What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-20 compared with 2008-11-14 · 66 added, 544 removed, 1 unchanged (100% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

believe transparency and clarity are the primary goals of successful financial

We remain committed to increasing the transparency of our financial

reporting, providing our shareholders with informative financial disclosures and

presenting an accurate view of our financial position and operating

Discussion and Analysis of Financial Condition and Results of Operations

(“MD&A”) is designed to provide a reader of our financial statements with a

narrative from the perspective of our management on our financial condition,

results of operations, liquidity, and certain other factors that may affect our

future results.

Our MD&A is presented in the following

Strategy, Core Philosophies, and Current

of Operations

and Capital Resources

Off-Balance-Sheet

and Quantitative Disclosures About Market

following discussion and other sections of this Form 10-Q contain

forward-looking statements that involve a number of risks and uncertainties.

These forward-looking statements are made pursuant to the “safe-harbor”

provisions of the Private Securities Litigation Reform Act of 1995 and are made

based on management’s current expectations or beliefs, as well as assumptions

made by, and information currently available to, management.

All statements

regarding future events, our future financial performance and operating results,

our business strategy and our financing plans are forward-looking statements.

many cases, you can identify forward-looking statements by terminology, such as

“may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,”

“believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative

of such terms and other comparable terminology.

These statements are only

Known and unknown risks, uncertainties and other factors could

cause our actual results to differ materially from those projected in the

forward-looking statements.

INFORMATION CONTAINED IN THIS FORM 10-Q IS NOT A COMPLETE DESCRIPTION OF OUR

BUSINESS OR THE RISKS ASSOCIATED WITH AN INVESTMENT IN US.

READERS ARE REFERRED

TO DOCUMENTS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION,

WHICH IDENTIFY IMPORTANT RISK FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER

FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS.

end of the quarter, September 30, 2008, Renewal Fuels, Inc.

(“Renewal”) had

three wholly-owned subsidiaries - Renewal Biodiesel, Inc.

(“Renewal Biodiesel”),

Biodiesel Solutions, Inc.

(“BSI”), and Renewal Plantations, Inc

Biodiesel was incorporated in the state of Delaware on March 9, 2007 and

acquired the business, fixed assets and inventory of the FuelMeister business of

BSI, effective March 30, 2007.

Renewal Biodiesel is engaged in the business of

designing, developing, manufacturing and marketing personal biodiesel processing

equipment and accessories to convert used and fresh vegetable oil into

clean-burning biodiesel.

Renewal Biodiesel’s products allow customers to make

biodiesel fuel, which is capable of powering all diesel fuel engines, for a

current cost of approximately 70 cents per gallon.

Renewal Biodiesel has

developed a network of dealers in the United States for sale and distribution of

its products.

Renewal Biodiesel’s manufacturing facilities are currently located

in Sparks, Nevada.

established to manufacture a factory-built biodiesel processing plant that is

designed to produce 350,000 gallons of biodiesel per year, appropriately scaled

for a variety of customers, including small communities, farms, farm co-ops and

trucking fleets.

The design was to provide a biodiesel production system that is

continuous, flexible, efficient, affordable, and fully-automated.

The automated

control system would minimize labor costs and facilitate remote diagnostics.

BSI’s manufacturing facilities were located in Sparks, Nevada, adjacent to the

manufacturing facilities for Renewal Biodiesel.

As of April 15, 2008

BSI ceased development operations due to rising input costs and the development

of more efficient means of converting vegetable oil into biodiesel fuel.

Employment agreements for BSI employees have been terminated as of April 15,

The Company sold productive and shop equipment previously used

in BSI operations on July 9, 2008.

The Company wrote off $373,868 of

intangibles, goodwill, and remainder of the fixed assets.

engaged in the growth of cellulosic feedstock for the biofuels

Through a service agreement with a third party, we are

establishing nurseries for the growth of unique high density, short-rotation

trees, which are designed to provide a very high concentration of biomass per

A Management Service Agreement between RPI and Emerald Energy,

LLC (“Service Agreement”) was consummated on February 11, 2008, providing for

the completion of the greenhouse installation and operation of the

We are establishing customers for the products to be

produced by RPI.

