MAGELLAN COPPER & GOLD Corp 10-Q

ITEM 2. 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 year ended December 31, 2025, and our interim unaudited financial statements and notes thereto included with this report in Part I, Item 1. Forward-Looking Statements Some of the information presented in this Form 10-Q constitutes “forward-looking statements”. These forward-looking statements include, but are not limited to, statements that include terms such as “may,” “will,” “intend,” “anticipate,” “estimate,” “expect,” “continue,” “believe,” “plan,” or the like, as well as all statements that are not historical facts. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from current expectations. Although we believe our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from expectations. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. 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 the 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. Our current focus is to advance the Ophir Creek Placer Gold Mine towards resource definition and eventual development. Secondarily, we may acquire additional mineral projects which could add earlier revenue to the Company. The Company is currently severely restrained by access to capital and any plans with respect to its existing or future projects are subject to availability of capital on reasonable terms. In the past, and for the foreseeable future, we will continue to rely upon the sale of our securities as well as advances and loans from executive management, and also from significant shareholders, to fund our operations as we do not generate consistent revenue. Prospective investors should note that there is no assurance that additional capital will be available to the Company to carry out its stated work plans. 15 Results of Operations for the three months ended March 31, 2026 and 2025 Three months ended March 31, 2026 2025 Operating expenses: General and administrative expenses $ 113,041 $ 58,036 Total operating expenses 113,041 58,036 Operating loss (113,041 ) (58,036 ) Other income (expense): Interest expense (22,433 ) (23,343 ) Loss on conversion of debt – (19,950 ) Loss on change in derivative liability (33,479 ) (82,811 ) Total other income (expense) (55,912 ) (126,104 ) Net loss $ (168,953 ) $ (184,140 ) Operating expenses During the three months ended March 31, 2026, our total operating expenses included general and administrative expenses of $113,041 as compared to $53,036 during the three months ended March 31, 2025. The $55,005 change was mainly related to an increase in professional fees. Other income (expense) During the three months ended March 31, 2026, total other expense was $55,912 as compared to $126,104 during the three months ended March 31, 2025. The $70,192 change was mainly related to change in derivative liability. Liquidity and Capital Resources Our unaudited 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 March 31, 2026, we had not yet generated sufficient revenues or achieved profitable operations, and we have accumulated losses of $22,364,566. We expect to incur further losses in the development of our business, all of which raises 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, of which there can be no assurance. 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 debt or equity financing will occur. 16 Cash Flows A summary of our cash provided by and used in operating, investing and financing activities is as follows: Three months ended March 31, 2026 2025 Net cash used in operating activities $ (5,893 ) $ (21,708 ) Net cash provided by financing activities 5,850 26,610 Net change in cash (43 ) 4,902 Cash beginning of period 547 896 Cash end of period $ 504 $ 5,798 At March 31, 2026, we had $504 in cash and a $2,264,897 working capital deficit. This compares to cash of $547 and a working capital deficit of $2,093,260 at December 31, 2025. Net cash used in operating activities during the three months ended March 31, 2026 was $5,893 and was mainly comprised of our $168,953 net loss during the period, adjusted by non-cash charges of $11,466 of stock compensation, and a loss on change in derivative liability of $33,479. In addition, it reflects changes in operating assets and liabilities of $118,115. Net cash used in operating activities during the three months ended March 31, 2025 was $21,708 and was mainly comprised of our $184,140 net loss during the period, adjusted by a non-cash charges of $8,220 of stock compensation, loss on conversion of debt of $19,950 and a loss on change in derivative liability of $82,811. In addition, it reflects changes in operating assets and liabilities of $51,451. During the three months ended March 31, 2026, net cash provided by financing activities was $5,850 comprised of $20,000 in proceeds from advances from third parties offset by the repurchase of common stock, related party of $14,150. During the three months ended March 31, 2025, net cash provided by financing activities was $26,610 comprised of $140,000 in proceeds sale of common stock were offset by repayment of notes payable of $20,000 and repayment of advances of $93,390. Off Balance Sheet Arrangements We do not have and have never had any off-balance sheet arrangements. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial statements, including the following: long lived assets; intangible assets valuations; and income tax valuations. Management relies on historical experience and other assumptions believed to be reasonable in making its judgment and estimates. Actual results could differ materially from those estimates. Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change. 17 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.