Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the Company's unaudited 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 the Company's plans, estimates and beliefs. The Company's 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. The Company believes it is important to communicate its expectations. However, 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 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 the Company 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: sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; the ability to maintain and develop relationship with its existing and potential future customers, and, the Company's ability to maintain a level of investment that is required to remain competitive. Many factors could cause actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of revenues and financial performance; risks associated with technological changes; the acceptance of products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to the Company's involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates; and, the continued employment of the Company's key personnel and other risks associated with competition.

GENERAL OVERVIEW

Business Background

Cyber Enviro-Tech, Inc. (CETI) is an environmental technology company focused on sustainable solutions for the remediation of contaminated industrial wastewater, with an initial emphasis on the oil and gas sector. The Company develops and deploys proprietary equipment, biochemical products, and treatment processes to address complex hazardous waste and environmental challenges across global markets.

CETI has entered into a manufacturing and distribution agreement with Air Power USA to commercialize deployable, zero-emission energy systems. Powered by compressed air and designed for off-grid applications, these systems provide scalable, continuous power with no fuel and no emissions. This capability complements CETI's environmental solutions and strengthens its value proposition to industrial clients.

The Company is headquartered in Scottsdale, Arizona, with additional offices in Istanbul, Turkey, and Dubai, United Arab Emirates.

The Company's principal executive office is located at Cyber Enviro-Tech, Inc., 6991 E. Camelback Road, Suite D-300, Scottsdale, Arizona 85251. The Company's telephone number is 866 687-6856. The Company's Internet site is located at: www.cyberenviro.tech. The Company maintains its 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.

DESCRIPTION OF BUSINESS

Cyber Enviro-Tech, Inc. (CETI) is an environmental technology company focused on sustainable solutions for the remediation of contaminated industrial wastewater, with an initial emphasis on the oil and gas sector. The Company develops and deploys proprietary equipment, biochemical products, and treatment processes to address complex hazardous waste and environmental challenges across global markets.

CETI has entered into a manufacturing and distribution agreement with Air Power USA to commercialize deployable, zero-emission energy systems. Powered by compressed air and designed for off-grid applications, these systems provide scalable, continuous power with no fuel and no emissions. This capability complements CETI's environmental solutions and strengthens its value proposition to industrial clients.

The Company is headquartered in Scottsdale, Arizona, with leased office space in Istanbul, Turkey, and Dubai, United Arab Emirates.

The Alvey Oil Field was originally acquired by CETI as a pilot site to test and refine its proprietary oil production enhancement technologies. Those efforts proved instrumental in demonstrating broader applications-extending beyond oil field optimization into large-scale remediation of contaminated oil, sludge, soil, and wastewater. As CETI's technology and strategy have evolved, the Alvey asset no longer aligned with the Company's core focus On October 14, 2025, CETI exchanged all assets related to the Alvey oil field operation for 8,600,000 common shares of West Texas Resources Incorporated, ("WTXR"). By spinning off the Alvey asset, CETI can fully dedicate its resources to advancing a growing portfolio of domestic and international remediation projects. At the same time, CETI and its shareholders retain the opportunity to participate in the future value of the Alvey Oil Field through its continued development by a company with expertise in oil and gas production-ensuring the asset has a better chance to realize its full potential while CETI concentrates on its primary growth markets.

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, Global 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 October 6, 2020

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. (CETI) is an environmental technology company focused on sustainable solutions for the remediation of contaminated industrial wastewater, with an initial emphasis on the oil and gas sector. The Company develops and deploys proprietary equipment, biochemical products, and treatment processes to address complex hazardous waste and environmental challenges across global markets.

On March 23, 2026 the Company announced it entered into a manufacturing and distribution agreement with Air Power USA, securing exclusive territory rights to manufacture and distribute zero-emission energy systems powered by compressed air across key international markets. This agreement provides CETI with a tangible, revenue-oriented platform through the deployment of Air Power's clean energy generation technology. The Company expects initial project activity and potential deployments in the second half of 2026, aligning with CETI's broader strategy to prioritize revenue-producing opportunities and scalable environmental solutions.

CETI continues to evaluate its existing remediation business while expanding its environmental footprint into complementary sectors, including clean power generation and sustainable infrastructure solutions. The Company intends to leverage its established international relationships to support distribution, project development, and market entry initiatives for Air Power systems.

Building on this momentum, CETI has multiple projects in its development pipeline that are expected to come online during the second half of 2026, positioning the Company for potential revenue growth and expanded commercial traction.

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 the Company's water filtration system. As of June 22, 2026, the Company has agreements with several individuals who are pursuing a variety of opportunities but no contracts have been ratified so far.

Market Demand and Size - CETI's water filtration system can be modified to address many of the water contamination issues that exist worldwide. The markets envisioned for the CETI water system when funds permit would be both domestic (U.S.) and global.

Government Regulation

The Company is 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, the 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 st Texas Intermediate crude. Any change in one or more of these factors could reduce the Company's ability to earn and grow revenue in future periods.

Research and Development

For the periods ending June 30, 2026 and June 30, 2025, the Company spent approximately nil and $667,000 in research and development on its oil/water filtration products and process, respectively. In addition, from 2021 through December 31, 2024, approximately $3.4 million was invested in the Alvey Ranch Oil field to test new technologies in opening up the downhole fractures and removing contaminants from the reservoir for increased oil production and these expenditures had been capitalized. Effective October 14, 2025, the Alvey oil field was sold to another company as the Company intends to focus its efforts on water and oil/soil remediation as well as clean energy production.

Personnel

As of June 30, 2026, the Company has no employees but the Company does have 7 full-time and part-time consultants.

Results of Operations for the Three Months Ending June 30, 2026 and 2025:

		2026				2025				$				%
Operating Expenses:
Professional fees		$	99,697			$	31,991			$	67,706				211.6	%
General and administrative			94,553				266,911				(172,358	)			-64.6	%
Consulting			130,430				427,479				(297,049	)			-69.5	%
Total operating expenses			324,680				726,381				(401,701	)			-55.3	%
Loss from operations			(324,680	)			(726,381	)			(401,701	)			-55.3	%
Other Income (Expense):
Change in fair value of derivative			346,646				61,318				285,328				465.3	%
Change in fair value of contingent liability			-				10,000				(10,000	)			-100.0	%
Change in fair value of WTXR			184,132				-				184,132				100.0	%
Loss on issuance of derivative			(159,848	)			(57,538	)			(102,310	)			177.8	%
Gain on extinguishment of derivative liability			173,430				10,601				162,829				1536.0	%
Loss on extinguishment of debt			(379,644	)			-				(379,644	)			100.0	%
Interest income			3,403				4,030				(627	)			-15.6	%
Interest expense			(571,624	)			(168,001	)			(403,623	)			240.3	%
Total Other Income (Expense)			(403,505	)			(139,590	)			(263,915	)			189.1	%
Loss from continuing operations			(728,185	)			(865,971	)			(137,786	)			-15.9	%
Discontinued operations:
Loss from operations of discontinued operations			-				(117,320	)			117,320				-100.0	%
Net loss			(728,185	)			(983,291	)			255,106				-25.9	%
Less net loss attributable to noncontrolling interest			-				(12,559	)			12,559				-100.0	%
Net loss attributable to common stockholders		$	(728,185	)		$	(970,732	)		$	242,547				-25.0	%

Professional fees. These fees are largely made up of audit and audit-related fees ($87,589 and $31,790 during the periods ending June 30, 2026 and 2025 respectively).

General and administrative Expenses. General and administrative expenses for the three months ended June 30, 2026 were down by -64.6% or $172,358 versus 2025 largely due to decreases in travel expenses of $75,212, office expenses of $82,255 and rent expenses of $17,177 offsetting an increase in advertising and promotion of $19,000. The Company resources were more constrained in 2026 and most of these expenses are related to overseas projects which CETI continues to deemphasize in 2026 as instability continues in the Middle East.

Consulting fees. Decreased by 69.5% or $297,049 due to a number of factors impacting 2025 and not 2026: Three consultants had amortization of their stock compensation finish in 2025 ($45,527), several others were only employed in 2025 ($71,441), there were consulting expenses associated with the pursuit of the Green Bond ($38,000), TJ Agardy, former President was still employed for most of the first half of 2025 ($20,000), and, lastly marketing consulting expenses plus cost of warrants totaled $112,511. These five items account for almost the entire decrease in 2026 vs 2025.

Other income (expense). Net other expense increased by approximately $264,000 during the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to debt restructuring activities undertaken during the quarter, including losses recognized on debt settlements and non-cash accounting charges associated with the Company's convertible commercial financing arrangements.

While most of the Company's convertible commercial financing was incurred during the first quarter of 2026, the related financing instruments remained outstanding during the second quarter and, under U.S. GAAP, continued to require periodic fair value remeasurement. As a result, the Company recognized significant non-cash charges related to the issuance, amortization, and periodic remeasurement of derivative liabilities and related debt discounts. The Company also recognized a $379,644 loss on the settlement of debt in connection with negotiated agreements to retire or restructure certain commercial financing obligations. These unfavorable items were partially offset by a non-cash unrealized gain of a $184,132 related to the increase in the fair value of the Company's investment in West Texas Resources, Inc. ("WTXR") and $173,430 of gains on the extinguishment of debt.

Management believes these restructuring activities are intended to reduce higher-cost commercial debt and simplify the Company's financing obligations. A substantial portion of the increase in other expense consisted of non-cash fair value adjustments and other accounting entries required under U.S. GAAP, and certain charges were associated with debt restructuring activities during the current quarter that management does not believe are indicative of the Company's ongoing operating results.

Loss from continuing operations. The above changes resulted in net loss of $728,185 in the three months end June 30, 2026 compared to a net loss of $865,971 in 2025. Decreases in operating expenses of $401,701 offset the increase in other expenses as noted above resulting in a smaller loss in current quarter.

Discontinued operations: The Company sold the Alvey oil field in fourth quarter 2025, and this represents the non-capitalized expenses related to the Alvey.

Results of Operations for the Six Months Ending June 30, 2026 and 2025

		2026				2025				$				%
Operating Expenses:
Professional Fees		$	162,610			$	183,111			$	(20,501	)			-11.2	%
General and administrative			268,396				485,559				(217,163	)			-44.7	%
Consulting			306,964				942,668				(635,704	)			-67.4	%
Total operating expenses			737,970				1,611,338				(873,368	)			-54.2	%
Operating loss from continuing operations			(737,970	)			(1,611,338	)			(873,368	)			-54.3	%
Other Income (Expense):
Change in fair value of derivatives			(19,363	)			(141,392	)			122,029				-86.3	%
Loss on issuance of derivatives			(1,246,006	)			(75,214	)			(1,170,792	)			1556.6	%
Gain on extinguishment of derivative liability			202,003				362,572				(160,569	)			-44.3	%
Loss on extinguishment of debt			(379,644	)			-				(379,644	)			100.0	%
Change in fair value of contingent liabilities			174,675				25,000				149,675				598.7	%
Change in fair value of WTXR			184,132				-				184,132				100.0	%
Interest income			6,769				7,318				(549	)			-7.5	%
Interest expense			(974,521	)			(499,724	)			(474,797	)			95.0	%
Total Other Income (Expense)			(2,051,955	)			(321,440	)			(1,730,515	)			538.4	%
Loss from continuing operations			(2,789,925	)			(1,932,778	)			(857,147	)			44.3	%
Discontinued operations:
Loss from operations of discontinued operations			-				(198,594	)			198,594				-100.0	%
Net Income (Loss)			(2,789,925	)			(2,131,372	)			(658,553	)			30.9	%
Less net loss attributable to noncontrolling interest			-				(17,089	)			17,809				-100.0	%
Net loss attributable to common stockholders		$	(2,789,925	)		$	(2,114,283	)		$	(675,642	)			32.0	%

Professional fees. These fees are largely made up of audit and audit-related fees ($120,502 and $80,710 during the six months ending June 30, 2026 and 2025 respectively) and legal fees ($41,738 and $84,351 during the six months ending June 30, 2026 and 2025, respectively). The decrease in legal fees from 2025 to 2026, was largely due to a decrease in fees associated with preparation of the S-1 from 2025 to 2026 of $36,844 and a decrease in fees associated with the West Fox lawsuit of $26,269 partially offset by an increase fees associated with the preparation of loan documents in 2026 of $23,000.

General and administrative Expenses. General and administrative expenses for the six months ended June 30, 2026 were down by 44.7% versus 2025 or $217,163 largely due to a decrease in travel expense of $184,007, office expense of $86,370 and rent $23,914 offsetting an increase in water sampling of $73,700. The Company resources were more constrained in 2026 and therefore travel was curtailed. The water sampling was done for a specific client in 2026 that the Company did not have in the first half of 2025.

Consulting fees. Decreased by 67.4% or $635,704 due to a number of factors impacting 2025 and not 2026: Three consultants had amortization of their stock compensation finish in 2025 ($148,837), there were consulting expenses associated with the pursuit of the Green Bond ($106,000), TJ Agardy, former President was still employed for most of the first half of 2025 ($50,000), and, lastly, marketing consulting expenses plus cost of warrants totaled $294,859. These four items account for almost the entire decrease in 2026 vs 2025.

Other income (expense). Net other expense increased by approximately $1.73 million during the six months ended June 30, 2026, compared to the same period in 2025. The increase was driven primarily by financing and debt restructuring activities rather than changes in the Company's operating performance. During the period, the Company increased its use of convertible commercial financing arrangements to support operations and implement its debt restructuring strategy.

As a result of these financing activities, the Company recognized a $1.25 million non-cash loss on the issuance of derivative instruments and an increase in interest expense of approximately $475,000, primarily related to the issuance, amortization, and ongoing accounting for convertible financing arrangements. The Company also recognized a $379,644 loss on the settlement of debt in connection with negotiated agreements to retire or restructure certain commercial financing obligations. In addition, the Company recognized a lower gain on the extinguishment of derivative liabilities compared to the prior-year period, which also contributed to the increase in other expense.

These unfavorable items were partially offset by a non-cash unrealized gain of approximately $184,000 resulting from the increase in the fair value of the Company's investment in West Texas Resources, Inc. ("WTXR") and a $175,000 gain from the change in the fair value of contingent liabilities. Many of these charges and gains result from accounting required under U.S. GAAP for convertible financing instruments and fair value measurements and do not represent current-period cash expenditures.

Management believes these financing and debt restructuring activities are intended to reduce higher-cost commercial debt and simplify the Company's financing obligations. While these activities resulted in a significant increase in other expense during the current period, management does not believe the related non-cash accounting charges are indicative of the Company's ongoing operating performance.

Loss from continuing operations. The above changes resulted in net loss of $2,789,925 in the first six months of 2026 compared to a net loss of $1,932,778 in 2025. Decreases in operating expenses of $873,368 were offset by the increase in other expense as noted above especially the non-cash expenses associated with the derivative accounting.

Discontinued operations: The Company sold the Alvey oil field in fourth quarter 2025, and this represents the non-capitalized expenses related to the Alvey.

Liquidity and Capital Resources

As of June 30, 2026, the Company had total assets of $3,376,929 including current assets of $1,059,540, property and equipment, net of $1,149,889 and long term deposit of $1,167,500. CETI also has current liabilities of $4,661,496 which consist of accounts payable of $511,700, accounts payable related party of $342,766, accrued interest of $538,412, notes payable, current maturities of $268,953, notes payable related party of $153,989, short-term convertible notes payable of $2,761,076, net of discount of $392,798, and convertible notes payable related party of $84,600. The Company also has $2,841,372 of long-term liabilities consisting of convertible notes payable of $99,829, net of discount of $137,671 and a derivative liability of $2,655,735.

CETI believes its ability to achieve commercial success and continued growth will be dependent upon its continued access to capital either through sale of additional convertible debentures, sale of equity or cash generated from operations. The Company will attempt to obtain additional capital through private investors; however, CETI has no agreements or understandings with third parties at this time in regards to investing additional monies. To help fund operations, the Company filed an S-1 in July 2026 that became effective as of July 7, 2026 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.

During the six months ended June 30, 2026, net cash provided by financing activities from continuing operations was approximately $658,000. Financing cash inflows primarily consisted of $529,600 in proceeds from convertible notes payable, approximately $212,000 in proceeds from notes payable, and around $137,000 from the issuance of shares for cash. These inflows were partially offset by about $150,000 in repayments of convertible notes payable and approximately $71,000 in repayments of notes payable.

During the same period, continuing operations used close to $702,000 of cash in operating activities, while there were no cash flows from investing activities. Accordingly, around $658,000 of net cash provided by financing activities was not sufficient to fully offset cash used in operations, resulting in a net decrease in cash and cash equivalents from continuing operations of approximately $43,000 during the six months ended June 30, 2026.

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 August 13, 2026, 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.