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

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

Executive Overview

HyOrc Corporation is an integrated clean energy infrastructure and technology company focused on the commercialization of proprietary waste-to-energy, renewable methanol, distributed power generation and industrial decarbonization technologies. The Company's strategy is to convert low-value waste streams into high-value clean energy products through proprietary gasification, syngas conditioning and power generation technologies, while creating multiple long-term revenue streams from equipment sales, engineering services, licensing, project development and renewable fuel production.

During the three months ended June 30, 2026, the Company continued its transition from technology development and validation toward commercial deployment. Management's primary focus during the quarter was the execution of its first commercial renewable methanol facility in Porto, Portugal, continued engineering and fabrication activities, expansion of strategic commercial relationships, strengthening of the Company's capital resources, and maintenance of its regulatory and public company reporting obligations.

The Company also continued advancing a number of strategic commercial initiatives during the quarter, including:

	●	The Porto renewable methanol project
	●	The Bulgaria waste-to-methanol project
	●	Project Phoenix for rail decarbonization
	●	Distributed power generation opportunities in the United Kingdom
	●	Additional industrial decarbonization projects

Management believes these initiatives provide multiple pathways toward future recurring revenues while reducing dependence on any single project or market. Board discussions throughout the quarter reflected continued progress across these initiatives, including fabrication activities, financing, strategic partnerships and commercialization planning.

A significant milestone during the quarter was the continued fabrication of the Company's modular waste-to-methanol system intended for deployment in Porto, Portugal. The system is designed to process approximately three tonnes per day of Refuse Derived Fuel ("RDF") into up to one tonne per day of renewable methanol and is expected to serve as the Company's first commercial reference facility. Management believes successful deployment of this system will provide an important commercial reference for future larger-scale projects, including the proposed 35 tonne per day RDF to approximately 8 tonne per day renewable methanol facility currently being developed in Portugal.

The Company also continued to strengthen its position within the renewable methanol and clean energy sectors through increased third-party industry recognition and technology validation. During the quarter, HyOrc was featured within the Dow Jones OPIS Global Methanol Report, while continuing to advance independent validation activities and industry engagement intended to support future commercial deployment and institutional financing initiatives. Management believes that continued independent technical validation and industry recognition are important components in reducing commercialization risk and supporting customer, partner and investor confidence.

From a financing perspective, the Company completed a $135,000 aggregate principal amount convertible note financing during the quarter to support ongoing engineering, fabrication and commercialization activities. While the Company remains in the pre-commercial deployment phase and continues to invest in long-term growth initiatives, management believes maintaining adequate liquidity remains essential to executing its commercialization strategy. Subsequent to quarter end, the Company's liquidity position improved materially through additional equity financing, expanded financing facilities and significant non-dilutive grant funding, further strengthening management's ability to execute its near-term commercial objectives.

Management believes that the Company has now entered a materially different stage of its development. Historically, capital resources were directed primarily toward technology development, engineering, intellectual property and independent validation. During 2026, the Company's emphasis has shifted toward fabrication, deployment, commercialization and execution of revenue-generating infrastructure projects. This transition has been supported by continued access to capital, increasing industry recognition, strategic commercial relationships and progress toward commercial-scale project deployment.

Although the Company has not yet achieved sustained commercial revenues, management believes that the progress made during the quarter and subsequent events have substantially advanced HyOrc's commercialization strategy. The Company remains focused on completing deployment of its first commercial renewable methanol system, converting strategic opportunities into long-term contracts, expanding project financing initiatives and continuing to build an institutional-quality public company capable of supporting future growth, including management's objective of pursuing a listing on a national securities exchange when appropriate.

Business Overview

HyOrc Corporation is an integrated clean energy infrastructure and technology company focused on developing, owning and commercializing proprietary technologies that convert low-value waste and industrial heat into renewable fuels and clean energy. The Company is building a portfolio of technologies and infrastructure projects designed to address global demand for decarbonization, renewable fuels, distributed power generation and industrial energy efficiency.

The Company's principal technology platform is based upon the conversion of Refuse Derived Fuel ("RDF") and other sustainable feedstocks into synthesis gas, which can subsequently be processed into renewable methanol, hydrogen and other valuable energy products. In parallel, the Company continues to develop proprietary Organic Rankine Cycle ("ORC") power generation systems capable of converting waste heat and external combustion sources into electricity for stationary power generation, transportation and industrial applications.

Management's strategy is to establish HyOrc as both a technology provider and an infrastructure developer. Rather than relying upon a single revenue source, the Company intends to generate revenues through a combination of equipment sales, engineering and project development services, technology licensing, recurring service agreements, distributed power generation projects, renewable methanol production and participation in long-term infrastructure developments.

The Company believes that renewable methanol represents one of the most significant long-term opportunities within the global energy transition. Increasing demand for low-carbon marine fuels, sustainable industrial feedstocks and renewable chemical products is being driven by tightening environmental regulations, decarbonization initiatives and growing customer demand for commercially viable alternatives to conventional fossil fuels. Management believes that the Company's proprietary approach of utilizing Refuse Derived Fuel as its primary feedstock offers a significant commercial advantage by combining relatively low-cost feedstock with the potential to generate renewable fuels while simultaneously diverting waste from landfill.

