What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-31 compared with 2024-04-16 · 792 added, 257 removed, 536 unchanged (66% of the section changed)

Financial Statements and Supplementary Data

MIDWEST ENERGY EMISSIONS CORP.

AND SUBSIDIARY

BIRCHTECH CORP.

AND SUBSIDIARIES

(formerly Midwest Energy Emissions Corp.)

Index to Financial Information

3 unchanged sentences

(PCAOB ID 89 )

Report of Independent Registered Public Accounting Firm – Marcum LLP (PCAOB ID 688)

Consolidated Balance Sheets

3 unchanged sentences

Notes to Consolidated Financial Statements

To the Board of Directors and Stockholders of

Midwest Energy Emissions Corp.

O pinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Midwest Energy Emissions Corp (the Company) as of December 31, 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

The consolidated financial statements as of and for the year ended December 31, 2022, were audited by another auditor.

Their auditor’s report, dated May 12, 2023, contained an unqualified opinion on those financial statements.

B asis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Birchtech Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Birchtech Corp (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Restatement of Prior Periods

As discussed in Note 2, the December 31, 2023 consolidated financial statements have been restated to correct a misstatement.

Emphasis of Matter Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial statements, the Company has identified conditions, including a net loss and net cash used in operations, that raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are described in Note 3.

The financial statements do not include any adjustments that might results from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

C ritical Audit Matters

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

1 unchanged sentence

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

V aluation of Profit Share Liability

D escription of the Matter

Valuation of Profit Share Liability

Description of the Matter

As of December 31, 2024, the Company recorded a profit share liability of $6.85 million.

6 unchanged sentences

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s forecasted cash flows.

H ow We Addressed the Critical Audit Matter in Our Audit

How We Addressed the Critical Audit Matter in Our Audit

To test the profit share liability calculation as of December 31, 2024, we performed the following procedures among others, by which we:

Obtained an understanding of the Company’s internal controls and the process to determine the fair value of the profit share liability.

Obtained and reviewed the Unsecured Note Agreement and evaluated management’s assessment of the terms of the agreement.

Evaluated the reasonableness of management’s cash flow forecast by comparing the forecast to historical data and trends and current events influencing expected future cash flows, including the timing of expected cash flows.

Evaluated the assumptions regarding the probabilities related to the timing and amount of cash flows by comparing historical information and current events.

Utilized our internal valuation specialist to assist in the assessment of the appropriateness of the valuation methodology and the reasonableness of the discount rate applied, including consideration of conditions affecting market rates.

Performed sensitivity analyses to evaluate the potential impact of fluctuations in the underlying assumptions of the fair value of the profit share liability.

Tested the clerical accuracy of the profit share liability calculation.

2 unchanged sentences

Somerset, New Jersey

April 16, 2024

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

Midwest Energy Emissions Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Midwest Energy Emissions Corp.

(the “Company”) as of December 31, 2022, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audi t in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audi t also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provide s a reasonable basis for our opinion.

/s/ Marcum LLP

We have served as the Company’s auditor from 2018 (such date takes into account the acquisition Rotenberg Meril Solomon Bertiger & Guttilla, P.C.

by Marcum LLP effective February 1, 2022) to September 11, 2023.

Saddle Brook, NJ

MIDWEST ENERGY EMISSIONS CORP.

March 31, 2025

BIRCHTECH CORP.

AND SUBSIDIARIES

(formerly Midwest Energy Emissions Corp.)

CONSOLIDATED BALANCE SHEETS

(as restated)

Current assets

6 unchanged sentences

Intellectual property, net

LIABILITIES AND STOCKHOLDERS’ EQUITY ( DEFICIT)

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

4 unchanged sentences

Accrued salaries

Profit share liability – related party

Total current liabilities

Operating lease liability

Operating lease liability, net of current portion

Secured note payable, net of discount – related party

2 unchanged sentences

Total liabilities

COMMITMENTS AND CONTINGENCIES

Stockholders’ deficit

Commitments and contingencies (Note 10)

Stockholders’ equity (deficit)

Preferred stock, $ 0.001 par value:

6 unchanged sentences

( 61,951,125 )

Total stockholders’ deficit

( 7,416,859 )

Total liabilities and stockholders’ deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

See accompanying notes to these consolidated financial statements.

MIDWEST ENERGY EMISSIONS CORP.

BIRCHTECH CORP.

AND SUBSIDIARIES

(formerly Midwest Energy Emissions Corp.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(as restated)

Product revenue

License revenue

Other revenue

Cost of sales

( 10,305,076 )

( 12,172,374 )

Operating expenses:

1 unchanged sentence

Selling, general and administrative expenses (related party of $1,116,064 and $554,410)

( 14,216,377 )

( 14,206,761 )

Total operating expenses

Operating (loss) income

( 14,259,377 )

( 14,426,468 )

Operating loss

( 7,158,268 )

( 8,973,472 )

Other income (expense)

2 unchanged sentences

( 1,362,401 )

Loss on change in fair value of profit share and unsecured note

( 3,959,065 )

Loss on change in fair value of profit share

( 11,209,677 )

Loss on investment

Total other income (expense)

Interest income

Total other (expense) income

( 3,932,999 )

Income (loss) before provision for income taxes

(Loss) income before provision for income taxes

( 11,091,267 )

Provision for income taxes

Net income (loss)

Income tax benefit (expense)

Net (loss) income

$ ( 10,802,111 )

Basic & Diluted income (loss) per share:

Basic net income (loss) per share

Diluted net income (loss) per share

Basic & Diluted (loss) income per share:

Basic net (loss) income per share

Diluted net (loss) income per share

Weighted average common shares outstanding:

See accompanying notes to these consolidated financial statements.

MIDWEST ENERGY EMISSIONS CORP.

BIRCHTECH CORP.

AND SUBSIDIARIES

(formerly Midwest Energy Emissions Corp.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

Year Ended December 31, 2024

Balance – January 1, 2023

$ ( 68,698,389 )

Balance - January 1, 2024 (as restated)

$ ( 61,951,125 )

Share based compensation expense

Stock issued for cashless exercise of options

Stock issued for cash exercise of options

Balance December 31, 2023

Stock issued for exercise of warrants

Stock issued for cashless exercise of warrants

Gain on modification of related party debt

Share based payments

( 10,802,111 )

MIDWEST ENERGY EMISSIONS CORP.

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

Balance – December 31, 2024

$ ( 72,753,236 )

Year Ended December 31, 2023

Balance – January 1, 2022

Balance – January 1, 2023 (as previously reported)

$ ( 68,698,389 )

$ ( 7,416,859 )

Restatement adjustment

Balance – January 1, 2023 (as restated)

Share based compensation expense

Stock issued for cashless exercise of options

Stock issued for consulting services

Issuance of stock for compensation

Capital contribution for gain on extinguishment of secured note payable – related party

Capital contribution for gain on extinguishment of unsecured note payable – related party

Issuance of stock for exercise of options

( 1,581,476 )

Balance December 31, 2022

$ ( 68,698,389 )

Stock issued for cash exercise of options

Balance December 31, 2023 (as restated)

$ ( 61,951,125 )

See accompanying notes to these consolidated financial statements.

MIDWEST ENERGY EMISSIONS CORP.

BIRCHTECH CORP.

AND SUBSIDIARIES

(formerly Midwest Energy Emissions Corp.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

1 unchanged sentence

For the year Ended

(as restated)

Cash flows from operating activities

Net income (loss)

Net (loss) income

$ ( 10,802,111 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Stock-based compensation – amortization of prepaid services

1 unchanged sentence

Amortization of discount of notes payable

Amortization of debt issuance costs

Amortization of right to use assets

2 unchanged sentences

Impairment loss

Non-cash interest revenue

Loss on change in fair value of profit share

1 unchanged sentence

Accounts receivable

( 1,762,554 )

Prepaid expenses and other assets

1 unchanged sentence

Accounts payable and accrued liabilities

( 1,388,385 )

Income tax payable

Operating lease liability

Net cash provided by operating activities

Cash flows from investing activities

Net cash (used in) provided by operating activities

( 4,105,167 )

Cash flows used in investing activities

Purchase of property and equipment

2 unchanged sentences

Proceeds from exercise of stock options

Payments of equipment notes payable

Net cash provided by financing activities

Net increase in cash and cash equivalents

Repayment of secured notes payable

Repayment of unsecured notes payable

( 12,314,895 )

Net cash (used in) provided by financing activities

( 12,569,081 )

Net (decrease) increase in cash and cash equivalents

( 17,483,680 )

Cash and cash equivalents - beginning of period

3 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS

Common stock issued for prepaid services

Common stock issued for consulting services

Capital from related party debt extinguishments

Recognition of ROU asset and operating lease liability

See accompanying notes to these consolidated financial statements.

MIDWEST ENERGY EMISSIONS CORP.

BIRCHTECH CORP.

AND SUBSIDIARIES

(formerly Midwest Energy Emissions Corp.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Note 1 - Organization

Midwest Energy Emissions Corp.

is organized under the laws of the State of Delaware.

Birchtech Corp.

and MES, Inc.

Birchtech Corp., formerly Midwest Energy Emissions Corp.

(together with its consolidated subsidiaries, the “Company”), is organized under the laws of the State of Delaware.

Effective on October 17, 2024, Midwest Energy Emissions Corp.

changed its corporate name to Birchtech, Inc.

pursuant to a certificate of amendment to its certificate of incorporation filed with the State of Delaware.

is incorporated in the State of North Dakota.

is a wholly owned subsidiary of Midwest Energy Emissions Corp.

and is engaged in the business of developing and commercializing state of the art control technologies relating to the capture and control of mercury emissions from coal fired boilers in the United States and Canada.

is a wholly owned subsidiary of Birchtech Corp.

The Company is a provider of specialty activated carbon technologies and provides patented sorbent technologies for mercury emissions capture for the coal-fired utility sector and is developing water purification technologies with a specialization on forever chemicals such as PFAS and PFOS.

ME2C Sponsor LLC and ME2C Acquisition Corp.

ME2C Sponsor LLC is a limited liability company formed in the State of Delaware and is a wholly owned subsidiary of Midwest Energy Emissions Corp.

ME2C Sponsor LLC is a limited liability company formed in the State of Delaware and is a wholly owned subsidiary of Birchtech Corp.

and owns 85 % of ME2C Acquisition Corp.