Recently, RPI learned that the root sections

processed and planted by Emerald Energy, LLC in April and May 2008 did not

According to Emerald Energy, LLC, the PH level of the soil

wasn’t proper for the sustained growth of the root sections.

engaged an independent grower to grow the replaced root

These root sections appear to be growing

RPI and Emerald Energy, LLC are in ongoing discussions

about how to modify their relationship given these developments.

Reorganization

of Tech Laboratories, Inc.

and Reverse Merger with Renewal Biodiesel,

20, 2007, Tech Laboratories, Inc.

entered into a Merger Agreement with Renewal

Biodiesel, a Delaware corporation formed in 2007 for the purposes of the asset

acquisition of the FuelMeister Business described below.

Under the terms of the

agreement, we acquired 100% of the common stock of Renewal Biodiesel in exchange

for the issuance by us of 343,610 shares of our series A convertible preferred

stock, which was subsequently converted into 22,907,323 common shares.

officers and directors of Renewal Biodiesel assumed similar positions with us.

Although we were the legal acquirer, Renewal Biodiesel was considered the

accounting acquirer and as such the acquisition was accounted for as a reverse

merger and recapitalization.

As a result, the accompanying consolidated

financial statements represent the results of operations and cash flows of the

accounting acquirer (Renewal Biodiesel) from the date of its inception on March

Immediately prior to the reorganization, we had 673,356 shares of

common stock outstanding and net liabilities of $1,677,020, consisting of the

following, at fair value:

liabilities assumed:

term debt, including accrued interest

liabilities assumed

liabilities assumed primarily represent debt obligations to YA Global

Investments, L.P.

(“YA Global”) and were assumed in connection with the

provision of additional long-term debt financing provided by YA Global (see Note

7 in our accompanying consolidated financial statements included in this

Report), which additional funding was provided simultaneously with the reverse

merger and recapitalization.

Accordingly, the net liabilities assumed were

recorded as deferred financing costs incurred in connection with the additional

debt funding provided by YA Global and are being amortized by periodic charges

to income on a straight-line basis over the life of that debt funding.

addition, the Company paid $180,000 in fees in connection with the additional

debt funding provided by YA Global.

Laboratories had no active business operations immediately prior to the merger.

John King, former Chief Executive Officer and Mr.

David Marks, Chairman were

officers and directors and were minority shareholders of Renewal

prior to the reorganization, Renewal Biodiesel issued an aggregate of 5,727,979

shares of its common stock to 23 accredited investors for an aggregate

consideration of $57,279.

Under the terms of the agreement, we acquired 100% of

the 5,727,979 shares of common stock of Renewal Biodiesel in exchange for the

issuance by us of 343,610 shares of series A preferred stock, which were

subsequently converted into 23,907,323 common shares (approximately 97% of the

outstanding common shares immediately after the reorganization).

share price paid for the 5,727,979 shares of Renewal Biodiesel exchanged for our

common shares was $0.01.

Current officers, directors and principal stockholders

of ours, who beneficially own in the aggregate approximately 80% of our

outstanding common stock, owned the following aggregate shares of common stock

of Renewal Biodiesel:

Group LLC (1)

Crivello SEP IRA (1)

investors as a group (17)

Crivello is also the managing member of Crivello Group,

the shares attributed to Mr.

Marks, 200,000 shares are registered in the

name of the Irrevocable Children’s Trust of which Mr.

Marks is a trustee

and 200,000 are registered in the name of Phoenix Investors, LLC of which

Marks is Managing Director.

we were the legal acquirer, Renewal Biodiesel was considered the accounting

acquirer and as such the acquisition was accounted for as a reverse merger and

recapitalization.

The officers and directors of Renewal Biodiesel assumed

similar positions with us.

As a result, the accompanying consolidated financial

statements represent the results of operations and cash flows of the accounting

acquirer (Renewal Biodiesel) from the date of its inception on March 9,

value of the common stock issued to the shareholders of Renewal Biodiesel was

estimated to be $0.2265 per share, based on the trading price of our common

stock immediately prior to the reorganization and reverse merger.

The difference

between the fair value of the shares issued and the amount paid by the

shareholders of Renewal Biodiesel for their shares resulted in an immediate

expense of $5,131,231.

