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Item 8. Financial Statements and Supplementary Data

2026-03-19 compared with 2025-03-19 · 229 added, 336 removed, 595 unchanged (49% of the section changed)

Financial Statements and Supplementary Data.

forth below are the audited financial statements for the Company for the years ended December 31, 2024, and December 31, 2023, and the

report thereon of Assure, CPA.

forth below are the audited financial statements for the Company for the years ended December 31, 2025, and December 31, 2024, and the report thereon of Assure,

Biofuels, Inc.

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to Financial Statements Page

of Independent Registered Public Accounting Firm PCAOB ID 444

Report of Independent Registered Public Accounting Firm PCAOB ID 444

Balance Sheets as of December 31, 2025, and December 31, 2024.

Statements of Operations for the years ended December 31, 2025, and December 31, 2024.

of Stockholder’s Deficit for the years ended December 31, 2024, and December 31, 2023.

Statements of Stockholder’s Deficit for the years ended December 31, 2025, and December 31, 2024.

Statements of Cash Flows for the years ended December 31, 2025, and December 31, 2024.

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Property and Equipment, net of accumulated depreciation and amortization of $ 482,578 and $ 361,887 at December 31, 2025 and December 31, 2024, respectively

Security Deposits

Right of Use Assets, net of accumulated amortization

Patents and Trademarks

Patents and Trademarks, net of accumulated amortization

TOTAL OTHER ASSETS

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Right of Use Lease Liability - Current

Convertible Notes Payable — Related Party

Convertible Notes Payable - Other

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Convertible Notes Payable - Related Party

Convertible Notes Payable — Other

Convertible Notes Payable

Legacy Notes Payable — Related Party

Legacy Notes Payable — Other

Legacy Notes Payable

TOTAL LONG TERM LIABILITIES

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Other (income) expense:

Government Grants

Grants Income

Gain on extinguishment of debt

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Interest expense - related party

Interest expense - other

Interest expensed or (earned) - other

Total other (income) expense

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Additional Paid-in

Total Stockholder’s

Total Stockholders’

Balance as of December 31, 2024

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Issuance of common stock for services

Issuance of 303,500 warrants for services

Issuance of common stock for property and equipment

Issuance of common stock for patent and trademark costs

Issuance of 266,000 warrants for services

Issuance of 250,000 warrants for interest

Issuance of warrants for interest

Repricing of warrants for services

Cancelling 350,000 warrants for services

Cancelling warrants for services

Issuance of common stock and warrants for cash through PPM

Exercise of warrants

Employee director stock options exercised on a cashless basis

Issuance of common stock and warrants for cash through private placements

Issuance of common stock and warrants on the conversion of notes

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Issuance of 303,500 warrants for services

Issuance of warrants for services

Issuance of 180,000 warrants for interest

Issuance of warrants for interest

Warrants exercised

Issuance of common stock and warrants for cash through PPM

Repricing of warrants for services

Cancellation of 350,000 warrants for services

Issuance of common stock and warrants for cash through private placements

Issuance of common stock and warrants on the conversion of notes

Stock based compensation recognized under the employee, director plan

Employee stock options exercised

Net Income (Loss)

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Accounts payable

Accounts payable - related party

Deferred wages and directors fees - related party

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( 1,003,420 )

( 1,600,412 )

Cash flows from investing activities

Net purchase of property and equipment

Patent and trademark costs

Purchase of property and equipment

Payment of deposits on property

Additions to patent and trademark costs

Net cash from (used in) investing activities

Cash flows from financing activities

Net proceeds from issuance of common stock

Net proceeds from the issuance of convertible notes — RP

Net proceeds from the issuance of convertible notes — Other

Proceeds from exercise of warrants and options

Repayment of debt

Proceeds from issuance of common stock

Proceeds from the issuance of convertible notes - RP

Proceeds from the issuance of convertible notes - Other

Proceeds from exercise of warrants

Net cash provided by financing activities

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Cash and cash equivalent at end of the year

Supplemental disclosure of cash flow information

Cash paid during the year for

Supplemental schedule of non-cash financing and investing activities

Recognition of operating lease liability and right-of-use asset

Issuance of common stock for patent and trademark costs

Issuance of common stock for property and equipment

Issuance of common stock and warrants on the conversion of notes payable

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liabilities as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented.

estimates inherent in the preparation of the accompanying Financial Statements include estimates of depreciable lives of assets, impairment

assessment of long-lived assets, valuation allowance of deferred taxes, and valuation of stock-based compensation.

Estimates are based

on past experience and other considerations reasonable under the circumstances.

Actual results may differ from these estimates.

estimates inherent in the preparation of the accompanying financial statements include estimates of useful lives associated with assets,

impairment assessment of long-lived assets, valuation allowance of deferred taxes, incremental borrowing rates and valuation of stock-based

compensation.

Estimates are based on past experience and other considerations reasonable under the circumstances.

Actual results may

differ from these estimates.

and Cash Equivalents

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Depreciation is provided for on a straight-line basis over the useful

lives of the assets, generally 5 to 10 years.

Expenditures for additions and improvements are capitalized;

repairs and maintenance are

expensed as incurred.

When an asset is sold, we recognize a gain (loss) in the Statements of Operations

based upon the proceeds received on the sale less the net carrying value of the asset.

lives of the assets, generally 5 to 10 years and 15 years for buildings and improvements as indicated in Note 4.

Expenditures for additions

and improvements are capitalized;

repairs and maintenance are expensed as incurred.

When an asset is sold, we recognize a gain (loss)

in the Statements of Operations based upon the proceeds received on the sale less the net carrying value of the asset.

a product is currently under research and development and is not currently approved for market, costs incurred in connection with patent

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and amortized over the expected revenue life of the patent(s).

Since the Company’s primary end products are expected to be sugar, ethanol, and SAF, which are in wide use,

the Company has determined that it is reasonable to capitalize the patent costs associated with its CTS process.

Since the Company’s primary end products are expected to be ethanol,

and sustainable aviation fuel (SAF), which are in wide use, the Company has determined that it is reasonable to capitalize the patent

costs associated with its cellulose-to-sugar (CTS) process, the sugar being converted into ethanol, and the ethanol either sold or further

converted into SAF.

and Development

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Variable lease expenses are recorded when incurred.

Stock Purchase Warrants and Other Derivative Financial Instruments

Company classifies as equity any contracts that require physical settlement or net-share settlement or provide it with a choice of net-cash

settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts

are indexed to its own stock.

The Company classifies as assets or liabilities any contracts that require net-cash settlement (including

a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or give the

counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

The Company assesses

the classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether

a change in classification between assets and liabilities is required.

of Long-Lived Assets

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the related tax authority would be recognized.

has no material uncertain tax positions for any of the reporting periods presented.

The Company has no material uncertain tax positions for any of the reporting periods presented.

Income (Loss) per Share :

profit (loss) per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting

Diluted loss per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect

Diluted loss per share is calculated using the weighted-average number of common shares plus the potentially dilutive effect

of securities such as outstanding options and warrants.

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December 31, 2025 and 2024, the Company has no assets or liabilities that are measured at fair value on a recurring basis.

estimated fair value of certain financial instruments including notes payable are

carried at historical cost basis, which approximates their fair values because of the short-term nature of these

The estimated

fair value of certain financial instruments including notes payable are carried at historical cost basis, which approximates their fair

values because of the short-term nature of these instruments.

Company operates as a single operating segment.

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Accounting Pronouncements

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07,

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to

include disclosure of incremental segment information on an annual and interim basis.

Among the disclosure enhancements are new disclosures

regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported

measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within

fiscal years beginning after December 15, 2024, and are applied retrospectively.

The adoption of this update as of December 31, 2024

had minimal impact on our consolidated financial statements and disclosure.

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

Improvement to Income Tax Disclosures, amending income tax disclosure

requirements for the effective tax rate reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal

years beginning after December 15, 2024 and are applied prospectively.

Early adoption and retrospective application of the amendments

are permitted.

We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,

Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate

reconciliation and income taxes paid.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024

and are applied prospectively.

Early adoption and retrospective application of the amendments are permitted.

We retrospectively adopted

the income tax disclosures required under amendments in the year ended December 31, 2025 financial statements.

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

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depreciation expense was $ 120,691 and $ 118,798 for the years ended December 31, 2025, and 2024, respectively.

the fiscal year ended December 31, 2023, the Company disposed of laboratory equipment and machinery that was no longer in use for a total

of $ 3,500 that was originally purchased for $ 8,172 and that had accumulated depreciation of $ 3,513 , thereby taking a loss of $ 1,159 on

the disposal of assets.

In the fiscal year ended December 31, 2024, the Company did no t dispose of any equipment.

the fiscal year ended December 31, 2025, the Company did not dispose of any equipment.

In the fiscal year ended December 31, 2024, the

Company did not dispose of any equipment.

5 – PATENTS AND TRADEMARKS

Company has obtained two patents and has applied for three more patents on its technology, and has also applied for international patents.

Company has obtained three patents and has applied for six more patents on its technology, and has also applied for international patents.

The Company has obtained one trademark and has four more pending.

The Company has capitalized the legal and filing fees of its patents

and trademarks in the amount of $ 298,079 as of December 31, 2024.

The Company disposed of one trademark in 2024, and recognized an expense

The following is a summary of the Company’s patents and trademarks

at December 31, 2025 and December 31, 2024:

OF PATENTS AND TRADEMARKS

Trademarks issued

Patents issued

Intangible assets, at cost

Accumulated amortization

Patents and trademarks pending

TOTAL PATENTS AND TRADEMARKS

expenses for patents and trademarks for the years ended December 31, 2025 and December 31, 2024 were $ 25,161 and $ 0 , respectively.

amortization expense for the years subsequent to December 31, 2025, is as follows:

OF ESTIMATED EXPENSE

Year ending December 31,

for the years ended December 31, 2025 and 2024 associated with the Company’s debt is outlined below.

Payable – Related Party

2023, the Company entered into long term convertible note agreements of $460,000 with board member Chris Kneppers.

These notes bore interest

at 10% and were convertible into shares of the Company’s comment stock at rates that ranged from $0.13 to $0.25 per share.

of the notes were due to be paid or automatically converted in 2024.

The remaining were to be paid when the Company completes a capital

raise of at least $5.0 million.

2024, prior to June 22, 2024, the Company borrowed an additional $240,000 from Mr.

These notes were non-interest bearing and

were initially due 13 months after issuance.

The outstanding principal balance due to Mr.

Kneppers on June 22, 2024 was $940,000.

June 22, 2024, the terms of all of the convertible notes due to Mr.

Kneppers were modified.

Under the modification, the notes are now

payable on the earliest of the date on which the Company (1) uplists to the Nasdaq or NYSE;

2023 and 2024, the Company borrowed a total of $1,140,000 from board member Chris Kneppers.The notes are now payable on the earliest

of the date on which the Company (1) uplists to the Nasdaq or NYSE;

(2) receives $5 million in equity financing;

or (3) begins generating revenue from its first facility.

Subsequent to the amendment, the Company borrowed an additional $440,000 with

Total outstanding principal balance due Mr.

Kneppers at December 31, 2024 is $1,140,000.

In January and February 2025, the

Company borrowed an additional $100,000 from Mr.

or (3) begins generating

revenue from its first facility.

In 2025, the Company borrowed an additional $185,000 from Mr.

Kneppers with the same terms.

connection with modification of the terms of all of Mr.

Kneppers notes, interest stopped accruing on March 31, 2024.

In lieu of interest,

the Company will pay Mr.

Kneppers 100% of the outstanding loan balance due him contingent upon the financing of the first plant.

interest and loan amounts automatically come due upon a change of control of the Company or if the Company files for bankruptcy under

Chapter 11 or Chapter 7.

During the years ended December 31, 2024 and 2023, the Company recognized $11,500 and $35,151, respectively,

in interest expense on these notes due to Mr.

At December 31, 2024 and 2023, accrued interest payable to Mr.

Kneppers is $46,651

and $35,151, respectively.

debt due as of December 31, 2025, is $1,325,000.

In lieu of interest, the Company will pay Mr.

Kneppers 100% of the outstanding loan

balance due him contingent upon the financing of the first plant.

All interest and loan amounts automatically come due upon a change

of control of the Company or if the Company files for bankruptcy under Chapter 11 or Chapter 7.

During the years ended December 31, 2025

and 2024, the Company recognized $0 and $11,500, respectively, in interest expense on these notes due to Mr.

At December 31,

2025, and 2024, accrued interest payable to Mr.

Kneppers is $46,651, and $46,651, respectively.

Notes Payable – Related Party

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in lieu of interest.

During the years ended December 31, 2024 and 2023, 80,000 warrants with a fair value of $5,932 and $8,180, respectively,

During the years ended December 31, 2025 and 2024, 50,000 and 80,000 warrants with a fair value of $6,328 and $5,932,respectively,

were issued to Mr.

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statement of operations.

April 2023, the Company entered a long-term convertible note with board member Edmund Burke, with a principal balance of $150,000, to

be repaid when the Company receives an equity investment of at least $1.5 million.

April 2023, the Company entered a separate long-term convertible note with board member Mr.

Burke, with a principal balance of $150,000,

to be repaid when the Company receives an equity investment of at least $1.5 million.

The notes may convert into common stock at $0.13/share

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During the years

ended December 31, 2024 and 2023, 100,000 warrants with a fair value of $6,518 and $13,914, respectively, were issued to Mr.

The fair value of these warrants is included in interest expense – related parties on the statement of operations.

ended December 31, 2025 and 2024, 200,000 and 100,000 warrants with a fair value of $18,149 and $6,518, respectively, were issued to

Burke (see Note 7).

The fair value of these warrants is included in interest expense – related parties on the statement of

Notes Payable – Non-Related Parties

January through April 2024, the Company issued convertible notes to four different individuals totaling $250,000.

January through April 2024, the Company issued convertible notes to four different individuals totalling $250,000.

These notes carried

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shares of the Company’s common stock and 3,125,000 warrants (see Note 7).

December 2023, the Company issued a convertible note to one individual for $50,000.

The note was non-interest bearing and had a term

of thirteen months.

In January 2025, the note was converted into 625,000 shares of the Company’s common stock and 625,000 warrants

with a strike price of $0.10 per share and a five year expiration.

Notes Payable

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recognized a gain on debt extinguishment of $2,320,932.

Notes Payable — Other

February 28, 2018, the Company entered into a short-term loan with Steven Sadaka, with a principal balance of $100,000 due and payable

on May 1, 2018.

The note does not accrue interest, however the Company provided 2,000,000 inducement shares to secure the note.

inducement shares were valued at $84,000 and are being amortized over the life of the note.

The note’s maturity date was extended

If the note is not repaid at maturity, then an additional 5,000,000 shares of common stock will be due.

The note was renegotiated

during the Company’s Chapter 11 proceedings, and as per the Plan Confirmation, it is agreed that $100,000 is to be paid out of

future gross revenues to satisfy this note in full, with no additional shares to be issued.

May 15, 2018, the Company entered into a short term loan with Christopher Jemapete, with a principal balance of $50,000 due and payable

on May 16, 2019.

The note carried an interest rate of 5% plus the company issued 1,250,000 inducement shares to secure the note as well

as 1,000,000 warrants with a $0.10 strike price and with a 5-year expiration.

These inducement shares were valued at $36,250 and are

being amortized over the life of the note;

the warrants had a value of $24,449.

On August 25, 2018, this note was restructured to remove

the warrants.

As of June 30, 2018 accrued interest on this note is $315.

The note was renegotiated during the Company’s Chapter

11 proceedings, and as per the Plan Confirmation, it is agreed that $50,315 is to be paid out of future gross revenues.

May 15, 2018, the Company entered into a short term loan with Pamela Jemapete, with a principal balance of $50,000 due and payable on

May 16, 2019.

The note carried an interest rate of 5% plus the company issued 1,250,000 inducement shares to secure the note as well

as 1,000,000 warrants with a $0.10 strike price and with a 5-year expiration.

These inducement shares were valued at $36,250 and are

being amortized over the life of the note;

the warrants had a value of $24,449.

On August 25, 2018, this note was restructured to remove

the warrants.

As of June 30, 2018 accrued interest on this note is $315.

The note was renegotiated during the Company’s Chapter

11 proceedings, and as per the Plan Confirmation, it is agreed that $50,315 is to be paid out of future gross revenues.

July 2016, the Company issued a short-term note payable to a third party in conjunction with the Company’s acquisition of the remaining

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18, 2024, and the Company recognized a gain on debt extinguishment of $96,570.

November 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $143,000 due and payable

on May 30, 2018.

The note carries an 8% one-time interest charge, a $43,000 original issue discount and a 35% conversion discount to

the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder.

the Company provided 500,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month

anniversary if the Company’s share price declines.

These inducement shares were valued at $39,500 and were amortized over the life

The note can be repaid, without prepayment penalties, within the first 90 days.

Thereafter, the note will incur a 120% prepayment

penalty of the then outstanding principal and interest due.

In May 2018, the company made two principal payments totaling $40,000.

note went into default on June 1, 2018 and incurred a 40% penalty of the outstanding balance immediately prior to the default event.

On August 30, 2018, Hoppel sued the Company in Superior Court of the State of California County of San Diego Central District.

was staid on October 22, 2018 when the Company filed for Chapter 11 protection in the US Bankruptcy Court in the Southern District of

Negotiations took place and a settlement was reached on this note and a subsequent note, and confirmed as part of the Plan Confirmation

Order, that Hoppel would be paid a total of $100,000 out of 5% of the future gross revenue of the Company.

February 2018, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $165,000 due and payable

on September 21, 2018.

The note carries an 8% one-time interest charge, a $15,000 original issue discount and a 40% conversion discount

to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder.

addition, the Company provided 500,000 inducement shares to secure the note.

These inducement shares were valued at $14,500, and were

amortized over the life of the note.

The note can be repaid, without prepayment penalties, within the first 90 days.

Thereafter, the

note will incur a 120% prepayment penalty of the then outstanding principal and interest due.

The Note went into default on June 1, 2018,

through a cross default provision with another Note to Hoppel, and incurred a 40% penalty of the outstanding balance immediately prior

to the default event.

On August 30, 2018, Hoppel sued the Company in Superior Court of the State of California County of San Diego Central

That case was staid on October 22, 2018 when the Company filed for Chapter 11 protection in the US Bankruptcy Court in the

Southern District of Florida.

Negotiations took place and a settlement was reached on this note and a prior note, and confirmed as part

of the Plan Confirmation Order, that Hoppel would be paid a total of $100,000 out of 5% of the future gross revenue of the Company to

settle both notes.

March 27, 2019, the Company entered into an agreement with another creditor, such that its debt will be reduced from $32,000 to $20,000

payable out of future gross revenues, upon the bankruptcy court’s acceptance of the Company’s plan of reorganization.

Plan was confirmed by the Court on September 18, 2019.

to the Company’s Chapter 11 Plan of Reorganization confirmed on September 18, 2019, the Company restructured several outstanding

notes payable and convertible debentures into fixed settlement obligations.

Under the terms of the confirmed Plan, the original terms,

interest rates, and conversion features were terminated in exchange for a combined settlement of $320,630, payable solely out of the

Company’s future gross revenues or a percentage thereof.

As of December 31, 2025 and 2024, the remaining aggregate balance of these

obligations is $320,630.

No additional shares or warrants are issuable under these restructured agreements.

summary of all Notes that remain of those indicated in the Notes above is as follows:

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Current Convertible Notes — Other

Current Convertible Notes – Related Party

Long Term Convertible Notes Payable – Related Party

Long Term Convertible Notes – non-Related Party

Long Term Notes Payable – Related Party

Long Term Notes Payable from future revenue — Related Party

Long Term Notes Payable from future revenue — Other

Long Term Note Payable from future profits — Related Party

Long Term Note Payable from future profits — Other

Long Term Notes Payable from future revenue

TOTAL NOTES PAYABLE

of December 31, 2024, only $50,000 of the $1,700,630 outstanding notes payable was due at a specific point in time.

That $50,000 was

converted in January 2025.

Of the remaining amount outstanding:

$1,330,000 is due on a successful capital raise ranging from $1.5 million

to $5 million;

of December 31, 2025, none of the $1,835,630 outstanding notes payable was due at a specific point in time.

$1,515,000 is due on a successful

capital raise ranging from $1.5 million to $5 million;

and $320,630 will be paid from future revenue or profits.

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for any of its authorized Preferred Stock.

the year ended December 31, 2024, the Company had the following transactions associated to its shares of common stock:

1,970,000 units consisting of one shares of its common stock consisting of one share of common stock and one warrant through private

placements for $ 197,000 .

The warrants have a strike price of $ 0.15 and a five -year expiration.

the year ended December 31, 2025, the Company had the following transactions to its shares of common stock:

Sold 6,830,000

units consisting of one share of common stock and one warrant through private placements for $ 745,000 .

4,350,000 warrants have a strike price of $ 0.15 ,

and 2,480,000 have a strike price of $ 0.18 .

All of these warrants have a

5 five-year expiration.

384,408 shares of its common stock for options exercised cashlessly.

750,000 shares of its common stock for warrants exercised for proceeds of $ 68,750 .

265,046 shares of its common stock with a fair value of $ 38,744 for services.

Issued 672,520 shares of its common stock with a fair value of $ 67,253 for property and equipment.

Issued 384,630 shares of its common stock with a fair value of $ 38,463 for patent and trademark costs.

625,000 shares of its common stock upon conversion of notes payable with a principal balance of $ 50,000 .

the year ended December 31, 2024, the Company had the following transactions associated to its shares of common stock:

6,684,998 units consisting of one share of common stock and one warrant through private placements for $ 1,002,773 .

The warrants have

a strike price of $ 0.25 and a five -year expiration.

174,194 shares of its common stock for services with a fair value of $ 29,300 .

5,450,148 shares of common stock upon exercise of warrants for proceeds of $ 72,251 .

500,000 shares of common stock upon exercise of employee stock options for proceeds of $ 25,000 .

units consisting of one shares of its common stock consisting

of one share of common stock and one warrant through private placements for $ 197,000 .

The warrants have a strike price of $ 0.15

and a 5 five-year expiration.

114,545 shares of its common stock with a fair value of $ 10,095 for services.

3,125,000 shares of its common stock upon conversion of notes payable with a principal balance of $ 250,000 .

activity for the years ending December 31, 2025 and 2024 is as follows:

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Debt-related interest

( 2,401,332 )

Debt conversion

Expired or rescinded

( 3,397,981 )

Exchanged for stock options

Balance, December 31, 2024

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Debt conversion

Expired or rescinded

( 3,397,981 )

Exchanged for stock options

Balance, December 31, 2025

are also 500,000 unvested warrants that vest subject to certain conditions.

of December 31, 2025, outstanding warrants have a weighted average remaining life of 2.83 years.

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for debt-related interest and financing costs having a fair value of $ 24,477 .

the year ended December 31, 2024, the Company issued 303,500 warrants for services having a fair value of $ 23,820 and 180,000 warrants

for debt-related interest and financing costs having a fair value of $ 12,450 .

The Company also cancelled 350,000 warrants and recognized

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options that were granted in prior years.

the year ended December 31, 2023, the Company issued 614,000 warrants for services having a fair value of $ 62,583 and 180,000 warrants

for debt-related interest and financing costs having a fair value of $ 22,094 .

2021, the Company adopted the 2021 Employee, Director Stock Plan (the “2021 Plan”) to provide the Corporation with share-related

mechanisms to attract and retain persons eligible to participate in the 2021 Plan, motivate Participants to achieve long-term Company

goals, and further align holders’ interests with those of the Company’s other stockholders.The Plan was approved by the Corporation’s

shareholders on June 2, 2021.

The Plan allows for grants of restricted stock, stock options and other forms of incentive compensation

to our officers, employees, directors and consultants.

Under the terms of the Plan, the aggregate maximum number of shares that may be

issued pursuant to awards granted under the Plan cannot 15% of the Company’s issued and outstanding common stock on a fully-diluted

goals, and further align holders’ interests with those of the Company’s other stockholders.

The Plan was approved by the

Corporation’s shareholders on June 2, 2021.

The Plan allows for grants of restricted stock, stock options and other forms of incentive

compensation to our officers, employees, directors and consultants.

Under the terms of the Plan, the aggregate maximum number of shares

that may be issued pursuant to awards granted under the Plan cannot 15% of the Company’s issued and outstanding common stock on

a fully diluted basis.

Shares delivered under the Plan will be from authorized but unissued shares of the Company.

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Options expired

Exchanged for warrant

( 1,250,000 )

Options exercised

Balance, December 31, 2024

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Options expired

Exchanged for warrant

( 3,658,335 )

Options exercised

Balance, December 31, 2025

Vested, December 31, 2025

the years ended December 31, 2024 and 2023, the Company recognized share based compensation expense from options of $ 1,649,555

(general and administrative expense of $ 535,395 and research and development expense of $ 1,114,160 ) and $ 637,028

(general and administrative expense of $ 169,382 and research and development expense of $ 467,646 ), respectively.

the years ended December 31, 2025, and 2024, the Company recognized share-based compensation expense from options of $ 956,610 (general

and administrative expense of $ 349,773 and research and development expense of $ 606,837 ) and $ 1,649,555 (general and administrative expense

of $ 535,395 and research and development expense of $ 1,114,160 ), respectively.

weighted average remaining life of outstanding and vested options is 6.5 years and 6.1 years, respectively.

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December 31, 2025, remaining compensation to be recognized as future vesting of stock options is approximately $5.3 million of which

approximately $0.1 million will vest over the next year and approximately $4.1 million will vest upon the probability of achieving performance

milestone criteria.

the year ended December 31, 2024, the Company granted 29,166,571 options with a fair value of $ 2,851,422 under the 2021 Plan.

granted in 2024 had terms ranging from five to ten years except for 1,158,334 options which had a term of 0.25 years.

The 2024 option

grants had exercise prices ranging from $ 0.11 to $ 0.12 .

the year ended December 31, 2023, the Company granted 18,150,000 options with a fair value of $ 2,993,552 under the 2021 Plan.

had a term of ten years with exercise prices ranging from $ 0.16 to $ 0.20 .

approximately $0.3 million will vest over the next year, $0.1 million will vest in subsequent years, and approximately $4.9 million will

vest upon the achievement of performance milestone criteria .

the year ended December 31, 2025, the Company granted 12,774,470 options with a fair value of $ 1,130,723 .

All options granted in 2025

had terms ranging from five to ten years.

The 2025 option grants had exercise prices ranging from $ 0.11 to $ 0.13 .

the year ended December 31, 2024, the Company granted 29,166,571

options with a fair value of $ 2,851,422

under the 2021 Plan.

All options granted in 2024 had terms ranging from 5 five to ten

years except for 1,158,334

options which had a term of 0.25

The 2024 option grants had exercise prices ranging from $ 0.11

Value of Warrants and Stock Options issued:

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compensation issued in the years ended December 31, 2025 and December 31, 2024:

SCHEDULE OF BLACK-SCHOLES OPTION

PRICING MODELS FOR WARRANT-BASED STOCK COMPENSATION

$ 0.061 - $ 0.125

$ 0.106 - $ 0.177

Risk-free interest rate

3.74 % - 4.70 %

3.30 % - 4.72 %

Expected term (in years)

Expected share price volatility

89.73 % - 113.72 %

81.11 % to 123.52 %

Expected dividend yield

0.0 % - 0.0 %

SCHEDULE OF BLACK-SCHOLES OPTION PRICING MODELS FOR WARRANT-BASED STOCK COMPENSATION

interest rate

term (in years)

share price volatility

dividend yield

8 – INCOME TAXES

benefit (provision) has been recognized for the years ended December 31, 2025, and 2024.

The reconciliation of income tax benefit at the

The reconciliation of income tax benefit at

statutory rate of 21% for years ending December 31, 2025, and 2024, to the Company’s effective tax rate, is as follows:

SCHEDULE OF RECONCILIATION BETWEEN STATUTORY TAX RATE AND EFFECTIVE TAX RATE

Statutory federal income tax rate

State income tax, net of federal benefits

December 31, 2025

December 31, 2024

Benefit (provision) at statutory rate

Effect of Florida state income tax, net of federal benefits

Non-deductible items

Change in prior year estimate

Change in Valuation Allowance

Income tax provision (benefit)

Income tax benefit (provision)

tax effects of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2025, and 2024

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Net operating loss carryovers

Research and development

Total deferred tax assets

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( 13,329,866 )

Deferred tax asset, net of allowance

Deferred tax assets, net of allowance

Deferred tax liability – property and equipment

Net Deferred tax asset

of December 31, 2025, the Company has U.S.

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The original lease, signed in 2019, had a 5 five-year term and was renewed by the Company in 2024 for an additional

The renewed lease includes escalating monthly payments ranging from $ 9,100 to $ 10,242 .

For the initial measurement of the

lease liability and right-of-use asset, the Company applied a discount rate of 10.0 %, reflecting its estimated incremental borrowing

As of December 31, 2024, the weighted average remaining lease term for the operating lease was 4.9 years.

The renewed lease includes escalating monthly payments ranging from $ 9,100

to $ 10,242 .

For the initial measurement of the lease liability and right-of-use asset, the Company applied a discount rate of 10.0 %,

reflecting its estimated incremental borrowing rate.

As of December 31, 2025, the weighted average remaining lease term for the operating

lease was 3.9

December 31, 2025, minimum lease payments to be paid by the Company are as follows:

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with an annual cost of $ 6,370 and includes a renewal option for up to five years .

A second lease, covering an additional 167.6 acres,

began on March 31, 2023, at a semi-annual cost of $ 24,721 , also with a renewal option for up to five years .

As these leases can be terminated

at will, they are not recognized as right-of-use assets or lease liabilities on the Company’s balance sheet.

The lease for the

167.6 acres was not renewed in 2024.

It has been renewed for 2025-2026.

As this lease can

be terminated at will, it is not recognized as right-of-use assets or lease liabilities on the Company’s balance sheet.

the year ended December 31, 2025, and 2024, the Company recognized rent expense, including common area maintenance fees and state sales

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Party transaction with the Company are as follows:

Short-term notes payable,

convertible notes, and legacy liabilities issued to related parties are described in NOTE 6.

A board resolution was

passed on February 13, 2020 that pledged the patents and pending patents to secure the back pay claims of Ben Slager, CEO, Anthony

Santelli, CFO, and Charles Sills, Director.

This was done to ensure the continued involvement of management to build the Company

while they receive less than full salaries.

During 2024, the board

of directors approved an increase in salaries to two officers of the Company retroactive to August 1, 2023, in light of the fact

that they are not receiving payments of salaries on a consistent basis.

CEO Ben Slager is to receive annual salary of $ 525,000 and

CFO Anthony Santelli $ 325,000 .

In June 2024, the board

of directors approved a partial anti-dilution compensation for CEO Ben Slager, CFO Anthony Santelli, and Director Chris Kneppers

to be paid in restricted stock units and stock options of 4 %, 3 %, and 3 %, respectively, of the equity and warrants sold to investors

on the next $ 50 million in equity raised into the Company or its subsidiaries.

This is compensation for their deferring salary or

lending funds to the Company until such raise(s) is affected.

These restricted share units will be issued as the Company raises capital

through sale of its common stock.

As of the end of 2024, Ben Slager is to be issued 88,800 RSUs and options with a 15 cent exercise

price and expiring on November 14, 2029, and both Anthony Santelli and Chris Kneppers are each to be issued 66,600 RSUs and 66,600

notes payable, convertible notes issued to related parties are described in NOTE 6.

board resolution was passed on February 13, 2020 that pledged the patents and pending patents to secure the back pay claims of Ben

Slager, CEO, Anthony Santelli, CFO, and Charles Sills, Director.

This was done to ensure the continued involvement of management

to build the Company while they receive less than full salaries.

2024, the board of directors approved an increase in salaries to two officers of the Company retroactive to August 1, 2023, in light

of the fact that they are not receiving payments of salaries on a consistent basis.

CEO Ben Slager is to receive annual salary of

$ 525,000 and CFO Anthony Santelli $ 325,000 .

June 2024, the board of directors approved a partial anti-dilution compensation for CEO Ben Slager, CFO Anthony Santelli, and Director

Chris Kneppers to be paid in restricted stock units and stock options of 4 %, 3 %, and 3 %, respectively, of the equity and warrants

sold to investors on the next $ 50 million in equity raised into the Company or its subsidiaries.

This is compensation for their deferring

salary or lending funds to the Company until such raise(s) is affected.

These restricted share units will be issued as the Company

raises capital through sale of its common stock.

As of the end of 2025, Ben Slager is to be issued 382,000 RSUs and 282,800 options

with a 15 cent exercise price and 99,200 options with an 18 cent exercise price, all expiring five years from the date of issuance,

and both Anthony Santelli and Chris Kneppers are each to be issued 286,500 RSUs and 212,100 options with a 15-cent exercise price

and 74,400 with an 18-cent exercise price.

These remain payable as of December 31, 2025.

As of April 1, 2024, the

board of directors approved ceasing accruing interest on back pay due to officers and on directors’ fees.

In lieu of interest,

the Company will pay an additional $ 25,000 to each director contingent upon the financing of the first plant or the successful uplisting

to the NYSE or Nasdaq.

Similarly, a performance bonus equal to 100 % of the outstanding back pay balance due to Officers Ben Slager

and Anthony Santelli shall be paid contingent upon the financing of the first plant.

These amounts automatically come due upon a

Change of Control or if the Company files for bankruptcy under Chapter 11 or Chapter 7.

As of August 28, 2024,

each Director that is not an Officer shall receive 3.5% in cash and 3.5% in warrants for any investor first introduced to the Company

by the Director.

The warrants shall either be at the same price as any warrants being offered in the raise, or, if there are no warrants

in the raise, then at the closing market price on the date in which the funds are received.

All warrants will have a 5-year expiration

from the date of the investment.

of April 1, 2024, the board of directors approved ceasing accruing interest on back pay due to officers and on directors’ fees.

In lieu of interest, the Company will pay an additional $ 25,000 to each director contingent upon the financing of the first plant

or the successful uplisting to the NYSE or Nasdaq.

Similarly, a performance bonus equal to 100 % of the outstanding back pay balance

due to Officers Ben Slager and Anthony Santelli shall be paid contingent upon the financing of the first plant.

These amounts automatically

come due upon a Change of Control or if the Company files for bankruptcy under Chapter 11 or Chapter 7.

of August 28, 2024, each Director that is not an Officer shall receive 3.5% in cash and 3.5% in warrants for any investor first introduced

to the Company by the Director.

The warrants shall either be at the same price as any warrants being offered in the raise, or, if

there are no warrants in the raise, then at the closing market price on the date in which the funds are received.

All warrants will

have a 5-year expiration from the date of the investment.

No such cash/warrants were earned in 2025.

December 15, 2025, the Board of Directors approved of a $500,000 bonus for Ben Slager for having met the milestone of being able

to produce over 500 lbs of sugar in an 8-hour day, an offer originally made on March 12, 2021, as an incentive to upscale and commercialize

the Company’s patented CTS system .

11 – GRANT INCOME

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The purpose of the grant

is to support the further development of the Company’s patented CTS process and to bring it to the point of being commercially

was to support the further development of the Company’s patented CTS process and to bring it to the point of being commercially

Accounting for this DOE grant does not fall under Accounting Standard Codification 606, Revenue from Contracts with Customers ,

1 unchanged sentence

the year ended December 31, 2025, $ 865,000 was recognized as grant income for this grant.

The Company anticipates recognizing an additional

$ 870,000 on this grant over the next 12 months.

July, 2023, the Company was awarded an SBIR Phase I grant by the U.S.

DOE in the amount of $ 206,500 .

The purpose of the grant was to

support the development of the Company’s patented CTS process and its scaling.

Accounting for this DOE grant does not fall under

Accounting Standard Codification 606, Revenue from Contracts with Customers , as the DOE does not meet the definition of a customer

under this standard.

The entire amount was recognized in 2023.

During the year ended December 31, 2024, $ 285,000

was recognized as grant income for this grant.

There is no additional grant money from this grant.

12 – SUBSEQUENT EVENTS

2 unchanged sentences

the Company has identified the following subsequent events:

to December 31, 2024, the Company issued 44,000 shares of its common stock upon the cashless exercise of 100,000 stock options.

Company converted a convertible note for $ 50,000 into 625,000 shares of the Company’s common stock and 625,000 warrants with an

exercise price of 10 cents and a 5 -year expiration.

Company borrowed an additional $ 100,000 from board member Chris Kneppers (see Note 6).

The board of directors granted 1,659,090 options with exercise price of

$ 0.11 to the Company’s employees.

to December 31, 2025:

Company issued 2,426,000 shares of its common stock for proceeds of $ 272,000 .

options vested and 10,000 options expired.

shares were issued for services.

– 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