forfeiture for stock based professional fee.
Compensation cost for stock awards, which include common shares, Series C 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 Preferred stock as if converted to common stock. We measure the fair value of PSUs using a Monte Carlo valuation model and warrants using a Black Scholes valuation model. Compensation cost for PSUs are recognized using the derived service period and accelerated if the condition is satisfied at an earlier date.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures” (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
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.
| 15 |
| Table of Contents |
Note 3 – Inventory
As of September 30, 2025 and December 31, 2024, inventory consisted of the following:
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| September 30, |
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| December 31, |
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| 2025 |
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| 2024 |
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Finished goods |
| $ |
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| $ |
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Raw materials |
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| $ |
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| $ |
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The Company did not impair any inventories as unsalable for the three and nine months ended September 30, 2025 and 2024.
Note 4 – Equipment, net
As of September 30, 2025 and December 31, 2024, equipment consisted of the following:
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| September 30, |
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| December 31, |
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| 2025 |
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| 2024 |
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Cost: |
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Equipment |
| $ |
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| $ |
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Vehicles |
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Less: accumulated depreciation |
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Equipment, net |
| $ |
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| $ |
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During the nine months ended September 30, 2025, the Company purchased vehicles and equipment for $
For the three and nine months ended September 30, 2025 and 2024, depreciation consists of:
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| Three Months Ended |
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| Nine months ended |
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| September 30, |
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| September 30, |
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| 2025 |
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| 2024 |
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| 2025 |
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| 2023 |
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Depreciation |
| $ |
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| $ |
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| $ |
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| $ |
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Financing loan
The Company had a financing loan for the purchase of vehicle for the year ended December 31, 2024.
| 16 |
| Table of Contents |
The Company had a financing loan for the purchase of vehicle in January 2025.
The Company had a financing loan for the purchase of vehicle in September 2025.
The Company had a financing loan for the purchase of vehicle in September 2025.
Note 5 – Intangible Assets, net
In 2022, the Company acquired the intellectual property of MFB California, 19 patents centered around its MFB Technology for the prevention and spread of wildfires. MFB California currently holds 31 granted patents and 56 pending patent applications. The granted patents include MFB California’s main chemistry and applications. MFB California has 21 trademarks and various copyrights. Internally generated patents, trademarks and copyrights, are expensed as incurred.
As of September 30, 2025 and December 31, 2024, finite lived intangible assets consisted of the following:
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| September 30, |
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| December 31, |
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| 2025 |
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| 2024 |
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Acquired patents (19) |
| $ |
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| $ |
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Accumulated amortization |
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Intangible assets, net |
| $ |
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| $ |
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Estimated future amortization expense for finite lived intangibles are as follows:
December 31, |
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2025 remaining |
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2026 |
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2027 |
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2028 |
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2029 |
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Thereafter |
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As of September 30, 2025, the weighted-average useful life is
During the three and nine months ended September 30, 2025 and 2024, amortization expense is as follows:
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| Three Months Ended |
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| Nine months ended |
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| September 30, |
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| September 30, |
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| 2025 |
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| 2024 |
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| 2025 |
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| 2023 |
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Amortization |
| $ |
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| $ |
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| $ |
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| $ |
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| 17 |
| Table of Contents |
Note 6 – 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 of 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 is April 1, 2025, and the termination date is March 31, 2030. The Company records a security deposit of $
Short-term lease
The Company has some rental equipment with a month-to-month contract and leases mobile office space, used in our warehouse location, which is under a one year lease agreement and expires July 28, 2026.
For the three and nine months ended September 30, 2025 and 2024, right-of-use asset and lease information about the Company’s operating lease consist of:
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| Three Months Ended |
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| Nine months ended |
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| 2025 |
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| 2024 |
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| 2025 |
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| 2024 |
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The components of lease expense were as follows: |
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Operating lease cost |
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Short-term lease cost |
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Variable lease cost |
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Total lease cost |
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| $ |
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| $ |
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Supplemental cash flow information related to leases was as follows:
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| Nine months ended |
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| September 30, |
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| 2025 |
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| 2024 |
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Cash paid for operating cash flows from operating leases |
| $ |
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| $ |
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Right-of-use asset obtained in exchange for new operating lease liabilities |
| $ |
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| $ |
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Weighted-average remaining lease term - operating leases (year) |
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Weighted-average discount rate — operating leases |
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The following table outlines maturities of our lease liabilities as of September 30, 2025:
Year ending December 31, |
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2025 - remaining three months |
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2026 |
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2027 |
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2028 |
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2029 |
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Thereafter |
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Less: Imputed interest |
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| ( | ) |
Operating lease liabilities |
| $ |
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| 18 |
| Table of Contents |
Note 7 – Convertible Notes
The components of convertible notes as of September 30, 2025 and December 31, 2024, were as follows:
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| Interest |
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| Interest |
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| September 30, |
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Payment date |
| Amount |
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| date |
| Rate |
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| Rate |
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| 2025 |
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| 2024 |
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July 15, 2024 |
| $ |
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August 15, 2024 |
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November 15, 2024 |
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December 15, 2024 |
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February 7, 2025 |
| $ |
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February 15, 2025 |
| $ |
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Total Convertible notes |
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| $ |
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| $ |
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Less: Unamortized debt discount |
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Less: Current portion |
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| ( | ) |
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| ( | ) |
Long-term portion |
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| $ |
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| $ |
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On July 15, 2024 and August 15, 2024, the Company entered into seventeen (17) convertible notes ($
In February 2025, the Company entered into eleven (11) convertible notes ($
During the nine months ended September 30, 2025, the Company recognized the debt discount of $
In June 2025, seventeen (17) note holders converted convertible notes issued in July and August 2024 of $
| 19 |
| Table of Contents |
On August 19, 2025, the Company withdrew its registration statement and decided not to proceed with qualified offering. The Company determined that the bifurcated conversion feature was no longer a liability and is now categorized as equity. As a result, the Company reclassified its derivative liability of $
In July and September 2025, six (6)
During the nine months ended September 30, 2025 and 2024, the Company recognized interest expense of $
The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note.
