Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our management's discussion and analysis provide a narrative about our financial performance and condition that should be read in conjunction with the audited consolidated financial statements and related notes thereto included in this annual report. This discussion contains forward-looking statements reflecting our current expectations estimates and assumptions about events and trends that may affect our future operating results or financial position. Our actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements due to several factors, including, but not limited to, those outlined in the sections of this annual report titled "Risk Factors" and "Forward-Looking Statements".

Overview

Between June and September 2024, the Company shifted its strategic focus to the waste-to-energy industry and began evaluating various business opportunities to determine which specific area within the industry to pursue. During 2024, the Company made investments in components for the development of waste-to-energy equipment, obtained proposals for equipment design and construction, and engaged in initiatives to assess related technology education platforms and associated business opportunities.

Former Businesses

As of September 2024, the Company was engaged in providing a comprehensive suite of services to assist businesses in developing and integrating blockchain and payment technologies into their operations. Revenue was generated through a fee-for-service model, technology licensing arrangements, and recurring transaction-based income. Additionally, the Company participated in movie licensing and distribution, securing a significant contract for the licensing and distribution of a film. This contract remains in effect and continues to generate residual income.

In 2024, the Company made a strategic decision to discontinue these lines of business and shift its focus exclusively to the waste-to-energy industry. While the Company does not plan to pursue new projects or contracts in its former business areas, it may still receive future revenues from existing contractual obligations.

Results of Operations

Revenue

During the year ended December 31, 2025 we recognized total revenue of $424,167, coming from consulting services and raw material fees. We recognized no revenue for the year ended December 31, 2024.

Operating Expenses

We incurred general and administrative expenses of $662,621 and $1,194,309 for the year ended December 31, 2025 and 2024, respectively, representing a decrease of $531,688 between the two periods. These expenses consisted primarily of stock-based compensation, consulting fees, pre-licensing fees, professional fees, and other general and administrative costs. The decrease in general and administrative expenses was mainly due to the decrease in platform development and advertising and marketing expenses in 2025.

Net Profit (Loss) from Operations

We incurred net loss from operations of $365,988 and $1,194,309 for the year ended December 31, 2025 and 2024, respectively, representing a net change of $828,321, primarily attributable to the factors discussed above under the headings "Revenue" and "Operating Expenses".

Other Income (Expense)

Other income (expenses) was $(710,819) and ($131,588) for the year ended December 31, 2025 and 2024, respectively, mainly consisting of loss on issuance of debt, interest expense from the loan payable, changes in derivative liability, and gain on debt settlement.

Net Loss from Discontinued Operations

Enderby Works, LLC and MotoClub, LLC were deemed discontinued operations in 2024 due to management's strategic decision to shift its business focus to the waste-to-energy industry.

Discontinued operations reported no income in 2025 and 2024, incurred other expenses in the amount of $1,554,250 for the impairment of software for FY2024 and nil for FY2025.

Net and Comprehensive Loss

Net profit (loss) attributable to Waste Energy was $(1,076,807) and ($2,880,147) for the year ended December 31, 2025, and 2024, respectively, representing a decreased loss of $1,803,340. This change is primarily attributable to the factors discussed above under the headings "Operating Expenses" and "Other Income (Expense).

Liquidity and Capital Resources

Working Capital

		As at December 31, 2025				As at December 31, 2024
Current Assets		$	99,744			$	35,682
Current Liabilities			4,597,087				3,206,371
Working Capital (Deficit)		$	(4,497,343	)		$	(3,170,689	)

Current Assets

Current assets on December 31, 2025, were comprised of only cash and cash equivalents of $68,244, accounts receivable, net of $7,500, prepaid rent of $12,000 and a security deposit of $12,000.

Current assets on December 31, 2024, were comprised of only cash and cash equivalents of $682 and accounts receivable, net of $35,000.

Current Liabilities

On December 31, 2025, current liabilities were comprised of accounts payable and accrued expenses of $1,497,767 (related and unrelated parties), notes payable, net $117,000, convertible notes payable $857,353, derivative liability of $1,828,934, lease liability of $135,000, deferred revenue of $83,333 and deposits payable of $77,700.

On December 31, 2024, current liabilities were comprised of accounts payable and accrued expenses of $1,611,263 (related and unrelated parties), notes payable, net $183,056, convertible notes payable $1,293,409, derivative liability of $40,941, and deferred revenue of $77,700.

Cash Flow

Our cash flows for the years ended December 31, 2025 and December 31, 2024 are as follows:

		Year ended December 31, 2025				Year ended December 31, 2024
Net cash (used in) continuing operating activities		$	(390,107	)		$	(402,563	)
Net cash (used in) discontinued operating activities			-				-
Net cash provided by (used in) investing activities			(653,250	)			-
Net cash provided by financing activities			1,110,919				400,169
Net changes in cash and cash equivalents		$	67,562			$	(2,394	)

Operating Activities

Net cash used in operating activities from continued operations was $390,107 for the year ended December 31, 2025, as compared to $402,563 for the year ended December 31, 2024, resulting in an increase of $12,456 in net cash used. The increase in net cash used in continuing operating activities was primarily due to greater operating expenses and repayment of aged payables.

There was no net cash used or provided by discontinued operations for the year ended December 31, 2025 or 2024.

Investing Activities

Net cash used in investing activities was $653,250 for the year ended December 31, 2025, compared to nil for the same period in 2024, an increase of $653,250. This increase was attributable to payments made to acquire a waste-to-energy machine. As of December 31, 2025, the company has not obtained custody of the machine, its construction is not complete, nor does the company have control, the amount is therefore held as a deposit made for capital advance.

Financing Activities

Financing activities provided cash of $1,110,919 for the year ended December 31, 2025, and $382,856 for the year ended December 31, 2024, an increase of $728,062. The change was principally due to an increase in cash proceeds from the issuance of convertible notes.

Cash Requirements

We expect that we will require $900,000, including our current working capital, to fund our operating expenditures for the next twelve months. Projected working capital requirements for the next twelve months are as follows:

Our estimated general and administrative expenses for the next 12 months are $900,000 and are comprised of: consulting fees, accounting services, board of directors and our advisory board, investor relations consultants, and to our public relations and marketing consultants; legal and professional fees (including auditing fees); for insurance; marketing and advertising expenses; trade shows; travel expenses; office rent and miscellaneous and office expenses.

We will require additional cash resources to meet our planned capital expenditures and working capital requirements for the next 12 months. We expect to derive such cash through the sale of equity or debt securities or by obtaining a credit facility. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in debt service obligations, which could cause additional dilution to our stockholders, and could require us to agree to financial covenants that could restrict our operations or modify our plans to source new business opportunity. Financing may not be available for amounts at terms acceptable to us, if at all. Failure to raise additional funds could cause our company to fail.

Going Concern

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. On a consolidated basis, the Company has incurred significant operating losses since its inception. For the year ended December 31, 2025 and 2024, the Company incurred a net loss of $1,076,807 and $2,880,147, respectively. On December 31, 2025 and 2024, the Company has an accumulated deficit of $51,035,224 and $49,958,417, respectively, negative working capital of $4,497,343, and $3,170,689, respectively, and cash balances of $68,244 and $682, respectively. Further losses are anticipated as the Company pursues business opportunities, raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profits, adequate cash flows and/or obtaining the necessary financing to meet its 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 existing cash on hand, loans from third parties, related party debt and proceeds from the issuance of stock. There are no assurances that the Company will be able to secure funding on terms that are acceptable to the Company or at all.

The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.