9, 2007, the Company, which was a New Jersey entity (“Tech Labs-NJ”), entered

into an Agreement and Plan of Merger with Tech Laboratories, Inc., a

Delaware entity (“Tech Labs - DE”) under which Tech Labs - NJ and Tech Labs - DE

were merged with and into the surviving corporation, Tech Labs - DE, whose name

was subsequently changed on August 1, 2007 to Renewal Fuels, Inc.

certificate of incorporation and bylaws of the surviving corporation became the

certificate of incorporation and bylaws of the Company, and the directors and

officers in office of the surviving corporation became the directors and

officers of the Company.

10, 2007, the majority stockholders of the Company authorized a 1-for-15 reverse

stock split which was effective on August 1, 2007.

As a result, the shares

of common stock of the Company (the "Old Shares") that were outstanding at July

31, 2007 automatically converted into 23,805,126 shares of common stock

(the "New Shares").

All common share and per share amounts in our financial

statements have been retroactively restated to reflect this reverse stock split.

The New Shares issued pursuant to the reverse stock split are fully paid and

non-assessable.

All New Shares have the same par value, voting rights and other

rights as the Old Shares.

Stockholders of the Company do not have preemptive

rights to acquire additional shares of common stock which may be issued.

August 1, 2007, the Company changed its name from Tech Laboratories, Inc.

Renewal Fuels, Inc.

and the Company’s quotation symbol on the OTC Bulletin Board

was changed from TLBT to RNWF.

of Assets of FuelMeister Business

9, 2007, Crivello Group, LLC (“Crivello”) and its wholly-owned subsidiary,

Renewal Biodiesel, entered into an Asset Purchase Agreement with Biodiesel

Solutions, Inc.

(“BSI”), which was effective March 30, 2007.

Pursuant to the

Asset Purchase Agreement, BSI sold substantially all of the assets and property

of its FuelMeister operations (the “FuelMeister Business” , the “Predecessor” or

the “Predecessor Business”, an unrelated Company) to Renewal Biodiesel, in

exchange for an aggregate purchase price of $500,000, subject to adjustment.

Under the terms of the Agreement, the purchase price was subsequently adjusted

to $494,426 to reflect the inventory on hand at closing.

Of the adjusted

purchase price, $100,000 was paid on execution of the Agreement as a down

payment, $100,000 was paid at closing, $50,000 was paid on April 11, 2007, and

the balance of the purchase price was paid by delivery of a promissory note, as

amended, in the amount of $244,426.

The promissory note was subsequently paid on

April 20, 2007.

The $250,000 cash portion of the $494,426 purchase price of the

assets was funded by loans received from Crivello of $200,000 and cash of

$57,279 received by Renewal Biodiesel from our founders for common stock.

loans from Crivello, together with the promissory note for $244,426, were repaid

from the proceeds of loans from YA Global (see Note 7 in the accompanying

consolidated financial statements).

The difference of $5,131,231 between the

fair value of the 22,907,323 common shares issued to our founders as a result of

the reverse merger described above, determined based on the trading price of

$0.2265 per share immediately prior to the reorganization and reverse merger,

and the amount they paid for their shares of Renewal Biodiesel of $57,279 has

been recorded as stock-based transaction expense.

Biodiesel also entered into a management services agreement with BSI, pursuant

to which BSI agreed to provide general management and administrative services to

Renewal Biodiesel, as well as the use of its facilities.

Renewal Biodiesel

reimbursed BSI for the direct cost of services and facilities, as provided.

agreement terminated 90 days after the FuelMeister acquisition or upon ten days

notice by Renewal Biodiesel.

acquisition of the FuelMeister Business was accounted for by the purchase method

in accordance with Financial Accounting Standards Board Statement No.

141") and the results of its operations are included in these consolidated

financial statements from the date of acquisition.

The aggregate purchase price

determined in accordance with FAS 141 was $494,426.

following is a summary of the net assets acquired at the date of acquisition, at

assets acquired:

lists, engineering drawings and other intangibles

assets acquired

BUSINESS STRATEGY, CORE

PHILOSOPHIES, CURRENT OPERATIONS

Fuels is dedicated to technologies that enable the production of high quality

fuels from a variety of non-food feedstock sources and waste streams.

that developed and emerging technologies to produce fuels from waste will

provide an important alternative to feedstock sources which compete with uses

Fuels’ business model includes strategic partnerships and acquisitions in the

expanding biofuels industry.

Increasing political and social responsiveness,

combined with exciting developments in biofuel technology, has created an

unprecedented environment for organic growth as well as growth through

acquisitions.

