UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
Or
For the transition period from ___________ to ___________
Commission file number:
| (Exact name of registrant as specified in charter) |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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| (Address of principal executive office) | (Zip Code) |
| +1 ( |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act: None
(Title of Class)
Indicate
by checkmark whether the registrant has (1) 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 if any, every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit).
Indicate by checkmark 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 standard 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 Act). Yes ☐
No
At May 15, 2025 there were shares of the registrant’s Common Stock issued and outstanding.
TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
CYBER ENVIRO-TECH, INC.
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 (Unaudited) | December 31, 2024 (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Loan receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Long-term deposits | ||||||||
| Assets of discontinued operations, non-current | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable – related parties | ||||||||
| Accrued interest | ||||||||
| Notes payable, current maturities | ||||||||
| Note
payable, related party, net of discount of $ | ||||||||
| Convertible notes payable, net of discount of $ | ||||||||
| Convertible notes payable – related party | ||||||||
| Contingent liabilities | ||||||||
| Liabilities of discontinued operations, current | ||||||||
| Liabilities of discontinued operations, current, related parties | ||||||||
| Total current liabilities | ||||||||
| Convertible notes payable, net of discount of $ | ||||||||
| Derivative liability | ||||||||
| Liabilities of discontinued operations, non-current | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 4) | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Series A Convertible Preferred Stock, par value $, shares authorized; shares issued and outstanding | ||||||||
| Series B Convertible Preferred Stock, par value $, shares authorized; share issued and outstanding | ||||||||
| Series C Non-convertible, Preferred Stock, par value $, shares authorized; shares issued and outstanding | ||||||||
| Special 2020 Series A Preferred Stock, par value $, share authorized; share issued and outstanding | ||||||||
| Common Stock, par value $, shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Common stock to be issued | ||||||||
| Treasury stock, at cost | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Controlling interest | ( | ) | ( | ) | ||||
| Non-controlling interest | ||||||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements
| 1 |
CYBER
ENVIRO-TECH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND
2024
(Unaudited)
| 2025 | 2024 | |||||||
| Operating Expenses: | ||||||||
| Professional fees | $ | $ | ||||||
| General and administrative | ||||||||
| Consulting | ||||||||
| Total operating expenses | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Other Income (Expense): | ||||||||
| Change in fair value of derivatives | ( | ) | ||||||
| Loss on issuance of derivatives | ( | ) | ||||||
| Gain on extinguishment of derivative liability | ||||||||
| Amortization of intangible assets | ( | ) | ||||||
| Change in fair value of contingent liability | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expense, net | ( | ) | ( | ) | ||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Discontinued Operations: | ||||||||
| Loss from operations of discontinued operations | ( | ) | ( | ) | ||||
| Total Discontinued Operations | ( | ) | ( | ) | ||||
| Net loss before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | | |||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Net loss attributable: | ||||||||
| Non-controlling interest | $ | ( | ) | $ | ||||
| Common stockholders | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share, basic and diluted | $ | ) | $ | ) | ||||
| Weighted average shares outstanding, basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements
| 2 |
CYBER ENVIRO-TECH, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
| Preferred | Common Stock | CS to be Issued | Accum | Non Controlling | ||||||||||||||||||||||||||||||||||||||||
| Description | Shares | Amt | Shares | Amt | APIC | Treasury | Shares | Amt | Deficit | Interest | Total | |||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||
| Shares issued for interest | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued for conversion of convertible notes payable | — | |||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||
| Shares issued for services | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued for exercised warrants | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares issued for interest | — | |||||||||||||||||||||||||||||||||||||||||||
| Shares issued for conversion of convertible notes payable | — | |||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements
| 3 |
CYBER ENVIRO-TECH, INC.
CONSOLIDATED STATEMENTS
OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
| Change in fair value of derivatives | ( | ) | ||||||
| Loss on issuance of derivatives | ||||||||
| Gain on extinguishment of derivative liability | ( | ) | ( | ) | ||||
| Stock compensation | ||||||||
| Warrants issued for services | ||||||||
| Amortization of debt discount | ||||||||
| Depreciation and amortization expense | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Contingent liability | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accounts payable - related parties | ||||||||
| Accrued interest | ||||||||
| Net cash from operating activities from continuing operations | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Issuance of loan receivable | ( | ) | ( | ) | ||||
| Net cash from investing activities from continuing operations | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayment of convertible notes payable | ( | ) | ( | ) | ||||
| Proceeds from convertible notes payable | ||||||||
| Proceeds from notes payable | ||||||||
| Repayment of notes payable | ( | ) | ( | ) | ||||
| Net cash from financing activities from continuing operations | ||||||||
| Net change in cash and cash equivalents from continuing operations | ||||||||
| Cash flow from discontinued operations: | ||||||||
| Net cash from operating activities from discontinued operations | ( | ) | ||||||
| Net cash from investing activities from discontinued operations | ( | ) | ||||||
| Net cash from financing activities from discontinued operations | ||||||||
| Net change in cash and cash equivalents from discontinued operations | ( | ) | ||||||
| Cash and cash equivalents at beginning of year | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||||||||
| Shares issued for conversion of convertible notes payable and accrued interest | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements
| 4 |
CYBER
ENVIRO-TECH, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Cyber Enviro-Tech, Inc. (“CETI” or the “Company”) is a publicly held water science technology company that designs water purification solutions for commercial applications and industries with an initial emphasis on the oil & gas industry. The corporate headquarters are located in Scottsdale, Arizona.
On September 3, 2020, Synergy Management Group,
LLC (“Synergy”) and Global Environmental Technologies, Inc (“Global”), which was formed on April 20, 2020, entered
into a securities purchase agreement, whereby Synergy sold its share of Special 2020 Series A preferred stock and its one-half share of
Series C preferred stock to Global for $
In February 2025, CETI formed a wholly-owned Turkish subsidiary, Cyber International Ltd, with an office in Istanbul. There are no operations in this entity yet but it was formed to enable CETI to effectively manage its international contacts.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The consolidated financial statements and related disclosures as of March 31, 2025, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In managements’ opinion, these unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2024, and 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 14, 2025. The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for the full year ended December 31, 2025.
Principles of Consolidation
The consolidated financial statements include the accounts of CETI and CETI Axenic, Inc (“Axenic”). Axenic is a majority owned subsidiary of CETI. All significant intercompany balances and transactions have been eliminated.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue recognition
The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” (“Topic 606”). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of Topic 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company expects to recognize revenues as the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.
The Company recognizes sales when oil is picked up by the delivery company and control passes to the customer.
| 5 |
Cash equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. There were
Property and Equipment
Property and equipment is recorded at cost. Cost of improvements that substantially extend the useful lives of the assets are capitalized. These costs are depreciated starting when the asset is put into service and is depreciated on a straight-line basis over its estimated useful life. Maintenance and repair costs are expensed when incurred. When other property and equipment is sold or retired, the capitalized costs and related accumulated depreciation are removed from their respective accounts.
Discontinued Operations
A component of an entity that is disposed of by sale or abandonment is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity's operations and financial results. The results of discontinued operations are aggregated and presented separately in the Consolidated Statements of Operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets, including the comparative prior year period. The Company is in the process of spinning off its oil field operations known as the Alvey oil field (Alvey). Alvey’s cash flows are reflected as cash flows from discontinued operations within the Company’s Consolidated Statements of Cash Flows for each period presented.
Amounts presented in discontinued operations have been derived from the Company’s consolidated financial statements and accounting records using the historical basis of assets, liabilities, and historical results of Alvey. The discontinued operations exclude general corporate allocations.
Note Receivable
CETI provided two Short-Term Capital Bridge Loans totaling
$
Impairment of Long-Lived Assets
In accordance with authoritative guidance on accounting for the impairment or disposal of long-lived assets, as set forth in Topic 360 of the ASC, the Company assesses the recoverability of the carrying value of its non-oil and gas long-lived assets when events occur that indicate an impairment in value may exist. An impairment loss is indicated if the sum of the expected undiscounted future net cash flows is less than the carrying amount of the assets. If this occurs, an impairment loss is recognized for the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets.
