General Enterprise Ventures, Inc. - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

or

Commission File Number: 033-55254-38

(800) 401-4535

(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. Yes ☒ No ☐

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). Yes ☒ No ☐

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.

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 ☐ NO ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

93,945,388 shares of common stock issued and outstanding as of November 9, 2022.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

 General Enterprise Ventures, Inc.

Consolidated Balance Sheets

(Unaudited)

See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.

General Enterprise Ventures, Inc.

Consolidated Statements of Operations

(Unaudited)

See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 

General Enterprise Ventures, Inc.

Consolidated Statements of Change in Stockholders’ Deficit

(Unaudited)

  For the nine months ended September 30, 2022

  For the nine months ended September 30, 2021

See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements.

General Enterprise Ventures, Inc.

 Consolidated Statements of Cash Flows

(Unaudited)

See the accompanying Notes, which are an integral part of these unaudited consolidated financial statements. 

General Enterprise Ventures, Inc.

Notes to Consolidated Financial Statements

September 30, 2022

(Unaudited)

Note 1 – Nature of Operations and Going Concern

General Enterprise Ventures, Inc., (the “Company” or “GEVI”), was originally incorporated under the laws of the State of Nevada on March 14, 1990.

Corporate changes

On April 13th, 2022 General Enterprise Ventures, Inc. acquired Mighty Fire Breaker, LLC , an Ohio Limited Liability company (“ MFB”) and all associated IP, in exchange for 1,000,000 Preferred C Shares and a 10% royalty on the gross sales before taxes of products sold under the MFB family of products. MFB has 19 patents centered around its CitroTech MFB 31 Technology for the prevention and spread of wildfires.  Its core products can be used for lumber treatments for fire prevention.  It has been widely tested and is currently in testing at 3 major us government agencies. When CitroTech Science is sprayed and applied it takes flammable fuels like dry native vegetation and wood and makes them noncombustible. During the third quarter of 2022 the company received EPA Safer Choice status and UL Green-Guard Gold approval on its Citro-Tech fire inhibitor.  It continues to pursue additional  accreditations such Missoula Testing approval for selling products to the government.

Effective April 1, 2022, the Company implemented a plan to divest its Crypto Mining operations and focus resources on the operations of Mighty Fire Breaker LLC (“MFB”). We expanded our services by building upon its foundation of emerging technology development, by creating a Crypto-Currency mining operation (farm).  Previously, the Company had 20 Bitmain Antminer SJ19 PRO 104t/h and 99 Mini-Doge 185 m/h miners deployed, which are mining, Bitcoin, Doge, and Litecoin through the F2Pool and utilized its 8,000 Sq Ft Commercial space to house these ASIC Miners.

Change of Control

On April 28^th, 2022, Jan Ralston transferred ownership of 10,000,000 Preferred A shares to CEO, Joshua Ralston, making Mr. Ralston the new Majority Shareholder.

Series C Preferred Stock

On April 13, 2022, The Company designated 5,000,000 shares of Series C convertible Preferred Stock (“Series C Preferred Stock”). The Series C Preferred Stock is convertible into twenty (20) shares of Common Stock for each share of Series C Preferred Stock at the option of the stockholder. The Series C Preferred Stock does not have voting rights and is not eligible to receive dividends 

Going Concern

The accompanying consolidated financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant income to date. The Company is subject to the risks and uncertainties associated with a business with no substantive revenue, as well as limitations on its operating capital resources. These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. In light of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise capital and generate revenue and profits in the future.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited interim financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2021, as filed with the SEC on April 12, 2022.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Cash and Cash Equivalents

For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company had $57,152 and $5,469 cash equivalents at September 30, 2022 and December 31, 2021, respectively.

Inventory

Inventories consist of raw materials which are stated at lower of cost or net realizable value, with cost being determined on the weighted average method. As of September 30, 2022, and December 31, 2021, the Company held inventories of $114,413 and $0, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed on the straight-line method. Currently our assets consist solely of furniture and equipment which we amortize over a useful life of 5 years. The Company previously held crypto mining equipment which was amortized over a useful life of 5 years. As of September 30, 2022, the Company no longer has any crypto mining operations and had divested all such equipment (see Note 4).

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income. 

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.

Digital Assets

We currently account for all digital assets held as a result of these transactions as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. We have ownership of and control over our digital assets and we may use third-party custodial services to secure it. The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheet at cost, net of any impairment losses incurred since acquisition.