Our focused business model is designed to facilitate high profit

margins and security of feedstock pricing.

management of Renewal Fuels is establishing relationships with multiple biofuel

entities with projects, products, and technologies at various stages of

development, fitting the Company’s mission.

The company is currently seeking

additional technologies and businesses to add to its portfolio, which currently

includes the businesses described below.

manufactures and markets the FuelMeister® line of personal biodiesel processors

from its facility in Sparks, NV.

The FuelMeister allows a user to make biodiesel

from waste vegetable oil, for personal use.

The FuelMeister line of biodiesel

processors are produced from industrial-grade materials.

In general, it takes

approximately 1/2 hour hands-on time per batch of biodiesel fuel production.

products offered are not do-it-yourself kits, but complete systems with all key

components needed to make biodiesel ‘at home’ with ease and

biodiesel processors are supplied with a user safety kit, oil titration and

field test kit, high quality steel methanol pump, and easy prime oil draw tube.

Quick disconnect fittings allow for future expansion and more convenient

connection of tanks.

If capacity needs change, additional modular tanks, lids,

and accessories can be added to the FuelMeister II platform.

A customer can

start making biodiesel the same day the system arrives.

All that is required is

a barrel of used fryer oil (typically collected at no charge from local

restaurants), lye (at a typical cost of 20¢/gallon of biodiesel), a barrel of

racing methanol (at a typical cost of 50¢ /gallon of biodiesel), a barrel for

the finished biodiesel, AC power, and a water hose.

Renewal’s products are

designed specifically to allow shipment by UPS in order to minimize customers’

freight expenses.

Any machines operating on diesel fuel, including

cars, trucks, generators, tractors, furnaces, etc.

may be powered with the

biodiesel produced with the FuelMeister II biodiesel production

engaged in the growth of cellulosic feedstock for the biofuels

Through a service agreement with another party, we are

establishing nurseries for the growth of unique high density, short-rotation

trees, which are designed to provide a very high concentration of biomass per

We are currently completing installation of the nurseries and

establishing customers for the products to be produced by RPI.

Service Agreement between RPI and Emerald Energy, LLC was consummated on

February 11, 2008, providing for the completion of the greenhouse installation

and operation of the facility.

Root sections were purchased for

$50,000 in 2008.

In April and May of 2008, the root sections did not

survive due to growing circumstances.

In August 2008, RPI has

replenished and replanted a number of root sections and has engaged an

independent grower to supervise the conditions and growth of the roots.

Emerald Energy are in discussions to modify its Management Services Agreement

the revenue generating activities of the FuelMeister Business, the Predecessor

business, remained significantly intact after the acquisition, there have been

changes in our marketing strategy, administrative costs (including those

expenses related to public equity market participation) and financing

As a result, we believe that the expenses of the Predecessor

business are not representative of our current business, financial condition or

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

The following discussion and analysis of our financial

condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related

notes included elsewhere in this Quarterly Report on Form 10-Q and with the audited financial statements and related notes included in

our Registration Statement on Form 10 filed with the Securities and Exchange Commission on March 12, 2026.

We are a development-stage advanced energy company

focused on the development and commercialization of the Texatron™, a compact pulsed toroidal fusion reactor designed to provide

clean, scalable baseload electricity.

We operate under a Power-as-a-Service business model, intending to own and operate Texatron™

units and sell electricity under long-term contracts.

The Company completed its reverse recapitalization

with Kepler Fusion Technologies Inc.

on February 27, 2026.

As a result of the transaction, Kepler Fusion became our wholly owned subsidiary,

and we have fully integrated its assets, technology, and operations.

We are pre-commercial and have no revenue from operations.

Our activities

during the three months ended March 31, 2026 continued to focus on research and development, prototype testing (including advancement

of the Version 9 prototype in Midland, Texas), intellectual property expansion, and preparation for commercial deployment.