Intangible Assets
The Company recognizes intangible assets in accordance with ASC 350 which deals with accounting for indefinite-lived intangible assets other than goodwill. Intangible assets are defined as identifiable non-monetary assets without physical substance, acquired through purchase, internally generated, or acquired as part of a business combination, which provide future economic benefits and are under the control of the Company.
Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-line basis, unless another systematic and rational method better represents the consumption of the economic benefits. Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually or more frequently if there are indications of impairment.
The Company reviews intangible assets for indicators of impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized if the carrying amount of the assets exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Any impairment loss is recognized in the consolidated statements of operations. Upon impairment, the carrying amount of the intangible asset is reduced to its recoverable amount.
| 6 |
Accounting for Majority-Owned Subsidiary
The Company consolidates the financial statements of majority-owned subsidiaries in accordance with U.S. GAAP. A subsidiary is classified as majority-owned when the Company owns more than 50% of its voting shares, giving it control over the subsidiary's operations and financial policies.
In the consolidated financial statements, all intercompany transactions, balances, and unrealized gains and losses on transactions between the Company and its subsidiaries have been eliminated. The financial position, results of operations, and cash flows of each majority-owned subsidiary are fully consolidated with the portion attributable to non-controlling interests presented as a separate line item in the equity section of the consolidated balance sheets and as a separate component of net income in the consolidated statements of operations. However, for the three-month period ended March 31, 2024, no non-controlling interests are presented in the consolidated financial statements since there was no subsidiary in operation at that time.
Non-controlling interests represent the portion of equity in subsidiaries that is not attributable, directly or indirectly, to the Company.
The Company applies the fair value method of Financial Accounting Standards Board (“FASB”) ASC 718, “Share Based Payment”, in accounting for its stock-based compensation. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values stock-based compensation at the market price for the Company’s common stock and other pertinent factors at the grant date. During the three months ended March 31, 2025 and 2024, the Company recorded $ and $ in stock-based compensation expense, respectively.
Fair Value of Financial Instruments
The Company adopted ASC 820, “Fair Value Measurements.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
| Level 1: | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2: | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3: | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.
The Company evaluates convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC 815, “Derivatives and Hedging”. The result of this accounting treatment is that the fair value of the derivative is marked to market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date.
The following table classifies the Company’s liability measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2025:
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
| Derivative | $ | $ | $ | $ | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||
The following table classifies the Company’s liability measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2024:
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
| Derivative | $ | $ | $ | $ | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||
| 7 |
Income taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expect to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits as a component of general and administrative expenses. The Company’s federal tax return and any state tax returns are not currently under examination.
The Company has adopted ASC 740, “Accounting for Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually from differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Under the provisions of ASC 260, “Earnings per Share”, basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The following potential common shares were excluded from the calculation of diluted net income (loss) per share available to common stockholders because their effect would have been antidilutive:
Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Warrants | ||||||||
| Stock options | ||||||||
| Common stock to be issued | ||||||||
| Convertible notes payable | ||||||||
| Preferred stock | ||||||||
| Total | ||||||||
Concentration of credit risks
The Company maintains accounts with financial institutions. All cash in checking accounts is non-interest bearing and is fully secured by the Federal Deposit Insurance Corporation (FDIC). At times, cash balances may exceed the maximum coverage provided by the FDIC on insured depositor accounts. The Company believes it mitigates its risk by depositing its cash and cash equivalents with major financial institutions.
Segment Reporting
The Company has determined that it has one reportable segment, which includes industrial water remediation. The single segment was identified based on how the Chief Operating Decision Maker, who was determined to be the Chief Executive Officer, manages and evaluates performance and allocates resources.
Recently issued accounting pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, enhancing segment expense transparency. The update requires public entities to disclose significant segment expenses regularly provided to the chief operating decision maker and extends certain annual segment disclosures to interim periods. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, with interim period application required starting after December 15, 2024, and early adoption permitted. The Company adopted this guidance as of January 1, 2024 and it is not expected to have a material impact.
Advertising Costs
Advertising costs are accounted for in accordance with ASC 720-35, Advertising Costs, which requires that such costs be expensed as incurred unless they meet the criteria for capitalization. Prepaid advertising costs may be recorded as assets if payment is made in advance of the advertisement and the benefit is expected to be realized in a future period.
The Company had $
| 8 |
NOTE 3 – GOING CONCERN
The Company’s consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business for the foreseeable future. The Company does not yet have sufficient revenue to cover its operating expenses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary financing to meet the Company’s obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with increased revenue and private placement loans or institutional investors. However, the Company is in the process of filing an S-1 to give it the ability to raise funds through sale of stock. While the Company believes that it will be successful in obtaining the necessary financing and generating revenue to fund the Company’s operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations.
The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. In April 2025, the Company received notice of litigation regarding its potential purchase of a salt water disposal facility in 2024 that it decided not to pursue. The outcome of this litigation is undetermined at this time but the Company believes that its counterclaims will exceed whatever the plaintiff is asking for therefore no accrual has been made as of March 31, 2025.
In December 2021, the Company entered into
an agreement to operate the wells on the Alvey Oil Field. Under this agreement, the Company owes a contingent amount based upon
In February 2022 and February 2023, CETI
entered into agreements with two different investors offering them a stock guarantee on share price within a three-year period of
time. The first investor’s shares in February 2022, came due in February 2025 and CETI entered into an agreement to pay cash
and shares to satisfy that guarantee. For the second investor, the Company accrued a liability as of March 31, 2025 and December 31,
2024 for the difference between the share price on those dates and the guaranteed share price. The guarantees are presented as
Contingent liabilities of $
On December 9, 2024, CETI entered into an agreement
with a company to provide consulting services to obtain funding of at least $
On December 21, 2024, CETI entered into a Financial
Consulting Engagement Agreement (FCEA) to provide consulting services and identify potential sources of private and/or public financing
of up to
| 9 |
NOTE 5 – PROPERTY AND EQUIPMENT
As of March 31, 2025 and December 31, 2024, property and equipment consisted of the following:
| March 31, 2025 | December 31, 2024 | Useful Lives | ||||||||
| Equipment | $ | $ | ||||||||
| Vehicles | ||||||||||
| Less accumulated depreciation | ( | ) | — | |||||||
| Property and equipment, net | $ | $ | — | |||||||
There was $
NOTE 6 – INTANGIBLE ASSETS
The intangible assets consist of exclusive licenses
for United States distribution obtained by the Company from KAM Biotechnology Ltd (“KAM”) in May 2023 and the agreement has
a term of ten years. The asset is stated at the fair value of $
NOTE 7 – DEBT
| March 31, 2025 | December 31, 2024 | |||||||
| Notes payable | $ | $ | ||||||
| Note payable – related party | ||||||||
| Convertible notes payable | ||||||||
| Convertible notes payable – related party | ||||||||
| Debt discount | ( |
) | ( |
) | ||||
| Less current portion | ||||||||
| Long term portion | $ | $ | ||||||
The following is a schedule of debt maturity and the years in which the debt is scheduled to mature:
| Year | Amount | |||||
| 2025 | $ | |||||
| 2026 | ||||||
| 2027 | ||||||
| $ | ||||||
Notes payable
In February 2021, the Company purchased certain
oil and gas production equipment in the Alvey Oil Field. The total purchase price was $
| 10 |
In December 2023, the Company borrowed $
In September 2023, a related party issued a loan
to the Company for a total amount of $
In March 2024, the Company had two loans payable to
an individual. One loan was paid off in December 2024 and the other of $
In February 2025, an investor made a short-term loan
to the Company for $
At March 31, 2025 and December 31, 2024, the Company
had drawn down $
Convertible notes payable
In 2020, the Company executed a convertible
note payable with a related party for $
During the year ended December 31, 2022,
the Company received $
During the year ended December 31, 2023,
the Company raised a net of $
During 2024, the Company raised a net of
$
During 2024, the Company converted $
During the first quarter of 2025, the Company
raised $
All notes payable and convertible notes payable are unsecured.
| 11 |
NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS
Embedded derivatives
The Company’s convertible notes payable gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of March 31, 2025 and December 31, 2024 and the amounts that were reflected in income related to derivatives for the period ended:
| March 31, 2025 | ||||||||
| The financings giving rise to derivative financial instruments | Indexed Shares | Fair Values | ||||||
| Embedded derivatives | $ | |||||||
| Total | $ | |||||||
| December 31, 2024 | ||||||||
| The financings giving rise to derivative financial instruments | Indexed Shares | Fair Values | ||||||
| Embedded derivatives | $ | |||||||
| Total | $ | |||||||
The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the three months ended March 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Embedded derivatives | $ | ( | ) | $ | ||||
| Loss on issuance of derivative | ( | ) | ||||||
| Total gain (loss) | $ | ( | ) | $ | ||||
Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. The Company has selected the Monte Carlo Simulation Model, which approximates the Monte Carlo Simulations, a valuation technique to fair value the embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Monte Carlo Simulation Model technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. For instruments in which the time to expiration has expired, the Company has utilized the intrinsic value as the fair value. The intrinsic value is the difference between the quoted market price on the valuation date and the applicable conversion price.
Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the embedded derivatives that have been bifurcated from the convertible notes and classified in liabilities:
| Inception Date | Inception Date | |||||||
April 26, 2024 Note | June 21, 2024 Note | |||||||
| Quoted market price on valuation date | $ | $ | ||||||
| Effective contractual conversion rates | $ | $ | ||||||
| Contractual term to maturity | ||||||||
| Market volatility: | ||||||||
| Volatility | %- | % | %- | % | ||||
| Risk-adjusted interest rate | % | % | ||||||
| 12 |
| Inception Date | Inception Date | Year Ended | ||||||||||
| October 10, 2024 Note | November 7, 2024 Note | December 31, 2024 | ||||||||||
| Quoted market price on valuation date | $ | $ | $ | |||||||||
| Effective contractual conversion rates | $ | $ | ||||||||||
| Contractual term to maturity | ||||||||||||
| Market volatility: | ||||||||||||
| Volatility | %- | % | %- | % | %-% | |||||||
| Risk-adjusted interest rate | % | % | -% | |||||||||
| Inception Date | Period Ended | |||||||
| January 3, 2025 Note | March 31, 2025 | |||||||
| Quoted market price on valuation date | $ | $ | ||||||
| Effective contractual conversion rates | $ | $ | ||||||
| Contractual term to maturity | ||||||||
| Market volatility: | ||||||||
| Volatility | %- | % | %- | % | ||||
| Risk-adjusted interest rate | % | % | ||||||
The following table reflects the issuances of embedded derivatives and changes in fair value inputs and assumptions related to the embedded derivatives as of March 31, 2025 and December 31, 2024.
Period Ended March 31, 2025 | Year Ended December 31, 2024 | |||||||
| Balances at beginning of period | $ | $ | ||||||
| Issuances: | ||||||||
| Embedded derivatives | ||||||||
| Gain on extinguishment of derivative liability | ( | ) | ( | ) | ||||
| Changes in fair value inputs and assumptions reflected in income | ( | ) | ||||||
| Balances at end of period | $ | $ | ||||||
NOTE 9 – RELATED PARTY TRANSACTIONS
At March 31, 2025 and December 31, 2024, the Company
had a convertible note payable for $
At
March 31, 2025 and December 31, 2024, the Company had accounts payable to various related parties for a total of $
In September 2023, a related party loaned $
During periods ended March 31, 2025 and 2024, the
Company paid various related parties for consulting services in the amounts of $
The above transactions and amounts are not necessarily what third parties would have agreed to.
| 13 |
NOTE 10 – PREFERRED STOCK
Series A Convertible Preferred Stock
The Company previously designated shares of
Preferred Stock as Series A Convertible Preferred Stock and had issued shares.
During 2023, the Company changed the terms this series of stock whereby one (1) share of Series A Convertible Preferred, after a minimum two-year holding period, can be converted into three thousand (3,000) shares of the Company’s common stock and has the same equivalent voting rights. In October 2023, the three top shareholders cancelled common shares of stock and were issued shares of Series A Convertible Preferred Stock. As of March 31, 2025 and December 31, 2024, there are shares of Series A Convertible Stock issued and outstanding.
Series B Convertible Preferred Stock
The Company previously designated shares of
Preferred Stock as Series B Convertible Preferred Stock and had issued shares.
Series C Non-Convertible Preferred Stock
The Company previously designated shares of
Preferred Stock as Series C Non-Convertible Preferred Stock and had issued all shares.
Special 2020 Series A Preferred
The Company has one share of preferred stock designated
as Special 2020 Series A Preferred, par value $. The holder for the Special 2020 Series A Preferred shall vote with the holders
of both preferred and common stockholders as a single class. The holder is entitled to 60% of all votes. The one share of Series A is
convertible into shares of common stock at any time and is not entitled to dividends. The Company purchased that one series
A preferred share for $
| 14 |
NOTE 11 – STOCK OPTIONS AND WARRANTS
In connection with a consulting agreement dated March
7, 2022, the Company issued options at an exercise price of $
On June 3, 2023,
The following table summarizes the accounting effects of the modification:
| June 3, 2023 Replacement Award | ||||
| Fair value of new award | $ | |||
| Fair value of original award on modification date | $ | |||
| Incremental cost | $ | |||
| Unrecognized grant-date fair value of original award on modification date | $ | |||
| Cost to be recognized after modification | $ | |||
| Recognition Period | ||||
Significant inputs and results arising from the Black-Scholes process are as follows for the options:
| Quoted market price on valuation date | $ | |||
| Exercise price | $ | |||
| Expected life (in years) | Years | |||
| Equivalent volatility | % | |||
| Interest rates | % | |||
Stock option activity for the three months ended March 31, 2025 and the year ended December 31, 2024 summarized as follows:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | ||||||||||||
| Options outstanding December 31, 2023 | ||||||||||||||
| Issued | — | |||||||||||||
| Exercised | — | |||||||||||||
| Cancelled | — | |||||||||||||
| Options outstanding December 31, 2024 | ||||||||||||||
| Options exercisable December 31, 2024 | $ | |||||||||||||
| Issued | — | |||||||||||||
| Exercised | — | |||||||||||||
| Cancelled | — | |||||||||||||
| Options outstanding March 31, 2025 | ||||||||||||||
| Options exercisable March 31, 2025 | $ | |||||||||||||
In connection with a different
consulting agreement dated March 1, 2023, the Company initially agreed to pay
shares of common stock, along with a monthly consulting fee. This common stock was valued at $
on the date of the agreement and was amortized equally over the six-month agreement. On July 1, 2023, the Company and consultant
decided to amend the agreement so that the consultant would receive
During the year ended December 31, 2024, the Company issued an aggregate warrants in connection with convertible notes. warrants were issued in the first quarter of 2025 but warrants were exercised.
| 15 |
Significant range of inputs and results arising from the Black-Scholes process are as follows for the warrants:
| Quoted market price on valuation date | $ | |||
| Effective contractual strike price | $ | |||
| Market volatility | % | |||
| Contractual term to maturity | years | |||
| Risk-adjusted interest rate | % |
Stock warrant activity for three months ended March 31, 2025 and the year ended December 31, 2024 is summarized as follows:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | ||||||||||||
| Warrants exercisable December 31, 2023 | $ | |||||||||||||
| Issued | $ | |||||||||||||
| Exercised | — | |||||||||||||
| Expired | — | |||||||||||||
| Warrants outstanding December 31, 2024 | ||||||||||||||
| Warrants exercisable December 31, 2024 | $ | |||||||||||||
| Issued | — | |||||||||||||
| Exercised | — | |||||||||||||
| Expired | — | |||||||||||||
| Warrants outstanding March 31, 2025 | ||||||||||||||
| Warrants exercisable March 31, 2025 | $ | |||||||||||||
NOTE 12 – DISCONTINUED OPERATIONS
CETI is planning to spin-off the Alvey oil field operations into a new entity called Phoenix Well Development Inc (PWD). The shareholders of CETI will get a pro rata stock distribution of PWD common shares. A new investor group will run the operation.
Accordingly, the Company has categorized Alvey as discontinued operations in the consolidated financial statements.
The operating results for discontinued operations have been presented in the accompanying consolidated statements of operations for the three months ended March 31, 2025 and 2024 as discontinued operations and are summarized below:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total revenue | $ | $ | ||||||
| Total cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expenses) | ||||||||
| Loss before tax expense | ( | ) | ( | ) | ||||
| Tax expense | ||||||||
| Loss from operations of discontinued operations | $ | ( | ) | $ | ( | ) | ||
| 16 |
The assets and liabilities of the discontinued operations at March 31, 2025 and December 31, 2024 are summarized below:
March 31, 2025 | December 31, 2024 | |||||||
| Property and equipment, net(1) | $ | $ | ||||||
| Texas Railroad Commission bond(2) | ||||||||
| Assets of discontinued operations, non-current | ||||||||
| Total assets | $ | $ | ||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable – related party | ||||||||
| Notes payable, current maturities | ||||||||
| Liabilities of discontinued operations, current | ||||||||
| Estimated asset retirement obligation | ||||||||
| Liabilities of discontinued operations, non-current | ||||||||
| Total liabilities | $ | $ | ||||||
(1) Property and equipment, net
Property and equipment, at cost, for the discontinued operations consisted of the following at March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | Useful Lives | ||||||||
| Equipment | $ | $ | ||||||||
| Vehicles | ||||||||||
| Well development costs | * | |||||||||
| Less accumulated depreciation | ( | ) | ( | ) | — | |||||
| Property and equipment, net | $ | $ | — | |||||||
| * |
Depreciation expense for the discontinued operations
for periods ended March 31, 2025 and 2024 was $
Oil and Gas Producing Activities
The Company uses the successful efforts
method of accounting for oil and gas activities. Under this method, the costs of productive exploratory wells, all development wells,
related asset retirement obligation assets, and productive leases are capitalized and amortized, principally by field, on a units-of-production
basis over the life of the remaining proved reserves. Exploration costs, including personnel costs, geological and geophysical expenses,
and delay rentals for oil and gas leases are charged to expense as incurred. Exploratory drilling costs are initially capitalized, but
charged to expense if and when the well is determined not to have found reserves in commercial quantities. The sale of a partial interest
in a proved property is accounted for as a cost recovery, and no gain or loss is recognized as long as this treatment does not significantly
affect the units-of-production amortization rate. A gain or loss is recognized for all other sales of producing properties. There were
capitalized costs of $
Unproved oil and gas properties are assessed annually to determine whether they have been impaired by the drilling of dry holes on or near the related acreage or other circumstances, which may indicate a decline in value. When impairment occurs, a loss is recognized. When leases for unproved properties expire, the costs thereof, net of any related allowance for impairment, is removed from the accounts and charged to expense. During the three months ended March 31, 2025 and 2024, there was no impairment to unproved properties. The sale of a partial interest in an unproved property is accounted for as a recovery of cost when substantial uncertainty exists as to the ultimate recovery of the cost applicable to the interest retained. A gain on the sale is recognized to the extent that the sales price exceeds the carrying amount of the unproved property. A gain or loss is recognized for all other sales of unproved properties. For the three months ending March 31, 2025 and 2024, there was no gain or loss recognized for sales of unproved properties.
| 17 |
Costs associated with development wells that are unevaluated
or are waiting on access to transportation or processing facilities are reclassified into developmental wells-in-progress ("WIP").
These costs are not put into a depletable field basis until the wells are fully evaluated or access is gained to transportation and processing
facilities. Costs associated with WIP are included in the cash flows from investing as part of investment in oil and gas properties. At
March 31, 2025 and December 31, 2024,
Depreciation, depletion and amortization of proved
oil and gas properties is calculated using the units-of-production method based on proved reserves and estimated salvage values. During
the three months ended March 31, 2025 and 2024, the Company recorded
The Company reviews its proved oil and natural gas
properties for impairment whenever events and circumstances indicate that a decline in the recoverability of its carrying value may have
occurred. It estimates the undiscounted future net cash flows of its oil and natural gas properties and compares such undiscounted future
cash flows to the carrying amount of the oil and natural gas properties to determine if the carrying amount is recoverable. If the carrying
amount exceeds the estimated undiscounted future cash flows, the Company will adjust the carrying amount of the oil and natural gas properties
to fair value. During the three months ended March 31, 2025 and 2024, there was
(2) Texas Railroad Commission Bond and Estimated Asset Retirement Obligation
To cover the estimated future asset retirement obligations
("ARO") related to its oil and gas properties, the Company maintains a $
Revisions to the liability could occur due to changes in estimated abandonment costs, changes in well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of wells
NOTE 13 – INCOME TAXES
Deferred taxes are provided on a liability method
whereby deferred tax assets are recognized for deductible temporary differences and operating loss, and tax credit carryforwards and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of
Income taxes consist of the following components as of:
| March 31, 2025 | March 31, 2024 | |||||||
| Federal income tax benefit attributable to: | ||||||||
| Current Operations | $ | $ | ||||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Net provision for Federal income taxes | $ | $ | ||||||
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the periods ended March 31, 2025 and December 31, 2024, due to the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Deferred tax asset attributable to: | ||||||||
| Net operating loss carryover | $ | $ | ||||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | $ | ||||||
| 18 |
At March 31, 2025, the Company had net operating loss
carry forwards of $
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
NOTE 14 – SUBSEQUENT EVENTS
Management has evaluated events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued. The following are subsequent events that the Company considers may be material:
| · | New money raised from investors since March 31, 2025 totaled $ |
| · | As noted in the Commitments and Contingencies section, a lawsuit was filed in April 2025 against CETI. CETI believes it will prevail and therefore no accrual for lawsuit liability has been recorded. |
| · | Kuwait Oil Company approved CETI as a vendor opening the door to potential contracts in Kuwait and the Middle East. |
| · | The Company is in the process of filing an S-1 Registration statement which, among other things, will give it the ability to raise money through the sale of common stock. |
| · | Subsequent to March 31, 2025, CETI did an issuance to various shareholders who previously converted their convertible debentures which were recorded as common stock to be issued. This issuance totaled common shares. |
| · | Subsequent to March 31, 2025, the Company converted $ |
| 19 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in this Form 10-Q and are hereby referenced. 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 report. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers, and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates; and, the continued employment of our key personnel and other risks associated with competition.
GENERAL OVERVIEW
Business Background
CYBER ENVIRO-TECH, INC. is a publicly held Wyoming oil and water filtration technology company that designs water purification solutions for commercial applications and industries
Our principal executive office is located at Cyber Enviro-Tech, Inc., 6991 E. Camelback Road, Suite D-300, Scottsdale, Arizona 85251. Our telephone number is 866 687-6856. Our Internet site is located at: www.cyberenviro.tech. We maintain our statutory registered agent's office at Registered Agents Inc. 30 N Gould St Ste R Sheridan, WY 82801 USA Telephone Number. (307) 200-2803
On June 12, 2020, the District Court of Laramie County, Wyoming appointed Benjamin Berry of Synergy Management Group LLC (“Synergy”) as custodian of the Company.
On September 3, 2020, Synergy and Global Environmental Technologies, Inc. (“Global”), entered into a Securities Purchase Agreement, whereby Synergy sold its one share of Special Series A preferred stock and one-half share of Series C preferred stock to Global Environmental Technologies, Inc.
On September 23, 2020, the Company entered into a share exchange agreement with Global Environmental Technologies, Inc., (“Global”) a Wyoming corporation. Per the terms of the agreement, NexGen Holdings Corp exchanged thirty-five shares of common stock for one share of Global.
On October 6, 2020, the Company formally changed its name with the State of Wyoming from NexGen Holdings Corp to Cyber Enviro-Tech, Inc.
| 20 |
DESCRIPTION OF BUSINESS
Cyber Enviro-Tech, Inc is a water science technology company focusing on the remediation of contaminated industrial wastewater with an initial emphasis on the oil & gas industry. We are an emerging growth company with limited revenues and operating history. Our independent auditor has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern. Our pilot project is an oil field in West Texas. We currently own the mineral rights to a 479- acre, 33-well, located in Callahan County, Texas. This oil field operation known as the Alvey oil field will be spun-off into a new entity in the second quarter of 2025. In addition, the Company will soon be testing its oil water filtration machine in a few locations Southwest Texas and Oklahoma. In addition, the Company is in conversations to purchase its own Salt Water Disposal facility.
GENERAL OVERVIEW
Form and year of organization;
Cyber Enviro-Tech, Inc., also referred to as “CETI” and the “Company”, was founded in the State of Wyoming as Electronic Biotek, Inc in April 1986.
Bankruptcy, receivership;
The company has never filed Bankruptcy or been involved in any receiverships or similar proceedings.
Material reclassification;
The Company has been known by a variety of names since its inception in the State of Wyoming as Electronic Biotek, Inc. In 2020, CETI through its previous name, Globel Technologies, Inc. (“Global”) acquired NexGen Holdings Corp via a reverse merger. Subsequent to the reverse merger, the Company changed its name to Cyber Enviro-Tech, Inc. Below lists the names that the Company has been known as since inception as well as the dates those names were active:
Cyber Enviro-Tech, Inc - CURRENT.
NexGen Holdings Corp - Until April 30, 2021
WindPower Innovations, Inc. until January 2014
Educational Services International, Inc. until November 2009
Bio-Life Systems, Inc. until November 2001
Biolectronics, Corp. to April 1992
Electronic Biotek, Inc April 1986
Business of the Cyber Enviro-Tech, Inc.;
Cyber Enviro-Tech, Inc is a water science technology company focusing on the remediation of contaminated industrial wastewater with an initial emphasis on the oil & gas industry. We do this by integrating technologies to include cyber, aerospace, satellite, industrial and AI engineering telemetry. Our water filtration, wastewater and alternative energy systems will have neural sensors, controls and networks - all connected to a cellular device.
Our pilot project was an oil field in West Texas. We currently own the mineral rights to a 479- acre, 33-well, property located in Callahan County, Texas. This oil field operation known as the Alvey oil field is intended to be spun-off into a new entity in the near future and is shown as discontinued operations in the accompanying consolidated financial statements. In addition, the Company is continuing the development and testing of its water filtration machine in Texas as well as looking to place its oil and soil remediation systems in the Middle East and its water remediation systems in the meat packing industry and with municipalities.
Our focus for the current fiscal year will be on:
| 1) | Expanding our water and oil remediation operations in the Middle East and Texas |
| 2) | Developing further tests with at least one meat packing client |
| 3) | Spin off the Alvey Oil Field and turning management over to a third-party owner/operator. |
| 21 |
Sales Strategy – CETI’s B2B Sales Strategy will include partnering with individuals and companies who have many years of experience and developed relationships within their respective aforementioned targeted verticals. Prior knowledge of those specific industry issues, water filtration needs, history and relationships developed over many years will enable them to shorten the sales cycle for our water filtration system. As of March 31, 2025 the Company has independent services contracts with three individuals for its B2B sales strategy – two in oil and gas and one in the meat packing industry – and another company for its overseas services in the Middle East.
Market Demand and Size - CETI’s water filtration system can be modified to address many of the water contamination issues that exists anywhere in the world. The markets envisioned for the CETI water filtration system, when funds permit, would be both domestic (U.S.) and global.
Government Regulation
We are subject to government regulations that regulate businesses generally, such as compliance with regulatory requirements of federal, state, and local agencies and authorities, including regulations concerning workplace safety and labor relations. In addition, our operations are affected by federal and state laws relating to marketing practices in the oil industry and/or expansion of operations; a change to or changes to government regulations; a general economic slowdown; a significant decrease in the price of West Texas Intermediate crude. Any change in one or more of these factors could reduce our ability to earn and grow revenue in future periods.
Research and Development
For the year ending December 31, 2024, CETI spent approximately $1.5 million in research and development of our oil/water filtration products and process and another $268,000 in the first three months of 2025. In addition, from 2021 through December 31, 2024, approximately $3.4 million was invested in the Alvey Ranch Oil field to prove our new technologies in opening up the downhole fractures and removing contaminants from the reservoir for increased oil production. The former has been expensed and the latter capitalized. Currently the Alvey is being spun off into a separate company as the Company intends to focus its efforts on water and oil/soil remediation and therefore expenses for the Alvey during the first quarter of 2025 were to keep the field active.
Personnel
As of March 31, 2025, we have no employees but the Company does have 11 full-time and part-time consultants.
Results of Operations for the Three Months Ending March 31, 2025 and 2024:
| 2025 | 2024 | $ | % | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Professional fees | $ | 151,120 | $ | 48,403 | $ | 102,717 | 212 | % | ||||||||
| General and administrative | 218,648 | 400,769 | (182,121 | ) | -45 | % | ||||||||||
| Consulting | 515,189 | 574,827 | (59,638 | ) | -10 | % | ||||||||||
| Total operating expenses | 884,957 | 1,023,999 | (139,042 | ) | -14 | % | ||||||||||
| Loss from operations | (884,957 | ) | (1,023,999 | ) | (139,042 | ) | -14 | % | ||||||||
| Other Income (Expense): | ||||||||||||||||
| Change in fair value of derivative | (202,710 | ) | 24,516 | (227,226 | ) | -927 | % | |||||||||
| Loss on issuance of derivative | (17,676 | ) | — | (17,676 | ) | 100 | % | |||||||||
| Amortization of intangible assets | — | (28,213 | ) | 28,213 | -100 | % | ||||||||||
| Interest expense | (331,723 | ) | (161,152 | ) | (170,571 | ) | 106 | % | ||||||||
| Gain on extinguishment of derivative liability | 351,971 | 79,564 | 272,407 | 342 | % | |||||||||||
| Change in fair value of contingent liability | 15,000 | — | 15,000 | 100 | % | |||||||||||
| Interest income | 3,288 | 924 | 2,364 | 256 | % | |||||||||||
| Total Other Income (Expense) | (181,850 | ) | (84,361 | ) | (97,489 | ) | 116 | % | ||||||||
| Loss from continuing operations | (1,066,807 | ) | (1,108,360 | ) | (41,553 | ) | -4 | % | ||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from operations of discontinued operations | (81,274 | ) | (11,812 | ) | (69,462 | ) | 588 | % | ||||||||
| Net loss | (1,148,081 | ) | (1,120,172 | ) | (27,909 | ) | 2 | % | ||||||||
| Less net loss attributable to noncontrolling interest | (4,530 | ) | — | (4,530 | ) | 100 | % | |||||||||
| Net loss attributable to common stockholders | $ | (1,143,551 | ) | $ | (1,120,172 | ) | $ | (23,379 | ) | 2 | % | |||||
| 22 |
General and administrative Expenses. General and administrative expenses for the three months ended March 31, 2025 were down by -45% versus 2024 largely due to a decrease in advertising and promotion of approximately $39,000 and a decrease in sampling and testing of $150,000.
Professional fees. These fees are largely made up of audit and audit-related fees ($48,920 and $46,142 during the periods ending March 31, 2025 and 2024 respectively) and, in 2025, another $66,250 worth of fees related to the Green Bond fundraising project.
Consulting fees. Decreased by 10% due to higher stock compensation in 2024 vs 2025 of $181,287 and $279,580, respectively due to more consultants receiving stock compensation in 2024.
Other income (expense). Much of this is related to the issuance and conversion of convertible debentures used to raise money for the Company’s operations. $1,117,500 and $870,000 was raised by the sale of convertible debentures in first quarter of 2025 and 2024, respectively. In the 1st Qtr 2025, one convertible loan with derivatives was converted to stock which resulted in an amortization of debt discount (part of interest expense) of $228,449 which largely accounts for the difference in interest expense since the overall convertible debt for the quarters ending in March 2025 and 2024 was almost the same ($2,591,076 and $2,594,250 respectively). In addition, the change in fair value of derivatives was a net decrease of $227,226 in 2025 versus 2024 which was offset by the increase on the gain on extinguishment of the derivative liability of $272,407 from 2024 to 2025.
Net income (loss) from continuing operations. The above changes resulted in net loss of $1,143,551 in the first three months of 2025 compared to a net loss of $1,120,172 in 2024. Decreases in operating expenses of $139,042 were offset by the increase in other expense as noted above.
Discontinued operations: The Company is spinning off the Alvey oil field in second quarter 2025, and this represents the non-capitalized expenses related to the Alvey.
Liquidity and Capital Resources
As of March 31, 2025, the Company had total assets of $3,727,247 including current assets of $685,669 as well as $2,065,483 from the discontinued operations of the Alvey oil field. We also have current liabilities of $2,473,059 which consist of accounts payable of $231,791 and short-term convertible notes payable of $971,861, net of discount of $48,835, notes payable of $468,925, net of discount of $5,274 and $378,500 from the discontinued operations of the Alvey oil field which is mostly the payable due on the Alvey Oil Field leasehold improvements. We also have $1,866,847 of long-term liabilities which is largely due to convertible notes payable of $1,438,731, net of discount of $128,269 and a derivative liability of $330,653. We believe our ability to achieve commercial success and continued growth will be dependent upon our continued access to capital either through sale of additional convertible debentures, sale of our equity or cash generated from operations. We will attempt to obtain additional capital through private investors; however, we have no agreements or understandings with third parties at this time in regards to investing additional monies. To help fund operations, the Company is in the process of filing an S-1 to give it the ability to raise funds through sale of stock. While the Company believes that it will be successful in obtaining the necessary financing and generating revenue to fund the Company’s operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations. As explained in Note 3, the Company does not yet have sufficient revenue to cover its operating expenses. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
S-1 Registration Statements Effective January 2023 and December 2023
The Company filed an S-1 Registration statement in 2022 and it became effective in January 2023. This gives the Company the right to sell 10 million shares of common stock at $0.40 per share and allowed almost seven million shares of stock from debentures converted in 2022 to become free trading shares. As of May 15, 2025, none of the 10 million shares of common stock have been sold.
The Company filed a second S-1 Registration statement in 2023 and it became effective in December 2023. This registration statement registered securities for consultants, who received shares for services, and some investors, who received shares for either cash or on the conversion of convertible debentures.
| 23 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 4. Controls and Procedures.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our management, with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, being March 31, 2025.
Based on this evaluation, these officers concluded that, as of December 31, 2024 these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission. The conclusion that our disclosure controls and procedures were not effective was due to the Company was lacking in pre-planning for expenses and documentation of all transactions. As of March 31, 2025, some progress has been made in implementing enhanced controls and procedures.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a more than remote possibility that a misstatement of our company's annual or interim consolidated financial statements could occur. In its assessment of the effectiveness of our internal control over financial reporting as of March 31, 2025, we determined that there were control deficiencies that constituted material weaknesses which are indicative of many small companies with small staff, such as:
| (1) |
inadequate segregation of duties and effective risk assessment; and
| |
| (2) | insufficient written policies and procedures for documenting all transactions with vendors. |
Our management is currently evaluating remediation plans for the above deficiencies. During the period covered by this quarterly report on Form 10-Q, we have been able to remediate some of the weaknesses described above. However, we plan to take steps to enhance and improve the design of our internal control over financial reporting.
| 24 |
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
As noted in the Commitments and Contingencies section, a lawsuit was filed in April 2025 against CETI. CETI believes it will prevail and therefore no accrual for lawsuit liability has been recorded.
Item 1A. Risk Factors.
As a “Smaller Reporting Company,” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
| Date of Transaction | Transaction type (e.g. new issuance, cancellation, shares returned to treasury) | Number of Shares Issued (or cancelled) | Class of Securities | Value of shares issued ($/per share) at Issuance | Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed) | Reason for share issuance (e.g. for cash or debt conversion) -OR- Nature of Services Provided | Restricted or Unrestricted as of this filing | |||||||||||||||
| 3/24/2023 | New | 300,000 | Common | 0.420 | Joe Isaac, Axiom Group | Services | Restricted | |||||||||||||||
| 4/3/2023 | New | 3,000,000 | Common | 0.001 | Joe Isaacs | Services | Unrestricted | |||||||||||||||
| 5/23/2023 | New | 250,000 | Common | 0.42 | Joe Isaacs | Services | Restricted | |||||||||||||||
| 5/23/2023 | New | 250,000 | Common | 0.38 | Frank Straw | Services | Restricted | |||||||||||||||
| 5/23/2023 | New | 250,000 | Common | 0.31 | Markus Miller | Services | Restricted | |||||||||||||||
| 5/23/2023 | New | 200,000 | Common | 0.38 | Bruce Moore | Services | Restricted | |||||||||||||||
| 5/23/2023 | New | 1,000,000 | Common | 0.38 | US Affiliated Inc, Karen Fowler | Services | Restricted | |||||||||||||||
| 7/21/2023 | New | 15,000 | Common | 0.35 | Benjamin Berry | Contingent Liability Paid | Restricted | |||||||||||||||
| 10/18/2023 | New | 600,000 | Common | 0.10 | Jaron Mossman & Jode Vallejos JTTEN | Debt conv | Restricted | |||||||||||||||
| 10/18/2023 | New | 253,180 | Common | 0.10 | Mark Mitrev | Debt conv | Restricted | |||||||||||||||
| 10/18/2023 | New | 101,250 | Common | 0.10 | Jaylen Mossman | Debt conv | Restricted | |||||||||||||||
| 10/18/2023 | New | 252,850 | Common | 0.10 | Peter D. Lawrence | Debt conv | Restricted | |||||||||||||||
| 10/18/2023 | New | 121,370 | Common | 0.10 | Justin Mossman | Debt conv | Restricted | |||||||||||||||
| 11/7/2023 | New | 500,000 | Common | 0.31 | Markus Miller | Services | Restricted | |||||||||||||||
| 11/7/2023 | New | 2,000,000 | Common | 0.335 | Serdar Gurel | Services | Restricted | |||||||||||||||
| 11/7/2023 | New | 252,580 | Common | 0.10 | McKellar R Trust, Winston McKellar, trustee | Debt conv | Restricted | |||||||||||||||
| 11/7/2023 | New | 252,580 | Common | 0.10 | Susan E. Crossett | Debt conv | Restricted | |||||||||||||||
| 11/7/2023 | New | 505,050 | Common | 0.10 | Douglas Gore | Debt conv | Restricted | |||||||||||||||
| 12/28/2023 | New | 360,000 | Common | 0.25 | Markham and ML Broughton RT, Markham Broughton | Services | Restricted | |||||||||||||||
| 12/28/2023 | New | 253,240 | Common | 0.10 | Timothy and Kim Dukes | Debt conv | Restricted | |||||||||||||||
| 12/28/2023 | New | 252,470 | Common | 0.10 | Alexander Fil | Debt conv | Restricted | |||||||||||||||
| 12/28/2023 | New | 252,360 | Common | 0.10 | Chris Gressinger | Debt conv | Restricted | |||||||||||||||
| 12/28/2023 | New | 256,360 | Common | 0.10 | Dwayne Hay | Debt conv | Restricted | |||||||||||||||
| 2/2/2024 | New | 1,011,620 | Common | 0.10 | DePrima Donnelly Family Trust, Anthon DePrima, trustee | Debt conv | Restricted | |||||||||||||||
| 25 |
| Date of Transaction | Transaction type (e.g. new issuance, cancellation, shares returned to treasury) | Number of Shares Issued (or cancelled) | Class of Securities | Value of shares issued ($/per share) at Issuance | Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed) | Reason for share issuance (e.g. for cash or debt conversion) -OR- Nature of Services Provided | Restricted or Unrestricted as of this filing | |||||||||||||||
| 2/2/2024 | New | 335,850 | Common | 0.10 | Carl R. Vertuca | Debt conv | Restricted | |||||||||||||||
| 2/2/2024 | New | 335,780 | Common | 0.10 | Bryan Vertuca | Debt conv | Restricted | |||||||||||||||
| 2/28/2024 | New | 252,030 | Common | 0.10 | Jeffrey Kelley | Debt conv | Restricted | |||||||||||||||
| 2/28/2024 | New | 302,370 | Common | 0.10 | Leibowitz Living Trust, Alan Leibowitz, trustee | Debt conv | Restricted | |||||||||||||||
| 2/28/2024 | New | 336,790 | Common | 0.10 | Dominic Mancini | Debt conv | Restricted | |||||||||||||||
| 2/28/2024 | New | 253,680 | Common | 0.10 | David Townley Paton | Debt conv | Restricted | |||||||||||||||
| 2/28/2024 | New | 253,240 | Common | 0.10 | Michael Volpe/ Liliane Stachishin-Moura, JTTN | Debt conv | Restricted | |||||||||||||||
| 3/12/2024 | New | 505,820 | Common | 0.10 | Paul Stander, SEP-IRA | Debt conv | Restricted | |||||||||||||||
| 3/12/2024 | New | 202,020 | Common | 0.10 | Nicole M. Hobbs | Debt conv | Restricted | |||||||||||||||
| 3/12/2024 | New | 252,140 | Common | 0.10 | James S Benedict | Debt conv | Restricted | |||||||||||||||
| 3/12/2024 | New | 252,090 | Common | 0.10 | Cameron Turner | Debt conv | Restricted | |||||||||||||||
| 3/12/2024 | New | 100,710 | Common | 0.10 | Jill B. Mossman | Debt conv | Restricted | |||||||||||||||
| 4/2/2024 | New | 256,310 | Common | 0.10 | Dwayne Hay | Debt conv | Restricted | |||||||||||||||
| 4/2/2024 | New | 252,310 | Common | 0.10 | JJJ Enterprises, Jeff J. Jorgenson | Debt conv | Restricted | |||||||||||||||
| 4/2/2024 | New | 251,700 | Common | 0.10 | Michael B. Schuster | Debt conv | Restricted | |||||||||||||||
| 4/2/2024 | New | 126,565 | Common | 0.20 | Business Marketing Group, Brian Foster | Debt conv | Restricted | |||||||||||||||
| 4/2/2024 | New | 252,030 | Common | 0.10 | McKellar Revocable Trust, December 17 2012, Donald McKellar III, trustee | Debt conv | Restricted | |||||||||||||||
| 4/2/2024 | New | 126,565 | Common | 0.20 | Business Marketing Group, Brian Foster | Debt conv | Restricted | |||||||||||||||
| Restricted | ||||||||||||||||||||||
| 4/15/2024 | New | 756,250 | Common | 0.10 | Timothy and Kim Dukes | Debt conv | Restricted | |||||||||||||||
| 4/15/2024 | New | 500,760 | Common | 0.10 | Dwayne Hay | Debt conv | Restricted | |||||||||||||||
| 4/15/2024 | New | 34,000 | Common | 0.35 | DePrima Donnelly Family Trust, Anthony DePrima, trustee | Debt conv | Restricted | |||||||||||||||
| 4/15/2024 | New | 66,000 | Common | 0.35 | Neil Superfon | Debt conv | Restricted | |||||||||||||||
| 4/15/2024 | New | 201,360 | Common | 0.20 | Thomas Randall Powell | Debt conv | Restricted | |||||||||||||||
| 5/9/2024 | New | 252,910 | Common | 0.10 | Markl Family Living Trust, Barry Markl | Debt conv | Restricted | |||||||||||||||
| 5/9/2024 | New | 200,970 | Common | 0.10 | Kaan Brian Gokay | Debt conv | Restricted | |||||||||||||||
| 5/9/2024 | New | 253,015 | Common | 0.20 | William and Jennifer Vincent | Debt conv | Restricted | |||||||||||||||
| 5/9/2024 | New | 303,555 | Common | 0.20 | TWCI Consulting LLC, Christopher Ingram | Debt conv | Restricted | |||||||||||||||
| 5/9/2024 | New | 25,255 | Common | 0.20 | Michael Hay | Debt conv | Restricted | |||||||||||||||
| 5/9/2024 | New | 50,505 | Common | 0.20 | Jaye Gene Todd Collier | Debt conv | Restricted | |||||||||||||||
| 5/22/2024 | New | 77,285 | Common | 0.20 | Paul Leonard | Debt conv | Restricted | |||||||||||||||
| 5/22/2024 | New | 128,645 | Common | 0.20 | David Haley | Debt conv | Restricted | |||||||||||||||
| 5/22/2024 | New | 128,535 | Common | 0.20 | Staunton Family 2007 Trust, Richard Staunton, trustee | Debt conv | Restricted | |||||||||||||||
| 26 |
| Date of Transaction | Transaction type (e.g. new issuance, cancellation, shares returned to treasury) | Number of Shares Issued (or cancelled) | Class of Securities | Value of shares issued ($/per share) at Issuance | Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed) | Reason for share issuance (e.g. for cash or debt conversion) -OR- Nature of Services Provided | Restricted or Unrestricted as of this filing | |||||||||||||||
| 5/22/2024 | New | 1,285,070 | Common | 0.20 | Chris Cappuccilli | Debt conv | Restricted | |||||||||||||||
| 5/22/2024 | New | 12,835 | Common | 0.20 | Dallas Dukes | Debt conv | Restricted | |||||||||||||||
| 5/22/2024 | New | 12,835 | Common | 0.20 | T Jordan Dukes | Debt conv | Restricted | |||||||||||||||
| 6/11/2024 | New | 513,155 | Common | 0.20 | Michael and Judith Mendoza Revocable Living Trust dated 8 March 2004, Michael Mendoza, trustee | Debt conv | Restricted | |||||||||||||||
| Restricted | ||||||||||||||||||||||
| 6/11/2024 | New | 127,580 | Common | 0.20 | Jessica Patterson | Debt conv | Restricted | |||||||||||||||
| 6/11/2024 | New | 127,140 | Common | 0.20 | F. Stanton Sipes | Debt conv | Restricted | |||||||||||||||
| 6/11/2024 | New | 260,305 | Common | 0.20 | Peter Mitrev | Debt conv | Restricted | |||||||||||||||
| 6/11/2024 | New | 184,620 | Common | 0.20 | Carlos Eduardo Garcia Enriquez | Debt conv | Restricted | |||||||||||||||
| 6/11/2024 | New | 25,785 | Common | 0.20 | Michele Blackman | Debt conv | Restricted | |||||||||||||||
| 6/20/2024 | New | 525,320 | Common | 0.20 | Neil Superfon | Debt conv | Restricted | |||||||||||||||
| 6/20/2024 | New | 127,905 | Common | 0.20 | Michele Blackman | Debt conv | Restricted | |||||||||||||||
| 6/20/2024 | New | 127,330 | Common | 0.20 | Harborside Group Trust, Jim Mead | Debt conv | Restricted | |||||||||||||||
| 6/20/2024 | New | 128,730 | Common | 0.20 | Chase Donaldson | Debt conv | Restricted | |||||||||||||||
| 6/20/2024 | New | 12,870 | Common | 0.20 | David Paton | Debt conv | Restricted | |||||||||||||||
| 6/20/2024 | New | 294,200 | Common | 0.10 | Lawrence Weiss Living Trust, Katherine Lawrence, trustee | Debt conv | Restricted | |||||||||||||||
| 7/10/2024 | New | 170,910 | Common | 0.15 | Mark Mitrev | Debt conv | Restricted | |||||||||||||||
| 7/10/2024 | New | 407,980 | Common | 0.25 | Neil Superfon | Debt conv | Restricted | |||||||||||||||
| 7/10/2024 | New | 252,910 | Common | 0.10 | Lawrence Weiss Living Trust, Katherine Lawrence, trustee | Debt conv | Restricted | |||||||||||||||
| 7/10/2024 | New | 388,975 | Common | 0.20 | Suncoast Financial Mortgage Profit Sharing Plan, David Malcolm, trustee | Debt conv | Restricted | |||||||||||||||
| 7/10/2024 | New | 126,700 | Common | 0.20 | Staunton Family Investment Partnership, Richard Staunton, trustee | Debt conv | Restricted | |||||||||||||||
| 7/10/2024 | New | 127,000 | Common | 0.20 | Gardner Investment Trust, Roy A Gardner, trustee | Debt conv | Restricted | |||||||||||||||
| 7/15/2024 | New | 170 | Common | 0.10 | Timothy and Kim Dukes | Debt conv | Restricted | |||||||||||||||
| 7/15/2024 | New | 25 | Common | 0.20 | Business Marketing Group, Brian Foster | Debt conv | Restricted | |||||||||||||||
| 7/15/2024 | New | 60 | Common | 0.10 | The McKellar Revocable Trust, December 17 2012, Donald McKellar III, trustee | Debt conv | Restricted | |||||||||||||||
| 7/15/2024 | New | 45 | Common | 0.20 | Thomas Randall Powell | Debt conv | Restricted | |||||||||||||||
| 8/1/2024 | New | 500,000 | Common | 0.20 | Michael and Judith Mendoza Revocable Living Trust, dated 8 March 2004, Michael Mendoza, trustee | Cash | Restricted | |||||||||||||||
| 27 |
| Date of Transaction | Transaction type (e.g. new issuance, cancellation, shares returned to treasury) | Number of Shares Issued (or cancelled) | Class of Securities | Value of shares issued ($/per share) at Issuance | Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed) | Reason for share issuance (e.g. for cash or debt conversion) -OR- Nature of Services Provided | Restricted or Unrestricted as of this filing | |||||||||||||||
| 8/1/2024 | New | 334,000 | Common | 0.15 | Jason Black | Cash | Restricted | |||||||||||||||
| 8/1/2024 | New | 281,352 | Common | 0.10 | Julie Kutilek | Debt conv | Restricted | |||||||||||||||
| 8/1/2024 | New | 2,992,822 | Common | 0.10 | Joseph Kutilek | Debt conv | Restricted | |||||||||||||||
| 8/1/2024 | New | 110,669 | Common | 0.10 | Tara Rahr | Debt conv | Restricted | |||||||||||||||
| 8/1/2024 | New | 1,603,902 | Common | 0.10 | Charles Merkel | Debt conv | Restricted | |||||||||||||||
| 8/20/2024 | New | 1,655,192 | Common | 0.10 | Scott Jasper | Debt conv | Restricted | |||||||||||||||
| 8/20/2024 | New | 1,635,472 | Common | 0.10 | Joel Gale | Debt conv | Restricted | |||||||||||||||
| 8/20/2024 | New | 2,192,290 | Common | 0.10 | Larry Grillo | Debt conv | Restricted | |||||||||||||||
| 8/20/2024 | New | 26,742 | Common | 0.20 | Kelsey Mallory | Debt conv | Restricted | |||||||||||||||
| 10/7/2024 | New | 203,990 | Common | 0.20 | JJJ Enterprises, Jeff J Jorgenson | Debt conv | Restricted | |||||||||||||||
| 10/7/2024 | New | 697,064 | Common | 0.20 | Chris Cappuccilli | Debt conv | Restricted | |||||||||||||||
| 10/15/2024 | New | 317,950 | Common | 0.20 | Alla Abato | Debt conv | Restricted | |||||||||||||||
| 2/25/2025 | New | 168,860 | Common | 0.15 | Mark Mitrev | Debt conv | Restricted | |||||||||||||||
| 2/25/2025 | New | 84,804 | Common | 0.25 | Markl Family Living Trust, Barry Markl | Debt conv | Restricted | |||||||||||||||
| 2/25/2025 | New | 1,991,931 | Common | 0.001 | Kaybrook Client Group LLC, Harry Datys | Services | Restricted | |||||||||||||||
| 3/20/2025 | New | 113,317 | Common | 0.10 | Craig Cox | Debt conv | Restricted | |||||||||||||||
| 3/20/2025 | New | 63,295 | Common | 0.20 | Dan’l Mitchell | Debt conv | Restricted | |||||||||||||||
| 3/20/2025 | New | 136,450 | Common | 0.20 | Dr. Sea Sport, Steve Mikulak | Debt conv | Restricted | |||||||||||||||
| 3/20/2025 | New | 218,276 | Common | 0.25 | Nick Frost | Debt conv | Restricted | |||||||||||||||
| 3/20/2025 | New | 269,830 | Common | 0.20 | Jim Wade | Debt conv | Restricted | |||||||||||||||
| 3/20/2025 | New | 130,885 | Common | 0.20 | Robert Romanchek | Debt conv | Restricted | |||||||||||||||
Securities authorized for issuance under equity compensation plans
The Company has not reserved any securities for issuance under equity compensation plans for any officers, directors or any beneficial owners. The individuals below are consultants and part of their compensation is in stock as follows:
On April 25, 2023 the Company entered into a consulting agreement with Dr. Markus Miller for professional services wherein the Company paid 1,000,000 common shares.
On May 17, 2023 the Company entered into a consulting agreement with Frank Straw for professional services wherein the Company paid 1,000,000 common shares.
On June 3, 2023, the Company entered into a consulting agreement with Ken Waters for professional services wherein the Company issued 1,000,000 options with a strike price of $0.20 a share.
On September 15, 2023, the Company entered into a consulting agreement with Kaybrook Client Consulting LLC, Harry Datys, for professional services wherein the Company issued 3,750,000 warrants at a par value of $0.001. This agreement was amended on November 1, 2024 and CETI authorized another 800,000 warrants at the same par value as before and extended the consulting agreement for another 8 months.
On November 6, 2023 the Company entered into a distribution and consulting agreement with Delta, Serdar Gurel, for professional services wherein the Company paid 1,000,000 common shares.
The Company has had a working relationship with Bruce Moore for several years. To keep him engaged, the Company gave him 200,000 common shares in 2023 for professional services.
The Company has had a working relationship with US Affiliated, Inc, owned by Karen Fowler, for the past year. To keep the company engaged in 2023, CETI gave US Affiliated, Inc 1,000,000 common shares for professional services.
| 28 |
Item 3. Defaults Upon Senior Securities.
There is a loan of $22,000 to a related party that is due and payable as well as two convertible debentures totaling $150,000 that were due in September 2024. In addition, there is a loan of $343,500 due to the estate of Danny Hyde (EDH). However, as noted in the Contingency footnote, over $2 million has been spent on the rework costs of the Alvey and EDH is to bear part of that cost which exceeds what CETI owes EDH.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
During the Company’s quarter ended March 31,
2025, no director or officer
Item 6. Exhibits.
| Incorporated by Reference |
Filed or Furnished | |||||||||
| Exhibit # | Exhibit Description | Form | Date | Number | Herewith | |||||
| 31.1 | Certification of Principal Executive Officer (302) | Filed | ||||||||
| 31.2 | Certification of Principal Financial Officer (302) | Filed | ||||||||
| 32.1 | Certification of Principal Executive and Principal Financial Officers (906) | Furnished* | ||||||||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | Filed | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed | ||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed | ||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed | ||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed | ||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed | ||||||||
*This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
| 29 |
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.
| Signature | Title | Date | ||
|
/s/ Kim D. Southworth Kim D. Southworth
/s/ Dan Leboffe Dan Leboffe |
Chief Executive Officer
Principal Accounting Officer |
May 16, 2025
May 16, 2025 | ||
| 30 |