MAGELLAN COPPER & GOLD Corp 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. We use the terms “Magellan,” “we,” “our,” and “us” to refer to Magellan Copper & Gold Corp. The following discussion and analysis provide information that management believes is relevant for an assessment and understanding of our results of operations and financial condition. This information should be read in conjunction with our audited financial statements, which are included in our Annual Report on Form 10-K for the fiscal years ended December 31, 2025 and 2025. Overview We were incorporated on September 28, 2010, in Nevada. Our principal business is the acquisition and exploration of mineral resources. We have not presently determined whether our properties to which we have mineral rights contain mineral reserves that are economically recoverable. We have only had limited operations to date, and we rely upon the sale of our securities and borrowings from significant investors to fund our operations, as we have not generated any revenue. See Item 1 of this report for information regarding our mining properties. Results of Operations for the Years Ended December 31, 2025 and 2024 Years Ended December 31, 2025 2024 Operating expenses: General and administrative expenses $ 181,548 $ 319,938 Impairment expense 100,000 422,565 Total operating expenses 281,548 742,503 Operating loss (281,548 ) (742,503 ) Other income (expense): Interest expense (77,934 ) (82,921 ) Gain (loss) on conversion of debt (19,950 ) 16,329 Gain (loss) on change in derivative liability (52,593 ) 39,285 Total other income (expense) (150,477 ) (27,307 ) Net loss $ (432,025 ) $ (769,810 ) 21 Operating expenses During the year ended December 31, 2025, our total operating expenses were $281,548 as compared to $742,503 during the year ended December 31, 2024. The $460,955 decrease is primarily associated with the $422,565 impairment expense related to the Blue Jacket and Cuprum project and development costs during the year ended December 31, 2024. Other income (expenses) During the year ended December 31, 2025, total other expenses were $150,477 as compared to $27,307 during the year ended December 31, 2024. The $123,170 change was mainly related to a $91,878 increase in loss on change in derivative liability and a $36,279 increase in loss on conversion of debt in 2025. Liquidity and Capital Resources: Our audited consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. At December 31, 2025, we had not yet generated any revenues or achieved profitable operations and we have accumulated losses of $22,195,613. We expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. During the year ended December 31, 2025, the Company entered into a subscription agreement to issue 1,000,000 shares of common stock at $0.14 per share for total cash proceeds of $140,000. During the year ended December 31, 2024, the Company issued unsecured promissory notes totaling $115,000 with a related party. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock but cannot assure that any future financings will occur. Cash Flows A summary of our cash provided by and used in operating, investing, and financing activities is as follows: Years ended December 31, 2025 2024 Net cash used in operating activities $ (36,959 ) $ (142,703 ) Net cash provided by financing activities 36,610 143,500 Net change in cash (349 ) 797 Cash at beginning of period 896 99 Cash at end of period $ 547 $ 896 At December 31, 2025, we had $547 in cash and a $2,093,260 working capital deficit. This compares to $896 in cash and a working capital deficit of $1,981,883 at December 31, 2024. 22 Net cash used in operating activities during the year ended December 31, 2025 was $36,959 and was mainly comprised of our $432,025 net loss during the period, adjusted by non-cash charges of $100,000 of impairment expense, $29,666 of stock compensation, loss on conversion of debt of $19,950 and a loss on change in derivative liability of $52,593. In addition, it reflects changes in operating assets and liabilities of $192,857. Net cash used in operating activities during the year ended December 31, 2024 was $142,703 and was mainly comprised of our $769,810 net loss during the year, adjusted by $422,565 of impairment expense, stock compensation expense of $61,983, $16,329 gain on conversion of debt and $39,285 gain on change in derivative liability. In addition, it reflects changes in operating assets and liabilities of $198,173. Net cash provided by financing activities during the year ended December 31, 2025 was $36,610 comprised of $140,000 in proceeds from sale of common stock and $10,000 advances from third parties offset by repayment of notes payable of $20,000 and repayment of advances of $93,390. Net cash provided by financing activities during the year ended December 31, 2024 was $143,500 comprised of $115,000 proceeds from notes payable from related parties and $29,500 proceeds from advances which were offset by $1,000 repayment of notes payable.