Results of Operations

Accordingly, where practicable we have included various

forward looking statements regarding the effects of our new operating

discussion that follows of Results of Operations is in the following

of operations for the three months ended September 30, 2008 and 2007(

of operations for the nine months ended September 30, 2008 and the period

March 9, 2007 (date of inception) through September 30, 2007 (

OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND

three months ended September 30, 2008, revenues were $631,694, an increase when

compared with the three months ended September 30, 2007 of $148,800 is due to

sales of the Fuelmeister product while fuel prices were high.

though sales have increased, quarter by quarter, the sales are slowly decreasing

due to fuel prices decreasing, hence the demand for the Fuelmeister product has

of Sales and Gross Profit

sales for the three months ended September 30, 2008 was $437,523, resulting in a

gross profit of $194,171 for the three months ended September 30, 2008 an

increase when compared to three months ended September 30, 2007 of $109,048 and

a gross profit of $39,752 due to an increase in sales of the Fuelmeister

Compensation and Benefits

compensation and benefits were $82,325 for the three months ended September 30,

2008 a decrease when compared to three months ended September 30, 2007 of

$243,101 due to the termination of BSI employees on April 14, 2008.

and Equipment

and equipment expenses, consisting of rent, depreciation, and other

miscellaneous expenses, amounted to $105,896 for the three months ended

September 30, 2008 an increase when compared with the three months ended

September 30, 2007 of $71,045 due to balance owed on the building lease for

expenses were $21,442 for the three months ended September 30, 2008 decreased

when compared with the three months ended September 30, 2007 of $96,187 due to

less advertising and website costs because of discontinued operations at

fees, consisting primarily of accounting, attorney and accountant fees, were

$56,723 for the three months ended September 30, 2008 decreased when compared

with the three months ended September 30, 2007 of $80,150 is due to the costs

associated with the acquisitions and mergers in 2007.

and development

transaction expense was $5,131,231 for the three months ended September 30,

2007, associated with the acquisition of Fuelmeister.

and Administrative Expenses

and administrative expenses, consisting of administrative expenses, insurance

and other non-manufacturing related expenses were $63,391 for the three months

ended September 30, 2008 decreased when compared with the three months ended

September 30, 2007 of $217,665 due to BSI no longer operating.

of Intangible Assets

of intangible assets was $67,617 for the three months ended September 30, 2008,

increased when compared to the three months ended September 30, 2007 of $45,268

primarily due to the amortization of assets acquired in the acquisition of

Fuelmeister and BSI.

expense, of $433,036 for the three months ended September 30, 2008increased when

compared with the three months ended September 30, 2007 of $221,050 due to the

interest and debt discount associated with all convertible debenture

operations for the three months ended September 30, 2008 of $22,939 compared to

the three months ended September 30, 2007 of $0 is due to discontinued

operations of BSI in 2008.

result of the above, we reported a net loss of $613,320 for the three months

ended September 30, 2008 and a net loss of $4,153,722 for the three months ended

September 30, 2007.

OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 and MARCH 9, 2007

(DATE OF INCEPTION) TO SEPTEMBER 30, 2007.

nine months ended September 30, 2008, revenues were $1,857,529 increased when

compared with period of March 9, 2007 (Date of Inception) to September 30, 2007

of $392,887 due to sales of the Fuelmeister product which are higher due to

higher gas prices.

Even though sales have increased, year by year,

the sales have slowly decreased due to fuel prices dropping and the demand for

the Fuelmeister product has decreased.

of Sales and Gross Profit

sales for the nine months ended September 30, 2008 was $1,235,067 resulting in a

gross profit of $622,462 for the nine months ended September 30, 2008 increased

when compared to $251,390 and a gross profit of $141,497 for March 9, 2007

(Date of Inception) to September 30, 2007 due successful sales and production of

the Fuelmeister product.

Compensation and Benefits

compensation and benefits were $435,426 for the nine months ended September 30,

2008 increased when compared to March 9, 2007 (Date of Inception) to September

30, 2007 of $277,373 due to overtime associated with the sales of the

Fuelmeister product.