During the quarter, management continued to prioritize development of its first commercial renewable methanol reference facility in Porto, Portugal. This modular facility is designed to process approximately three tonnes per day of RDF into up to one tonne per day of renewable methanol and is intended to demonstrate the commercial performance of the Company's integrated technology platform under continuous operating conditions. Successful deployment is expected to support future commercial expansion into larger-scale facilities, including the proposed 35 tonne per day RDF to approximately 8 tonne per day renewable methanol project currently under development in Portugal.

In addition to renewable methanol, the Company continues to pursue opportunities in distributed power generation, industrial waste heat recovery, rail decarbonization and other energy infrastructure sectors. During the quarter, management advanced discussions relating to Project Phoenix, the Company's diesel-to-gas powered locomotive initiative, continued development of distributed power generation opportunities in the United Kingdom, progressed engineering work associated with the Bulgaria waste-to-methanol project, and expanded commercial engagement with strategic partners across Europe. These initiatives reflect management's strategy of applying the Company's core technology platform across multiple industrial sectors while diversifying future revenue opportunities.

The Company also continued to strengthen its competitive position through independent technical validation, strategic partnerships and increased industry visibility. Management believes that third-party validation, regulatory compliance and demonstration of commercial performance are essential to reducing technology adoption risk and supporting future customer acquisition, project financing and institutional investment.

As of June 30, 2026, the Company remained in the commercial deployment phase of its business. Although significant investment continues to be directed toward engineering, fabrication, regulatory compliance and commercialization activities, management believes that HyOrc has progressed beyond the technology development stage and is now focused on executing commercial projects capable of generating long-term recurring revenues. The Company's strategy is to leverage its proprietary intellectual property, growing portfolio of strategic relationships and expanding access to capital to support scalable deployment of its technologies across multiple international markets.

Results of Operations

Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025

The Company remains in the commercial deployment phase of its development. As a result, operating results for the quarter continue to reflect investment in engineering, commercialization, regulatory compliance and corporate infrastructure rather than mature operating revenues. Management expects the Company's financial performance to evolve as commercial projects enter operation and begin generating recurring revenues.

Revenues

Revenue for the three months ended June 30, 2026 was $24,000, compared with $0 for the comparable period in 2025.

The revenue recognized during the quarter primarily represented commission income earned under historical commercial arrangements with Vaigunth EnerTek. Prior to the establishment of HyOrc India Private Limited, EnerTek marketed and supplied equipment incorporating HyOrc's proprietary technology within India, with HyOrc earning commissions on qualifying equipment sales.

Management expects future commercial activity within India to transition progressively to HyOrc India Private Limited, providing the Company with greater operational control over future projects, customer relationships and revenue generation.

While current revenues remain modest, management believes they are not indicative of the Company's longer-term revenue potential. The Company's principal commercial focus remains deployment of renewable methanol production facilities, distributed power generation projects, technology licensing and engineering services, all of which are expected to become more significant contributors to revenue as projects move into commercial operation.

Operating Expenses

Operating expenses during the quarter primarily consisted of:

	●	engineering and technical development;
	●	fabrication and commercialization activities;
	●	legal and professional fees;
	●	accounting, audit and SEC reporting costs;
	●	corporate governance and public company compliance expenses;
	●	business development and strategic partnership activities; and
	●	general administrative expenses.

Operating expenses continued to reflect management's strategy of investing in the infrastructure necessary to transition the Company from technology development to commercial deployment.

Operating expenses for the quarter also included approximately $234,319 of non-cash director and consultant compensation, settled through the issuance of common stock rather than cash.

As an OTCQB reporting company preparing for continued institutional growth, the Company has experienced increased professional costs associated with SEC reporting, PCAOB audit requirements, legal compliance, corporate governance, investor communications and commercialization activities. Management believes these expenditures are necessary to support the Company's long-term strategic objectives, including continued access to institutional capital markets and the Company's objective of pursuing a future national securities exchange listing.

Research, Engineering and Commercialization

During the quarter, the Company continued investing in engineering and fabrication activities associated with its renewable methanol platform.

A significant portion of these activities related to fabrication of the Company's first commercial modular waste-to-methanol facility for deployment in Porto, Portugal. This project represents an important transition from technology validation toward commercial execution and is expected to provide the Company's first commercial reference installation.

The Company also continued investing in engineering support for Project Phoenix, distributed power generation opportunities, industrial decarbonization projects and further development of its proprietary technology platform. Board updates throughout the quarter reflected continued progress across these initiatives, including Porto fabrication, Platform Energy, GB Railfreight and the Bulgaria project.

Net Loss

The Company reported a net loss for the quarter as management continued to invest in engineering, commercialization, project execution and public company infrastructure.

Management believes the current level of expenditure reflects the Company's stage of development and is consistent with its strategy of establishing long-term revenue-generating infrastructure rather than maximizing short-term profitability.

The Company expects operating expenses to remain elevated during the commercial deployment phase as additional engineering, manufacturing, certification, regulatory, financing and project execution activities are undertaken. However, management anticipates that successful deployment of commercial projects will progressively shift the Company's financial profile from development-related expenditures toward recurring operating revenues.

A significant portion of the net loss for the quarter relates to non-cash charges associated with the accounting for the Company's convertible notes, including derivative fair value re-measurement, rather than cash operating expenditures. See Note 10 to the financial statements for further discussion.

Management's Perspective

Management believes that traditional quarterly financial metrics alone do not fully reflect the progress achieved during the period. The Company's principal objective during the quarter was not short-term earnings generation, but rather execution of key commercial milestones intended to establish the foundation for future recurring revenues.