A decision was made in January 2023 to liquidate these entities.

As such, as of December 31, 2022, the Company wrote off the assets for these entities and recorded a $ 95,500 loss.

Note 2 - Liquidity and Financial Condition

A decision was made in January 2023 to liquidate these entities which are inactive.

Note 2 – Restatement of Previously Issued Financial Statements

Description of Restatement Adjustments

In connection with the preparation of the Company’s consolidated financial statements as of and for the period ended December 31, 2024, management identified an error in the previously reported financial statements related to the recognition of revenue during the year ended December 31, 2022.

The Company entered into a license agreement for which it should have recognized the entire proceeds receivable pursuant to the agreement as revenue during the year ended December 31, 2022.

The Company should also have recognized the financing component of the licensing agreement during the fiscal years ended December 31, 2023 and 2024.

As a result, the consolidated financial statements reflect the recognition of this additional revenue during the year ended December 31, 2022, removes the revenue recognized and records the financing component of the arrangement during annual and interim periods in the fiscal year ending December 31, 2023 and the interim periods in the fiscal year ending December 31, 2024.

The following tables reflect the impact of the restatement to the specific line items presented in the Company’s previously reported consolidated financial statements as of December 31, 2022 and for the year ended December 31, 2023.

The accompanying applicable notes to consolidated financial statements have been updated to reflect the effects of the restatement.

The impact of the restatement to the consolidated statements of stockholders’ equity (deficit) includes a decrease of $ 843,251 in accumulated deficit as of December 31, 2023 and a $ 1,078,950 decrease to the accumulated deficit as of January 1, 2023.

The amounts in the “As previously reported” columns are amounts derived from the Company's previously filed consolidated financial statements.

The amounts in the “Restatement adjustments” columns present the impact of the following adjustments:

The recognition of the licensing revenue during the year ended December 31, 2022.

The removal of the licensing revenue recorded during the year ended December 31, 2023.

The recording of the financing component during the year ended December 31, 2023.

The amounts in the “As restated” columns are the updated amounts including the impacts from the restatement.

Audited Financial Statements

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of December 31, 2023:

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2023

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 62,794,376 )

( 61,951,125 )

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the year ended December 31, 2023:

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2023

As previously reported

$ ( 315,000 )

Operating (loss) income

Interest income

Total other income

Income (loss) before provision for income taxes

Net income (loss)

$ ( 235,699 )

Net loss per common share - basic and diluted:

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statements of Changes in Stockholder’s Equity for the years ended December 31, 2023 and 2022:

Accumulated Deficit

Balance – January 1, 2022

$ ( 67,116,913 )

( 1,581,476 )

Balance December 31, 2022

( 68,698,389 )

( 67,619,439 )

Balance December 31, 2023

$ ( 62,794,376 )

$ ( 843,251 )

$ ( 61,951,125 )

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the year ended December 31, 2023:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2023

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 235,699 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

Note 3 – Going Concern and Financial Condition

Under ASC 205-40, Presentation of Financial Statements—Going Concern , the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued.

As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment.

As reflected in the consolidated financial statements, the Company had approximately $ 21 million in cash at December 31, 2023.

In addition, the Company had cash provided by operating activities of $ 19 million for the year ended December 31, 2023, had working capital of $ 22 million and an accumulated deficit of $ 63 million at December 31, 2023.

The accompanying consolidated financial statements as of December 31, 2023 have been prepared assuming the Company will continue as a going concern.

On October 28, 2022, the Company’s principal lender agreed to extend the maturity date of all of its existing secured and unsecured debt in the principal amount of $ 13.4 million from October 31, 2022 to August 25, 2025 (see Note 7 - Related Party ).

As a result, such liabilities have been classified as long-term liabilities in the accompanying consolidated financial statements as of December 31, 2023.

Based upon such extension of the maturity date of such secured and unsecured debt, the Company’s current cash position and revenues from operations, management believes substantial doubt regarding the Company’s ability to continue as a going concern has been mitigated.

The Company believes it will have sufficient working capital to fund operations for at least the next twelve months from the date of issuance of these financial statements.

Management has assessed the Company’s ability to continue as a going concern in accordance with the requirements of ASC 205-40.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

As reflected in the consolidated financial statements, the Company had a net loss of approximately $ 10.8 million and cash used in operating activities of approximately $ 4.1 million for the year ended December 31, 2024;

had cash of approximately $ 3.5 million at December 31, 2024;

and an accumulated deficit of approximately $ 72.8 million at December 31, 2024.

The Company’s working capital deficiency at December 31, 2024 was approximately $ 2.7 million.

The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of the financial statements.

In addition to maintaining its revenue stream from its legacy mercury emissions control business, the Company’s plans and expectations over the next twelve months to mitigate such financial condition include receiving additional cash inflows from the judgment expected in connection with the $ 57.1 million jury verdict awarded to the Company in March 2024, additional licensing revenues and product sales from the other patent litigation recently commenced, and revenues from the Company’s entry into the water treatment business.

During 2024, the Company opened two new state of the art laboratories and have added personnel to support our entry into the water business which the Company believes will lead to a vibrant new revenue stream.

In addition, management is exploring additional financing opportunities.

While management believes these plans will alleviate substantial doubt, there is no assurance that they will be successfully realized or implemented.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the financial statements are issued.

Note 4 - Basis of Presentation and Summary of Significant Accounting Policies

2 unchanged sentences

Principles of Consolidation

The consolidated financial statements include the accounts of Midwest Energy Emissions Corp.

and its wholly-owned subsidiaries, MES, Inc.

The consolidated financial statements include the accounts of Birchtech Corp.

(formerly Midwest Energy Emissions Corp.) and its wholly-owned subsidiaries, MES, Inc.

and ME2C Sponsor LLC, and ME2C Acquisition Corp.

which is 85% owned by ME2C Sponsor LLC (collectively, the “Company”).

which is 85 % owned by ME2C Sponsor LLC.

Intercompany balances and transactions have been eliminated in consolidation.

1 unchanged sentence

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, valuation of equity issuances and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

The Company uses estimates in accounting for, among other items, profit share liability, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve and impairment of intellectual property.

The Company uses estimates in accounting for, among other items, profit share liability, revenue recognition, allowance for credit losses, stock-based compensation, income tax provisions, excess and obsolete inventory reserve and impairment of intellectual property.

Actual results could differ from those estimates.

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value.

Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable.

The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used.

As of December 31, 2024 and 2023, the Company had no valuation allowance.

Property and Equipment

16 unchanged sentences

The Company has evaluated the recoverability of the carrying value of the Company’s property and equipment, right of use asset and intellectual property.

After completing the assessment of property and equipment for impairment as of December 31, 2023, the Company recorded an impairment expense related to property and equipment of $ 219,707 which is included in Impairment loss in the Company’s consolidated statements of operations and comprehensive income (loss).

After completing the assessment of property and equipment for impairment as of December 31, 2024 and 2023, the Company recorded an impairment expense related to property and equipment of $ 43,000 (2023 - $ 219,707 ) which is included in Impairment loss in the Company’s consolidated statements of operations and comprehensive income (loss).

The expense was primarily related to the impairment of construction in process costs where management determined that the undiscounted future cash flows were not sufficient to recover the carrying value of these assets over the estimated useful life.

No impairment charges were recognized for the year ended December 31, 2022.

Stock-Based Compensation

9 unchanged sentences

The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

Profit share liability was the only item measured at fair value on a recurring basis by the Company at December 31, 2023 and December 31, 2022.

Profit share liability is considered to be Level 3.

The profit share liability is the only item measured at fair value on a recurring basis by the Company at December 31, 2024 and December 31, 2023.

The profit share liability is considered to be Level 3 measurements.

Financial instruments include cash, accounts receivable, accounts payable, and short-term debt.

The carrying amounts of these financial instruments approximated fair value at December 31, 2024 and December 31, 2023 due to their short-term maturities.

The fair value of the notes payable at December 31, 2023 and December 31, 2022 approximated the carrying amount as the notes were recently issued at interest rates prevailing in the market and interest rates as of December 31, 2023 and December 31, 2022.

The fair value of the notes payable at December 31, 2023 approximated the carrying amount, as the notes were recently issued at interest rates prevailing in the market.

The fair value of the notes payable was determined on a Level 2 measurement.

Discounts on issued debt, as well as debt issuance costs, are amortized over the term of the individual notes.

The fair value of the profit share liability at December 31, 2023 and December 31, 2022 was calculated using a discounted cash flow model based on estimated future cash payments.

The fair value of the profit share liability was determined on a Level 3 measurement.

At December 31, 2024, the fair value of the profit share liability is calculated using a discounted cash flow model based on estimated future cash payments.

The fair value of the profit share liability at December 31, 2023 was also calculated using a discounted cash flow model based on estimated future cash payments.

At December 31, 2024 and December 31, 2023, the fair value of the profit share liability was determined on a Level 3 measurement.

These values are determined using pricing models for which the assumptions utilized management’s estimates.

Significant unobservable inputs include a discount rate of approximately 14.55 % and the projection of future cash flows.

The following tables present the Company’s liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.

8 unchanged sentences

(1) See Note 8 - Related Party

The following tables present the Company’s liabilities that are measured at fair value on a non-recurring basis and are categorized using the fair value hierarchy.

Fair Value Measurement as of

December 31, 2024

Property and equipment (Construction in progress)

Fair Value Measurement as of

December 31, 2023

Property and equipment (Construction in progress)

Revenue Recognition

17 unchanged sentences

Revenue for product sales is recognized at the point of time in which the customer obtains control of the product, at the time title passes to the customer upon shipment or delivery of the product based on the applicable shipping terms.

Licensing revenue includes the licensing of the Company’s intellectual property (“IP”).

Revenue for IP rights is accounted for based on the nature of the promise to grant the license.

In determining whether the Company’s promise is to provide a right to access its IP or a right to use its IP, the Company considers the nature of its IP to which the customer will have rights.

IP is either functional IP which has significant standalone functionality or symbolic IP which does not have significant standalone functionality.

Revenue from functional IP is recognized at the point in time when control of the distinct license is transferred to the customer.

Revenue from symbolic IP is recognized over the access period to the Company’s IP.

The licenses provide the customer with the right to use the Company’s patented technologies as they exist at a point in time when the license is granted, for the duration of the contract term.

The patented technology has stand-alone functionality, and the Company has no obligation to provide any future updates.

During the year ended December 31, 2024 the Company recognized $ 2,773,750 (2023 - $ 356,250 ) of revenue for licenses for which revenue was recognized at a point in time and $ 34,375 (2023 - $ 31,250 ) for licenses for which revenue was recognized over time.

When a license arrangement contains payment terms beyond one year, a significant financing component may exist.

The significant financing component is calculated as the difference between the stated value and present value of the license fees and is recognized as interest income over the payment period.

Variable consideration is recorded as revenue only to the extent that a significant reversal of cumulative revenue recognized is not probable of occurring when the uncertainty associated with the variable consideration is subsequently resolved.

Significant judgment is required in estimating variable consideration for the performance obligation identified in the contract and this judgment involves assessing factors outside of our influence.

Revenue for equipment sales is recognized upon commissioning and customer acceptance of the installed equipment per the terms of the purchase contract.

14 unchanged sentences

The Company historically has not experienced significant uncollectible accounts receivable.

As of December 31, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $ 0 .

As of December 31, 2024 and December 31, 2023, the Company’s allowance for credit losses was $ 0 , and the Company recorded $ 0 of bad debt expense for both the years ended December 31, 2024 and 2023.

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, Income Taxes .

12 unchanged sentences

Basic and Diluted Income (Loss) Per Common Share

Income per share – basic is calculated by dividing net income by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration.

Income (loss) per share – basic is calculated by dividing net income (loss) by the weighted average number of shares of stock outstanding during the year, including shares issuable without additional consideration.

Income per share – assuming dilution is calculated by dividing net income by the weighted average number of shares outstanding during the year adjusted for the effect of dilutive potential shares from options and warrants calculated using the treasury stock method and the if-converted method for preferred stock.

There are 3,280,702 dilutive stock options and no dilutive warrants for the year ended December 31, 2023 as the Company reported net income for the period.

There were no dilutive potential common shares for year ended December 31, 2024, because the Company incurred a net loss and basic and diluted losses per common share are the same.

There are 3,280,702 dilutive stock options and no dilutive warrants for the year ended December 31, 2023 as the Company reported net income for the period.

We calculate basic earnings per share by dividing net income by the weighted-average number of common shares outstanding during the reporting period.

15 unchanged sentences

Financial instruments that subject the Company to credit risk consist of cash and equivalents on deposit with financial institutions and accounts receivable.

The Company’s cash as of December 31, 2023 and 2022 is maintained at high-quality financial institutions and has not incurred any losses to date.

The Company’s cash as of December 31, 2024 and December 31, 2023 is maintained at high-quality financial institutions and has not incurred any losses to date.

Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $ 250,000 .

At December 31, 2024, the Company had $ 2,956,082 (2023 - $ 20,439,762 ) in excess of FDIC limits.

Customer and Supplier Concentration

For the year ended December 31, 2023, three customers represented 28 %, 23 %, and 11 % of the Company’s revenues, and for the year ended December 31, 2022, four customers represented 21 %, 16 %, 13 % and 11 % of the Company’s revenues.

At December 31, 2023, four customers represented 43 %, 13 %, 11 % and 10 % of the Company’s accounts receivable, and at December 31, 2022, four customers represented 24 %, 18 %, 16 % and 10 % of the Company’s accounts receivable.

For the year ended December 31, 2023, 91 % of the Company’s purchases related to three suppliers.

For the year ended December 31, 2024, three customers represented 32 %, 13 %, and 10 % of the Company’s revenues, and for the year ended December 31, 2023, three customers represented 28 %, 23 %, and 11 % of the Company’s revenues.

At December 31, 2024, three customers represented 32 %, 26 % and 9 % of the Company’s accounts receivable, and at December 31, 2023, four customers represented 32 %, 27 %, 10 % and 8 % of the Company’s accounts receivable.

For the year ended December 31, 2024, two suppliers represented 51 % and 35 % of the Company’s purchases.

For the year ended December 31, 2023, 91 % of the Company’s purchases related to three suppliers.

17 unchanged sentences

2016-13 did not have a material effect on the accompanying consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which amends and enhances the disclosure requirements for reportable segments.

All disclosure requirements under this standard will also be required for public entities with a single reportable segment.

The new standard will be effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 effective for its Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent interim periods.

Since ASU 2023-07 addresses only disclosures, the adoption of ASU 2023-07 did not have a significant impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which is intended to provide enhancements to annual income tax disclosures.

The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements.

The standard is effective for years beginning after December 15, 2024 and early adoption is permitted.

The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This ASU requires entities to disaggregate expense items in the notes to the financial statements and requires disclosure of specified information related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted.

The Company is currently evaluating the impact of the ASU on its consolidated financial statements and related disclosures.

In January 2025, the FASB issued ASU No.

2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date .

This ASU amends the effective date of ASU No.

2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption of ASU No.

2024-03 is permitted.

Note 5 - Inventory

7 unchanged sentences

Trucking equipment

Lab equipment

Office equipment, computer equipment and software

7 unchanged sentences

During the year ended December 31, 2024 and 2023 depreciation expense was $ 11,702 and $ 12,927 , respectively.

At December 31, 2023, the Company concluded that Company’s plant construction in process asset had become impaired based on the existing and anticipated future economic outlook.

At December 31, 2024, lab equipment included $ 725,626 of lab equipment not yet placed in service.

At December 31, 2024 and 2023, the Company concluded that Company’s plant construction in process asset had become impaired based on the existing and anticipated future economic outlook.

As a result, the Company impaired the asset to reduce the carrying value to fair value.

1 unchanged sentence

As a result of the uncertain cash flows related to the Company’s capitalized construction costs, the Company has recorded an impairment charge of $ 43,000 (2023 - $ 219,707 ).

No impairment losses were recorded during the year ended December 31, 2022.

Note 7 - Intellectual Property

On January 15, 2009, the Company entered into an “Exclusive Patent and Know-How License Agreement Including Transfer of Ownership” with the Energy and Environmental Research Center Foundation, a non-profit entity.

Under the terms of the Agreement, the Company has been granted an exclusive license by the Energy and Environmental Research Center Foundation for the technology to develop, make, have made, use, sell, offer to sell, lease, and import the technology in any coal-fired combustion systems (power plant) worldwide and to develop and perform the technology in any coal-fired power plant in the world.

On April 24, 2017, the Company closed on the acquisition of all patent rights from the Energy and Environmental Research Center Foundation including all patents and patents pending, domestic and foreign, relating to the foregoing technology.

A total of 42 domestic and foreign patents and patent applications were included in the acquisition.

In accordance with the terms of the License Agreement, the patent rights were acquired for the purchase price of (i) 2,500,000 in cash, and (ii) 925,000 shares of common stock of which 628,998 shares were issued to the Energy and Environmental Research Center Foundation and 296,002 were issued to the inventors who had been designated by the Energy and Environmental Research Center Foundation.

The shares issued were valued at $ 518,000 ($ 0.56 per share), representing the value as of the closing date.

License and patent costs capitalized as of December 31, 2024 and December 31, 2023 are as follows:

5 unchanged sentences

Amortization expense for the year ended December 31, 2024 and 2023 was $ 204,600 and $ 205,534 , respectively.

Estimated annual amortization for each of the next 9 years is as follows:

Estimated annual amortization for each of the next 5 years and thereafter is as follows:

Annual amortization for the years ended:

16 unchanged sentences

As such the Company recorded a capital contribution of $ 54,983 for the year ended December 31, 2022 on this exchange which is related to the difference in fair value of the note on the date of the exchange.

As of both December 31, 2023 and December 31, 2022, total principal of $ 271,686 was outstanding on this note.

On February 27, 2024, the Company paid AC Midwest $275,625 representing the remaining principal balance under the AC Midwest Secured Note of $271,686 plus interest of $3,939 .

As a result of the repayment of the remaining principal balance under the AC Midwest Secured Debt, the Company and AC Midwest executed a Satisfaction and Discharge of Secured Debt confirming the cancellation of the AC Midwest Secured Note.

As of December 31, 2024 and December 31, 2023, total principal of $ 0 and $ 271,686 , respectively, was outstanding on this note.

Interest expense for the years ended December 31, 2024 and 2023 was $ 4,279 and $ 43,955 , respectively.

Amortized discount recorded as interest expense for the year ended December 31, 2023 and 2022 was $ 19,504 and $ 3,259 , respectively.

As of December 31, 2023 and 2022, the unamortized balance of the discount was $ 32,220 and $ 51,724 respectively, which is being expensed over the life of the loan.

Amortized discount recorded as interest expense for the years ended December 31, 2024 and 2023 was $ 32,220 and $ 19,504 , respectively.

As of December 31, 2024 and 2023, the unamortized balance of the discount was $Nil and $ 32,220 , respectively.

Unsecured Note Payable

1 unchanged sentence

Unsecured note payable

Less fair value adjustment on extinguishment, net of amortized discount of $1,547,536 and $230,868, respectively

( 12,314,895 )

Less fair value adjustment on extinguishment, net of amortized discount of $1,965,984 and $1,547,536, respectively

( 2,175,208 )

Plus fair value adjustment

Total unsecured note payable

3 unchanged sentences

On February 25, 2019, the Company, entered into an Unsecured Note Financing Agreement (the “Unsecured Note Financing Agreement”) with AC Midwest, pursuant to which AC Midwest issued an unsecured note in the principal amount of $ 13,154,931 (the “AC Midwest Unsecured Note”), which represented the outstanding principal and accrued and unpaid interest at closing.

The AC Midwest Unsecured Note, which replaced the AC Midwest Subordinated Note, was scheduled to mature on August 25, 2022 and bear a zero cash interest rate.

The Company determined that the rate of interest on the AC Midwest Subordinated Note was a below market rate of interest and determined that a discount of $ 6,916,687 should be recorded.

This discount was based on an applicable market rate for unsecured debt for the Company of 21 % and is being amortized as interest expense over the life of the loan.

In accordance with the Unsecured Note Financing Agreement, AC Midwest shall be entitled to a profit participation preference equal to 1.0 times the original principal amount (the “Profit Share”).

The Profit Share is “non-recourse” and shall only be derived from and computed on the basis of, and paid from, Net Litigation Proceeds from claims relating to the Company’s intellectual property, Net Revenue Share and Adjusted Free Cash Flow (as such terms are defined in the Unsecured Note Financing Agreement), and Equity Offering Net Proceeds as described below.

On August 30, 2022, AC Midwest agreed to an extension of the maturity date of the AC Midwest Unsecured Note (and AC Midwest Secured Note) from August 25, 2022 to September 30, 2022.

4 unchanged sentences

On October 28, 2022, the Company, along with MES, and AC Midwest, executed Amendment No.

1 to Unsecured Note Financing Agreement (“Amendment No.

1”) pursuant to which the maturity date of the AC Midwest Unsecured Note was extended to August 25, 2025.

In addition, the parties agreed that the Profit Share be increased by $ 4,500,000 from $ 13,154,931 (representing 1.0 times the original principal amount) to $ 17,654,931 .

1 to Unsecured Note Financing Agreement pursuant to which the maturity date of the AC Midwest Unsecured Note was extended to August 25, 2025.

In addition, the parties agreed that the Profit Share (see “Profit Share” below) be increased by $ 4,500,000 from $ 13,154,931 (representing 1.0 times the original principal amount) to $ 17,654,931 .

The Company has accounted for the extension as debt extinguishment with a related party.

As such the Company recorded a capital contribution of $ 3,234,469 on this exchange which is related to the difference in fair value of the note on the date of the exchange.

On February 27, 2024, the Company entered into an Unsecured Debt Restructuring Agreement (the “Debt Restructuring Agreement”) with AC Midwest which replaces and supersedes the Unsecured Note Financing Agreement.

Pursuant to the Debt Restructuring Agreement, on February 27, 2024, the Company (i) paid AC Midwest $ 9,040,000 as a reduction in the outstanding principal balance of the AC Midwest Unsecured Note, and (ii) issued to AC Midwest a new unsecured replacement note representing the remaining outstanding principal balance of the Unsecured Note in the principal amount of $ 4,114,931 (the “New Note”).

In addition, within 30 days, the Company would either facilitate the private sale to third parties of certain shares of common stock of the Company held by AC Midwest for a purchase price of no less than $960,000, which amount shall be applied as a credit against the principal balance due on the New Note dollar for dollar, or pay AC Midwest $960,000 toward the principal balance due on the New Note.

The private sale of shares for the purchase price of $960,000 was completed on March 11, 2024.

Any remaining principal balance on the New Note shall be due August 27, 2024 (the “New Note Maturity Date”), which is six months from February 27, 2024.

Until repaid in full, the New Note shall accrue interest at a rate equal to SOFR plus 2.0 % per annum.

The New Note completely replaced and superseded the AC Midwest Unsecured Note, which shall be of no further force and effect.

On August 26 and 27, 2024, the Company repaid AC Midwest the remaining principal of $ 3,154,931 on the New Note together with accrued interest of $ 119,964 .

As a result, the only remaining debt obligation under the Debt Restructuring Agreement is the profit participation as described below.

The Company has accounted for the February 27, 2024 modification as debt extinguishment with a related party.

As such the Company recorded a capital charge of $ 1,005,984 on this exchange which is related to the difference in fair value of the New Note on the date of the exchange.

The New Note represented a hybrid instrument and the Company elected to apply fair value option accounting to the New Note.

Cash flows of the hybrid instrument in its entirety are discounted at an appropriate rate for the applicable duration of the instrument.

Interest on the interest-bearing portion of the instrument that is held to maturity is aggregated as loss on change in fair value of profit share and unsecured note in the consolidated statements of operations.

Amortized discount recorded as interest expense for the years ended December 31, 2024 and 2023 was $ 209,224 and $ 1,316,667 , respectively.

As of December 31, 2023 and 2022, the unamortized balance of the discount was $ 2,175,208 and $ 3,491,875 respectively, which is being expensed over the life of the loan.

Principal Payments and the Profit Share

In connection with the AC Midwest Unsecured Note the Company shall pay the principal outstanding, as well as the Profit Share, in an amount equal to 60.0% of Net Litigation Proceeds until such time as any litigation funder has been paid in full and, thereafter, in an amount equal to 75.0% of such Net Litigation Proceeds until the Unsecured Note and Profit Share have been paid in full .

In addition, and within 30 days following the end of each fiscal quarter, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to the Net Revenue Share (which means 60.0% of Net Licensing Revenue (as defined) from licensing the Company’s intellectual property) plus Adjusted Free Cash Flow until the Unsecured Note and Profit Share have been paid in full, provided, however, that such payments shall exclude the first $ 3,500,000 of Net Licensing Revenue and Adjusted Free Cash Flow achieved commencing with the fiscal quarter ending March 31, 2019.

In addition, and pursuant to Amendment No.

1, the Company shall pay the principal outstanding and Profit Share in an aggregate amount equal to 75.0% of any Equity Offering Net Proceeds (as defined) until the Unsecured Note and Profit Share have been paid in full.

Any remaining principal balance due on the Unsecured Note shall be due and payable in full on the maturity date.

The Profit Share, however, if not paid in full on or before the maturity date, shall remain subject to Unsecured Note Financing Agreement until full and final payment.

As of December 31, 2024 and 2023, the unamortized balance of the discount was $Nil and $ 2,175,208 , respectively.

Pursuant to the Unsecured Note Financing Agreement, AC Midwest was also entitled to a “non-recourse” profit participation preference equal to 1.0 times the original principal amount of the AC Midwest Unsecured Note which on October 28, 2022 was increased to $ 17,654,931 (the “Profit Share”).

Prior to maturity, the outstanding principal, as well as the Profit Share, were to be paid from Net Litigation Proceeds from claims relating to the Company’s intellectual property, Net Revenue Share, Adjusted Free Cash Flow and Equity Offering Net Proceeds (as such terms are defined in the Unsecured Note Financing Agreement).

Any remaining principal balance due on the Unsecured Note would be due and payable in full on the maturity date.

The Profit Share, however, if not paid in full on or before the maturity date would remain subject to the Unsecured Note Financing Agreement until full and final payment.

Pursuant to the Debt Restructuring Agreement, AC Midwest was granted a profit participation preference equal to $ 7,900,000 (the “Restructured Profit Share”) which replaces and supersedes the terms and conditions of the Profit Share in the amount of $ 17,654,931 provided for in the Unsecured Note Financing Agreement, which shall be of no further force and effect.

The Restructured Profit Share is “non-recourse” and shall only be paid from Net Litigation Proceeds (as defined in the Debt Restructuring Agreement) from claims relating to the Company’s intellectual property.

Following the receipt of any Net Litigation Proceeds, the Company shall prepay any remaining principal balance of the New Note and pay the Restructured Profit Share in an amount equal to 75.0 % of such Net Litigation Proceeds until the New Note and Restructured Profit Share have been paid in full.

The Restructured Profit Share, if not paid in full on or before the New Note Maturity Date, shall remain subject to the terms of the Debt Restructuring Agreement.

In addition to facilitating the private sale to third parties as described above, AC Midwest granted the Company the exclusive right until December 31, 2024 to facilitate the sale of all or a portion of the remaining balance of the shares of common stock of the Company held by AC Midwest, which proceeds above a certain amount will be applied as a credit against the Restructured Profit Share dollar for dollar (the “Facilitation Credit”).

As of December 31, 2024, the Company had not facilitated the sale of any portion of the remaining shares held by AC Midwest.

As a result, no Facilitation Credit has been issued to the Company.

The Company has accounted for the February 27, 2024 modification as debt extinguishment with a related party.

As such the Company recorded a capital contribution of $ 11,833,179 on this exchange which is related to the difference in fair value of the Restructured Profit Share on the date of the exchange.

The Company is utilizing the methodology behind the ASC 815, Derivatives and Hedging and ASC 480, Distinguishing Liabilities from Equity to determine how to account for the profit-sharing portion of the note payable.

1 unchanged sentence

The Profit Share was determined to have a fair value of $ 3,389,043 upon grant.

The fair value of the Profit Share upon grant included $ 3,422,400 attributed to the Facilitation Credit which reduced the fair value of the Profit Share liability.

At December 31, 2024, the Facilitation Credit had expired and the fair value attributed to the feature was $0.

This increased the fair value of the Profit Share at December 31, 2024, and increased the loss on change in fair value of the profit share recorded during the year ended December 31, 2024 by $ 3,422,400 .

The discounted cash flow model assumptions used at December 31, 2024 to calculate the Profit Share liability included:

the projected full repayment of the profit share liability of $7,900,000 upon the receipt of Net Litigation Proceeds in 2025, and an annual market interest rate of 14.55% .

The discounted cash flow model assumptions used at December 31, 2023 to calculate the Profit Share liability included:

the projected full repayment of the profit share liability of $ 17,654,931 upon the receipt of Net Litigation Proceeds in 2025, and an annual market interest rate of 14.55 %.

The profit share liability will be marked to market every quarter utilizing management’s estimates.

4 unchanged sentences

Profit Share as of January 1, 2024

( 11,833,179 )

Loss on change in fair value of profit share

Profit Share as of December 31, 2024

Debt Repayment and Exchange Agreement

On June 1, 2021, the Company, along with MES, entered into a Debt Repayment and Exchange Agreement with AC Midwest, which was expected to repay all existing secured and unsecured debt obligations presently held by AC Midwest (the “Debt Repayment Agreement”).

Pursuant to the Debt Repayment Agreement, the Company was at closing to repay the principal balance outstanding on the AC Midwest Secured Note in cash, together with any other amounts due and owing under such note and repay the outstanding debt under the AC Midwest Unsecured Note by paying and issuing a combination of cash and shares of common stock which AC Midwest had agreed to accept in full and complete repayment of the obligations thereunder.

At closing, and with regard to the AC Midwest Unsecured Note, the Company was to pay AC Midwest $ 6,577,465 in cash representing 50 .0% of the aggregate outstanding principal balance of such note, and issue shares of common stock to AC Midwest in exchange for the remaining 50 .0% of the aggregate outstanding principal balance at an exchange price equal to 100% of the offering price of common stock in the Qualifying Offering (as defined below).

With regard to the Profit Share, at closing the Company was to pay AC Midwest $ 2,305,308 in cash representing the Profit Share Valuation, and issue shares of common stock for $ 4,026,568 representing the Adjusted Profit Share Valuation (as such terms are defined in the Debt Repayment Agreement) at the same exchange price indicated above.

The Company agreed to provide certain registration rights with respect to the shares issued thereunder.

The closing was subject to various conditions including but not limited to the completion of an offering of equity securities resulting in net proceeds of at least $ 12.0 million by December 31, 2021, which was extended to June 30, 2022 (the “Qualifying Offering”).

Such closing conditions were not met by June 30, 2022.

On October 28, 2022, the parties entered into a Termination Agreement pursuant to which the parties agreed to terminate the Debt Repayment Agreement with immediate effect and that none of the parties shall have any further responsibility or liability thereunder.

On February 27, 2024, the Company entered into an Unsecured Debt Restructuring Agreement with AC Midwest which replaced and superseded the Unsecured Note Financing Agreement as described in Note 13.

Short term debt

On June 13, 2022, the Company entered into a promissory note in the amount of $ 250,000 with the Company’s Chairman of the Board of Directors.

The note bears interest at 6 % and is due on the earlier of 90 days or the Company having cash of $ 1,200,000 .

The note was repaid in full in 2022.

Interest expense for the year ended December 31, 2022 was $ 4,937 .

Related Party Transactions

2 unchanged sentences

At December 31, 2024 and December 31, 2023, $ 37,500 and $ 33,333 , respectively, was owed to the firm for services rendered.

In September 2022, the Company acquired a pickup truck from the Company’s then Chief Financial Officer for the purchase price of $ 10,727 which the parties determined to be its fair market value.

On January 31, 2023, the Company entered into a License and Supply Agreement with Dakin Holdings Ltd., a company incorporated in Barbados (“Dakin”), effective as of January 1, 2023, pursuant to which Dakin has granted to the Company (i) a limited license to manufacture and produce for Dakin products comprising certain intellectual property owned by Dakin (the “Dakin IP”), and (ii) an exclusive license to commercialize the Dakin IP in the United States.

In addition, the Company shall pay Dakin a license fee of $ 12,500 per month for a three-year period commencing as of the effective date and pay Dakin a royalty on all sales in the United States of the products comprising the Dakin IP made by the Company.

On January 31, 2023, the Company entered into a License and Supply Agreement with Dakin Holdings Ltd., a company incorporated in Barbados (“Dakin”), effective as of January 1, 2023 (the “Dakin Agreement”), pursuant to which Dakin has granted to the Company (i) a limited license to manufacture and produce for Dakin products comprising certain intellectual property owned by Dakin (the “Dakin IP”), and (ii) an exclusive license to commercialize the Dakin IP in the United States.

In addition, the Company shall pay Dakin a license fee of $ 12,500 per month for a three-year period commencing as of the effective date and ending December 31, 2025, and pay Dakin a royalty on all sales in the United States of the products comprising the Dakin IP made by the Company.

On November 18, 2024, the parties entered into an amendment to the Dakin Agreement which eliminated all further monthly license fees after September 30, 2024.

Dakin is a company owned and controlled by the Company’s Chief Executive Officer and President.

Dakin charged $ 150,000 for license fees for the year ended December 31, 2023.

As of December 31, 2023, license fees of $ 25,000 were owed to Dakin.

The Dakin Agreement is for a term of ten years unless terminated earlier under certain circumstances as set forth therein.

For the years ended December 31, 2024 and 2023, Dakin incurred $ 112,500 and $ 150,000 license fees.

At December 31, 2024 and 2023, $Nil and $ 25,000 was owed to Dakin for license fees.

On May 28, 2024, the Company entered into an Administrative Services Agreement with Greenberg Enterprises, LLC (“Greenberg Enterprises”), pursuant to which Greenberg Enterprises will be paid for certain administrative support provided to the Company since January 1, 2024 and administrative support to be provided in the future to the Company including but not limited to general office and technical support, project management and support, and vendor relations support.

Such agreement was terminated effective in December 2024.

During the year ended December 31, 2024, Greenberg Enterprises provided $ 237,020 for administrative services and $ 335,100 for expense reimbursement.

At December 31, 2024, $Nil was owed to Greenberg Enterprises pursuant to the agreement.

Greenberg Enterprises is a company owned and controlled by Christopher Greenberg, Chairman of the Board of the Company.

Note 9 - Operating Leases

On July 1, 2015, the Company entered into a five-year lease for warehouse space in Corsicana, Texas.

Rent is $ 3,750 monthly throughout the term of the lease.

The Company is also responsible for the pro rata share of the projected monthly expenses for the property taxes.

The current pro rata share is $ 882 .

The lease was extended on June 1, 2019 for five years.

On June 1, 2019, the lease was extended to March 31, 2024, and on March 28, 2024, the lease was further extended for an additional five years from March 31, 2024 to March 31, 2029 .

Rent is $3,750 monthly until March 31, 2026 and then $3,866 per month until March 31, 2029 .

The Company recorded a right of use asset and an operating lease liability of $ 161,728 .

This amount represents the difference between the value from the remaining lease and the extended lease.

On August 1, 2024, the Company entered into a 3 -year lease for laboratory space in Grand Forks, North Dakota.

The lease contains an option to extend for a further three years that the Company is reasonably certain to exercise.

As a result, the additional three year extension is included as part of the least term.

Rent is $1,400 monthly until July 31, 2027 , and then effectively $1,540 per month until July 31, 2030.

Upon commencement of the lease the Company recorded a right of use asset and an operating lease liability of $ 69,615 .

On November 22, 2024, the Company entered into an approximate 3 -year lease for laboratory space in State College, Pennsylvania, commencing December 15, 2024 and ending November 30, 2027.

The lease contains an option to extend for a further three years that the Company is reasonably certain to exercise.

As a result, the additional three year extension is included as part of the lease term.

Rent is $1,800 monthly until November 30, 2025, $1,860 monthly thereafter until November 30, 2026, and $1,920 monthly thereafter until November 30, 2027 .

During the option period, rent is $1,980 monthly from December 1, 2027 to November 30, 2028, $2,040 monthly thereafter through November 30, 2029, and $2,100 monthly thereafter through November 30, 2030.

Upon commencement of the lease the Company recorded a right of use asset and an operating lease liability of $ 94,942 .

For the years ended December 31, 2024 and 2023, the Company recorded an operating lease right of use asset and liabilities as follows:

9 unchanged sentences

The weighted average remaining lease term for operating leases is 5.2 years and the weighted average discount rate used in calculating the operating lease asset and liability is 14.55 %.

For the year ended December 31, 2023 and 2022, payments on lease obligations were $ 45,000 and $ 260,360 respectively, and amortization on the right of use assets was $ 40,924 and $ 338,535 respectively.

For the years ended December 31, 2024 and 2023, payments on lease obligations were $ 52,871 and $ 45,000 , respectively, and amortization on the right of use assets was $ 31,782 and $ 40,924 , respectively.

For the years ended December 31, 2024 and 2023, the Company’s lease cost consists of the following components, each of which is included in costs and expenses within the Company’s consolidated statements of operations:

35 unchanged sentences

The remaining CERT defendants and their customers (for activities relating to the CERT defendants) are not included within the scope of the license.

The Court has rescheduled the trial as to the claims against the remaining CERT defendants to begin on February 26, 2024.

The Court rescheduled the trial as to the claims against the remaining CERT defendants to begin on February 26, 2024.

Following a five-day trial, on March 1, 2024, a federal jury in the U.S.

District Court for the District of Delaware awarded a $ 57.1 million patent infringement verdict in favor of the Company against the remaining group of CERT defendants.

Such group of affiliated defendants included multiple limited liability companies with refined coal industry operations, including CERT Operations II LLC, CERT Operations IV LLC, CERT Operations V LLC, and CERT Operations RCB LLC.

The jury determined that these defendants infringed our patented technologies for mercury emissions and were liable for willful infringement, along with inducing and contributory infringement.

Following the trial, various post-trial motions and applications were made by the parties.

We are awaiting rulings from the Court.

In July 2024, the Company commenced three patent infringement lawsuits against multiple defendants, including coal-fired power utilities, in three separate U.S.

District Courts in Arizona, Iowa and Missouri.

Such lawsuits claim infringement of the Company’s patent rights related to the Company’s mercury emissions reduction technologies.

Named as defendants in the action filed in the U.S.

District Court for the District of Arizona are Tucson Electric Power Co., San Carlos Resources, Inc., Salt River Project Agricultural Improvement and Power District, Tri-State Generation and Transmission Association, Inc., Springerville Unit 3 Holding LLC, and Springerville Unit 3 Partnership LP.

Named as defendants in the action filed in the U.S.

District Court for the Southern District of Iowa are Berkshire Hathaway Energy Company, MidAmerican Energy Company, PacifiCorp, Alliant Energy Corporation, Interstate Power and Light Company, and Wisconsin Power and Light Company, and named as defendants in the action filed in the U.S.

District Court for the Eastern District of Missouri are Ameren Corp.

and Union Electric Co.

In each lawsuit, the Company requests a trial by jury against the defendants and seeks damages, costs, and legal expenses, along with a finding of willful infringement by the defendants, and an injunction prohibiting the defendants from further acts of infringement.

Effective as of October 8, 2024, the Company entered into agreement with one of the utilities and an affiliated entity named as defendants in the patent infringement lawsuit commenced by the Company in July 2024 in the U.S.

District Court in Arizona (the “Arizona Action”).

Such agreement provides such parties and their affiliates with a non-exclusive license to certain Company patents related to the Company’s two-part Sorbent Enhancement Additive (SEA®) process for use in connection with a certain designated coal-fired power plant operated by such utility.

The agreement includes a one-time license fee which has been received by the Company, and provides the Company with a right of first refusal for certain of such utility’s product supply for mercury emissions capture at such designated power plant.

Such lawsuit will continue against the other non-affiliated defendants named in the Arizona Action.

On December 17, 2024, a United States Judicial Panel on Multidistrict Litigation ordered that the above three patent infringement lawsuits be consolidated and centralized in the Southern District of Iowa for coordinated or consolidated pretrial proceedings (the “Transfer Order”).

See “Note 16 – Subsequent Events” for information on an agreement entered into with another party named as a defendant in the Arizona Action, along with information of the commencement of additional patent litigation and filing of petitions for Inter Partes Review with the United States Patent and Trademark Office.

Except for the foregoing disclosures, the Company is not presently aware of any other material pending legal proceedings to which the Company is a party or of which any of its property is the subject.

1 unchanged sentence

As such, there can be no assurance that the Company will be successful in litigating and/or settling any of these claims.

The Company expenses legal costs relating to patent litigation as incurred.

Note 11 - Stock Based Compensation

Stock Based Compensation

The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the consolidated financial statements over the vesting period based on the estimated fair value of the awards.

Stock based compensation consists of the amortization of common stock, stock options and warrants issued to employees, directors and consultants.

The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the unaudited condensed consolidated financial statements over the vesting period based on the estimated fair value of the awards.

Stock based compensation consists of the amortization of common stock, stock options, restricted share units and warrants issued to employees, directors and consultants.

For the years ended December 31, 2024 and 2023, stock-based compensation expense amounted to $ 1,088,922 and $ 520,449 , respectively.

Such expense is classified in selling, general and administrative expenses.

On May 31, 2022, and pursuant to a consulting agreement dated May 31, 2022 with a nonaffiliated third party, the Company issued 500,000 shares of common stock to such party as part of its compensation thereunder.

These shares of common stock were valued at $ 160,000 in accordance with FASB ASC Topic 718.

The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over 12 months.

On May 31, 2022, the Company issued a total of 250,000 shares of common stock to two Directors.

These shares of common stock were valued at $ 55,000 in accordance with FASB ASC Topic 718.

The fair value of the shares was expensed in full on the issuance date.

On July 3, 2023, the Board of Directors of the Company approved and adopted the Company’s Amended and Restated 2014 Equity Incentive Plan (the “2014 Plan”) and the Company’s Amended and Restated 2017 Equity Incentive Plan (the “2017 Plan”) which amended the Company’s previously adopted 2014 Equity Incentive Plan and 2017 Equity Incentive Plans.

Such amendments were made in accordance with the requirements of the TSX Venture Exchange.

The 2014 Equity Incentive Plan was first approved by the Board on January 10, 2014.

The 2017 Equity Incentive Plan replaced the 2014 Equity Incentive Plan, which was terminated by the Board on April 28, 2017.

As a result of such termination, no additional awards may be granted under the 2014 Equity Incentive Plan but previously granted awards shall remain outstanding in accordance with their terms and conditions.

The 2017 Plan was adopted by the Board on February 9, 2017.

As amended by the Board on July 3, 2023, the maximum number of shares of common stock that may be issued under the 2017 Plan after July 3, 2023 is 14,078,459 , and to the extent any award (or portion thereof) outstanding under the 2014 Plan expires, terminates or is cancelled, surrendered or forfeited for any reason on or after July 3, 2023, the shares of common stock subject to such award (or portion thereof) shall be added to and increase the foregoing limit, to a maximum of 4,775,000 additional shares of common stock.

(On July 3, 2023, there were 4,775,000 options and no other types of awards outstanding under the 2014 Plan.) On October 29, 2024, the Board approved certain non-material amendments to the 2014 Plan and 2017 Plan which amendments were made in connection with the listing of the Company’s shares on the Toronto Stock Exchange (“TSX”) and graduation from the TSX Venture Exchange to the TSX.

As of December 31, 2024, there were 5,741,306 shares remaining available for issuance under the 2017 Plan.

On November 8, 2022, the Company issued a total of 3,000,000 shares of common stock to the Chief Executive Officer.

1 unchanged sentence

The fair value of the shares will be amortized as an expense over the vesting period.

The shares became fully vested on November 8, 2024.

The expense for the years ended December 31, 2024 and 2023 was $ 402,666 and $ 486,667 , respectively.

Stock Options

References herein to the “2014 Plan” mean the Company’s 2014 Equity Incentive Plan, as amended, and references herein to the “2017 Plan” mean the Company’s 2017 Equity Incentive Plan, as amended.

On January 24, 2022, the Company extended the expiration dates of certain fully expensed previously granted nonqualified stock options (which were due to expire in February 2022) which were granted to five individuals to acquire an aggregate of 700,000 shares of the Company’s common stock under the 2014 Plan and 2017 Plan.

Such extended options are exercisable at prices ranging from $1.15 to $1.20 per share , representing the original fair market value of the common stock on the dates of grant as determined under the applicable Equity Plan.

The options are fully vested and exercisable and will now expire five years from their original expiration dates.

Based on a Black-Scholes valuation model, these modified options were valued at $ 138,623 , in accordance with FASB ASC Topic 718, which was expensed on the amendment date in selling, general and administrative expenses within the Company’s consolidated statements of operations.

On February 2, 2022, the Company issued 5,181 shares of common stock to a certain option holder upon the cashless exercise of options to purchase an aggregate of 9,750 shares of common stock at exercise prices ranging from $ 0.20 to $ 0.33 per share based upon a market price of $ 0.54 per share as determined under the terms of the options.

On May 31, 2022, the Company granted nonqualified stock options to the Company’s Senior Vice President and Chief Technology Officer, and to the Company’s Vice President of Operations – nonqualified stock options to each acquire 500,000 shares of the Company’s common stock;

and to its then Chief Financial Officer – nonqualified stock options to acquire 100,000 shares of the Company’s common stock.

On such date, two other employees were also granted nonqualified stock options to each acquire 50,000 shares of the Company’s common stock.

All of such options were granted under the 2017 Plan and are exercisable at $ 0.21 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan.

The options are fully vested and exercisable and expire five years from their issuance date.

Based on a Black-Scholes valuation model, these options were valued at $ 143,745 , in accordance with FASB ASC Topic 718, which was expensed on the issuance date in selling, general and administrative expenses within the Company’s consolidated statements of operations.

The valuation assumptions included an expected duration of 2.5 years, volatility of 96.83 %, discount rate of 2.62 % and dividends of $0.

On February 1, 2023, the Company issued (i) 850,000 shares of common stock to the Company’s Chairman of the Board upon a cash exercise of options to purchase an aggregate of 850,000 shares of common stock at exercise prices ranging from $ 0.19 to $ 0.27 per share or $ 209,500 in the aggregate, (ii) 110,000 shares of common stock to the Company’s Chief Executive Officer upon a cashless exercise of an option to purchase 250,000 shares of common stock at an exercise price of $ 0.28 per share based upon a market price of $ 0.50 per share as determined under the terms of the option, and (iii) 155,000 shares of common stock to a director of the Company upon a cashless exercise of an option to purchase 250,000 shares of common stock at an exercise price of $ 0.19 per share based upon a market price of $ 0.50 per share as determined under the terms of the option.

8 unchanged sentences

On September 30, 2023, the advisor agreement was terminated resulting in 50.0% of the option remaining unvested and unexercisable.

On April 4, 2023, and pursuant to a consulting agreement effective April 1, 2023 with a nonaffiliated third party, the Company granted a nonqualified stock option under the 2017 Plan to such third party to acquire 250,000 shares of the Company’s common stock at an exercise price of $ 0.39 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan.

On April 4, 2023, and pursuant to a consulting agreement effective April 1, 2023 with a nonaffiliated third party, the Company granted a nonqualified stock option under the 2017 Equity Incentive Plan to such third party to acquire 250,000 shares of the Company’s common stock at an exercise price of $ 0.39 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Equity Incentive Plan.

Fifty percent of the option shall vest and become exercisable on October 1, 2023 and the remaining fifty percent shall vest and become exercisable on April 1, 2024.

9 unchanged sentences

The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over twelve months.

During the years ended December 31, 2024 and 2023, the Company recognized $ 12,211 and $ 18,316 , respectively, of stock-based compensation.

The valuation assumptions included an expected duration of 2.88 years, volatility of 97 %, discount rate of 4.23 % and dividends of $ 0 .

3 unchanged sentences

On June 28, 2023, the Company issued (i) 5,213 shares of common stock to the Company’s Chief Executive Officer upon a cashless exercise of options to purchase an aggregate of 24,687 shares of common stock at exercise prices ranging from $ 0.21 to $ 0.29 per share based upon a market price of $ 0.30 per shares as determined under the terms of the options, (ii) 4,125 shares of common stock to the Company’s Senior Vice President and Chief Technology Officer upon a cashless exercise of an option to purchase 13,750 shares of common stock at an exercise price of $ 0.21 per share based upon a market price of $ 0.30 per share as determined under the terms of the option, and (iii) 1,875 shares of common stock to a director upon a cashless exercise of an option to purchase 6,250 shares of common stock at an exercise price of $ 0.21 per share based upon a market price of $ 0.30 per share as determined under the terms of the options.

On July 3, 2023, the Board of Directors of the Company approved and adopted the Company’s Amended and Restated 2014 Equity Incentive Plan and the Company’s Amended and Restated 2017 Equity Incentive Plan which amended the Company’s previously adopted 2014 Plan and 2017 Plans.

Such amendments were made in accordance with the requirements of the TSX Venture Exchange.

The 2014 Plan was first approved by the Board on January 10, 2014.

The 2017 Plan replaced the 2014 Plan, which was terminated by the Board on April 28, 2017.

As a result of such termination, no additional awards may be granted under the 2014 Plan but previously granted awards shall remain outstanding in accordance with their terms and conditions.

There are 4,775,000 options and no other types of award outstanding under the 2014 Plan.

The 2017 Plan was adopted by the Board on February 9, 2017.

On July 28, 2023, the Company issued (i) 8,007 shares of common stock to the Company’s Chief Executive Officer upon a cashless exercise of an option to purchase 16,458 shares of common stock, (ii) 6,690 shares of common stock to the Company’s Senior Vice President and Chief Technology Officer upon a cashless exercise of an option to purchase 13,750 shares of common stock, and (iii) 3,041 shares of common stock to a director upon a cashless exercise of an option to purchase 6,250 shares of common stock.

11 unchanged sentences

On December 13, 2023, the Company issued 2,204 shares of common stock to an employee upon a cashless exercise of an option to purchase 3,062 shares of common stock at an exercise price of $ 0.25 per share based upon a VWAP of $ 0.8931 per share as determined under the term of the options.

On January 15, 2024, the Company granted nonqualified stock options to certain directors, executive officers and employees to acquire an aggregate of 1,000,000 shares of the Company’s common stock under the 2017 Plan.

The options granted are exercisable at $ 0.88 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan.

The options are fully vested and exercisable as of the date of grant and will expire five years thereafter.

Based on a Black-Scholes valuation model, these options were valued at $ 632,214 , in accordance with FASB ASC Topic 718, which was expensed on the issuance date in selling, general and administrative expenses within the Company’s consolidated statements of operations.

The valuation assumptions included an expected duration of 5 years, volatility of 93 %, discount rate of 3.84 % and dividends of $ 0 .

On February 27, 2024, the Company issued 9,285 shares of common stock to a former employee upon a cashless exercise of an option to purchase 18,750 shares of common stock covered by an option to purchase a total of 100,000 shares of common stock, with an exercise price of $ 0.27 per share.

Such share issuance was based upon a VWAP of $ 0.9230 per share as determined under the terms of the option.

On June 24, 2024, the Company issued (i) 886,456 shares of common stock to the Company’s Chief Executive Officer upon a cashless exercise of an option to purchase 1,500,000 shares of common stock at an exercise price of $ 0.27 per share, and (ii) 672,867 shares of common stock to the Company’s Senior Vice President and Chief Technology Officer upon a cashless exercise of options to purchase an aggregate of 1,600,000 shares of common stock at exercise prices ranging from $ 0.27 to $ 0.45 per share.

Such share issuances were based upon a VWAP of $ 0.6601 per share as determined under the terms of the options.

On June 28, 2024, the Company issued (i) 46,409 shares of common stock to an employee upon a cashless exercise of options to purchase an aggregate of 300,000 shares of common stock at exercise prices ranging from $ 0.27 to $ 0.61 per share, (ii) 44,065 shares of common stock to an employee upon a cashless exercise of an option to purchase 75,000 shares of common stock covered by an option to purchase a total of 100,000 shares of common stock with an exercise price of $0.27 per share, and (iii) 15,000 shares of common stock to a former employee upon a cashless exercise of an option to purchase 25,531 shares of common stock covered by an option to purchase a total of 500,000 shares of common stock with an exercise price of $ 0.27 per share.

Such share issuances were based upon a VWAP of $ 0.6546 per share as determined under the terms of the options.

On August 3, 2024, the Company issued 32,112 shares of common stock to a former consultant upon a cashless exercise of an option to purchase 62,500 shares of common stock, with an exercise price of $ 0.40 per share.

Such share issuance was based upon a VWAP of $ 0.8227 per share as determined under the terms of the option.

A summary of stock option activity is presented below:

1 unchanged sentence

( 5,155,719 )

( 3,581,781 )

December 31, 2024

2 unchanged sentences

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.51 as of December 31, 2024 (the last trading day of the month of December 2024), which would have been received by the option holders had all option holders exercised their options as of that date.

Stock options exercised during the year ended December 31, 2023 include 850,000 that were exercised for cash and 875,839 which were a cashless exercise.

Stock options exercised during the year ended December 31, 2024 include none that were exercised for cash and 3,581,781 which were a cashless exercise.

Restricted Share Units

On January 15, 2024, the Company granted 50,000 restricted share units (“RSUs”) to a director pursuant to the 2017 Plan.

The RSUs will vest one year from the date of grant on January 15, 2025.

Once vested, each RSU represents the right to receive one share of the Company’s common stock .

These shares of common stock were valued at $ 43,500 in accordance with FASB ASC Topic 718.

The fair value of the shares will be amortized as an expense over the vesting period.

The shares become fully vested on January 15, 2025.

The expense for the year ended December 31, 2024 was $ 41,832 .

Note 12 - Warrants

2 unchanged sentences

When calculating the value of warrants issued, the Company uses a volatility factor, a risk-free interest rate and the life of the warrant for the exercise period.

No warrants were issued or exercised during the years ended December 31, 2023 and 2022.

No warrants were issued during the years ended December 31, 2024 and 2023.

The following warrants were exercised during the years ended December 31, 2024 and 2023:

On June 17, 2024, the Company issued an aggregate of 16,665 shares of common stock to certain warrant holders upon the cashless exercise of warrants to purchase an aggregate of 600,000 shares of common stock at an exercise price of $ 0.70 per share based upon a market value of $ 0.72 per share as determined under the terms of the warrants.

On June 18, 2024, the Company issued 3,521 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 250,000 shares of common stock at an exercise price of $ 0.70 per share based upon a market value of $ 0.71 per share as determined under the terms of the warrant.

On August 5, 2024, the Company issued 66,666 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 400,000 shares of common stock at an exercise price of $ 0.70 per share based upon a market value of $ 0.84 per share as determined under the terms of the warrant.

On August 22, 2024, the Company issued 25,000 shares of common stock to a certain warrant holder upon a cash exercise of a warrant to purchase 25,000 shares of common stock at an exercise price of $ 0.70 per share or $ 17,500 in the aggregate.

The following is a summary of the Company’s warrant activity:

December 31, 2023

( 1,275,000 )

December 31, 2024

6 unchanged sentences

Weighted Average

Contractual Life

Remaining Contractual

Weighted Average

4 unchanged sentences

Income tax provision

$ ( 303,321 )

The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense (benefit) as follows:

12 unchanged sentences

Total deferred tax assets

Deferred tax liabilities:

Property and equipment

Intangible assets

Total deferred tax liabilities

Deferred tax liability:

IRC Section 481(a) adjustment

Valuation Allowance

6 unchanged sentences

If not used, these NOLs may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations.

The Company plans on undertaking a detailed analysis of any historical and/or current Section 382 ownership changes that may limit the utilization of the net operating loss carryovers.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

13 unchanged sentences

The Company does not expect any significant changes in its unrecognized tax benefits in the next year.

Note 14 – Segment and Geographic Information

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer (the “CEO”).

The Company is a provider of specialty activated carbon technologies and, at December 31, 2024, had one operating segment, which entails the providing of patented sorbent technologies for mercury emissions capture for the coal-fired utility sector in the United States.

There are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level.

Accordingly, management has determined that the Company has a single operating and reportable segment.

The accounting policies related to operating and reportable segments are the same as those described in Note 4, “Basis of Presentation and Summary of Significant Accounting Policies”.

The primary measure of segment profit or loss is consolidated net income as presented below and is used the by CEO for the purpose of evaluating segment performance and allocation of budget to support business expansion, new product development and operational efficiencies.

Material sales

Other revenues

Total revenues

Material costs

( 7,686,447 )

( 8,898,747 )

Blending and milling

( 1,081,781 )

( 1,380,051 )

Other cost of goods sold

Compensation and benefits

( 6,148,100 )

( 2,577,473 )

Stock-based compensation

( 1,088,922 )

Amortization and depreciation

Consulting fees

Professional fees

( 4,722,313 )

( 9,717,572 )

General and administrative

( 1,588,129 )

( 1,471,311 )

Change in fair value of profit share

( 3,959,065 )

( 11,209,677 )

Interest expense

( 1,362,401 )

Impairment loss

Income tax benefit (expense)

Income from legal claims

Interest income

Segment net (loss) income

( 10,802,111 )

Reconciliation of profit or loss

Adjustments and reconciling items

Consolidated net (loss) income

$ ( 10,802,111 )

The segment assets are not reviewed by the CODM at a different asset level or category and is reviewed at the consolidated level.

Note 15 - Subsequent Events

On February 27, 2024, the Company entered into an Unsecured Debt Restructuring Agreement (the “Debt Restructuring Agreement”) with AC Midwest which replaced and superseded the Unsecured Note Financing Agreement.

See Note 7 – Related Party.

Pursuant to the Debt Restructuring Agreement, on February 27, 2024, the Company (i) paid AC Midwest $ 9,040,000 as a reduction in the outstanding principal balance of the Unsecured Note, (ii) issued to AC Midwest a new unsecured replacement note representing the remaining outstanding principal balance of the Unsecured Note in the principal amount of $ 4,114,931 (the “New Note”), and (iii) paid AC Midwest $275,625 representing the remaining principal balance under the Secured Note of $ 271,686 plus interest of $ 3,939 .

The private sale of shares for the purchase price of $ 960,000 was completed on March 11, 2024.

Any remaining principal balance on the New Note shall be due August 27, 2024 (the “Maturity Date”), which is six months from February 27, 2024.

Until repaid in full, the New Note shall accrue interest at a rate equal to SOFR plus 2.0 % per annum.

The New Note completely replaces and supersedes the Unsecured Note, which shall be of no further force and effect.

In addition, pursuant to the Debt Restructuring Agreement, AC Midwest shall be entitled to a profit participation preference equal to $ 7,900,000 (the “Restructured Profit Share”).

The Restructured Profit Share is “non-recourse” and shall only be paid from Net Litigation Proceeds (as defined in the Debt Restructuring Agreement) from claims relating to our intellectual property.

Following the receipt of any Net Litigation Proceeds, we shall prepay any remaining principal balance of the New Note and pay the Restructured Profit Share in an amount equal to 75.0% of such Net Litigation Proceeds until the New Note and Restructured Profit Share have been paid in full .

The Restructured Profit Share completely replaces and supersedes the terms and conditions of the Profit Share in the amount of $ 17,654,931 provided for in the Unsecured Note Financing Agreement, which shall be of no further force and effect.

The Restructured Profit Share, if not paid in full on or before the Maturity Date, shall remain subject to the terms of the Debt Restructuring Agreement.

In addition to facilitating the private sale to third parties as described above, AC Midwest has granted the Company the exclusive right until December 31, 2024 to facilitate the sale of all or a portion of the remaining balance of the shares of common stock of the Company held by AC Midwest, which proceeds above a certain amount will be applied as a credit against the Restructured Profit Share dollar for dollar.

As a result of the repayment of the remaining principal balance under the Secured Debt, the Company and AC Midwest executed a Satisfaction and Discharge of Secured Debt confirming the cancellation of the Secured Note and that all of the obligations under the Restated Financing Agreement have been fully satisfied and discharged.

Patent Litigation

See “Note 10 – Commitments and Contingencies” for information on the patent litigation initiated by the Company in 2019.

Following a five-day trial, on March 1, 2024, a federal jury in the U.S.

District Court for the District of Delaware awarded a $ 57.1 million patent infringement verdict in favor of the Company against the remaining group of CERT defendants.

The jury determined that these defendants infringed our patented technologies for mercury emissions and were liable for willful infringement, along with inducing and contributory infringement.

Other Subsequent Events

The options granted are exercisable at $ 0.88 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan.

The options are fully vested and exercisable as of the date of grant and will expire five years thereafter.

In addition, on such date, the Company granted 50,000 restricted share units (“RSUs”) to another director pursuant to the 2017 Plan.

The RSUs will vest one year from the date of grant on January 15, 2025.

Once vested, each RSU represents the right to receive one share of the Company’s common stock.

Such share issuance was based upon a VWAP of $ 0.9230 per share as determined under the terms of the option.

On March 28, 2024, the lease for the Company’s warehouse space in Corsicana, Texas was extended for an additional five years from March 31, 2024 to March 31, 2029.

On January 2, 2025, and pursuant to an investor relations consulting agreement effective as of January 1, 2025 with a nonaffiliated third party, the Company granted a nonqualified stock option under the 2017 Plan to such third party to acquire 250,000 shares of the Company’s common stock at an exercise price of $ 0.51 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan.

Twenty-five percent of the option shall vest and become exercisable three months following the grant date and twenty-five percent shall vest every three months thereafter such that the option shall be fully vested one year following the grant date.

The option will expire three years after the grant date.

Effective as of January 7, 2025, the Company entered into agreement with another one of the utilities named as a defendant in the Arizona Action (see “Note 10 – Commitments and Contingencies”).

Such agreement provides such party and its affiliates with a non-exclusive license to certain Company patents related to the Company’s two-part Sorbent Enhancement Additive (SEA®) process for use in connection with a certain designated coal-fired power plant operated by such utility.

The agreement includes a one-time license fee which has been received by the Company, and provides the Company with the right to be included in such party’s bidding process for certain product supply for mercury emissions capture at such party’s designated power plant.

On January 9, 2025, the Company granted a nonqualified stock option under the 2017 Plan to a new director, who was elected to the Board on December 30, 2024, to acquire 100,000 shares of the Company’s common stock at an exercise price of $ 0.56 per share, representing the fair market value of the common stock on the date of grant as determined under the 2017 Plan.

The option is fully vested and exercisable as of the grant date and will expire five years thereafter.

On January 15, 2025, the Company issued 50,000 shares of common stock to a director due to the vesting on such date of 50,000 restricted share units (“RSUs”) which had previously been granted on January 15, 2024 pursuant to the 2017 Plan and had a one-year vesting period.

In January 2025, the Company commenced another patent infringement lawsuit against four defendants in the U.S.

District Court for the Western District of Missouri.

Such lawsuit claims infringement of the Company’s patent rights related to the Company’s mercury emissions reduction technologies.

Named as defendants in the action are Evergy, Inc., Evergy Metro Inc., Evergy Missouri West, Inc.

and Evergy Kansas Central, Inc.

In the lawsuit, the Company requests a trial by jury against the defendants and seek damages, costs, and legal expenses, along with a finding of willful infringement by the defendants, and an injunction prohibiting the defendants from further acts of infringement.

In February 2025, such lawsuit was consolidated with and transferred to the Southern District of Iowa pursuant to the Transfer Order (see “Note 10 – Commitments and Contingencies”).

In January and February 2025, certain of the defendants in the patent infringement lawsuits which have been consolidated and centralized in the Southern District of Iowa filed petitions for Inter Partes Review with the United States Patent and Trademark Office, seeking to invalidate certain claims to the patents which are subject to the litigation.

On March 19, 2025, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may purchase up to $ 5.0 million of its common stock.

Purchases under the share repurchase program may be made from time to time, in such amounts as management deems appropriate, through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or by any combination of such methods.

The timing and amount of any repurchases pursuant to the share repurchase program will be determined based upon a variety of factors, including general market conditions, share price, corporate and regulatory requirements and limitations, corporate liquidity requirements and priorities, and other factors.

The Company anticipates that any repurchases will not occur before the second half of 2025.

The share repurchase program does not have an expiration date, does not require the Company to repurchase any specific number of shares of its common stock, if any, and may be modified, suspended or terminated at any time without notice.

Note 16 – Restatement of Quarterly Financial Information (Unaudited)

As described in Note 2—Restatement of Previously Issued Financial Statements, for the period ended December 31, 2024, management identified an error in the previously reported financial statements related to the recognition of revenue during the year ended December 31, 2022.

The Company entered into a license agreement for which it should have recognized the entire proceeds receivable pursuant to the agreement as revenue during the year ended December 31, 2022.

The Company should also have recognized the financing component of the licensing agreement during the fiscal years ended December 31, 2023 and 2024.

The following tables present the effect of the restatement on the Company's previously reported:

unaudited condensed consolidated balance sheets as of March 31, 2023, June 30, 2023, and September 30, 2023;

unaudited condensed consolidated balance sheets as of March 31, 2024, June 30, 2024, and September 30, 2024;

unaudited condensed consolidated statements of operations for the three months ended March 31, 2023, the three months and six months ended June 30, 2023, and the three months and nine months ended September 30, 2023;

unaudited condensed consolidated statements of operations for the three months ended March 31, 2024, the three months and six months ended June 30, 2024, and the three months and nine months ended September 30, 2024;

unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023, the six months ended June 30, 2023, and the nine months ended September 30, 2023;

unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2024, the six months ended June 30, 2024, and the nine months ended September 30, 2024.

The values as previously reported were derived from the previously filed Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024, and September 30, 2024.

These restatements do not result in a reclassification between cash flows from operating activities, cash flows from investing activities, or cash flows from financing activities in the unaudited condensed consolidated statements of cash flows for the periods presented.

The restatements only impact net loss in the unaudited condensed consolidated statements of changes in stockholders’ equity (deficit) in the periods presented.

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of March 31, 2023:

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2023

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 70,145,373 )

( 69,356,965 )

Total stockholders’ equity (deficit)

( 8,504,314 )

( 7,715,906 )

Total liabilities and stockholders’ equity (deficit)

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three months ended March 31, 2023:

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2023

As previously reported

$ ( 315,000 )

Interest income

Total costs and expenses

Loss before provision for income taxes

( 1,427,196 )

( 1,717,738 )

$ ( 1,446,984 )

$ ( 290,542 )

$ ( 1,737,526 )

Net loss per common share - basic and diluted:

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the three months ended March 31, 2023:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 1,446,984 )

$ ( 290,542 )

$ ( 1,737,526 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of June 30, 2023:

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2023

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 70,909,843 )

( 70,103,562 )

Total stockholders’ equity (deficit)

( 9,131,190 )

( 8,324,909 )

Total liabilities and stockholders’ equity (deficit)

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three and six months ended June 30, 2023:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS

ENDED JUNE 30, 2023

FOR THE SIX MONTHS

ENDED JUNE 30, 2023

As previously reported

$ ( 315,000 )

Interest income

Total costs and expenses

Net loss before provision for income taxes

( 2,191,350 )

( 2,464,019 )

$ ( 764,470 )

$ ( 746,597 )

$ ( 2,211,454 )

$ ( 272,669 )

$ ( 2,484,123 )

Net loss per common share - basic and diluted:

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the six months ended June 30, 2023:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 2,211,454 )

$ ( 272,669 )

$ ( 2,484,123 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of September 30, 2023:

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2023

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 71,737,345 )

( 70,912,786 )

Total stockholders’ equity (deficit)

( 9,856,227 )

( 9,031,668 )

Total liabilities and stockholders’ equity (deficit)

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three and nine months ended September 30, 2023:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS

ENDED SEPTEMBER 30, 2023

FOR THE NINE MONTHS

ENDED SEPTEMBER 30, 2023

As previously reported

$ ( 315,000 )

Interest income

Total costs and expenses

Net loss before provision for income taxes

( 3,038,956 )

( 3,293,347 )

$ ( 827,502 )

$ ( 809,224 )

$ ( 3,038,956 )

$ ( 254,391 )

$ ( 3,293,347 )

Net loss per common share - basic and diluted:

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the nine months ended September 30, 2023:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 3,038,956 )

$ ( 254,391 )

$ ( 3,293,347 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of March 31, 2024:

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2024

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 65,353,367 )

( 64,806,000 )

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three months ended March 31, 2024:

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2024

As previously reported

$ ( 315,000 )

Operating loss

( 2,083,492 )

( 2,398,492 )

Total other income (expense)

Loss before provision for income taxes

( 2,558,991 )

( 2,854,875 )

$ ( 2,558,991 )

$ ( 295,884 )

( 2,854,875 )

Net loss per common share - basic and diluted:

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the three months ended March 31, 2024:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2024

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 2,558,991 )

$ ( 295,884 )

$ ( 2,854,875 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

$ ( 439,220 )

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of June 30, 2024:

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2024

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 71,512,689 )

( 70,952,914 )

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS

ENDED JUNE 30, 2024

FOR THE SIX MONTHS

ENDED JUNE 30, 2024

As previously reported

$ ( 315,000 )

Operating loss

( 3,573,510 )

( 5,657,002 )

( 5,972,002 )

Interest income

Total other income (expense)

( 2,585,466 )

( 2,573,058 )

( 3,060,965 )

( 3,029,441 )

Net loss before provision for income taxes

( 6,158,976 )

( 6,146,568 )

( 8,717,967 )

( 9,001,443 )

$ ( 6,159,322 )

$ ( 6,146,914 )

$ ( 8,718,313 )

$ ( 283,476 )

$ ( 9,001,789 )

Net loss per common share - basic and diluted:

The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the six months ended June 30, 2024:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 8,718,313 )

$ ( 283,476 )

$ ( 9,001,789 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

$ ( 3,122,619 )

The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of September 30, 2024:

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2024

As previously reported

ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts receivable

Total current assets

Stockholders’ equity (deficit)

Accumulated deficit

( 71,982,925 )

( 71,410,460 )

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS

ENDED SEPTEMBER 30, 2024

FOR THE NINE MONTHS

ENDED SEPTMEER 30, 2024

As previously reported

$ ( 315,000 )

Operating loss

( 1,107,431 )

( 6,764,433 )

( 7,079,433 )

Interest income

Total other income (expense)

( 2,717,973 )

( 2,673,759 )

Net loss before provision for income taxes

( 9,482,406 )

( 9,753,192 )

$ ( 470,236 )

$ ( 457,546 )

$ ( 9,188,549 )

$ ( 270,786 )

$ ( 9,459,335 )

Net loss per common share - basic and diluted:

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

As previously reported

Cash flows from operating activities

Net income (loss)

$ ( 9,188,549 )

$ ( 270,786 )

$ ( 9,459,335 )

Adjustments to reconcile net loss to net cash

Non-cash interest income

Changes in operating assets and liabilities

Accounts receivable

Net cash provided by operating activities

$ ( 3,274,785 )

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data