Note 8 – Derivative Liability
Fair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Binomial Lattice model to calculate the fair value as of September 30, 2025 and December 31, 2024.
For the nine months ended September 30, 2025 and the year ended December 31, 2024, the estimated fair values of the liabilities measured on a recurring basis, used the following significant assumptions:
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| September 30, |
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| December 31 |
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| 2025 |
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| 2024 |
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Expected term |
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Risk-free interest rate |
| % |
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| % | |||
Stock price at valuation date |
| $ | |
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Expected average volatility |
| % |
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| % | |||
Expected dividend yield |
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| - |
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| - |
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| 20 |
| Table of Contents |
The following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2025:
Fair Value Measurements Using Significant Observable Inputs (Level 3) |
| |||
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Balance - December 31, 2024 |
| $ |
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Addition of new derivatives recognized as debt discounts |
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Settled on issuance of common stock |
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| ( | ) |
Reclassification to additional paid in capital |
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| ( | ) |
Loss on fair value of derivative liability |
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Balance - September 30, 2025 |
| $ |
| |
Note 9 – Accounts payable and accrued liabilities
As of September 30, 2025 and December 31, 2024, accounts payable and accrued liabilities consisted of the following:
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| September 30, |
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| December 31, |
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| 2025 |
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| 2024 |
| ||
Accounts payable |
| $ |
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| $ |
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Accrued interest |
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Credit card |
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Sales tax payable |
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Other liabilities |
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Payroll liability |
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| $ |
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| $ |
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Note 10 – Related Party Transactions
The related parties that had material transactions for the nine months ended September 30, 2025 and 2024, consist of the following:
Related Party | Nature of Relationship to the Company | |
A | An Ohio limited liability company - a significant shareholder | |
B | Owner of A and our former Chief Executive Officer of the Company from April 1, 2025 to October 1, 2025. Current Chairman of the Board of Directors. | |
C | Chief Executive Officer of the Company until March 31, 2025 and Vice President of Operations from April 1, 2025. | |
D | A California limited liability company owned by a related party E | |
E | Significant shareholder and our Chief Technology Officer | |
F | Director and Chief Executive Officer of GEVI Insurance Holdings Inc. | |
G | A Delaware limited liability company – Series A Preferred shareholder | |
H |
| A company controlled by our Chief Financial Officer |
| 21 |
| Table of Contents |
For the nine months ended September 30, 2025 and 2024, expenses to related parties and their nature consists of:
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| Nine Months Ended |
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| September 30, |
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Related Party |
| 2025 |
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| 2024 |
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| Nature of transaction |
| Financial Statement Line Item | |||
A |
| $ |
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| $ |
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| Professional fees - related party | ||||
A |
| $ |
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| $ |
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| Due to related party | ||||
A |
| $ |
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| $ |
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| Due to related party | ||||
D |
| $ |
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| $ |
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| Professional fees - related party | ||||
D |
| $ |
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| $ |
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| Cost of revenue - related party | ||||
E |
| $ |
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| $ |
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| Professional fees - related party | ||||
E |
| $ |
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| $ |
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| Cost of revenue - related party | ||||
F |
| $ |
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| $ |
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| Management compensation | ||||
F |
| $ |
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| $ |
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| Professional fees - related party | ||||
G |
| $ |
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| $ |
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| Financing expense | ||||
H |
| $ |
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| $ |
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| General and administrative | ||||
H |
| $ |
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| $ |
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| Professional fees - related party | ||||
For the three months ended September 30, 2025 and 2024, expenses to related parties and their nature consists of:
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| Three Months Ended |
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| September 30, |
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Related Party |
| 2025 |
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| 2024 |
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| Nature of transaction |
| Financial Statement Line Item | |||
D |
| $ |
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| $ |
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| Professional fees - related party | ||||
D |
| $ |
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| $ |
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| Cost of revenue - related party | ||||
E |
| $ |
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| $ |
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| Professional fees - related party | ||||
E |
| $ |
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| $ |
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| Cost of revenue - related party | ||||
H |
| $ |
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| $ |
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| General and administrative | ||||
H |
| $ |
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| $ |
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| Professional fees - related party | ||||
| 22 |
| Table of Contents |
Convertible notes – related parties
The components of convertible notes as of September 30, 2025 and December 31, 2024, were as follows:
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| Effective |
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| Stated |
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| Principal |
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| Maturity |
| Interest |
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| Interest |
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| September 30, |
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| December 31, |
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Payment date |
| Amount |
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| date |
| Rate |
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| Rate |
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| 2025 |
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| 2024 |
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December 1, 2024 |
| $ |
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| % |
| $ |
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| $ |
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February 2025 |
| $ |
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| % |
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| % |
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Total Convertible notes |
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| $ |
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| $ |
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Less: Unamortized debt discount |
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Less: Current portion |
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Long-term portion |
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| $ |
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| $ |
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On December 31, 2024, the Company issued a convertible note of $
In February 2025, the Company entered into one (1) subscription agreement for convertible notes ($
During the nine months ended September 30, 2025, the Company recognized the debt discount of $
During the three and nine months ended September 30, 2025, the Company recognized interest expenses of $
Note 11 – Stockholders’ Equity
Amended Articles of Incorporation
Effective on March 17, 2025,
| 23 |
| Table of Contents |
Preferred Shares
Shares Outstanding
The Company is authorized to issue up to
Series A Preferred Stock
The Company originally 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
Other Rights. Shares of Series A Preferred Stock are not entitled to a liquidation preference. The holders of the Series A Preferred Stock may not be redeemed without the consent of the holders of the Series A Preferred Stock. The holder of the Series A Preferred Stock are not entitled to pre-emptive rights or subscription rights.
As of September 30, 2025 and December 31, 2024, 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 as such time shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into
Other Rights. The holders of the Series C Convertible Preferred Stock are not entitled to a liquidation preference. The holders of the Series C Convertible Preferred Stock may not be redeemed without the consent of the holders of the Series C Convertible Preferred Stock. The holder of the Series C Convertible Preferred Stock are not entitled to pre-emptive rights or subscription rights.