These milestones included continued fabrication of the Porto commercial facility, advancement of multiple strategic infrastructure projects, expansion of commercial relationships, strengthening of the Company's financing position and continued enhancement of its visibility within the renewable methanol and clean energy sectors. Management believes these activities significantly advanced the Company's transition from a technology development business toward a commercially focused clean energy infrastructure company.

Key Performance Indicators (KPIs)

Management evaluates the Company's progress using a combination of financial and operational performance indicators. Given that HyOrc remains in the commercial deployment phase of its business, management believes operational milestones currently provide a more meaningful measure of performance than short-term financial results alone.

The principal performance indicators monitored by management include:

Commercial Project Execution

Management measures progress based on the advancement of commercial projects from engineering and validation through fabrication, deployment and commercial operation.

During the quarter, the Company continued fabrication of its first commercial modular renewable methanol facility for deployment in Porto, Portugal while advancing larger-scale commercial opportunities in Portugal, Bulgaria and the United Kingdom. Management believes successful deployment of the Porto reference facility represents a significant milestone toward broader commercial adoption of the Company's technology platform.

Technology Validation and Independent Verification

Independent technical validation remains a key component of the Company's commercialization strategy. Management believes third-party validation reduces technology risk for customers, investors, financing partners and regulatory authorities.

During 2026 the Company continued to build upon previously completed independent validation activities while increasing industry engagement and technical recognition. Management intends to continue pursuing independent validation and certification activities as commercial projects advance.

Commercial Partnerships

Management measures progress by the quality and advancement of strategic commercial relationships rather than solely by the number of agreements executed.

During and subsequent to the quarter, the Company continued to expand discussions with industrial partners, engineering firms, infrastructure developers, project financiers and potential customers across Europe, the United Kingdom, the Middle East and Asia. Management believes these relationships are essential to future commercialization of the Company's renewable methanol and distributed power technologies.

Financing and Liquidity

Maintaining adequate liquidity to support commercial deployment remains one of management's primary performance indicators.

During the quarter, the Company completed additional financing to support engineering and fabrication activities. Subsequent to quarter end, management further strengthened the Company's liquidity through additional equity financing, expanded debt facilities and a committed equity line of credit. In addition, the Company's Portuguese consortium received approval for approximately €6.7 million of funding under the European STEP programme. Management believes these developments materially strengthen the Company's ability to execute its commercialization strategy.

Commercial Deployment

Management measures success based upon the transition from technology development to revenue-generating commercial assets.

Current priorities include:

	●	completion and commissioning of the Company's first commercial renewable methanol facility in Porto, Portugal;
	●	advancement of the proposed commercial-scale 35 tonne per day RDF to approximately 8 tonne per day renewable methanol project;
	●	continued development of distributed power generation opportunities;
	●	advancement of Project Phoenix and other industrial decarbonization initiatives; and
	●	conversion of commercial discussions into long-term revenue-generating contracts.

Corporate Development

Management also monitors the Company's progress as a publicly traded reporting company.

Key indicators include:

	●	maintaining timely SEC reporting compliance;
	●	strengthening corporate governance and internal controls;
	●	expanding institutional investor engagement;
	●	improving access to strategic and project financing;
	●	broadening independent industry recognition; and
	●	continuing preparation for a future listing on a national securities exchange, subject to satisfaction of the applicable listing standards and market conditions.

Management believes that collectively these operational indicators provide a more meaningful assessment of the Company's progress than quarterly financial results alone while the Company continues transitioning from technology development to commercial deployment.

KPI		Q2 2026 Status
SEC Reporting		Current
Commercial Reference Plant		Under fabrication
Independent Validation		Bureau Veritas completed; further validation progressing
Commercial Financing		Convertible note completed
Subsequent Liquidity		Reg S equity, additional note, $7.5M ELOC, €6.7M STEP approval
Strategic Projects		Portugal, Bulgaria, UK distributed power, Project Phoenix progressing
Commercial Focus		Transition from technology validation to commercial deployment

Liquidity and Capital Resources

At June 30, 2026, HyOrc remained in the commercial deployment phase of its business. Management's primary use of capital continues to be the funding of engineering, fabrication, project development, regulatory compliance, commercialization activities and general corporate operations.

Historically, the Company has financed its operations through a combination of equity issuances, convertible debt, strategic investment and limited operating revenues. Management's objective is to progressively transition from reliance on corporate financing toward project-level financing and recurring cash flows generated by commercial operations.

Management does not currently anticipate utilizing corporate equity financing as the primary source of capital for construction of commercial renewable methanol facilities where project-level financing or non-dilutive funding is available.

Cash Flows and Working Capital

The Company's cash resources at June 30, 2026 reflected its continued investment in commercial deployment activities. During the quarter, available capital was principally directed toward engineering, manufacturing, project execution, public company compliance, intellectual property protection, regulatory activities and business development.

Management continuously evaluates the Company's working capital requirements and seeks to maintain sufficient liquidity to support ongoing operations while advancing commercial deployment of its technology platform.

Although the Company continues to report operating losses, management believes these losses primarily reflect investment in future revenue-generating infrastructure rather than mature operating activities.

Going Concern

The Company's recurring losses and reliance on additional financing raise substantial doubt about its ability to continue as a going concern. Management believes it can meet its obligations through continued capital raising and project-level financing; however, no assurance can be given. See Note 2 to the financial statements for further discussion.

Financing Activities

During the quarter, the Company completed a financing with Monroe Street Capital and Lambda Ventures consisting of an aggregate principal amount of $135,000 under a convertible promissory note.

