Filing summary
Entity identification: The supplied filing is a Form 10-Q for General Entertainment Ventures, Inc. (renamed General Enterprise Ventures, Inc. effective October 11, 2021), not Citrotech Inc. Investors should verify the issuer and filing match their intended company. Financial statements are unaudited.
Business context and reporting period
The report covers the quarter and nine months ended September 30, 2021. The company says its operations, assets, and liabilities had been discontinued from February 2010 until January 2021. It acquired Strategic Asset Holdings (SAH), an early-stage home-technology company holding a provisional patent for a secure night light, on May 10, 2021. SAH was controlled by the company’s CEO, making the acquisition a related-party transaction. The filing identifies the registrant as a shell company.
Financial performance and position
| Metric | Three months ended Sept. 30, 2021 | Nine months ended Sept. 30, 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $8,110 | $71,313 |
| Net loss | $9,055 | $72,782 |
| Interest expense | $945 | $1,469 |
Revenue and cost of goods sold were zero, so the filing provides no meaningful gross margin. Nine-month operating expenses included $52,976 of goodwill impairment, $12,500 of management compensation, and $5,837 of general and administrative costs. The three-month expenses included $6,095 of management compensation and $2,015 of general and administrative costs. Basic and diluted loss per share was reported as $0.00, rounded, for both 2021 periods.
- Liquidity: At September 30, cash and total current assets were $686, versus current liabilities of $82,823, resulting in a working-capital deficit of $82,137. At December 31, 2020, the deficit was $9,355.
- Liabilities and debt: Total liabilities were $82,823, including a $50,000 related-party note, a $20,260 line-of-credit balance, $11,094 due to related parties, and $1,469 of accrued interest/payables as presented in the balance sheet. The CEO note bears 7.5% interest and matures May 10, 2022. The third-party line is unsecured, allows borrowing up to $40,000, and bears 0% interest on draws repaid within two years; thereafter, the stated rate is 9%.
- Cash flows, nine months: Operating activities used $18,889; investing activities provided $14,075, described as cash proceeds from the SAH acquisition; financing activities provided $5,500 from line-of-credit proceeds. Cash increased by $686 to $686.
- Equity and control: The company reported a stockholders’ deficit of $82,137. It had 22,945,388 common shares outstanding as of October 18, 2021. A 10-million-share Series A preferred position acquired by Jan Ralston in April 2021 carries stated super-voting and conversion rights of 1,000 common shares and votes per preferred share, and the filing says the transaction changed control.
Changes, outlook, and risks
Compared with the same 2020 periods, revenue remained zero; the company reported no expenses or loss in 2020, while 2021 included operating costs, interest, and the SAH-related goodwill impairment. The filing provides no revenue, earnings, or operating guidance. Management states that the company has not generated significant income and that its limited operating capital and lack of substantive revenue raise substantial doubt about its ability to continue as a going concern. Continuation depends on raising capital and generating revenue and profits.
Management said COVID-19 had no material adverse impact on the company’s financial position or results as of September 30, 2021, but acknowledged that future effects remain uncertain and could harm operations or business-plan timing. The company reported no material off-balance-sheet arrangements and no legal proceedings believed likely to have a material adverse effect. It reported no defaults upon senior securities.
Management concluded that disclosure controls were ineffective as of September 30, citing no functioning audit committee, no board majority of outside directors, inadequate segregation of duties, and management dominated by one individual without adequate compensating controls. The filing says the company expects to rely materially on outside accounting consulting and warns that weaknesses could lead to financial-statement errors or restatement. The registrant checked “No” for having filed all required reports during the preceding 12 months and for submitting all required Interactive Data Files.
Important facts for investors to verify
- Confirm that this General Entertainment/General Enterprise Ventures filing is the intended issuer; the request identifies Citrotech Inc.
- Assess the company’s going-concern warning, minimal cash, working-capital deficit, and need for external financing.
- Review the related-party SAH acquisition, full goodwill impairment, CEO note, and preferred shares’ voting and conversion rights.
- Reconcile related-party and accrued-liability disclosures: the balance sheet reports $11,094 due to related parties and $1,469 in accounts payable/accrued liabilities, while the notes state $9,355 of accrued salary at September 30 and December 31.
- Verify the reported acquisition-related investing cash inflow of $14,075 and how it relates to the $50,000 acquisition consideration recorded as a note payable.
- Monitor remediation of the disclosed control weaknesses and the company’s filing and XBRL reporting compliance.