In September 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale (the “PIPE Offering”) of (i)
| 24 |
| Table of Contents |
In addition, during the nine months ended September 30, 2025, the Company issued
| · | |
| · | |
| · |
During the nine months ended September 2025, the holders of the Series C Convertible Preferred Stock converted
As of September 30, 2025 and December 31, 2024, there were
Common Stock
The holders of shares of our Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders of Common Stock are entitled to equal dividends and distributions, with respect to the Common Stock when, as, and if declared by the Board of Directors from funds legally available for such dividends. No holder of Common Stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption. Upon our liquidation, dissolution, or winding up, and after payment of creditors and any amounts payable to senior securities, the assets will be divided pro rata on a share-for-share basis among the holders of the shares of Common Stock.
No holder of shares of Common Stock of the Company shall be entitled as of right to purchase or subscribe for any part of any unissued stock of the Company or of any new or additional authorized stock of the Company of any class whatsoever, or any issue of securities of the Company convertible into stock, whether such stock or securities be issued for money or consideration other than money or by way of dividend, but any such unissued stock or such new or additional authorized stock or such securities convertible into stock may be issued and disposed of to such persons, firms, corporations and associations, and upon such terms as may be deemed advisable by the Board of Directors without offering to stockholders then of record or any class of stockholders any thereof upon the same terms or upon any terms.
During the nine months ended September 30, 2025, the Company issued
| · | |
| · | |
| · | |
| · | |
| · |
As of September 30, 2025 and December 31, 2024, there were
| 25 |
| Table of Contents |
Restricted stock award
On June 27, 2025 (the “Effective Date”), the Company entered into the employment agreement with our Chief Operating Officer (“COO”), commencing on July 21, 2025. Under this agreement, the Company issued
The grant date fair value of shares is $
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
The grant date fair value of shares is $
Management stock compensation (PSU)
During 2025, the Company entered into employment and consulting agreements with our CEO, COO and Consultant. The stock compensation based on market capitalization condition is as follows:
Market capitalization for 30 consecutive days |
|
| Consulting agreement CEO resigned on October 1, 2025 (Shares) |
|
| Consulting agreement Director (Shares) |
|
| Employment agreement COO (Shares) |
| ||||
| $ |
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| |
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| - |
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| $ |
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| $ |
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| $ |
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| |||||
| $ |
|
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| - |
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| - |
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|
|
|
|
|
|
|
|
Fair value ($) |
|
| $ |
|
| $ |
|
| $ |
| ||||
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 $
| 26 |
| Table of Contents |
For the nine months ended September 30, 2025, the estimated fair values of the compensation measured used the following significant assumptions:
2025 |
| |||
Derived service period |
|
| ||
Risk-free interest rate |
| % | ||
Stock price at valuation date | $ |
| ||
Expected average volatility |
| % | ||
First Capitalization Thresholder per share price | $ |
| ||
Second Capitalization Thresholder per share price | $ |
| ||
Third Capitalization Thresholder per share price | $ |
| ||
Fourth Capitalization Thresholder per share price | $ | |
| |
Warrants
The Company issued a total of
The Company issued a total of
The Company issued
The Company issued a total of
The Company and Univest Securities, LLC have agreed that the Univest Warrants to purchase up to
The Company issued a total of
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 were deemed to be equity instruments and were 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.
| 27 |
| Table of Contents |
The Company utilized the following assumptions:
|
| September 30, |
| |
|
| 2025 |
| |
Expected term |
|
| ||
Expected average volatility |
| % | ||
Risk-free interest rate |
| % | ||
Expected dividend yield |
|
|
| |
A summary of activity of the warrants during the nine months ended September 30, 2025 as follows:
|
| Warrants Outstanding |
|
| Weighted Average |
| ||||||
|
|
|
|
| Weighted |
|
| Remaining |
| |||
|
| Shares |
|
| Average Exercise Price |
|
| Contractual life (in years) |
| |||
|
|
|
|
|
|
|
|
|
| |||
Outstanding, December 31, 2024 |
|
|
|
| $ |
|
|
|
| |||
Granted |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| - |
|
|
|
|
|
| - |
| |
Canceled |
|
| ( | ) |
|
|
|
|
|
| ||
Outstanding, September 30, 2025 |
|
|
|
| $ |
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, September 30, 2025 |
|
|
|
| $ |
|
|
|
| |||
The intrinsic value of the warrants as of September 30, 2025 is $
Note 12 – Disaggregated revenue and Concentration
During the three and nine months ended September 30, 2025 and 2024, disaggregated revenue was as follows:
|
| Three Months Ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
| ||||
Products sale |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Product installation service |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
During the three and nine months ended September 30, 2025 and 2024, customer and supplier concentration (more than 10%) were as follows:
Revenue and accounts receivable
Recurring customers do not represent a material percentage of our revenue and accounts receivable for the three and nine months ended September 30, 2025 and 2024.
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
| ||||
Number of customers (more than 10% revenue) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total revenue of top 5 customers |
|
| % |
|
| % |
|
| % |
|
| % | ||||
|
| September 30, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
Number of customers (more than 10% of accounts receivable) |
|
|
|
|
|
| ||
Total % of accounts receivable balance (more than 10%) |
|
| % |
|
| % | ||
| 28 |
| Table of Contents |
Purchases 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 |
| ||||||||||||
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
|
| 2025 |
|
| 2024 |
| ||||||
Supplier A |
|
|
|
|
| % |
|
| % |
|
| % |
|
|
|
|
|
| ||||||
Supplier B |
|
| % |
|
| % |
|
| % |
|
| % |
|
| % |
|
| % | ||||||
Supplier C |
|
|
|
|
| % |
|
|
|
|
| % |
|
|
|
|
|
| ||||||
Supplier D |
|
| % |
|
| % |
|
| % |
|
| % |
|
| % |
|
|
| ||||||
Supplier E |
|
|
|
|
|
|
|
| % |
|
|
|
|
|
|
|
|
| ||||||
Supplier F |
|
|
|
|
| % |
|
| % |
|
| % |
|
|
|
|
| % | ||||||
Supplier G |
|
| % |
|
|
|
|
| % |
|
|
|
|
|
|
|
|
| ||||||
Supplier H |
|
| % |
|
|
|
|
| % |
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Note 13 – Subsequent Events
Management has evaluated subsequent events through November 12, 2025, which is the date these interim unaudited consolidated financial statements were available to be issued.
On October 15, 2025, by written consent of the majority voting stockholders in lieu of a special meeting, the Company amended and restated its bylaws and in connection therewith appointed two additional directors.
On October 21, 2025, the Company issued under a follow on to the PIPE offering: (i)
| 29 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
This 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 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 and all references to “common shares” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean General Enterprise Ventures, Inc.
General Overview
General Enterprise Ventures, Inc., was originally incorporated under the laws of the State of Nevada on March 14, 1990. When used in these notes, the terms “GEVI,” “Company,” “we,” “us” and “our” mean General Enterprise Ventures, Inc. and all entities included in our unaudited consolidated financial statements.
In January 2021, Board of Directors of the Company approved redomiciling the Company in Delaware. On March 31, 2021, the Company formed General Entertainment Ventures, Inc. in Delaware as a wholly owned subsidiary of the Company (“GEVI”). The purpose of the formation of GEVI was to merge the Company into GEVI pursuant to Section 251(g) of the General Corporation Law of the State of Delaware. On April 10, 2021, after approval by the board of directors and shareholders of the Company, the Company was merged into GEVI pursuant to an Agreement and Plan of Merger dated as of the same date. GEVI is the accounting and legal acquiror of the Company.
On June 3, 2021, after approval by the board of directors and shareholders of the Company, the Company was redomiciled to the State of Wyoming. On October 11, 2021, after approval by the board of directors and shareholders of the Company, the Company was renamed General Enterprise Ventures, Inc., in the State of Wyoming.
| 30 |
| Table of Contents |
Corporate Changes
Effective June 25, 2024, the Company formed and organized a wholly owned subsidiary, GEVI Insurance Holdings Inc., an Ohio corporation (“GEVI Insurance”), to enter the wildfire insurance markets utilizing the Company’s flame retardant and flame suppression product. Effective February 21, 2025, the Company formed MFB Insurance Company, Inc., a Hawaii corporation (“MFBI”) and organized it as a wholly owned subsidiary of GEVI Insurance to act as a captive insurance company to enter the wildfire insurance market. MFBI was formed to act as a captive insurance company to reinsure real property protected with the Company’s CitroTech product. MFBI is not currently able to reinsure real property.
On July 8, 2025, the Company filed Articles of Amendment of the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of the State of Wyoming for a 1-for-6 reverse stock split (the “Reverse Stock Split”) of the issued and outstanding shares of the Company’s Series A Preferred Stock (the “Series A Preferred”) and the Company’s Common Stock (the “Common Stock” ). The Board of Directors of the Company believes that the Reverse Stock Split is an effective means by which to increase the minimum bid price of the Company’s Common Stock proportionately by reducing the number of outstanding shares of Common Stock and put the Company in a position to uplist to the New York Stock Exchange American. In connection with filing the Amendment, the Company filed an Issuer Company-Related Action Notification with the Financial Industry Regulatory Authority (“FINRA”). FINRA approved the Reverse Stock Split on August 27, 2025, to be effective on August 28, 2025 (the “Effective Date”).
On the Effective Date, each six (6) shares of the Company’s Series A Preferred and each six (6) shares of the Company’s Common Stock issued immediately prior to the Effective Date was reclassified and combined into one (1) share of Series A Preferred and one (1) share of Common Stock, respectively. No fractional shares were issued and, in lieu thereof, any holder of less than one (1) share of Series a Preferred or one (1) share of Common Stock was entitled to receive one whole share of the Series A Preferred or the Common Stock of the Company, respectively. The Reverse Stock Split will affect all shares of the Company’s Series A Preferred and Common Stock outstanding immediately prior to the Effective Date of the Reverse Stock Split. In addition, the Reverse Stock Split caused a reduction in the number of shares of Common Stock issuable upon the conversion of the Company’s Series C Convertible Preferred Stock outstanding immediately prior to the effectiveness of the Reverse Stock Split.
Results of Operations
The following summary of our results of operations should be read in conjunction with our unaudited interim financial statements for the three and nine months ended September 30, 2025 and 2024, which are included herein.
The Company is in the early stages of developing and commercializing its product lines. Historically, the Company has focused on securing patents and obtaining various accreditations. To date, the Company’s commercialization efforts have relied on a limited number of customers primarily for testing and initial adoption of its CitroTech products and delivery systems. The Company currently does not have an established retail product line or a significant recurring customer base. As a result, period-over-period comparisons of operating results may not be indicative of future performance.
The following summary of our results of operations should be read in conjunction with our audited financial statements for the three and nine months ended September 30, 2025 and 2024, which are included herein.
Our results of operations for the three months ended September 30, 2025 and 2024 are summarized below:
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
|
|
|
|
|
| |||||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Revenue |
| $ | 288,212 |
|
| $ | 107,042 |
|
| $ | 181,170 |
|
|
| 169 | % |
Operating expenses |
|
| 4,525,910 |
|
|
| 668,405 |
|
|
| 3,857,505 |
|
|
| 577 | % |
Other expense |
|
| 3,691,510 |
|
|
| 93,875 |
|
|
| 3,597,635 |
|
|
| 3,832 | % |
Net loss |
| $ | (7,929,208 | ) |
| $ | (655,238 | ) |
| $ | (7,273,970 | ) |
|
| 1,110 | % |
| 31 |
| Table of Contents |
Revenue
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. During the three months ended September 30, 2025, the revenue increased $181,170 from the three months ended September 30, 2024, largely due to the adoption of our technology by the marketplace, including the sale of homebased wildfire defense systems, commercial and fire department chemical sales, and directly spraying residential properties due to the wildfire concerns.
Our revenues consisted of the following:
|
| Three Months Ended |
| |||||
|
| September 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Products sale |
| $ | 91,598 |
|
| $ | 68,542 |
|
Product installation service |
|
| 196,614 |
|
|
| 38,500 |
|
|
| $ | 288,212 |
|
| $ | 107,042 |
|
Product installation services commenced in the second quarter of 2024.
Our revenues from significant customers for the three months ended September 30, 2025 and 2024, are as follows:
|
| Three months ended |
| |||||
|
| September 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Number of customers (more than 10% revenue) |
|
| 6 |
|
|
| 4 |
|
Total revenue of top 5 customers |
|
| 79.6 | % |
|
| 82.1 | % |
We do not have major sales from recurring customers for the three months ended September 30, 2025 and 2024.
Operating Expenses
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
|
|
|
|
|
| |||||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Cost of revenue |
| $ | 575,603 |
|
| $ | 165,437 |
|
| $ | 410,166 |
|
|
| 248 | % |
Amortization and depreciation |
|
| 90,054 |
|
|
| 63,647 |
|
|
| 26,407 |
|
|
| 41 | % |
General and administration |
|
| 349,403 |
|
|
| 130,008 |
|
|
| 219,395 |
|
|
| 169 | % |
Advertising and marketing |
|
| 232,569 |
|
|
| 142,797 |
|
|
| 89,772 |
|
|
| 63 | % |
Payroll and management compensation |
|
| 2,437,089 |
|
|
| 25,000 |
|
|
| 2,412,089 |
|
| 9648 | % | |
Professional fees |
|
| 841,192 |
|
|
| 141,516 |
|
|
| 699,676 |
|
|
| 494 | % |
Total operating expenses |
| $ | 4,525,910 |
|
| $ | 668,405 |
|
| $ | 3,857,505 |
|
|
| 577 | % |
The increase in operating expenses was primarily attributed to increases in cost of revenue, professional fees and payroll and management compensation.
| 32 |
| Table of Contents |
Cost of revenue
|
| Three Months Ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
|
|
|
|
|
| |||||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Cost of inventory |
| $ | 494,144 |
|
| $ | 98,637 |
|
| $ | 395,507 |
|
|
| 401 | % |
Freight and shipping |
|
| 15,665 |
|
|
| 1,171 |
|
|
| 14,494 |
|
|
| 1,238 | % |
Consulting and advisory-related party |
|
| - |
|
|
| 5,800 |
|
|
| (5,800 | ) |
| (100 | %) | |
Royalty and sales commission-related party |
|
| - |
|
|
| 20,456 |
|
|
| (20,456 | ) |
| (100 | %) | |
Rent expense |
|
| 65,794 |
|
|
| 39,373 |
|
|
| 26,421 |
|
|
| 67 | % |
Total cost of revenue |
| $ | 575,603 |
|
| $ | 165,437 |
|
| $ | 410,166 |
|
|
| 248 | % |
During the three months ended September 30, 2025, the cost of revenue increased over the three months ended September 30, 2024, primarily due to an increase in cost of inventory and rent expense.
Cost of inventory consists of product costs, direct labor, related supplies and direct testing of our CitroTech product and various components required to for installation of Mighty Fire Breaker proactive wildfire defense systems. Cost of inventory increased during the three months ended September 30, 2025, primarily due to an increase in labor, product sales and supplies from increased sales.
Freight and shipping relate to costs for shipping products to customers.
Consulting and advisory services are to a related party company for services related to product installations. The Company recognized an allocated portion of consulting and direct labor costs associated with our revenue as royalty and sales cost of revenue during 2024. In March 2025, the Company entered into a new management contract and is no longer paying for consulting, advisory and royalty fees.
Rent expenses are warehouse rent expenses. The increase in rent expense is primarily because the Company leased a larger commercial space for office, retail and warehousing from April 2025.
Amortization and depreciation
Amortization and depreciation expenses are an amortization of patents and a depreciation of vehicle, and furniture and equipment.
General and administrative
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the three months ended September 30, 2025, the Company incurred increased expenditures on 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 three months ended September 30, 2025, over the three months ended September 30, 2024, is primarily due to support revenue growth.
Professional fees
The professional fees during the three months ended September 30, 2025, primarily included various professional fee for accounting and audit related to SEC filing, legal on patents and other consulting services in 2025. The professional fees during the three months ended September 30, 2024, primarily included accounting and audit related to SEC filing, legal on patents and other consulting services in 2024. The increase in professional fees during the three months ended September 30, 2025, over the three months ended September 30, 2024, is primarily due to an increase in consulting fees. In addition, on August 19, 2025, the Company withdrew the registration statement, as a result, the Company expensed deferred offering costs.
| 33 |
| Table of Contents |
Payroll and management compensation
During the three months ended September 30, 2025, management compensation primality included stock-based management compensation of $1.8 million to our management and cash payments of $379,000 to our management, and payroll to our employees of $240,000.
During the three months ended September 30, 2024, there was management compensation of $25,000.
Other Expenses
For the three months ended September 30, 2025 and 2024, the other income and expenses consisted of $1.3 million and $94,000 interest expenses related to convertible notes payable issued in 2025 and 2024, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $1.7 million gain and $0, respectively, and loss on settlement of debt from conversion of debt of $4.1 million and $0, respectively. Settlement of debt in 2025 is conversion of convertible notes issued in 2025.
Net loss
The net loss for the three months ended September 30, 2025, increased by approximately $7.3 million as compared to the three months ended September 30, 2024 primarily due to the increase in operating expenses and other expense offset by the increase in revenue.
Our results of operations for the nine months ended September 30, 2025 and 2024 are summarized below:
|
| Nine months ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
|
|
|
|
|
| |||||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Revenue |
| $ | 1,945,232 |
|
| $ | 738,729 |
|
| $ | 1,206,503 |
|
|
| 163 | % |
Operating expenses |
|
| 12,659,025 |
|
|
| 4,844,042 |
|
|
| 7,814,983 |
|
|
| 161 | % |
Other expenses |
|
| 20,022,838 |
|
|
| 977,039 |
|
|
| 19,045,799 |
|
| 1949 | % | |
Net loss |
| $ | (30,736,631 | ) |
| $ | (5,082,352 | ) |
| $ | (25,654,279 | ) |
|
| 505 | % |
Revenue
The Company’s revenue is associated with revenue from MFB Ohio which acquired intellectual property to fire suppression in April 2022. During the nine months ended September 30, 2025, the revenue increased $1.2 million from the nine months ended September 30, 2024, largely due to the adoption of our technology by the marketplace, including the sale of homebased wildfire defense systems, commercial and fire department chemical sales, and directly spraying residential properties due to the wildfire concerns.
Our revenues consisted of the following:
|
| Nine months ended |
| |||||
|
| September 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Products sale |
| $ | 1,142,865 |
|
| $ | 672,829 |
|
Product installation service |
|
| 802,367 |
|
|
| 65,900 |
|
|
| $ | 1,945,232 |
|
| $ | 738,729 |
|
Product installation services commenced in the second quarter of 2024.
| 34 |
| Table of Contents |
Our revenues from significant customers for the nine months ended September 30, 2025 and 2024, are as follows:
|
| Nine months ended |
| |||||
|
| September 30, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Number of customers (more than 10% revenue) |
|
| 1 |
|
|
| 3 |
|
Total revenue of top 5 customers |
|
| 37.9 | % |
|
| 95.5 | % |
We do not have major sales from recurring customers for the nine months ended September 30, 2025 and 2024.
Operating Expenses
|
| Nine months ended |
|
|
|
|
|
|
| |||||||
|
| September 30, |
|
|
|
|
|
|
| |||||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Cost of revenue |
| $ | 1,599,255 |
|
| $ | 437,637 |
|
| $ | 1,161,618 |
|
|
| 265 | % |
Amortization and depreciation |
|
| 241,700 |
|
|
| 190,247 |
|
|
| 51,453 |
|
|
| 27 | % |
General and administration |
|
| 872,109 |
|
|
| 388,746 |
|
|
| 483,363 |
|
|
| 124 | % |
Advertising and marketing |
|
| 489,673 |
|
|
| 450,777 |
|
|
| 38,896 |
|
|
| 9 | % |
Payroll and management compensation |
|
| 5,410,210 |
|
|
| 50,000 |
|
|
| 5,360,210 |
|
|
| 10,720 | % |
Professional fees |
|
| 4,046,078 |
|
|
| 3,326,635 |
|
|
| 719,443 |
|
|
| 22 | % |
Total operating expenses |
| $ | 12,659,025 |
|
| $ | 4,844,042 |
|
| $ | 7,814,983 |
|
|
| 161 | % |
The increase in operating expenses was primarily attributed to increases in cost of revenue and payroll and management compensation.
Cost of revenue
|
| Nine months ended |
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|
|
|
|
|
| |||||||
|
| September 30, |
|
|
|
|
|
|
| |||||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Cost of inventory |
| $ | 1,315,378 |
|
| $ | 233,362 |
|
| $ | 1,082,016 |
|
|
| 464 | % |
Freight and shipping |
|
| 21,724 |
|
|
| 9,321 |
|
|
| 12,403 |
|
|
| 133 | % |
Consulting and advisory-related party |
|
| 4,000 |
|
|
| 16,200 |
|
|
| (12,200 | ) |
| (75 | %) | |
Royalty and sales commission-related party |
|
| 91,290 |
|
|
| 83,192 |
|
|
| 8,098 |
|
|
| 10 | % |
Rent expense |
|
| 166,863 |
|
|
| 95,562 |
|
|
| 71,301 |
|
|
| 75 | % |
Total cost of revenue |
| $ | 1,599,255 |
|
| $ | 437,637 |
|
| $ | 1,161,618 |
|
|
| 265 | % |
During the nine months ended September 30, 2025, the cost of revenue increased over the nine months ended September 30, 2024, primarily due to an increase in cost of inventory, rent and royalty and sales commissions.
Cost of inventory consists of product costs, direct labor, related supplies and direct testing of our CitroTech product and various components required to for installation of Mighty Fire Breaker proactive wildfire defense systems. Cost of inventory increased during the nine months ended September 30, 2025, primarily due to an increase in product sales and supplies from increased sales.
Freight and shipping relate to costs for shipping products to customers.
Consulting and advisory services are to a related party company for services related to product installations.
Royalty and sales commissions increased in the nine months ended September 30, 2025, from more revenue. The Company recognized an allocated portion of consulting and direct labor costs associated with our revenue as royalty and sales cost of revenue in 2024 and during the first quarter of 2025. In March 2025, the Company entered into a new contract and there is no longer consulting and advisory and royalty.
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Rent expenses are warehouse rent expenses. The increase in rent expense is primarily because the Company leased a larger commercial space for office, retail and warehousing from April 2025 and the cancelation of one of our warehouse leases in May 2025.
Amortization and depreciation
Amortization and depreciation expenses are an amortization of patents and a depreciation of vehicle, and furniture and equipment.
General and administrative
General and administrative expenses are office, rent, travel, insurance, website, IT and other office related expenses. For the nine months ended September 30, 2025, the Company incurred increased expenditures on 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, 2025, over the nine months ended September 30, 2024, is primarily due to support revenue growth.
Professional fees
The professional fees during the nine months ended September 30, 2025, primarily included stock-based compensation of $2.4 million to a related party consultant (TC Special Investments, LLC (“TCSI”)) and various professional fees for accounting and audit related to SEC filings, legal on patents and other consulting services in 2025. The professional fees during the nine months ended September 30, 2024, primarily included stock-based management compensation of $1.4 million to advisors to our subsidiary MFB and stock-based compensation of $1 million to various consultants for IT service for software development, legal on patents and other consulting services in 2024.
TCSI’s consulting services to the Company include sales and business development, customer relationship management, strategy optimization, investor relations, underwriter interface, coordinating outside counsel and other business aspects at the request of the Board of Directors. In addition to TCSI, stock-based compensation was remitted to certain individuals with fire retardant and flame suppression industry experience, who provided guidance and insight to the Company’s management and Board of Directors with respect to the fire retardant and flame suppression industry, business development connections, and oversight during the testing and recognition processes.
Payroll and management compensation
During the nine months ended September 30, 2025, management compensation primality included stock-based management compensation of $4.1 million to our management and cash payments of $845,000 to our management, and payroll to our employees of $466,000.
During the nine months ended September 30, 2024, management compensation primality included cash payment of $50,000 to our former CEO.
Other Expenses
For the nine months ended September 30, 2025 and 2024, the other expenses consisted of interest expense related to convertible notes payable issued in 2025 and 2024 of $2.6 million and interest expense related to convertible notes issued in 2022 and 2023 and promissory notes issued in 2024 of $94,000, respectively, change in fair value of derivative liability related to convertible notes payable issued in 2025 and 2024 of $2.0 million and $0, respectively, financing expense of $8.7 million and $0, respectively, and loss on settlement of debt of $6.8 million and $882,000, respectively. Settlement of debt in 2025 is conversion of convertible notes issued in 2024 and 2025 and settlement of debt in 2024 is settlement of notes payable and convertible note issued in 2022. Financing expense is 4 million warrants granted to a financial advisor and 69,007 shares of Series C Convertible Preferred stock issued to a Series A Preferred Shareholder in 2025. The 4 million warrants were subsequently cancelled by the financial advisor in August, 2025.
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Net loss
The net loss for the nine months ended September 30, 2025, increased by approximately $25.7 million as compared to the nine months ended September 30, 2024 primarily due to the increase in operating expenses and other expense offset by the increase in 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 $30.7 million and $5.1 million for the nine months ended September 30, 2025 and 2024, respectively. During the nine months ended September 30, 2025, we completed a debt offering and an equity offering which generated net proceeds of approximately $3.7 million and $5.7 million respectively.
Working capital
|
| September 30, |
|
| December 31, |
|
|
|
|
|
|
| ||||
|
| 2025 |
|
| 2024 |
|
| Change |
|
| % |
| ||||
Current assets |
| $ | 7,258,534 |
|
| $ | 1,617,478 |
|
| $ | 5,641,056 |
|
|
| 349 | % |
Current liabilities |
| $ | 2,973,628 |
|
| $ | 2,161,883 |
|
| $ | 811,745 |
|
|
| 38 | % |
Working capital (deficiency) |
| $ | 4,284,906 |
|
| $ | (544,405 | ) |
| $ | 4,829,311 |
|
| (887 | %) | |
As of September 30, 2025 and December 31, 2024, the current assets consisted of cash of $6.2 million and $775,000, respectively, inventory of $467,000 and $325,000, respectively accounts receivable of $508,000 and $317,000, respectively, prepaid expenses and other current assets of $87,000 and $74,000, respectively, and deferred offering costs of $0 and $126,000, respectively.
As of September 30, 2025 and December 31, 2024, the current liabilities consisted of accounts payable and accrued liabilities of $705,000 and $187,000, respectively, deferred revenue of $6,000 and $0, respectively, convertible notes net of discount of $63,0000 and $196,000, respectively, convertible note – related parties of $1.8 million and $577,000, respectively, due to related parties of $161,000 and $0, respectively, financing loan of $48,000 and $97,000, respectively, derivative liability of $0 and $1.1 million, respectively, and current portion of operating lease liability of $143,000 and $50,000, respectively.
The increase in working capital in 2025 was primarily due to an increase in cash from equity and debt offering offset by an increase in convertible notes.
Cash Flows
For the nine months ended September 30, 2025 and 2024
|
| Nine months ended |
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|
|
| ||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2025 |
|
| 2024 |
|
| Change |
| |||
Cash used in operating activities |
| $ | (3,386,432 | ) |
| $ | (1,319,815 | ) |
| $ | (2,066,617 | ) |
Cash used in investing activities |
| $ | (221,670 | ) |
| $ | - |
|
| $ | (221,670 | ) |
Cash provided by financing activities |
| $ | 9,028,943 |
|
| $ | 1,079,189 |
|
| $ | 7,949,754 |
|
Net Change in cash |
| $ | 5,420,841 |
|
| $ | (240,626 | ) |
| $ | 5,661,467 |
|
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| Table of Contents |
Operating Activities
We have not generated positive cash flows from operating activities.
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 $6.8 million, financing expense of $8.7 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 and changes in derivative liability of $2.0 million, and increased by net changes in operating assets and liabilities of $328,000.
For the nine months ended September 30, 2024, net cash flows used in operating activities consisted of a net loss of $5.1 million, reduced by stock-based compensation of $2.6 million, non-cash lease expenses of $60,000, amortization and depreciation of $190,000, loss on settlement of debt of $882,000 and increased by net changes in operating assets and liabilities of $1,000.
Investing Activities
For the nine months ended September 30, 2025, the cash flows used in investing activities were $222,000, which was related to the purchase of property and equipment.
The Company did not use any funds for investing activities during the nine months ended September 30, 2024.
Financing Activities
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.
The basic terms of the convertible promissory notes issued in 2025 are: (i) a 12-month term; (ii) interest of 10% per annum, compounded annually; and (iii) voluntary conversion during the term at a conversion price of $2.40 for each dollar of principal amount. The associated warrants are exercisable for a period of 5 years from the issuance date, for an aggregate of up to 848,963 shares at an exercise price of $3.00.
For the nine months ended September 30, 2024, net cash provided by financing activities consisted of $165,000 proceed from issuance Series C Preferred Stock, $1.0 million from convertible promissory notes and warrants, $57,000 deferred offering cost payment and $60,000 repayment of loan - related party.
Contractual Obligations
Convertible notes
In first quarter 2025, the Company entered into eleven (11) subscription agreements for convertible notes ($2,075,000) and warrants (432,296 shares of common stock). The material terms of this convertible note indebtedness are, (i) a 12-month maturity; (ii) 10% interest per annum, capitalized on the maturity date; (iii) conversion rights in the amount of the principal, either (x) divided by 2.40 or (y) a 30% discount to the price sale of its Common Stock pursuant to a registration statement filed with the SEC and listing of the Common Stock on national securities exchange; and (iv) warrant coverage for five years at the rate of 1.25 shares of Common Stock for each dollar of principal, at an exercise price of $3.00 per share.
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Convertible notes – related party
On December 31, 2024, the Company issued convertible note of $577,000 to a related party, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $2.16.
In February 2025, the Company entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, the related party could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio.
Lease Agreements
The Company has one lease classified as an operating lease for an office and warehouse purpose. The following table outlines maturities of our lease liabilities as of September 30, 2025:
Year ending December 31, |
|
|
| |
2025 - remaining three months |
| $ | 47,430 |
|
2026 |
|
| 195,412 |
|
2027 |
|
| 203,228 |
|
2028 |
|
| 211,357 |
|
2029 |
|
| 219,812 |
|
Thereafter |
|
| 55,486 |
|
|
|
| 932,725 |
|
Less: Imputed interest |
|
| (133,595 | ) |
Operating lease liabilities |
| $ | 799,130 |
|
Financing loans
The Company had a financing loan for the purchase of vehicle in September 2025. A repayment of loan schedule is $2,021 per month for 60 months, beginning October 2025, with an interest rate of 11.33%.
The Company had a financing loan for the purchase of vehicle in September 2025. A repayment of loan schedule is $2,083 per month for 48 months, beginning October 2025, with an interest rate of 11.90%.
Liquidity
The Company has incurred losses since inception and incurred a net loss of $30.7 million during the nine months ended September 30, 2025. However, in September 2025, the Company completed an equity offering which generated net proceeds of $5.4 million. Additionally, in October 2025, the Company completed an equity offering which generated net proceeds of $2.7 million.
The Company’s existing cash resources are expected to provide sufficient funds to carry out the Company’s planned operations through fiscal year 2026. To continue operations beyond such time frame, the Company may be required to raise additional funds by completing additional equity or debt offerings or increasing revenue. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
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| Table of Contents |
Contingencies
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, 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, evaluates 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 unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which require management to make estimates, judgments and assumptions that affect the amounts reported in our unaudited consolidated financial statements and accompanying notes. We believe our most critical accounting estimates relate to the following:
| · | Fair value of convertible notes |
| · | Fair value of warrant to purchase common stock |
While our estimates and assumptions are based on our knowledge of current events and on actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company’s significant accounting policies, refer to Note 2 of Notes to Unaudited Consolidated Financial Statements.
Fair Value of Convertible Notes
The Company determined that the conversion feature, embedded in convertible notes, met the definition of a liability in accordance with ASC Topic No. 815-40, Derivatives and Hedging - Contracts in Entity’s Own Stock and therefore bifurcated the embedded conversion option once the note become convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and “day 1” derivative loss for the excess amount of debt discount and amortized to interest expense over the term of the note.
For the conversion feature classified as a liability, the Company uses a Binomial Lattice valuation model to value the derivative instrument at inception and on subsequent valuation dates. 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.
Fair Value of Warrant to Purchase Common Stock
The Company has issued warrants to investors in our debt offerings.
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.
For warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid in capital (potentially on a relative fair value basis if issued in a basket transaction with other financial instruments). Warrants that are equity-classified are not subsequently remeasured unless modified or required to be reclassified as liabilities. The classification of all outstanding warrants, including whether such instruments should be recorded as equity, is evaluated at the end of each reporting period.
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| Table of Contents |
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.
Off-balance sheet arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that 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 Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management consists of only six (6) individuals which may result in control deficiencies and the absence of sufficient other mitigating controls.
A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements would not be prevented or detected on a timely basis.
Changes in Internal Controls
There has been no change in the Company’s internal control over financial reporting during the three months ended September 30, 2025 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 and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional improvements as necessary.
| 41 |
| Table of Contents |
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. However, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in the “Risk Factors” section of the prospectus. 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, 2025, the Company issued 432,193 shares of Series C Preferred Stock as follow;
| · | 420,943 shares pursuant to PIPE offering, for proceeds of $5,395,797; |
| · | 5,000 shares for services valued at $98,167; and |
| · | 6,250 shares, to our CEO, for compensation valued at $117,917. |
During the three months ended September 30, 2025, the Company issued 6,688,404 shares of Common Stock as follow:
| · | 818,709 shares to six (6) investors upon conversion of debt and accrued interest of $1,964,897; |
| · | 5,683,336 shares for conversion of 1,705,000 shares of Series C Preferred Stock; |
| · | 36,000 shares for services valued at $215,640; |
| · | 150,000 shares, to our COO, for compensation as restricted stock awards, valued at $1,799,970; and |
| · | 359 shares for reverse stock split adjustment. |
The offers and sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. The recipients of the above securities represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof.
The cash proceeds will be used for working capital.
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, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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| Table of Contents |
Item 6. Exhibits.
Exhibit Number | Description | |
3.1 |
| Articles of Domestication/Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 15, 2024) |
3.2 |
| Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2025) |
3.3 |
| Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 10, 2025) |
3.4 |
| Amended and Restated Bylaws of the Company dated October 15, 2025 |
3.5 |
| Second Amended and Restated Designations and Preferences of Series A Preferred Stock (incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2025) |
3.6 |
| Amended and Restated Designations and Preferences of Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2025) |
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 created by 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 created by Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS* |
| Inline XBRL Instance Document |
101.SCH* |
| Inline XBRL Schema Document |
101.CAL* |
| Inline XBRL Calculation Linkbase Document |
101.LAB* |
| Inline XBRL Label Linkbase Document |
101.PRE* |
| Inline XBRL Presentation Linkbase Document |
101.DEF* |
| Inline XBRL Definition Linkbase Document |
104* |
| Cover Page Interactive Data File (embedded within the Inline XBRL document) |
________
* Filed herewith.
**Furnished herewith.
| 43 |
| Table of Contents |
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.
General Enterprise Ventures, Inc. | |||
|
|
| |
Dated: November 12, 2025 | By: | /s/ Nanuk Warman | |
| Nanuk Warman | ||
Chief Financial Officer (Principal Financial and Accounting Officer) | |||
| 44 |
FAQ
What were GEVI’s Q3 2025 revenues and year-to-date revenues?
What were GEVI’s Q3 2025 and year-to-date net losses?
How much cash did GEVI have at September 30, 2025?
Did GEVI raise capital in Q3 and after the quarter?
What capital structure changes did GEVI make in Q3 2025?
Did GEVI complete a reverse stock split?
How many GEVI common shares were outstanding?