Net proceeds received by the Company totaled approximately $117,980, with the difference representing the original issue discount together with financing costs and other amounts withheld at closing pursuant to the financing agreements.

Management believes the financing provided important working capital to continue engineering, fabrication and commercialization activities associated with the Company's renewable methanol platform, including the Porto project. The commitment shares associated with the financing remained reserved and had not been issued as of June 30, 2026.

GS Capital Convertible Note

In March 2026, the Company entered into a $150,000 convertible promissory note with GS Capital Partners LLC. Because the note's conversion feature varies based on the Company's stock price, it is accounted for as a derivative liability that is re-measured at fair value each reporting period.

This re-measurement, together with related non-cash charges recognized upon issuance, is reflected in the Company's results of operations for the six months ended June 30, 2026. See Note 10 to the financial statements for further discussion.

Capital Allocation

Management continues to allocate capital toward activities expected to accelerate commercialization and enhance long-term shareholder value.

During the quarter, capital was primarily deployed toward:

	●	fabrication of the Company's first commercial renewable methanol production system for deployment in Porto, Portugal;
	●	engineering and technical development;
	●	commercialization and strategic business development;
	●	SEC reporting, audit and regulatory compliance;
	●	intellectual property development and protection;
	●	legal and professional services; and
	●	general corporate administration.

Management believes these expenditures are necessary to establish the operational, technical and corporate infrastructure required to support future commercial operations.

Subsequent Liquidity Events

Subsequent to June 30, 2026, the Company's liquidity position strengthened materially.

The Company completed a $115,000 Regulation S equity investment from an international investor, providing additional non-debt working capital to support commercialization activities.

The Company also entered into additional financing arrangements with Monroe Street Capital and Lambda Ventures consisting of a $150,000 convertible promissory note together with a $7.5 million Equity Line of Credit ("ELOC"). Management believes these facilities provide additional financial flexibility as the Company advances toward commercial deployment and expands institutional financing initiatives.

In addition, the Company's Portuguese consortium received formal approval for approximately €6.7 million of funding under the European Union's Strategic Technologies for Europe Platform ("STEP") program. The approved funding supports development of a commercial renewable methanol production facility designed to process approximately 35 tons per day of Refuse Derived Fuel into approximately 8 tons per day of renewable methanol.

Although the STEP funding is awarded to the Portuguese project consortium rather than directly to HyOrc Corporation, management believes the approval substantially strengthens the commercial viability of the Company's European deployment strategy and materially reduces the external capital required for construction of the commercial facility.

Capital Requirements

Management expects capital requirements to remain elevated as the Company advances from engineering and fabrication into commissioning and commercial operation.

Near-term funding priorities include:

	●	completion and deployment of the Porto commercial reference facility;
	●	commissioning and operational optimization;
	●	engineering support for future commercial projects;
	●	continued advancement of Project Phoenix and distributed power initiatives;
	●	working capital for commercialization activities; and
	●	maintenance of the Company's public company reporting and governance obligations.

Management anticipates funding these activities through a combination of operating cash flows as projects commence commercial operation, strategic equity investments, project financing, government grants, equipment financing, commercial partnerships and, where appropriate, additional access to the capital markets.

Going Forward

Management believes the Company's liquidity position has improved significantly since June 30, 2026. The combination of additional equity capital, expanded financing facilities and substantial non-dilutive grant funding has strengthened the Company's ability to execute its near-term commercialization strategy.

The Company's long-term objective is to reduce reliance on parent company financing by transitioning individual commercial projects toward project-level financing supported by contracted revenues, strategic infrastructure investors and non-dilutive government funding. Management believes this approach will enable the Company to pursue scalable growth while seeking to minimize shareholder dilution over time.

Funding Strategy

Management's objective is to finance the Company's growth through a balanced combination of corporate capital, project-specific financing, strategic partnerships and non-dilutive funding. As the Company transitions from technology development to commercial deployment, management intends to reduce reliance on traditional corporate equity financing by matching the source of capital with the nature of each investment.

Corporate Capital

Corporate capital is primarily intended to fund activities that support the overall growth and governance of the Company. These include engineering and technology development, intellectual property, public company reporting and compliance, business development, corporate administration, and working capital. Management expects these activities to continue to be financed through a combination of operating cash flows, strategic equity investments and corporate financing facilities.

Project-Level Financing

Management intends that larger commercial facilities will, where practical, be financed at the project level rather than solely through the parent company. This approach allows individual projects to be funded based on their own contractual revenues, underlying assets and commercial economics, thereby reducing the funding burden on HyOrc Corporation while improving capital efficiency.

Project-level financing may include equipment financing, construction financing, infrastructure debt, strategic co-investment and other forms of non-recourse or limited-recourse financing.

Government Grants and Non-Dilutive Funding

The Company actively pursues government grants and other non-dilutive funding programs that support clean energy, renewable fuels and industrial decarbonization.

Management believes that grant funding can materially reduce project development costs, accelerate commercialization and improve overall project economics without increasing shareholder dilution. The approval of approximately €6.7 million under the European Strategic Technologies for Europe Platform ("STEP") program for the Company's Portuguese commercial methanol project demonstrates management's strategy of leveraging public-sector funding alongside private capital to accelerate infrastructure deployment.

The Company continues to evaluate additional grant program and public funding opportunities across the jurisdictions in which it operates.

Strategic Capital and Institutional Partnerships

Management continues to engage with strategic investors, infrastructure funds, commercial lenders and industrial partners that can provide not only financial resources but also technical expertise, market access and long-term commercial relationships.

Management believes that aligning with experienced strategic partners can accelerate project execution, improve access to project financing and reduce overall commercialization risk.

Capital Allocation Strategy

Management intends to align each source of capital with its intended purpose. Corporate financing facilities (including equity issuances, convertible securities and the Company's Equity Line of Credit) are expected to be used primarily to support HyOrc Corporation's corporate activities, including:

	●	Working capital
	●	Engineering
	●	Intellectual property development
	●	Public company compliance
	●	Business development
	●	Strategic acquisitions
	●	The Company's long-term objective of qualifying for a national securities exchange listing

By contrast, management intends that the construction and expansion of commercial renewable methanol facilities and other infrastructure assets will, wherever practical, be financed through project-level capital sources, including:

	●	Non-dilutive government grants
	●	Equipment finance
	●	Infrastructure investment funds

	●	Commercial lenders
	●	Strategic partners
	●	Project-specific financing

Management believes this approach aligns the source of capital with the underlying assets being financed, reduces reliance on parent-company equity dilution, improves capital efficiency and supports long-term shareholder value.

Commercial Development

During the three months ended June 30, 2026, the Company continued to advance the commercialization of its proprietary clean energy technologies through a portfolio of projects spanning renewable methanol production, distributed power generation, rail decarbonization and industrial energy recovery. Management's objective is to establish multiple independent revenue streams while demonstrating the scalability of the Company's technology platform across several end markets.

Portugal - Renewable Methanol Platform

The Company's principal commercial focus remains the deployment of its first renewable methanol reference facility in Porto, Portugal.

During the quarter, fabrication continued on a modular processing system designed to convert approximately 3 tons per day of Refuse Derived Fuel ("RDF") into up to 1 tons per day of renewable methanol. The facility is intended to demonstrate the commercial performance of the Company's integrated waste-to-methanol platform under continuous operating conditions and to serve as the Company's first commercial reference installation.

Management believes the Porto deployment represents an important milestone in the Company's transition from technology validation to commercial operation. In addition to demonstrating technical performance, the project is intended to validate installation procedures, operational performance, maintenance requirements and commercial economics before larger-scale deployment.

The Company also continued planning for expansion beyond the reference facility. The proposed commercial-scale Portuguese project is designed to process approximately 35 tons per day of RDF into approximately 8 tons per day of renewable methanol, providing a platform for future commercial growth subject to financing, permitting and final project execution.

Subsequent to quarter end, the Portuguese consortium received approval for approximately €6.7 million under the European Union's Strategic Technologies for Europe Platform ("STEP") program. While the grant is discussed further under "Subsequent Events," management believes the approval significantly strengthens the commercial pathway for the larger Portuguese development.

United Kingdom - Distributed Power Generation

The Company continued advancing distributed power generation opportunities within the United Kingdom.

Management continued discussions with Platform Energy regarding potential renewable power generation projects, including opportunities to support industrial facilities and future data center developments. These discussions reflect growing demand for decentralized, low-carbon power generation capable of supporting energy-intensive applications.

Management believes the Company's externally fired Organic Rankine Cycle ("ORC") technology is well suited for distributed generation where waste heat, renewable fuels or industrial process heat are available.

Although these discussions remain at various stages of commercial development, management believes they represent attractive opportunities to expand the Company's power generation business alongside its renewable methanol platform. Board discussions during the quarter included ongoing Platform Energy opportunities and broader distributed energy initiatives.

Project Phoenix - Rail Decarbonization

The Company continued advancing Project Phoenix, its rail decarbonization program designed to retrofit existing diesel locomotives using HyOrc's proprietary power generation technologies.

During the quarter, management continued discussions relating to engineering, financing and commercialization strategies for the program, including engagement with GB Railfreight and potential infrastructure funding partners. The project is intended to provide an alternative pathway for reducing emissions from existing rail fleets while leveraging established rail infrastructure. Board discussions also covered prospective funding structures and TÜV certification planning.

Management believes Project Phoenix represents a complementary long-term commercial opportunity that leverages the Company's thermal power generation expertise beyond renewable fuel production.

Bulgaria - Waste-to-Methanol Development

The Company continued advancing its proposed renewable methanol project in Bulgaria.

Management's activities during the quarter included continued commercial and technical discussions regarding project structure, financing and implementation strategy. In parallel, the Company continued pursuing grant funding opportunities intended to support commercial deployment.

Management believes Bulgaria represents an attractive market for future renewable methanol production due to its industrial infrastructure, available feedstock and strategic geographic location.

India

Historically, commercial activities in India were undertaken through arrangements with Vaigunth EnerTek, which manufactured equipment utilizing HyOrc technology and marketed certain systems within the region.

Following the establishment of HyOrc India Private Limited, management expects future commercial activities within India to transition progressively to that subsidiary. This is expected to provide improved operational control, strengthen customer relationships and support future regional expansion.

Management continues to view India as an important manufacturing and engineering base supporting international deployment of the Company's technology platform.

Commercial Strategy

Management's commercialization strategy is based on demonstrating the Company's technology through an initial commercial reference facility before expanding into larger infrastructure projects supported by strategic partners, project financing and government funding.

Rather than relying on a single source of revenue, management intends to develop multiple complementary revenue streams, including:

	●	engineering and design services;
	●	equipment manufacturing and sales;
	●	technology licensing;
	●	renewable methanol production;
	●	distributed power generation;
	●	long-term operation and maintenance services; and
	●	participation in project development and infrastructure ownership.

Management believes this diversified commercial model reduces dependence on any individual project or market while providing opportunities for recurring long-term revenue growth.

As of June 30, 2026, management believes the Company had progressed beyond the technology demonstration stage and was actively executing commercial deployment initiatives. The successful completion of these projects is expected to establish the operational foundation for broader international commercialization of the Company's clean energy platform.

Management believes the Company's commercialization model is designed to become increasingly self-reinforcing. Successful deployment of the Porto reference facility is intended to support customer confidence, project financing and commercial contracting for larger facilities. As additional commercial plants are deployed, management expects operational experience, reference projects and recurring revenues to improve access to project-level financing and support further international expansion while reducing reliance on corporate capital.

Technology Validation

Management believes that independent third-party validation is a critical component of the Company's commercialization strategy. As an emerging clean energy technology company, customer adoption, institutional financing and project development are influenced not only by technical performance but also by independent verification from recognized engineering organizations, independent research firms and industry participants.

Accordingly, the Company has adopted a strategy of obtaining independent validation at successive stages of technology development and commercial deployment in order to reduce technical, commercial and execution risk.

Bureau Veritas Process Validation

During 2026, the Company successfully completed an independent technical validation of its waste-to-methanol process through Bureau Veritas, one of the world's leading testing, inspection and certification organizations.

The validation included an independent review of the Company's RDF gasification and renewable methanol production process, together with verification of process performance and engineering documentation. Bureau Veritas reported no material non-conformities during the validation process.

Management believes this independent assessment represents an important milestone in the commercialization of the Company's renewable methanol platform by providing additional confidence to prospective customers, strategic partners, project financiers and institutional investors.

Lux Research Independent Assessment

During the quarter, the Company also benefited from an independent assessment by Lux Research, a globally recognized provider of technology and market intelligence for the energy, chemicals and industrial sectors.

Lux Research evaluated HyOrc's renewable methanol platform as part of its broader assessment of emerging low-carbon methanol technologies and identified the Company as one of a limited number of organizations developing commercial waste-to-methanol solutions. The assessment also independently evaluated the Company's projected renewable methanol production economics and supported management's target production cost of approximately US$350 per metric tons, subject to project-specific assumptions and operating conditions.

Management believes independent recognition by Lux Research provides important third-party validation of both the Company's technology platform and its commercial positioning within the rapidly developing renewable methanol market.

Industry Recognition

During the quarter, the Company continued to receive increasing recognition from participants within the global methanol industry.

The Company was invited to participate in the Dow Jones World Methanol Conference, one of the industry's leading international events, providing an opportunity to engage directly with major producers, traders, technology providers and infrastructure investors active in the global methanol market.

The Company also received coverage within the Dow Jones OPIS Global Methanol Report, increasing awareness of HyOrc's technology platform among participants in the international methanol industry.

Management believes participation in recognized industry forums and publications increases visibility among potential customers, strategic partners, project developers and institutional investors while supporting broader commercial acceptance of the Company's technology.

Engineering Validation

Management continues to work with internationally recognized engineering, certification and industry organizations to support the commercialization of its technology platform.

During the quarter, engineering activities continued in support of the Company's renewable methanol projects, distributed power systems and Project Phoenix, the Company's diesel-to-ORC locomotive retrofit program. Independent engineering review remains an important component of management's strategy to support customer acceptance, project financing, regulatory approvals and commercial deployment.

Project Phoenix has also benefited from continued engagement with GB Railfreight ("GBRF"), one of the United Kingdom's leading rail freight operators. Management believes collaboration with an established rail operator provides valuable operational insight into the commercial, technical and regulatory requirements associated with introducing new propulsion technologies into the rail sector.

In parallel, the Company received a formal proposal from TÜV SÜD Rail to undertake the Independent Safety Assessment ("ISA") for Project Phoenix. TÜV SÜD recognized that the Company's locomotive retrofit represents a novel propulsion architecture and proposed a structured, risk-based certification process based on the European EN 50126 RAMS lifecycle.

The proposed assessment is expected to progress through concept, design and validation phases and, subject to successful completion of the required engineering reviews, witnessed testing and vehicle inspection, culminate in the issuance of a Final Independent Safety Assessment Report.

Management believes the combination of operational engagement with GB Railfreight and the independent certification pathway proposed by TÜV SÜD provides a robust framework for reducing technical, operational and regulatory risk. Together, these initiatives support the Company's objective of advancing Project Phoenix from engineering development toward commercial deployment.

The Company intends to continue utilizing independent engineering review, application-specific certification and collaboration with industry participants as core elements of its commercialization strategy across its renewable methanol, distributed power and transportation technologies.

Commercial Demonstration

Management believes that successful operation of the Company's first commercial renewable methanol facility in Porto, Portugal will represent the next major stage of technology validation.

While laboratory testing, engineering verification and independent technical assessments provide important evidence of technical capability, management believes sustained operation under commercial conditions will demonstrate the scalability, reliability and commercial performance of the Company's integrated waste-to-methanol platform.

The Porto reference facility is intended to generate operational data that may be used to support future commercial deployments, project financing discussions and customer due diligence.

Validation Strategy

Management views technology validation as an ongoing process rather than a single event.

The Company's validation strategy includes:

	●	Independent engineering review and verification;
	●	Third-party technical validation;

	●	Independent commercial and market assessment;
	●	Participation in recognized international industry forums;
	●	Commercial demonstration under operating conditions;
	●	Engineering certification for specific applications; and
	●	Operational performance data from commercial installations.

Management believes that each completed validation milestone reduces technical uncertainty and strengthens the Company's competitive position within the renewable fuels and clean energy sectors.

Competitive Position

Management believes the Company's commercialization strategy differs from many early-stage clean energy companies by emphasizing independent verification before broad commercial deployment.

Rather than relying solely on internal performance claims, the Company has sought to demonstrate the technical and commercial viability of its platform through internationally recognized engineering organizations, independent research firms, industry publications and commercial reference projects.

Management believes this disciplined approach supports customer confidence, facilitates discussions with infrastructure investors and project financiers, and strengthens the Company's ability to compete for commercial opportunities within the rapidly developing renewable methanol and industrial decarbonization markets.

Technology Validation Milestones

Milestone		Status
Prototype development		Completed
Pilot RDF gasification		Completed
Renewable methanol production demonstrated		Completed
Bureau Veritas independent process validation		Completed
Lux Research independent commercial assessment		Completed
Dow Jones World Methanol Conference participation		Completed
Dow Jones OPIS Global Methanol Report recognition		Completed
GB Railfreight collaboration on Project Phoenix		Ongoing
TÜV SÜD Rail Independent Safety Assessment pathway established		Proposal received
Commercial reference plant fabrication (Portugal)		In progress
Commercial commissioning (Porto)		Planned
Commercial-scale deployment (35 TPD RDF → ~8 TPD renewable methanol)		In Development

Industry Trends

Management believes that the global energy transition continues to create significant long-term opportunities for technologies capable of reducing greenhouse gas emissions while utilizing existing industrial infrastructure. Increasing regulatory support for low-carbon fuels, growing demand for energy security, and the need for commercially scalable decarbonization solutions are driving investment across the renewable fuels, distributed power generation and industrial decarbonization sectors.

Although these market trends create substantial commercial opportunities, the Company recognizes that successful commercialization remains dependent upon technology performance, customer adoption, financing availability, regulatory approvals and execution of commercial projects.

Renewable Methanol

Renewable methanol has emerged as one of the principal alternative fuels being considered for the decarbonization of the global maritime, industrial and chemical sectors.

Demand for renewable methanol continues to be supported by tightening environmental regulations, the adoption of lower-carbon fuel standards and increasing investment by shipping companies, industrial manufacturers and fuel suppliers seeking practical alternatives to conventional fossil fuels.

Management believes renewable methanol offers several advantages over certain alternative fuels because it can be transported, stored and handled using much of the existing global liquid fuel infrastructure while also serving as both a transportation fuel and a chemical feedstock.

Waste as a Strategic Feedstock

Management believes that one of the principal constraints facing the renewable methanol industry is the availability of sustainable feedstocks capable of supporting large-scale production.

Many renewable methanol projects rely upon biomass, renewable electricity or other feedstocks that may become increasingly constrained as demand grows across multiple industries.

HyOrc's commercial strategy is based upon the utilization of Refuse Derived Fuel (RDF), a widely available waste-derived feedstock that management believes offers both environmental and commercial advantages. In addition to supporting renewable fuel production, RDF utilization may contribute to landfill diversion and improved waste management while providing a comparatively stable feedstock for commercial operations.

Management believes that access to abundant waste-derived feedstocks represents an important differentiating factor in the Company's long-term commercialization strategy.

Industrial Decarbonization

Industrial operators continue to face increasing pressure to reduce carbon emissions while maintaining reliable and cost-effective operations.

Management believes technologies capable of recovering waste heat, improving thermal efficiency and producing renewable fuels have the potential to assist industrial customers in meeting evolving environmental objectives without requiring complete replacement of existing industrial infrastructure.

The Company's externally fired Organic Rankine Cycle technology and renewable methanol platform are intended to address this market by providing practical solutions that can be integrated into a range of industrial applications.

Distributed Power Generation

Demand for distributed power generation continues to increase as industrial facilities, critical infrastructure and data centers seek reliable, resilient and lower-carbon energy supplies.

Management believes increasing electricity demand, coupled with constraints on conventional generation capacity and transmission infrastructure, is creating opportunities for modular distributed power systems capable of utilizing renewable fuels and waste-derived energy sources.

The Company continues to evaluate opportunities where its proprietary technologies may be deployed to support industrial facilities, energy infrastructure and other applications requiring continuous, decentralized power generation.

Infrastructure Investment

Governments and private investors continue to allocate substantial capital toward clean energy infrastructure, renewable fuels and industrial decarbonization projects.

In addition to traditional project finance, management believes public funding program, infrastructure funds and strategic industrial investors will continue to play an increasingly important role in accelerating deployment of commercially viable clean energy technologies.

Management believes the Company's strategy of combining private investment with project financing and non-dilutive government funding is well aligned with these broader infrastructure investment trends.

Regulatory Environment

Environmental regulations, carbon reduction initiatives and renewable fuel policies continue to evolve across many of the markets in which the Company operates.

Management believes that increasing regulatory support for renewable fuels, circular economy initiatives and waste diversion program may provide additional opportunities for commercialization of the Company's technologies. However, management also recognizes that regulatory frameworks continue to evolve and may vary significantly between jurisdictions.

Management's Perspective

Management believes that the convergence of increasing renewable methanol demand, greater emphasis on circular economy solutions, continued investment in clean energy infrastructure and growing interest in distributed power generation provides a favorable long-term environment for commercialization of the Company's technology platform.

The Company intends to continue focusing on projects where proprietary technology, strategic partnerships, project-level financing and independent technical validation can be combined to support commercially sustainable infrastructure developments.

While these industry trends provide a supportive backdrop, management remains focused on disciplined execution, prudent capital allocation and the successful deployment of commercial reference projects as the primary drivers of long-term shareholder value.

Subsequent Events

Subsequent to June 30, 2026, the Company continued to execute its commercialization strategy through additional financing activities, strategic project development and commercial partnerships.

Management believes these developments have strengthened the Company's financial flexibility and enhanced its ability to advance commercial deployment of its clean energy platform.

Regulation S Equity Financing

Subsequent to quarter end, the Company completed a $115,000 Regulation S equity financing with an international investor.

Management believes this investment further strengthens the Company's capital position while providing additional working capital to support commercialization, engineering activities and general corporate operations.

Additional Convertible Financing

The Company also entered into an additional $150,000 convertible promissory note with Monroe Street Capital and Lambda Ventures.

Management believes the financing provides additional liquidity to support ongoing commercial activities while maintaining financial flexibility as the Company advances toward commercial deployment.

$7.5 Million Equity Line of Credit

Subsequent to quarter end, the Company entered into an Equity Line of Credit ("ELOC") providing access to up to $7.5 million of potential financing, subject to the terms and conditions of the agreement.

Management views the Equity Line of Credit primarily as a strategic corporate financing resource rather than the intended source of capital for commercial infrastructure deployment. Management believes that preserving the facility for corporate growth initiatives, working capital and future public market opportunities, including preparation for a national securities exchange listing, represents the most efficient allocation of shareholder capital.

European STEP Grant Approval

Subsequent to quarter end, the Portuguese consortium developing the Company's renewable methanol project received formal approval for approximately €6.7 million under the European Union's Strategic Technologies for Europe Platform ("STEP") program.

The approved funding supports development of a commercial renewable methanol production facility designed to convert approximately 35 tons per day of Refuse Derived Fuel ("RDF") into approximately 8 tons per day of renewable methanol.

Although the funding is awarded to the Portuguese project consortium rather than directly to HyOrc Corporation, management believes the approval represents significant third-party validation of the project's technical and commercial merits and substantially enhances the project's financing profile.

Commercial and Strategic Development

Subsequent to quarter end, the Company continued advancing commercial discussions with prospective customers, strategic partners and institutional investors across its renewable methanol, distributed power and industrial decarbonization businesses.

Management also continued progressing engineering, manufacturing and project planning activities associated with the deployment of its first commercial renewable methanol reference facility in Porto, Portugal.

These activities are intended to support the Company's broader strategy of establishing commercial reference projects that can facilitate future international deployment of its technology platform.

Industry Recognition and Strategic Engagement

Following increased industry visibility resulting from independent technical validation and commercial progress, the Company continued to engage with a growing number of strategic industry participants, infrastructure investors and commercial organizations evaluating opportunities within the renewable fuels and clean energy sectors.

Management believes this increased engagement reflects growing market interest in commercially deployable waste-to-renewable fuel technologies.

Outlook

Management believes the Company has entered a significant stage in its evolution, transitioning from technology development and validation toward commercial deployment and infrastructure execution. During the first half of 2026, the Company continued to strengthen its technical, financial and commercial foundations through independent technology validation, strategic financing initiatives and the advancement of multiple commercial projects.

Looking ahead, management's principal objective is the successful deployment and commissioning of the Company's first commercial renewable methanol reference facility in Porto, Portugal. Management believes this project will serve as an important operational reference for future commercial developments and provide valuable operating data to support customer engagement, project financing and international expansion.

In parallel, the Company intends to continue advancing its broader portfolio of commercial opportunities, including:

	●	Renewable methanol production
	●	Distributed power generation
	●	Industrial decarbonization
	●	Project Phoenix

The Company intends to maintain a disciplined approach to capital allocation and project execution across this portfolio.

Management also intends to continue pursuing strategic partnerships with industrial companies, infrastructure investors, commercial lenders and government agencies that can support the deployment of the Company's technologies. The Company believes that combining private investment with project-level financing and non-dilutive funding provides a sustainable framework for long-term growth while seeking to minimize shareholder dilution.

The global transition toward lower-carbon fuels, circular economy solutions and distributed energy systems continues to create opportunities for technologies capable of converting waste into valuable energy products. Management believes the Company's integrated technology platform, together with its focus on commercially available feedstocks such as Refuse Derived Fuel ("RDF"), positions the Company to participate in these developing markets.

The Company also intends to continue strengthening its corporate governance, financial reporting and operational capabilities as it executes its commercialization strategy. Management believes that maintaining high standards of transparency, regulatory compliance and financial discipline will support future engagement with institutional investors, strategic partners and capital providers.

While management remains optimistic regarding the Company's long-term prospects, it recognizes that successful execution will depend upon continued access to capital, achievement of commercial milestones, customer adoption, regulatory approvals and effective project delivery. Accordingly, management remains focused on disciplined execution, prudent financial management and the systematic reduction of technical and commercial risk.

Based on the progress achieved during the first half of 2026 and the significant developments occurring subsequent to quarter end, management believes the Company is better positioned than at any previous stage in its history to advance the commercialization of its clean energy technologies. The Company's immediate priorities remain the successful execution of its commercial projects, the expansion of strategic relationships and the continued development of a scalable business model capable of generating long-term shareholder value.