Transaction Expense

transaction expense was $0 for the nine months ended September 30, 2008 compared

to $5,131,231 for March 9, 2007 (Date of Inception) to September 30, 2007 due to

the acquisition of the Fuelmeister product.

and Equipment

and equipment expenses, consisting of rent, depreciation, and other

miscellaneous expenses, amounted to $181,900 for the nine months ended September

30, 2008 increased when compared with March 9, 2007 (Date of Inception) to

September 30, 2007 of 79,302 due to facility production for the FuelMeister

product and balance owed for the building lease for BSI.

expenses were $73,216 for the nine months ended September 30, 2008 decreased

when compared with March 9, 2007 (Date of Inception) to September 30, 2007 of

$140,170 due to BSI no longer operating and lower advertising for the

Fuelmeister product.

and development

transaction expense was $0 for the nine months ended September 30, 2008 compared

to $3,140,000 for March 9, 2007 (Date of Inception) to September 30, 2007 due to

the acquisition of the RBI.

fees, consisting primarily of accounting and attorney fees were $319,406 for the

nine months ended September 30, 2008 decreased when compared with March 9, 2007

(Date of Inception) to September 30, 2007 of $429,891 due to acquisition and

merger costs in 2007, where we had no acquisitions and mergers in

and Administrative Expenses

General and administrative expenses,

consisting of administrative expenses, insurance and other non-manufacturing

related expenses were $388,153 for the nine months ended September 30, 2008

increased when compared with March 9, 2007 (Date of Inception) to September 30,

2007 of $315,209 due to additional costs associated with the

Fuelmeister .

of Intangible Assets

of intangible assets was $260,267 for the nine months ended September 30, 2008

increased when compared to March 9, 2007 (Date of Inception) to September

30, 2007 of $58,707 due to a full nine months in 2008 for the amortization of

assets acquired in the acquisition Fuelmeister and BSI.

expense of interest expense of $1,077,838 for the nine months ended September

30, 2008 increased when compared with March 9, 2007 (Date of Inception) to

September 30, 2007, interest of $636,477 due to all of the convertible debenture

obligations for 2008.

operations of $(373,868) for the nine months ended September 30, 2008 compared

to $0 for March 9, 2007 (Date of Inception) to September 30, 2007 is due to BSI

no longer operating in 2008.

result of the above, we reported a net loss of $2,517,339 for the nine months

ended September 30, 2008 and a net loss of $10,163,124 for March 9, 2007 (Date

of Inception) to September 30, 2007.

LIQUIDITY AND CAPITAL

and Cash Flows From Operations:

accompanying condensed consolidated financial statements have been prepared

assuming we will continue as a going concern.

During the nine months ended

September 30, 2008, we had a net loss of $2,517,339 which included non-cash

items totaling $1,746,948, consisting primarily of depreciation, amortization of

financing fees, convertible debt, and discontinuation of operations.

existence is dependent on management’s ability to develop profitable operations

and successful integration of our acquired businesses.

used in investing activities was $13,097, which is the purchase of depreciable

provided by financing activities was $257,042 which was provided by proceeds

from note payables from stockholders.

We currently do not have sufficient cash

reserves to meet all of our anticipated obligations for the next twelve months

and there can be no assurance that we will ultimately close on the necessary

We currently expect that funding from related parties, third-party

financing, or equity may be a continuing source of liquidity to fund our

OFF-BALANCE SHEET

currently have no off balance sheet arrangements, other than the property leases

described in the footnotes to the financial statements.

CRITICAL ACCOUNTING

ability to continue as a going concern is dependent on our ability to obtain

additional funds through debt and equity funding as well as increasing sales of

biodiesel units.

With these sales the Company anticipates that

it will become less reliant on short-term financing.

Concentrations

of Credit Risk

Company has several customers that accounted for the total revenue for the nine

months ended September 30, 2008.

Company recognizes sales when earned.

At the time of the transaction,

the Company assesses payment terms associated with the transaction and whether

collectibility is reasonably assured.

If a significant portion of a

fee is due after the normal payment terms, the Company accounts for the fee as

not being fixed and determinable.

In these cases, the Company

recognizes revenue as the fees become due.

Where the Company provides

a sale at a specific point in time and there are no remaining obligations, the

Company recognizes revenue upon completion of the sale.

- QUALITATIVE AND

QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

- CONTROLS AND

Controls and Procedures

required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end

of the period covered by this report, we have carried out an evaluation of the

effectiveness of the design and operation of our company’s disclosure controls

and procedures.