We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital asset quoted on the active exchange since acquiring the digital asset. If the then current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined.

Impairment losses are recognized within other income (expense) on the statements of operations in the period in which the impairment is identified. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same digital assets held within other income (expense). In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.

During the nine months ended September 30, 2022, the Company recorded an impairment loss of $6,125 associated with market value of digital currencies in excess of the Company’s cost basis. As of September 30, 2022, the Company has divested all of its digital currency holdings and the impairment loss has been recorded within the Company’s income from discontinued operations.

 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:

The Company’s financial instruments, including cash, accounts payable and accrued liabilities, and loans payable, are carried at historical cost. At September 30, 2022 and December 31, 2021, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 12).

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 three months ended September 30, 2022 and three and nine months ended September 30, 2021, 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.

Revenue

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.

Our revenues currently consist of products used for lumber products for fire prevention. Revenue is recognized at a point in time that is which the risks and rewards of ownership of the products transfer from the Company to the customer.

In prior periods our revenues included cryptocurrency mining revenues. The Company earned its cryptocurrency mining revenues by providing transaction verification services within the digital currency networks of cryptocurrencies, for Bitcoin, Litecoin, and Dogecoin. The Company satisfied its performance obligations at the point in time that the Company was awarded a unit of digital asset through its participation in the applicable network and network participants benefit from the Company’s verification service. In consideration for these services, the Company received Bitcoin, Litecoin, and Dogecoin, net of applicable network fees, which was recorded as revenue using the closing U.S. dollar price of the digital asset on the date of receipt. Expenses associated with running the cryptocurrency mining operations, which consisted of utilities, equipment depreciation and monitoring services were recorded as cost of revenues. On April 1, 2022, the Company implemented a plan to discontinue its crypto mining operations and divest all related assets. As of September 30, 2022, all of the crypto mining assets had been discarded and as the Company no longer engages in crypto mining all revenue during the nine months ended September 30, 2022, has been reclassified to income from discontinued operations (see Note 4).

There is currently no specific definitive guidance in GAAP or alternative accounting frameworks for the accounting for the production and mining of digital assets and management has exercised significant judgment in determining appropriate accounting treatment for the recognition of revenue for mining of digital assets. Management has examined various factors surrounding the substance of the Company’s operations and the guidance in ASC 606, including identifying the transaction price, when performance obligations are satisfied, and collectability is reasonably assured being the completion and addition of a block to a blockchain and the award of a unit of digital currency to the Company. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies which could result in a change in the Company’s financial statements.

Note 3 – Acquisition

On April 13, 2022 General Enterprise Ventures, Inc. acquired MFB and all associated IP, in exchange for 1,000,000 Preferred C Shares and a 10% royalty on the gross sales before taxes of products sold under the MFB family of products. MFB has 19 patents centered around its CitroTech MFB 31 Technology for the prevention and spread of wildfires.  Its core products can be used for lumber treatments for fire prevention.  It has been widely tested and is currently in testing at 3 major us government agencies. When CitroTech Science is sprayed and applied it takes flammable fuels like dry native vegetation and wood and makes them noncombustible.

The following table summarizes the consideration paid for MFB and the amounts of the assets acquired, and liabilities assumed at the acquisition date of April 13, 2022:

Note 4 – Discontinued Operations

(a) Crypto mining

On April 1, 2022, the Company implemented a plan to divest its crypto mining operations to focus its resources on the MFB acquisition (see Note 3). The Company recognized a loss of $2,030 from the disposition of its crypto mining operations, which consisted of the relinquishment of the digital currency assets in exchange for settlement of the related party note payable associated with the acquisition of the equipment.

The following is a summary of the assets and liabilities of the Company’s crypto mining operations as of April 1, 2022 and December 31, 2021:

The following is a summary of discontinued operations for the period ended April 1,2022 and the nine months ended September 30, 2021:

(b) Strategic Assets Holdings, LLC. (“SAH”)

On October 19, 2021, the Board of Directors approved the divesture of SAH. The separation was amicable, and no severance was determined to be owed to Mr. Jason Tucker or SAH. As result of divesture, the Company recognized $20,179 gain from disposition of SAH during the year ended December 31, 2021.

The following is a summary of the assets and liabilities of SAH as of October 19, 2021 and December 31, 2020:

The following is a summary of discontinued operations for the nine months ended September 30,2022 and 2021:

Note 5 – Inventory

The Company’s inventory consists of raw materials. During the nine months ended September 30, 2022 and 2021, the Company recorded cost of goods sold of $0 and $0 associated with the cost of inventories sold, respectively. The Company did not write-off any inventories as unsalable during the nine months ended September 30, 2022 or 2021.

Note 6 – Equipment, net

At September 30, 2022 and December 31, 2021, equipment consisted of the following:

During the year ended December 31, 2021, the Company acquired digital asset machines with a cost of $301,175. The machines started in operation from November 1, 2021. On April 1, 2022, the Company sold digital asset machines with a net book value of $276,379 as part of the divestiture of the Company’s digital asset operations (see Note 4).

During the nine months ended September 30, 2022, the Company recorded depreciation of $15,326, of which $15,059 is included within the Company’s income from discontinued operations (see Note 4).

Note 7 – Digital Currencies Intangible Assets

The Company mined Crypto currencies with a total aggregate value of $46,976. The Company has accounted for these coins as indefinite life intangible assets. The Company recorded the mining of the coins as revenue from digital currency mining in its result of operations, along with cost of sales (electricity and deprotection of digital assets machines). During the nine months ended September 30, 2022, the Company recorded impairment of $6,125 associated with the fair market value in excess of the cost. On April 1, 2022, the Company sold digital currency intangible assets with a net book value of $26,825 as part of the divestiture of the Company’s digital asset operations (see Note 4). The Company’s digital currency assets consist of the following at September 30, 2022 and December 31, 2021:

Note 8 – Intangible Assets

The Company has capitalized the costs associated with acquiring the intellectual property of MFB (see Note 3) at a value of $4,195,353 million and $0 as of September 30, 2022, and December 31, 2021, respectively.

The amount capitalized consisted of a portion of the fair value of 1,000,000 shares of Convertible Preferred C stock of $4,200,000. During the nine months ended September 30, 2022, no additional costs met the criteria for capitalization as an intangible asset.

Note 9 – Lease

The following summarizes right-of-use asset and lease information about the Company’s operating lease as of September 30, 2022:

Future minimum lease payments under the operating lease liability has the following non-cancellable lease payments as of September 30, 2022:

Note 10 – Convertible Note

On September 30, 2022, the Company entered a convertible note agreement for amount of $54,000, with term of six (6) months from the date of receipt of the funds, at interest rate of 2% per annum. At the sole option of the Lender, all or part of unpaid principal then outstanding may be converted into shares of common stock at any time starting from 24 hours after payment at fix conversion price of $0.18 per share.  As of September 30, 2022, following is the summary of funds received from the lender:

During the nine months ended September 30, 2022, the Company recognized $76 interest. As of September 30, 2022, the Company owned principal of $35,000 and accrued interest of $76.

Note 11 – Stockholders’ Equity

Preferred Shares

The Company’s preferred shares consist of the following:

On November 25, 2020, the Company’s board of directors approved issuance of 10,000,000 Convertible Series A Preferred Stock, valued at $100,000, for compensation to our former CEO.

On April 13, 2022, the Company’s board of directors approved the issuance of 1,000,000 Convertible Series C Preferred Stock, with a value of $4,200,000 to be issued to the vendor of MFB as consideration for the acquisition of the entity (see Note 3). The holder may exercise shares after an initial lock up period of six (6) months following the date of the agreement and may only exchange a maximum of four (4) million shares in a twelve (12) month period and may not hold or beneficially hold more than 10% of outstanding at any time. On June 7, 2022, the holder of the Convertible Series C Preferred Stock converted 50,000 shares of the Company’s Series C Preferred Stock into 1,000,000 shares of the Company’s common shares.

Common Shares

The Company has authorized 1,000,000,000 shares of common stock with a par value of $0.001. Each common stock entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought. As of September 30, 2022, 70,000,000 shares issued to a member of the board of directors and President of the Company are restricted (the “Restricted Stock Award”) and shall be released only upon the Company achieving gross revenue in each of the calendar years ended December 31, 2023, 2024, 2025 and 2026, of not less than $100,000,000. The holder of the Restricted stock shall be entitled to vote but is not entitled to dividends or disposal. The Company valued the voting rights associated with the awards at $2,100,000 which is recorded as stock-based compensation during the nine months ended September 30, 2022.

On June 7, 2022, the holder of the Convertible Series C Preferred Stock converted 50,000 shares of the Company’s Series C Preferred Stock into 1,000,000 shares of the Company’s common shares.

Common shares issued and outstanding as of September 30, 2022 and December 31, 2021 was 93,945,388 and 22,945,388 respectively.

Stock-Based Compensation

On June 13, 2022, the Company issued 70,000,000 Restricted Stock Award to a member of the board of directors and President of the Company. Set out below is a summary of the changes in the Restricted Shares during the nine months ended September 30, 2022:

Note 12 – Related Party Transactions

During the nine months ended September 30, 2022, our former officer forgave $9,355 in accrued salary and the Company recognized it as additional paid-in-capital.

During the nine months ended September 30, 2022 a related party advanced to the Company an amount of $584,484 and paid $97,819 for operating expenses on behalf of the Company. The Company repaid $55,720 owing of the loan.

During the nine months ended September 30, 2022, as part of the Company’s divestiture of its digital asset operations, a related party forgave loans payable of $301,175 in exchange for digital asset equipment with a net book value of $276,379 and digital currency intangible assets of $26,825, of which the Company recorded a loss on disposition of $2,030.

During the nine months ended September 30, 2022, the Company paid $92,000 consulting to an entity under common control of a related party and $59,500 commission to a related party.

As of September 30, 2022, and December 31, 2021, the Company was obliged to related parties, for unsecured, non-interest-bearing demand loans with a balance of $688,402 and $372,349, respectively.

Note 13 – Contingencies

As part of the consideration for the Company’s acquisition of MFB (see Note 4), the vendor will be entitled to a ten (10%) percent royalty on the gross sales before taxes of products sold under the MFB family of products, to be paid on or before the fifteenth (15^th) day of the following month.

Note 14 – Subsequent Events

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation

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. (the “Company”) was originally incorporated under the laws of the State of Nevada on March 14, 1990.

Effective April 1, 2022, the Company implemented a plan that is now complete to divest its Crypto Mining operations out of the company. The Company intends to focus resources on the operations of the Mighty Fire Breaker LLC (“MFB”) acquisition.

On April 13, 2022, General Enterprise Ventures, Inc. acquired Mighty Fire Breaker LLC and all associated IP, in exchange for 1,000,000 Preferred C Shares.

On April 13, 2022, The Company designated 5,000,000 shares of Series C convertible Preferred Stock (“Series C Preferred Stock”). The Series C Preferred Stock is convertible into twenty (20) shares of Common Stock for each share of Series C Preferred Stock at the option of the stockholder. The Series C Preferred Stock does not have voting rights and is not eligible to receive dividends 

On April 28, 2022, Jan Ralston transferred ownership of 10,000,000 Preferred A shares to CEO, Joshua Ralston, making Mr. Ralston the new Majority Shareholder.

Current Operations

Fully Integrated Services

We are a fully integrated technology company structured to provide mergers and acquisitions of new and available technology. Through our services, we incubate first-to-market products and help existing companies accelerate their product development within all regulatory requirements.

Environmental Impact

At this time, there are no significant environmental impacts occurring from the services, products, or activities of General Enterprise Ventures.

Human Services

The Company currently employees, 2 people full-time and hosts several consultants, attorneys, and independent contractors that all perform tasks on behalf of the company.

Results of Operations

The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the period ended September 30, 2022, which are included herein.

Our operating results for the nine months ended September 30, 2022, and 2021 and the changes between those periods for the respective items are summarized as follows:

For the three months ended September 30, 2022, compared to three months ended September 30, 2021

Revenue

Our Company generated $19,033 and $0 revenue for the three months ended September 30, 2022 and 2021, respectively. The Company’s revenue is associated with revenue from MFB which was acquired in April 2022.

Operating Expenses

For the three months ended September 30, 2022, operating expenses consisted of professional fees of $111,783, general and administrative expenses of $202,309 and depreciation of $132. For the three months ended September 30, 2021, operating expenses consisted of management compensation of $13250.

Other expenses

For the three months ended September 30,2022 and 2021, the other expenses consisted of interest expense $76 and $945, respectively.

Discontinued operations

During the three months ended September 30, 2022, loss on discontinued operations was $0.  During the three months ended September 30, 2021, loss on discontinued operations of $6,371 was the result of the net loss incurred from the operations of Strategic Asset Holdings, which was divested in October 2021.

Net Loss

As a result of the foregoing, we incurred a net loss of $297,065, for the three months ended September 30, 2022, compared to a net loss of $20,566 for the three months ended September 30, 2021.

 For the nine months ended September 30, 2022, compared to nine months ended September 30, 2021

Revenue

Our Company generated $60,501 and $0 revenue for the nine months ended September 30, 2022 and 2021, respectively. The Company’s revenue is associated with revenue from MFB which was acquired in April 2022.

Operating Expenses

For the nine months ended September 30, 2022, operating expenses consisted of management compensation of $2,100,000 associated with the issuance of 70,000,000 restricted stock units as compensation, professional fees of $334,249, general and administrative expenses of $283,015 and depreciation of $267. For the nine months ended September 30,2021, operating expenses consisted of management compensation of $13.250.

Other expenses

For the nine months ended September 30, 2022 and 2021, the other expenses consisted of interest expense $76 and $1,469, respectively.

Discontinued operations

During the nine months ended September 30, 2022, income from discontinued operations of $10,986 was the result of net income generated from the Company’s crypto mining activities of $13,016 reduced by a loss on disposition of the Company’s digital currency assets of $2,030, which includes the disposition of equipment and digital currency, against a note payable issued as consideration for the equipment when it was previously acquired. During the nine months ended September 30, 2021, loss on discontinued operations of $69,574 was the result of the net loss incurred from the operations of Strategic Asset Holdings, which was divested in October 2021.

Net Loss

As a result of the foregoing, we incurred a net loss of $2,647,918, for the nine months ended September 30, 2022, compared to a net loss of $84,293 for the nine months ended September 30, 2021.

Liquidity and Capital Resources

As of September 30, 2022, and December 31, 2021, we had $57,152 and $5,469 in cash, respectively.

As of September 30, 2022, and December 31, 2021, we had current assets of $171,565 and $5,469, current liabilities of $822,375 and $383,090, and our working capital deficiency were $650,810 and $377,621, respectively.  The increase in working capital deficiency of $273,189, was primarily the result of increases in cash on hand and inventory of $166,096 offset by increases in accounts payable and accrued liabilities of $34,470, due to related party of $316,053, convertible note of $35,000 and current portion of operating lease liability of $53,762.

As of September 30, 2022, and December 31, 2021, the current assets consisted of cash of $57,152 and $5,469 and inventory of $114,413 and $0, respectively.

As of September 30, 2022, and December 31, 2021, the current liabilities consisted of accounts payable and accrued liabilities of $45,211 and $10,741, due to related parties of $688,402 and $372,349, convertible note of $35,000 and $0, and current portion of operating lease liability of $53,762 and $0, respectively.

Cash Flows

Cash Flows from Operating Activities

For the nine months ended September 30, 2022, net cash flows used in operating activities were $506,731, consisting of a net loss of $2,647,918, reduced by non-cash management compensation of $2,100,000 associated with the issuance of 70,000,000 restricted stock units as compensation, loss on disposition of digital currency and digital currency assets of $2,030, impairment loss on digital assets of $6,125, non-cash lease expense of $29,647, depreciation of $15,326 and increased by an increase in inventory of $114,413, prepaid expenses of $5,190 , fixed cash payments on operating leases of $25,000 and decreased by an increase in due to related part of $97,819, accounts payable and accrued liabilities of $34,469 and change in digital currency of $374.

For the nine months ended September 30, 2021, net cash flows used in operating activities of $18,889, consisting of a net loss of $84,293, reduced by impairment loss on digital assets of $52,976, an increase in due to related party of $10,959 and accounts payable and accrued liabilities of $1,469.

Cash Flows from Investing Activities

Cash flows used in investing activities of $5,350 during the nine months ended September 30, 2022, was the result of the purchase of equipment. Cash flows provided by investing activities of $14,075 during the nine months ended September 30, 2021, was the result of cash acquired from the acquisition of SAH.

Cash Flows from Financing Activities

For the nine months ended September 30, 2022, net cash provided by financing activities was $563,764, consisting of $584,484 received from related parties, $35,000 from convertible note and repayments of $55,720 to related parties. For the nine months ended September 30,2021, net cash provided from financing activities was $5,500, was the result of a loan received of $5,500.

Going Concern

The accompanying financial statements have been prepared (i) in accordance with accounting principles generally accepted in the United States, and (ii) assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant income to date. The Company is subject to the risks and uncertainties associated with a business with no substantive revenue, as well as limitations on its operating capital resources. These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. In light of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise capital and generate revenue and profits in the future. 

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

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 revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

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, 2022. 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 is dominated by one individual without adequate compensating 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.

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the period ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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,” we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits