UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number 333-229638

CRUCIAL INNOVATIONS CORP.

(Exact name of registrant as specified in its charter)

Nevada		98-1446012
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

86-90 Paul Street London, United Kingdom		EC2A 4NE
(Address of principal executive offices)		(Zip Code)

________________________________________________________________

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Registrant’s telephone number, including area code: +44 (0) 203 148 1452

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller Reporting Company ☒	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company. Yes ☐ No ☒

There were 381,320,798 shares of the registrant’s common stock, $0.001 par value, outstanding, as of September 30, 2024, and 418,694,150 shares of the registrant’s common stock, $0.001 par value, outstanding as of July 29, 2025.

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EXPLANATORY NOTE

The following Quarterly Report on Form 10-Q (“10-Q”) for Crucial Innovations Corp. and its subsidiaries (“CINV” or the “Company”) for the three months ended September 30, 2024, presents the Company and its results of operations for the periods indicated therein. Except as specifically designated therein, this 10-Q does not reflect events occurring after September 30, 2024 and the Company has not otherwise updated disclosures contained herein to reflect events that occurred at a later date.

CRUCIAL INNOVATIONS CORP.

(A Nevada Corporation)

INDEX

	Page
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations and Comprehensive Loss	4
Condensed Consolidated Statements of Stockholders’ Deficit	5
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures about Market Risk	26
Item 4. Controls and Procedures	26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3. Defaults Upon Senior Securities	27
Item 4. Mine Safety Disclosures	27
Item 5. Other Information	27
Item 6. Exhibits	28
SIGNATURES	29

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Part I. Financial Information

Item 1. Consolidated Condensed Financial Statements (Unaudited)

CRUCIAL INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30,			December 31,
	2024			2023
ASSETS
Current Assets
Cash	$	299		$	—
VAT receivable		11,630			—
Prepaid expenses		18,768			—
Insurance receivable		40,633			—
Total Current Assets		71,330			—

Property and equipment, net		24,330			—
Right-of-use asset		12,586			67,634
Total Assets	$	108,246		$	67,634

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	310,072		$	9,670
Convertible note and accrued interest		10,000			10,000
Lease liability		13,359			68,229
Due to related parties		1,086,638			26,188
Total Current Liabilities		1,420,069			114,087

Total Liabilities		1,420,069			114,087

Commitments and contingencies		—			—

Stockholders' Deficit
Preferred stock: 50,000,000 authorized; $0.001 par value, no shares issued and outstanding		—			—
Common stock: 500,000,000 authorized; par value of $0.001, 381,320,798 shares and 74,417,002 shares issued and outstanding, respectively		381,321			74,417
Additional paid-in capital		88,921,216			76,515
Accumulated deficit		(90,534,568	)		(197,385	)
Accumulated other comprehensive loss		(79,792	)		—
Total Stockholders' Deficit		(1,311,823	)		(46,453	)
Total Liabilities and Stockholders' Deficit	$	108,246		$	67,634

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CRUCIAL INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

		For the							For the
		Three months ended							Nine months ended
	September 30,							September 30,
		2024			2023				2024			2023

Revenues		$	—		$	—			$	—		$	—

Operating expenses
Management fees			—			—				30,014,014			—
Professional fees			170,308			—				53,356,994			—
Marketing			19,626			—				5,352,377			—
Impairment of inventory			279,150			—				610,884			—
Impairment loss on fixed assets - acquisition Ember Pharms (Pty) Ltd			—			—				834,611			—
General and administrative expenses			40,517			6,310				150,981			6,310
Total operating expenses			509,601			6,310				90.319,861			6,310

Loss from operations			(509,601	)		(6,310	)			(90,319,861	)		(6,310	)

Other Expense
Interest expense			(14,218	)		(332	)			(17,322	)		(903	)
Total other expense			(14,218	)		(332	)			(17,322	)		(903	)

Net loss before taxes			(523,819	)		(6,642	)			(90,337,183	)		(7,213	)
Provision for income taxes			—			—				—			—
Net loss		$	(523,819	)	$	(6,642	)		$	(90,337,183	)	$	(7,213	)

Other comprehensive income (loss)
Foreign currency adjustment			(63,765	)		—				(79,792	)		—

Total comprehensive loss		$	(587,584	)	$	(6,642	)		$	(90,416,975	)	$	(7,213	)

Basic and diluted loss per common share		$	(0.00	)	$	(0.00	)		$	(0.29	)	$	(0.00	)

Weighted average number of common shares outstanding, basic and diluted			382,713,615			74,417,002				310,003,100			74,417,002

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CRUCIAL INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

For the Three and Nine Months ended September 30, 2024

						Additional						Accumulated			Total
		Common Stock				Paid-in			Accumulated			Comprehensive			Stockholders'
		Shares		Amount		Capital			Deficit			Income (Loss)			Deficit

Balance, December 31, 2023			74,417,002	$	74,417	$	76,515		$	(197,385	)	$	—		$(46,453)

	Common stock issued for prepaid asset acquisition		500,000		500		135,500			—			—		136,000
	Common stock issued for management fees		110,345,637		110,346		29,903,668			—			—		30,014,014
	Common stock issued for services		194,737,361		194,737		52,773,825			—			—		52,968,562
	Imputed interest on related party loans		—		—		872			—			—		872
	Net loss		—		—		—			(83,086,044	)		—		(83,086,044)
Balance, March 31, 2024			380,000,000		380,000		82,890,380			(83,283,429	)		—		(13,049)

	Stock purchase option granted for services		—		—		5,285,970			—			—		5,285,970
	Stock subscriptions for common stock		—		—		343,219								343,219
	Imputed interest on related party loans		—		—		2,232			—			—		2,232
	Common stock payable for acquisition of Ember Pharms (Pty) Ltd.		—		—		194,869			—			—		194,869
	Foreign currency translation adjustments		—		—		—			—			(16,027	)	(16,027)
	Net loss		—		—		—			(6,727,320	)		—		(6,727,320)
Balance, June 30, 2024			380,000,000		380,000		88,716,670			(90,010,749	)		(16,027	)	(930,106)

	Stock subscriptions for common stock		—		—		191,649			—			—		191,649
	Common stock issued for stock subscriptions		1,320,798		1,321		(1,321	)		—			—		-
	Imputed interest on related party loans		—		—		14,218			—			—		14,218
	Foreign currency translation adjustments		—		—		—			—			(63,765	)	(63,765)
	Net loss		—		—		—			(523,819	)		—		(523,819)
Balance, September 30, 2024			381,320,798	$	381,321	$	88,921,216		$	(90,534,568	)	$	(79,792	)	$(1,311,823)

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For the Three and Nine Months ended September 30, 2023

						Additional					Total
		Common Stock				Paid-in		Accumulated			Stockholders'
		Shares		Amount		Capital		Deficit			Deficit

Balance, December 31, 2022			74,417,002	$	74,417	$	43,628	$	(157,767	)	$(39,722)

	Imputed interest on related party loans		—		—		286		—		286
	Net loss		—		—		—		(286	)	(286)
Balance, March 31, 2023			74,417,002		74,417		43,914		(158,053	)	(39,722)

	Imputed interest on related party loans		—		—		285		—		285
	Net loss		—		—		—		(285	)	(285)
Balance, June 30, 2023			74,417,002		74,417		44,199		(158,338	)	(39,722)

	Imputed interest on related party loans		—		—		332				332
	Net loss		—		—		—		(6,641	)	(6,641)
Balance, September 30, 2023			74,417,002	$	74,417	$	44,531	$	(164,979	)	$(46,031)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CRUCIAL INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the
	Nine months ended
	September 30,
	2024			2023

Cash Flows from Operating Activities:
Net loss	$	(90,337,183	)	$	(7,212	)
Adjustments to reconcile net loss to net cash used in operating activities:
Imputed interest		17,322			903
Stock-based compensation		58,254,532			—
Stock - based compensation-related parties		30,014,014			—
Depreciation		6,579			—
Impairment of inventory		610,884			—
Impairment loss on fixed assets		40,633			—
Impairment loss on fixed assets- acquisition Ember Pharms (Pty) Ltd.		834,611			—
Changes in operating assets and liabilities:
VAT receivable		(7,018	)		—
Prepaid expenses		(18,768	)		—
Inventory		(610,884	)		—
Insurance receivable		(40,633	)		—
Accounts payable and accrued liabilities		240,434			6,309
Change in right-of-use asset and lease liability		178			—
Net Cash Used in Operating Activities		(995,299	)		—

Cash Flows from Investing Activities:
Acquisition of Ember Pharms (Pty) Ltd		5,615			—
Purchases of property and equipment		(17,765	)		—
Net Cash Used in Investing Activities		(12,150	)		—

Cash Flows from Financing Activities:
Advances from related parties		1,033,538			—
Repayment of related party loans		(534,868	)		—
Proceeds from common stock for stock subscription		534,868			—
Net Cash Provided by Financing Activities		1,033,538			—

Effect of exchange rate changes on cash		(25,790	)		—

Net change in cash		299			—
Cash, beginning of period		—			—
Cash, end of period	$	299		$	—

Supplemental cash flow information:
Cash paid for interest	$	—		$	—
Cash paid for taxes	$	—		$	—

Supplemental disclosure of non-cash financing activity
Common stock issued for acquisition Ember Pharms (Pty) Ltd.	$	330,869		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CRUCIAL INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Crucial Innovations Corp. (referred as the “Company”, “we”, “our” or “us”) was incorporated in the State of Nevada and established on February 28, 2018. We were initially engaged in the business of English language tutoring over the Internet. However, we were not able to execute our original business plan, develop significant operations or achieve commercial sales.

On May 8, 2023, the Company entered into an agreement to acquire all of the share capital of WLR Farming (Pty) Ltd, a company organized under the laws of South Africa and a licensed grower and exporter of medical cannabis (hereinafter, “WLR”), in exchange for (i) Six Million South Africa Rand (ZAR 6,000,000) which amount was intended to be paid over twelve months from the date of agreement, and (ii) 500,000 shares of our common stock. On March 5, 2024, we issued the owners of WLR an aggregate of 500,000 shares of our common stock. On November 8, 2024, this agreement was amended to provide for the payment of Fifty Thousand Pounds (GBP 50,000) in cash in lieu of the ZAR 6,000,000 described above, together with the issuance of an aggregate of 1,250,000 shares of common stock, inclusive of the 500,000 shares issued on March 5, 2024, and 750,000 shares issued on January 6, 2025. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. The Company believes that the issuance of its shares of common stock in connection with the agreement with the shareholders of WLR was exempt from registration with the Securities and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933. The cash payment obligation was satisfied on November 11, 2024. The owners of WLR transferred 100% of their WLR shares to the Company on April 2, 2024. In connection with the agreement to acquire WLR, we determined to change our business to become a supplier and distributor of medical cannabis in the United Kingdom and continental Europe.

On January 20, 2024, the Company entered into a distribution and service agreement with U Mir Pharma Limited, a company formed under the laws of England & Wales, doing business in the United Kingdom as Inspire Pharmacy (hereafter, “Inspire”). Inspire is a licensed pharmacy that is able to sell and distribute medical cannabis to qualified patients. The distribution and service agreement with Inspire was superseded by a joint venture agreement between the Company and Inspire which was entered into in May 2024. The joint venture was intended to be operated through a company jointly owned by the Company and Inspire. Accordingly, on March 25, 2024, the Company formed Crop Circle Dispensary Limited under the laws of England and Wales (hereafter, “Crop Circle”). The share capital of Crop Circle is allocated as to 92.5% to the Company and 7.5% to Inspire. Crop Circle is included in the consolidation of the Company even though it did not have any business transactions since inception through September 30, 2024.

On April 8, 2024, the Company entered into a cultivation and supply agreement with Tomanic Trading (Pty) Ltd, a supplier in South Africa. The supplier is a licensed cultivator and manufacturer of medical cannabis.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) balance sheet; (b) the statement of operations; and (c) cash flows, have been made in order to make the consolidated condensed financial statements presented not misleading. The results of operations for the periods presented are not necessarily indicative of operations for a full year. The accompanying consolidated condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (“SEC”) on December 10, 2024.

Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

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Principles of Consolidation

The consolidated condensed financial statements include the accounts of Crucial Innovation Corp. and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of 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 disclosures of contingent assets and liabilities at the date the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Included in these estimates is the fair value of shares of our capital stock issued during the relevant reporting period(s).

Foreign Currency Transactions

The Company has operations outside of the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk arises from the fluctuations in foreign exchange rates and the degrees of volatility in these rates. Currently the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included as other comprehensive income.

Cash and Cash Equivalents

The cash balance of $299 is held by the subsidiary Ember Pharms. The parent company, Crucial Innovations Corp., does not have its own bank account, and its transactions are routed through related party bank accounts. For purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company had no cash equivalents at September 30, 2024 and December 31, 2023, respectively.

Fair Value Measurements

The Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair Value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:

	●	Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

	●	Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

	●	Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation.

Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.

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Intangible Assets

Intangible assets with an indefinite life are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired. Intangible assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of the respective assets. Acquired intangible assets from business combinations and asset acquisitions are recognized and measured at fair value at the time of acquisition. Those assets represent assets with finite lives and are further amortized on a straight-line basis over the estimated economic useful lives of the respective assets.

Impairment of Long-lived Assets Other Than Goodwill

Long-lived assets with finite lives, primarily property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value.

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful lives, using the straight-line method. Currently our assets consist of machinery and equipment, vehicle and greenhouse upgrade which we amortize over a useful life of 5 years.

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

Inventories

Inventories are stated at the lower of cost or net realizable value. The cost of inventory includes capitalized production costs, including labor, materials, post-harvest costs and depreciation. Inventories costs are expensed to cost of goods sold on the Consolidated Statement of Operations and comprehensive loss in the same period as finished products are sold. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period when the write-down or loss occurs.

Share-Based Compensation

The Company accounts for employee and non-employee stock awards under ASC 718, “Compensation – Stock Compensation,” whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service.

The Company valued common stock compensation expense to employees and non-employees, as a Level 2 fair value measurement, based on a price of shares issued to unrelated parties for cash proceeds in connection with a private offering of our common stock at prices between $0.25 and $0.50 per share which commenced in the first quarter of 2024.

Basic and Diluted Net Loss Per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued.

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Related Parties

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

Deferred Income Taxes and Valuation Allowance

The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

Subsequent events

The Company follows ASC 855-10-20, “Types of Subsequent Events”, for events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements.

Recently issued accounting pronouncements

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires additional disclosures around significant segment expenses and disclosures to identify the title and position of the chief operating decision maker (“CODM”). ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2024. The Company does not expect this update to have a material impact on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ending December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements and whether we will apply the standard prospectively or retrospectively.

In March 2024, the FASB issued ASU 2024-02 "Codification Improvements – Amendments to Remove References to the Concepts Statements" ("ASU 2024-02"), which contains amendments to the Codification to remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. Generally, ASU 2024-02 is not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective for the Company for fiscal years beginning after December 15, 2024. The Company does not expect this update to have a material impact on its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

The Company has implemented all recently issued accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements or results of operations.

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NOTE 3 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of September 30, 2024, the Company had an accumulated deficit of $90,534,568, a net loss of $90,337,183 for the nine months ended September 30, 2024, and has not earned any revenues since inception. The Company intends to fund operations through equity financing arrangements and related party advances, all of which may be insufficient to fund its capital expenditures, working capital and other cash requirements.

The ability of the Company to emerge from an early stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 – ACQUISITION

The following table summarizes the consideration paid for WLR and the amounts of the assets acquired and liabilities assumed at the acquisition date of April 2, 2024:

Consideration:
Issuance of 1,250,000 shares of common stock	$	330,869
Cash payable of GBP 50,000		60,812
		391,681
Assets acquired and liabilities assumed:
Cash in bank	$	5,616
Property and equipment, net		49,345
Other receivable		5,902
Total tangible assets		60,863

Due to related parties	$	502,857
Other payable		936
Total liabilities		503,793
Net liabilities	$	(442,930	)

Impairment loss on fixed assets recorded in operating expenses	$	834,611

We assessed the nature of our 1,250,000 shares issuance for consideration of acquisition and considered certain factors which, in management’s view, made our shares a Level 2 valuation, including the following:

the lack of trading volume and institutional trading in our common stock during the period when our common stock was listed for trading on OTC Markets;

the de-listing of our shares from trading on OTC Markets during the second quarter of 2024; and

the absence of a registration statement covering the shares so issued and their resultant status as ‘restricted securities’ under U.S. federal securities laws.

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We examined other contemporaneous transactions involving our common stock with unaffiliated third parties as fair value indicators for the shares issued to the owners of WLR during the nine months of 2024 and subsequent thereto. During the first quarter of 2024, we commenced a private offering of our common stock at a weighted average price of $0.272 per share. We applied this price and determined the fair value of the 500,000 shares issued to the owners of WLR during the first quarter of 2024 to be $136,000. We continued our private offering during the second quarter of 2024 at an average price of $0.26 per share. We applied this price and determined the fair value of the 750,000 shares issued to the owners of WLR subsequent to the end of the third quarter of 2024 to be $194,869.

NOTE 5 – INVENTORY

As of September 30, 2024, and December 31, 2023, inventory consisted of the following:

	September 30,			December 31,
	2024			2023
Raw material-Genetics	$	549,333		$	—
Labor cost		61,551			—
Total inventory cost		610,884			—
Impairment of inventory		(610,884	)		—
	$	—		$	—

During the nine months ended September 30, 2024, the Company fully impaired inventory of $610,884. Such inventory was disposed of as pharmaceutical waste during January 2025 due to the expiry of the product pending receipt of the required specialist distribution license.

NOTE 6 – INSURANCE RECEIVABLE

On September 25, 2024, a major storm destroyed the Company’s greenhouse. Due to the nature of the damage, the company determined that the greenhouse was a total loss. The greenhouse and related upgrades had a net book value of $40,633 and an estimated replacement value of $88,000 as of September 30, 2024. As of September 30, 2024, based on discussions with the insurer, the Company concluded that it has a covered loss under the policy and that it is probable the insurer will settle the claim for at least the book value, and recorded an insurance receivable to offset the impairment loss of $40,633.

In December 2024, the Company received from the insurer cash of $89,117, net of insurance deductible.

NOTE 7 – PROPERTY AND EQUIPMENT

At September 30, 2024, property and equipment consisted of the following:

	September 30,			December 31,
	2024			2023
Machinery and equipment	$	15,767		$	—
Vehicle		11,694			—
		27,461			—
Accumulated depreciation		(3,131	)		—
Total property and equipment	$	24,330		$	—

On September 25, 2024, a major storm destroyed the Company’s greenhouse. The greenhouse was a part of the Company’s property and equipment, acquired from WLR in April 2024, for growing our cultivation of genetics. The Company recognized a full impairment loss from the damage of $40,633, the carrying amount of our greenhouse.

During the nine months ended September 30, 2024 and 2023, the Company recorded depreciation expense of $6,579 and $0, and impairment loss of $40,633 and $0, respectively.

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NOTE 8 – LEASE

The Company had the right to occupy certain real property in South Africa which contains the operations of WLR, commencing June 1, 2023, by paying a monthly lease payment of $6,320 (GBP 5,000). The Company occupied the land starting September 1, 2023, and recognized ROU assets and lease liabilities from this date.

The components of lease expense were as follows:

	September 30,			September 30,
	2024			2023
Operating lease cost	$	58,514		$	—
Variable lease cost (foreign currency adjustment)		(2,534	)		—
Total lease cost	$	55,980		$	—

Supplemental cash flow information related to leases was as follows:

Cash paid for operating cash flows from operating leases	$	55,980		$	—

Supplemental balance sheet information related to leases was as follows:

Weighted-average discount rate — operating leases		6.25	%		—
Weighted-average remaining lease term - operating lease (months)		2			—

Supplemental balance sheet information related to leases was as follows:

	September 30,		December 31
	2024		2023
Operating lease right-of-use asset	$	12,586	$	67,634

The following table outlines maturities of our lease liability as of September 30, 2024:

Year ending December 31,	Total
2024 (excluding the nine months ended September 30, 2024)	$	13,394
Thereafter		—
	$	13,394
Less imputed interest		(35	)
Operating lease liability	$	13,359

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NOTE 9 – RELATED PARTY TRANSACTIONS

The related parties that had material transactions for the nine months ended September 30, 2024, and 2023, consist of the following:

Related Party		Nature of Relationship to the Company

A		Chief Executive Officer
B		President, Chief Operating Officer
C		Chief Financial Officer
D		A UK company owned by related party A (JPD Capital)
E		A UK company owned by related party A (Eco-Equity Ltd.)
F		Shareholders and non-executive members of Board

As of September 30, 2024, and December 31, 2023, amounts owing to related parties consists as follows:

	September 30		December 31
Related Party	2024		2023
B	$	27,689	S	8,688
D		1,058,949		17,500
	$	1,086,638	$	26,188

The amounts owing to related parties are unsecured, non-interest bearing and due on demand.

For the nine months ended September 30, 2024, and 2023, advances to related parties and their nature consists of:

	For the
	Nine Months Ended
	September 30,
Related Party	2024		2023		Nature of transaction	Financial Statement Line Item
A	$	12,500	$	—	Accrued management fees	General and administrative expenses
B	$	28,733,134	$	—	105,636,521 shares of common stock issued for compensation	Management fees
B	$	12,500	$	—	Accrued management fees	General and administrative expenses
B	$	478	$	299	Imputed interest	Interest expenses
B	$	19,000	$	—	Cash paid for operating expenses on behalf of the Company	Professional fees
C	$	1,046,467	$	—	3,847,304 shares of common stock issued for compensation	Management fees
C	$	23,047	$	—	Cash paid for management fees	General and administrative expenses
D	$	376,589	$	—	Cash paid to Ember Pharm (Pty) Ltd	Due to related party
D	$	210,997	$	—	Cash paid for operating expenses on behalf of the Company	General and administrative expenses, Professional fees and management fees
D	$	406,660	$	—	Acquired Genetics	Inventory
D	$	534,868	$	—	Repayment due to related party D	Due to related party
D	$	16,730	$	603	Imputed interest	Interest expenses
F	$	234,413	$	—	861,812 shares of common stock issued for compensation to our directors	Management fees

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Following are the other related party transactions:

During the nine months ended September 30, 2024, the Company entered into a distribution and service agreement with U Mir Pharma Limited, a company formed under the laws of England & Wales, doing business in the United Kingdom as Inspire Pharmacy (hereafter, “Inspire”). This agreement was superseded by a joint venture agreement with Inspire as described in Note 1 above. Inspire is owned and controlled by a director of the Company.

NOTE 10 – CONVERTIBLE NOTE

On April 14, 2021, the Company issued a convertible note with a conversion price equal to a 60% discount on the market price to pay operating expenses of $6,480. As of September 30, 2024, and December 31, 2023, the Company had a convertible note of $6,480 and accrued interest of $3,520 for an aggregate of $10,000 and was in default.

On October 4, 2024, the Company paid $10,000 to the SEC, a judgment creditor of the holder of the promissory note described in the preceding paragraph, as full payment against this obligation.

NOTE 11 – ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES

The following table summarizes the components of the Company’s accounts payable and accrued liabilities as of the dates presented:

	September 30,		December 31,
	2024		2023
Accounts Payable	$	63,367	$	9,670
Due to the ex -owner of Ember Pharms (Pty) Ltd.		60,812		-
Accrued expenses		175,000		-
Payroll payable		10,893		-
	$	310,072	$	9,670

NOTE 12 – STOCKHOLDER’S EQUITY

On February 26, 2024, the Company’s Board of Directors approved an increase in the number of shares of capital stock authorized to be issued by the Company from Seventy-Five Million (75,000,000) to Five Hundred and Fifty Million (550,000,000) consisting of Five Hundred Million (500,000,000) shares of common stock, par value $0.001 per share, and Fifty Million (50,000,000) shares of undesignated preferred stock, par value $0.001 per share.

Preferred Stock

The Company has authorized 50,000,000 shares of preferred stock with a par value of $0.001 per share. No preferred stock was issued or outstanding as of September 30, 2024, and December 31, 2023.

Common Stock

The Company has authorized 500,000,000 shares of common stock with a par value of $0.001 per share.

On October 23, 2022, the Company issued an aggregate of 42,000,000 shares of its common stock (“Consideration Shares”) to acquire the share capital of Eco Equity Limited (“Eco Equity”) a Zimbabwean-based cultivator of medicinal cannabis. Due to logistical, regulatory, and political challenges facing the business in Zimbabwe, the acquisition of Eco Equity was abandoned. Nevertheless, the transaction introduced the Company into the medicinal cannabis sector and opportunities to conduct business and material transactions with other cultivators, exporters, manufacturers, and distributors in southern Africa and, ultimately, Europe. As a result of the exposure and access initiated by the transaction with Eco Equity, the Company permanently changed its business model to operate in the medicinal cannabis sector. Because of the beneficial effect of transaction, even though abandoned, the Company determined to continue to honor the issuance of the Consideration Shares.

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During the nine months ended September 30, 2024, the Company issued 305,082,998 shares under the Company’s 2024 Equity Incentive Plan (“Incentive Plan”) as follows:

110,345,637 shares of common stock to the Company’s CFO, director and non-executive board members, valued at $30,014,014.

194,737,361 shares of common stock for services, valued at $52,968,562.

Also during the nine months ended September 30, 2024, the Company issued the following shares of common stock:

1,320,798 shares of common stock issued in connection with subscriptions related to the Company’s private offering of common stock for $358,640 in cash; and

500,000 shares of common stock issued and 750,000 shares of common stock to be issued, valued at $330,869, to the shareholders of WLR Farming (Pty) Ltd (Note 1) in connection with the Company’s agreement to acquire the share capital of WLR.

During the nine months ended September 30, 2024, the Company received stock subscriptions for 659,790 shares of common stock, valued at $176,228, recorded to additional paid in capital.

As of September 30, 2024, and December 31, 2023, there were 381,320,798 and 74,417,002 shares of common stock issued and outstanding, respectively.

2024 Equity incentive plan

On February 26, 2024, the Company’s Board of Directors adopted the Incentive Plan, the purpose of which was to promote the interests of the Company by encouraging directors, officers, employees, and consultants of CINV to develop a long-term interest in the Company, align their interests with that of our stockholders, and provide a means whereby they may develop a proprietary interest in the development and financial success of the Company and its stockholders. The Incentive Plan is also intended to enhance the ability of the Company and its subsidiaries to attract and retain the services of individuals who are essential for the growth and profitability of the Company. The Incentive Plan permits the award of restricted stock, common stock purchase options, restricted stock units, and stock appreciation awards. The maximum number of shares of our common stock that are subject to awards granted under the Incentive Plan is 350,000,000 shares. The term of the Incentive Plan will expire on February 25, 2034. Our Board of Directors, which serves as the administrator of the Incentive Plan, has granted awards under the Incentive Plan to certain directors, executive officers, employees, and consultants in the aggregate amount of 305,082,998 shares, all of which became fully-vested at the time of grant. No solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of its shares of common stock in connection with the Incentive Plan was exempt from registration with the Securities and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933. As of September 30, 2024, 44,917,002 shares are available to be issued under the Incentive Plan.

Stock Purchase Options

On May 24, 2024, the Company entered into an agreement with a musician and entertainer to endorse and promote the Company’s business and the Company recorded marketing expense of $5,285,970. In consideration for services to be provided by the entertainer, the Company granted a 10-year stock purchase option to acquire 20,000,000 shares of common stock, at exercise price of $0.01 per share. The option is vested as of the grant date, and may be exercised in whole or in part, at any time.

The stock purchase options are valued using a Black-Scholes valuation model. The use of this valuation model requires the input of highly subjective assumptions. Any change to these inputs could produce significantly higher or lower fair value measurements.

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The Company utilized the following assumptions:

		2024
Estimated stock price	$	0.27
Expected term		5 years
Expected average volatility		72%
Expected dividend yield		-
Risk-free interest rate		4.53%

A summary of activity of the stock purchase options during the nine months ended September 30, 2024, as follows:

	Options Outstanding			Weighted Average
	Number of	Weighted Average		Remaining life
	Options	Exercise Price		(years)

Outstanding, December 31, 2023	-	$	-	-
Granted	20,000,000		0.01	10.00
Exercised	-		-	-
Forfeited/canceled	-		-	-
Outstanding, September 30, 2024	20,000,000	$	0.01	9.65

Exercisable options, September 30, 2024	20,000,000	$	0.01	9.65

NOTE 13 – COMMITMENTS

In January 2024, the Company entered into a strategic consulting agreement with a consultant to work alongside management teams to create value by commercializing business plans, optimizing financial and operational performance, making introductions, negotiating agreements, executing partnerships and formulating acquisition and exit strategies. The agreement, as amended, provides for a monthly fee of GBP 5,000 (approximately $6,320) per month and a one-time payment of 14,000,000 shares of our common stock. The agreement is for a free duration term, and the Company may terminate the consultancy at any time. During the nine months ended September 30, 2024, the Company issued 14,000,000 shares of common stock in satisfaction of this obligation, valued at $3,808,000.

On July 5, 2024, the Company entered into a purchase agreement with Cannabudgrow (Pty) Ltd, a company licensed to cultivate cannabis for the proposes of producing the Medicines and Related Substances. The Company’s commitment is to purchase a minimum quantity of 1,200 Kgs per annum for a period of two years.

We have entered into indemnification agreements with certain of our current directors and officers. The indemnification agreements indemnify the indemnitee to the fullest extent permitted by law, including against third-party claims and claims by or in right of the Company or any subsidiary or majority-owned partnership of the Company by reason of that person (including the advancement of expenses subject to certain conditions) (a) being a director, officer employee or agent of the Company, or of any subsidiary or majority-owned partnership of the Company or (b) serving at our request as a director, officer, employee or agent of another entity. If appropriate, we are entitled to assume the defense of the claim with counsel selected by us and approved by the indemnitee (which approval may not be unreasonably withheld). Separate counsel employed by the indemnitee will be at his or her own expense unless (1) the employment of separate counsel has been previously authorized by us, (2) the indemnitee reasonably concludes there may be a conflict of interest or (3) we have not, in fact, employed counsel to assume the defense of such claim.

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NOTE 14 – INCOME TAXES

The Company has not made provision for income taxes for the nine months ended September 30, 2024, and the year ended December 31, 2023 since the Company has the benefit of net operating losses in these periods.

Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize deferred income tax assets arising as a result of net operating losses carried forward, the Company has not recorded any deferred income tax assets as of September 30, 2024. The Company has incurred a net operating loss (NOL) of $623,142; the net operating loss carry forwards will begin to expire in varying amounts beginning with the year ended December 31, 2039, subject to its eligibility as determined by respective tax regulating authorities. NOLs generated in tax years prior to December 31, 2018, can be carryforward for twenty years, whereas NOLs generated after December 31, 2018, can be carryforward indefinitely. The Company’s net operating loss carry forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership change as defined in Section 382 of the Internal Revenue Code. U.S. Federal tax returns are closed by statute for years through 2015. The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates.

Net deferred tax assets consist of the following components as of September 30, 2024 and December 31, 2023:

	September 30,			December 31
	2024			2023
Net loss for the period	$	(623,142	)		(39,618	)
Effective tax rate		21	%		21	%
Tax Recovery		(130,860	)		(8,320	)
Less: valuation allowance		130,860			8,320
Net deferred asset	$	—		$	—

	September 30,			December 31
	2024			2023
Net Operating Loss carryforward	$	172,308		$	41,448
Less: Valuation allowance		(172,308	)		(41,448	)
Net deferred tax asset	$	—		$	—

Tax returns for the years ended 2018 to 2023, have not been filed by the Company, and are subject to review by the tax authorities. The Company has no liabilities related to uncertain tax positions or unrecognized benefits as of September 30, 2024. The Company has not accrued interest or penalties associated with unrecognized tax liabilities.

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NOTE 15 – SUBSEQUENT EVENTS

Management performed an evaluation of the Company’s activity through the date the financial statements were issued, noting the following subsequent events:

In February 2024, the Company entered into a joint venture agreement with Canna Capital Plc, a company registered under the laws of England and Wales to form a joint venture which shall be the exclusive supplier of Flower Biomass to Crop Circle Pharmacy in the United Kingdom. On November 27, 2024, the Company’s Board of Directors approved a discontinuation of the joint venture.

On October 4, 2024, the Company paid $10,000 to the U.S. Securities and Exchange Commission, a judgment creditor of the holder of the promissory note described in Note 8 above, as full payment against this obligation.

On November 8, 2024, the Company amended its share purchase agreement with the shareholders of WLR Farming (Pty) Ltd. The purchase price was amended to require a payment of $60,812 (GBP 50,000) in cash, together with the issuance of an aggregate of 1,250,000 shares of common stock, inclusive of the 500,000 shares issued on March 5, 2024. The cash payment obligation was satisfied on November 11, 2024. The remaining share payment obligation was satisfied on January 6, 2025.

On December 8, 2024, The Company amended its Deed of Sale, dated May 11, 2023, to require, in lieu of cash, a payment of $378,954 (ZAR 6,900,000), payable in shares of the Company’s common stock. Accordingly, on January 28, 2025, the Company issued the vendor to the Deed of Sale an aggregate of 375,000 shares of common stock in full satisfaction thereof.

On December 12, 2024, the Company covered the loss under the insurance policy, and obtained insurance proceeds of $89,117.

On January 28, 2025, the Company issued an aggregate of 7,500,000 shares of common stock to two consultants of the Company in connection with the Incentive Plan described in Note 12 above.

On May 22, 2025, the Company’s Board of Directors approved following:

An offering of 2- and 3-year senior secured convertible promissory notes of up to $10,000,000 in the aggregate (the “Note Offering” and the promissory notes issued in connection therewith, the “Notes”);

A Custodian Agreement, wherein the Company issued 20,000,000 shares to the custodian to hold in trust as partial security for the repayment of the Notes;

A consulting agreement for banking, finance, capital formation, mergers, acquisition and general corporate advisory services in exchange for monthly compensation of $100,000;

Consulting agreements with three advisors in connection with business development, valuation, global mergers and acquisitions, financial modelling services in exchange for the issuance of an aggregate of 1,348,000 shares of common stock; and

The award of 5,000,000 shares of common stock to two of the Company’s corporate advisory and operations consultants pursuant to the Company’s 2024 Equity Incentive Plan.

In connection with the Note Offering, during the second and third quarters of 2025, the Company issued Notes to various non-U.S. investors in the aggregate principal amount of $475,850.

On June 23, 2025, the Company and Ember Pharms (Pty) Ltd., its wholly-owned subsidiary, entered into a Deed of Settlement with Vertical Up Manufacturing (Pty) Ltd. (“Vertical Up) concerning a lawsuit filed by Vertical Up in the High Court of South Africa, Free State Division, Bloemfontein. The Deed of Settlement required that the Company vacate the premises and make a series of installment payments to Vertical Up totaling ZAR 2,758,500 in the aggregate, which payments may be offset from Vertical Up’s sale of cannabis inventory on the premises. Pursuant to the terms of the Deed of Settlement, the first installment payment of ZAR 500,000 was made on June 27, 2025.

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Crucial Innovations Corp. (collectively with our subsidiary, “we,” “us,” “our,” “CINV” or the “Company”), a Nevada corporation, was formed on February 28, 2018. We were initially engaged in the business of English language tutoring over the Internet. However, we were not able to execute our original business plan, develop significant operations or achieve commercial sales. In May 2023, we determined to change our business to become a supplier and distributor of medical cannabis in Europe, and signed an agreement to acquire a grower of medical cannabis and associated real property in South Africa. During the first quarter of 2024, we paid a partial payment toward this acquisition, and subsequently made additional payments during 2024 and 2025 (See Subsequent Events below).

Our principal office is located at 86-90 Paul Street, London EC2A 4NE United Kingdom, and our telephone number is +44 (0) 203 148 1452. Our corporate website is located at www.cinvcorp.com, although it does not constitute a part of this Quarterly Report. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed or furnished to the Securities and Exchange Commission (“SEC”). Our shares have previously traded on the OTC Markets expert trading platform under the symbol ‘CINV’. Following the filing of this quarterly report on Form 10-Q and other reports as required by the SEC, we intend to re-apply to OTC Markets to resume trading in our shares.

The information contained in this section should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Quarterly Report and in conjunction with the financial statements and notes thereto in the Company’s Annual Report on Form 10-K, and any amendments thereto (“10-K”). In addition, some of the statements in this report constitute forward-looking statements. The matters discussed in this Quarterly Report, as well as in future oral and written statements by management of CINV, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward- looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Important assumptions include our ability to generate revenues, achieve certain margins and levels of profitability, and the availability of additional capital. In light of these and other uncertainties, the inclusion of a forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans or objectives will be achieved. The forward-looking statements contained in this Quarterly Report may include statements as to:

our future operating results;

our business prospects;

currency volatility, foreign exchange, and inflation risk;

our contractual arrangements with our customers and other relationships with third parties;

the dependence of our future success on the general economy and its impact on the industries in which we invest;

political instability in the countries in which we operate;

uncertainty regarding certain legal systems in the countries in which we operate;

our dependence upon external sources of capital;

our expected financings and capital raising;

our regulatory structure and tax treatment;

the adequacy of our cash resources and working capital;

the timing of cash flows from our operations;

the impact of fluctuations in interest rates on our business;

market conditions and our ability to access additional capital, if deemed necessary; and

natural or man-made disasters and other external events that may disrupt our operations.

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There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by such forward-looking statements. For a discussion of factors that could cause our actual results to differ from forward- looking statements contained in this Quarterly Report, please see the discussion in “Item 1A. Risk Factors” in our 10-K. You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date this Quarterly Report is filed with the SEC.

Results of Operations

The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the three and nine months period ended September 30, 2024, which are included herein.

Our operating results for the three and nine months ended September 30, 2024 and 2023 and the changes between those periods for the respective items are summarized as follows.

Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023:


			Three Months Ended September 30,

	2024			2023			Change ($)	Change (%)
Revenues	$	―		$	―	$	—	― %
Operating expenses		509,601			6,310		503,291	7,976.08
Interest expense		14,218			332		13,886	4,182.53
Net loss	$	523,819		$	6,642	$	6,727,035	7,786.46

The Company generated no revenues for the three months ended September 30, 2024 and 2023. Operating expenses consist primarily of the impairment of inventory of $279,150. During the three months ended September 30, 2024 and 2023, the Company recognized $14,218 and $332, respectively, in interest on a convertible note. Our financial statements report a net loss of $523,819 for the three months ended September 30, 2024 compared to a net loss of $6,642 for the three months ended September 30, 2023.

Nine Months Ended September 30, 2024 Compared with the Nine Months Ended September 30, 2023:


			Nine Months Ended September 30,

	2024			2023			Change ($)	Change (%)
Revenues	$	―		$	―	$	—	― %
Operating expenses		90,319,861			6,310		90,313,551	1,431,276.56
Interest expense		17,322			903		16,419	1,818.27
Net loss	$	90,337,183		$	7,213	$	90,329,970	1,252,321.78

The Company generated no revenues for the nine months ended September 30, 2024 and 2023. Operating expenses consist primarily of stock-based compensation. During the nine months ended September 30, 2024, the Company issued 305,082,998 shares under the Company’s 2024 Equity Incentive Plan. 110,345,637 shares of common stock were issued to the Company’s CFO, director and non- executive board members, valued at $30,014,014. 194,737,361 Shares of common stock were issued for professional fees, valued at $52,968,562. The Company also incurred $5,352,377 in marketing costs. On May 24, 2024, the Company entered into an agreement with a musician and entertainer to endorse and promote the Company’s business and the Company recorded marketing expense of $5,285,970. In consideration for services provided by the entertainer, the Company granted a 10-year stock purchase option to acquire 20,000,000 shares of common stock, at an exercise price of $0.01 per share. The option is vested as of the grant date, and may be exercised in whole or in part, at any time. During the nine months ended September 30,2024, the Company recognized impairment loss on fixed assets-acquisition Ember Pharms (Pty) Ltd, of $834,611. During the nine months ended September 30, 2024 and 2023, the Company recognized $17,322 and $903, respectively, in interest on a convertible note. Our financial statements report a net loss of $90,337,183 for the nine months ended September 30, 2024 compared to a net loss of $7,213 for the nine months ended September 30, 2023.

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Liquidity and Capital Resources

The following tables provide selected financial data about our company as of September 30, 2024 and December 31, 2023, respectively.

Working Capital

	September 30,			December 31,
	2024			2023			Changes ($)
Cash	$	299		$	—		$	—
Current Assets	$	71,330		$	—		$	71,330
Current Liabilities	$	1,420,069		$	114,087		$	1,305,982
Working Capital (Deficiency)	$	(1,348,739	)	$	(114,087	)	$	(1,234,652	)

As of September 30, 2024 and December 31, 2023, our total current assets were $71,330 and $0, respectively. Current assets as of September 30, 2024 consist mainly of insurance receivable of $40,633 as described in Note 6 in the notes to the financial statements.

As of September 30, 2024, our current liabilities were $1,420,069 compared to $114,087 as of December 31, 2023. Working capital deficiency was $1,348,739 as of September 30, 2024 compared to working capital deficiency of $114,087 as of December 31, 2023. The increase in working capital deficiency was primarily the result of an increase in current liabilities. Current liabilities increased due to an increase in amounts due to related parties of $1,060,450 for payments made for operating expenses.

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Cash Flows

	Nine months ended
	September 30,
	2024			2023		Changes ($)
Cash Flows used in Operating Activities	$	(995,299	)	$	—	$	(995,299	)
Cash Flows used in Investing Activities		(12,150	)		—		(12,150	)
Cash Flows provided by Financing Activities		1,033,538			—		1,033,538
Effect of exchange rate changes on cash		(25,790	)		—		(25,790	)
Net Change in Cash During Period	$	299		$	—	$	299

During the nine months ended September 30, 2024 and 2023, cash flows used in operating activities were $995,299and $0, respectively. For the nine months ended September 30, 2024, the largest items in net cash flows used in operating activities consisted of a net loss of $90,337,183, stock-based compensation of $88,268,546, impairment of inventory of $610,884, impairment loss on fixed assets- acquisition Ember Pharms (Pty) Ltd,of $834,611, a decrease in inventory of $610,884, and an increase in accounts payable and accrued liabilities of $240,434. For the nine months ended September 30, 2023, net cash flows used in operating activities consisted of a net loss of $7,212, an increase in imputed interest of $903, and an increase in accounts payable and accrued interest of $6,309.

During the nine months ended September 30, 2024 and 2023, cash flows used in investing activities were $12,150 and $0, respectively. For the nine months ended September 30, 2024, net cash flows used in investing activities consisted of the acquisition of Ember Pharms (Pty) Ltd of $5,615 and purchases of property and equipment of $17,765.

During the nine months ended September 30, 2024 and 2023, cash flows provided by financing activities were $1,033,538 and $0, respectively. For the nine months ended September 30, 2024, net cash flows provided by financing activities consisted of proceeds from related parties of $1,033,538, repayment of related party loans of $534,868 and proceeds from common stock to be issued of $534,868.

We expect our cash on hand and revenues received from our operations will be insufficient to meet our anticipated liquidity needs for business operations for the next twelve months, and that we will need to secure capital from various sources, including loans and sales of our equity, as well as advances from one or more related parties. There can be no assurance that we will continue to generate cash flows at or above current levels or that we will be able to raise additional financing to support our operating and compliance expenditures. Absent our success in obtaining operating capital from one or more of these sources, there exists substantial doubt as to the Company’s ability to continue as a going concern.

Our future cash flows could be adversely affected by events outside of our control, including, without limitation, changes in overall economic conditions, regulatory requirements, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. The foregoing events, either individually or collectively, could affect our results.

Off Balance Sheet Arrangements

None.

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Subsequent Events

Crucial Innovations, Corp. 10-Q