Under the direction of our Chief Executive Officer and Chief

Financial Officer, we evaluated our disclosure controls and procedures and

internal control over financial reporting and concluded that (i) there continue

to be material weaknesses in the Company’s internal controls over financial

reporting, that the weaknesses constitute a “deficiency” and that this

deficiency could result in misstatements of the foregoing accounts and

disclosures that could result in a material misstatement to the consolidated

financial statements for the current period that would not be detected, (ii)

accordingly, our disclosure controls and procedures were not effective as

of September 30, 2008, and (iii) no change in internal controls over

financial reporting occurred during the quarter ended September 30, 2008, that

has materially affected, or is reasonably likely to materially affect, our

internal control over financial reporting;

provided, however, that it is to be

noted that, based on the above described material weakness, our management,

including our CEO and CFO have concluded that we did not maintain effective

internal control over financial reporting as of September 30, 2008.

controls and procedures and other procedures are designed to ensure that

information required to be disclosed in our reports or submitted under the

Securities Exchange Act of 1934 is recorded, processed, summarized and reported

within the time period specified in the Securities and Exchange Commission’s

rules and forms.

Disclosure controls and procedures include, without limitation,

controls and procedures designed to ensure that information required to be

disclosed in our reports filed under the Securities Exchange Act of 1934 is

accumulated and communicated to management including our president and financial

officer as appropriate, to allow timely decisions regarding required

15, 2008, Bryan Chance, age 38, was appointed as Chief Executive Officer and

Chief Financial Officer of the Company.

Chance is a certified

public accountant and has served as Chief Financial Officer of Titan Global

Holdings, Inc.

since January 24, 2006 and as President and Chief Executive

Officer since August 18, 2006.

Chance also served as Chief

Financial Officer for Aslung Pharmaceutical, a privately held generic

pharmaceutical manufacturing company from 2000 to 2002 and has held financial

and mergers and acquisition leadership positions in companies such as Caresouth,

Nursefinders, Home Health Corporation of America, the Baylor Healthcare System,

Columbia/HCA and Price Waterhouse, LLP.

By appointing someone who is

qualified as a CPA and has considerable experience serving as a Chief Financial

Officer, the Company has endeavored to provide the financial leadership that the

Company requires in order to eliminate the weaknesses in its internal controls

over financial reporting and otherwise design, implement and maintain a

sufficient systems of internal financial controls.

in Internal Control Over Financial Reporting

have been no changes in our internal controls over financial reporting during

the quarter ended September 30, 2008, which have materially affected, or are

reasonably likely to materially affect, our internal control over financial

II - OTHER INFORMATION

Three Months Ended March 31, 2026 Compared

to Three Months Ended March 31, 2025

We reported a net loss of $632,583 for the three

months ended March 31, 2026, compared to a net loss of $100,000 for the three months ended March 31, 2025.

The increase in net loss was

primarily attributable to increased professional fees and advertisement and marketing costs associated with operating as a public reporting

company as well as certain patent filing costs.

Operating expenses for the three months ended

March 31, 2026 consisted primarily of:

General and administrative expenses, including

legal, accounting, compliance, and public-company costs

Personnel and consulting expenses

Patent filing costs

There was no revenue during either period.

We expect operating expenses to increase in future

periods as we advance our technology development, expand our team, and prepare for commercial demonstration projects.

Liquidity and Capital Resources

As of March 31, 2026, we had $99,594 in cash and

cash equivalents.

Cash flows used in operations of $415,931 were offset by cash flows provided by financing activities of $513,000, Cash

flows provided by financing activities increased as a result of prepaid warrant funding.

We have historically funded our operations primarily

through equity issuances and related-party loans.

We continue to incur significant losses and negative cash flows from operations.

We expect to require substantial additional capital

to fund our research and development activities, prototype testing, intellectual property filings, and preparation for commercial deployment.

Management is actively pursuing financing opportunities, including the previously announced $50 million capital raise targeted for 2026.

Going Concern

The Company’s consolidated financial

statements have been prepared assuming that the Company will continue as a going concern.

As of March 31, 2026, the Company has an accumulated

deficit of approximately $9.6 million and has incurred recurring losses from operations.

These factors raise substantial doubt about the

Company's ability to continue as a going concern.

The accompanying consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

Management believes that the completion of the Kepler business merger and planned capital-raising

activities will provide the resources necessary to fund ongoing operations;

however, no assurance can be given that these plans will be

Critical Accounting Policies and Estimates

There have been no material changes to our critical

accounting policies and estimates from those disclosed in our Registration Statement on Form 10.

Forward-Looking Statements

The discussion in this Item 2 contains forward-looking

See “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Quarterly Report for important

information regarding such statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis