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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-04-16 · 26 added, 36 removed, 53 unchanged (54% of the section changed)

17 unchanged sentences

We intend to effectuate our business combination using cash derived from the proceeds of the Initial Public Offering and the sale of the private placement units, our shares, debt or a combination of cash, shares and debt.

On March 20, 2025 we changed our state of incorporation from the State of Delaware to State of Florida.

RESULTS OF OPERATIONS

1 unchanged sentence

Revenues for the years ended December 31, 2024 and 2023 were $807,089 and $488,520, respectively.

The increase is due to a full year of revenues for our environmental services subsidiary as well as an increase in fee income due to full year of income in the respective investments.

We generated non-operating income in the form of interest income on marketable securities held in the trust account.

The increase is due to increased volume for our environmental services subsidiary.

Total cost of revenues for the year ended December 31, 2024 and 2023 were $22,699 and $16,594, respectively.

The increase is due to increased volume for our environmental services subsidiary.

Total Operating Expenses for the year ended December 31, 2024 and 2023 were $1,096,748 and $777,600, respectively.

The main driver of operating expenses were administrative, professional fees, and salaries.

Total Other Income and Expense for the year ended December 31, 2023 and 2022 were ($380,315) and $4,674,395, respectively, mostly from the fair value adjustments of warrant liabilities, convertible debt interest and amortization expense intangibles.

The main reason for the increase to operating expenses were due to additional public company listing fees in addition to professional fees to keep the company compliant.

Total Other Income and Expense for the year ended December 31, 2024 were other income of $198,097, mostly from interest income, income from investment in FUB Mineral which is accounted for on the equity method of accounting, the fair value adjustments of warrant liabilities, and interest expense.

Total Other Income and Expense for the year ended December 31, 2023 were other expense of $807,971.

The increase was primarily due to a gain on fair value of warrants liabilities, an increase in interest income, and a decrease in interest expense due to all convertible notes being converted at time of business combination.

Financial Condition.

Total Assets as of December 31, 2024 and 2023 amounted to $15,040,664 and $15,040,123, respectively.

The large decrease in assets was due to trust redemptions of $7,613,762.

The increase in assets was due to an increase in accounts and interest receivables.

Total Liabilities as of December 31, 2024 and 2023 amounted to $1,414,940 and $3,926,243, respectively.

The primary drivers for the decrease in liability balance was the conversions of convertible notes payable and redemption of deferred underwriter commissions.

The primary driver for the decrease in liability balance was the conversions of accrued wages and notes payable to preferred stock shares.

See Note 12 for additional information.

LIQUIDITY AND CAPITAL RESOURCES

In March 2021, the initial stockholders purchased 2,875,000 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price of $25,000.

On March 17, 2021, we consummated an initial public offering of 10,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $100,000,000 (the “Initial Public Offering”).

Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 3,800,000 Private Warrants to our initial stockholders generating gross proceeds of $3,800,000.

Following the Initial Public Offering and the sale of the Private Warrants, a total of $101,000,000 was placed in the trust account.

We incurred $3,910,297 in Initial Public Offering related costs, including $3,500,000 of underwriting fees and $410,297 of other costs.

For the period from its inception though June 30, 2021, cash used in operating activities was $618,833 mostly from administrative and due diligence costs.

Cash generated from financing activities were $102,414,704 related to the proceeds of our Initial Public Offering and sale of Private Warrants.

On March 29, 2022 - trust redemption of $90,334,512,92, reducing the trust account balance to $15,788,742.13.

The redemption was allowed under initial offering documents at the time of trust extension which was necessary because a business combination had not been completed.

On September 28, 2022, a second trust redemption of $8,331,836.23.

The redemption was allowed under initial offering documents at the time of trust extension.

As of December 31, 2022 and October 31, 2023, the effective date of our business combination, the balance in the trust account was $7,613,761.76 and $0.00, respectively.

We intended to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination.

To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of December 31, 2023, we have unrestricted cash of $77,023.

We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel (to the extent necessary and practicable) to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.

Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses.

However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company.

In addition, profitability will ultimately depend upon the level of revenues received from business operations.

However, there is no assurance that the Company will attain profitability.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

The Company’s primary use of positive cash flow has been to fund corporate holding and public company costs.

As of December 31, 2024, the Company had retained earnings of $1,231,588.

The Company has limited financial resources.

As of December 31, 2024, the Company had a working capital deficit of $236,740, a cash balance of $114,138 and cash flow from operations totaling $690,443.

Management believes that the Company has sufficient liquidity to meet its obligations through at least the first quarter of 2026.

In order to execute on its investment and growth plans, the Company will likely be required to raise additional proceeds, through the issuance of equity or debt securities.

See Note 11 to the Company’s consolidated financial statements for more information on its Debt Facilities.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements as of December 31, 2023 and December 31, 2022.

We have no off-balance sheet arrangements as of December 31, 2024 and 2023.

We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

4 unchanged sentences

The Company agreed to pay the Sponsor $10,000 per month for these services.

As of December 31, 2022 and October 31, 2023, the effective date of the business combination and termination of the services agreement, $120,000 and $0, respectively, has been paid under this agreement.

At the date of business combination, the services agreement terminated.

As of the year ended December 31, 2024, $120,000, is accrued and owed under this agreement.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our Consolidated Financial Statements are prepared in accordance with GAAP.

The preparation of financial statements in conformity with GAAP requires us to establish accounting policies and make estimates that affect amounts reported in our Consolidated Financial Statements.

Our Consolidated Financial Statements are prepared in accordance with United States generally accepted accounting principles (“U.S.

The preparation of financial statements in conformity with U.S.

GAAP requires us to establish accounting policies and make estimates that affect amounts reported in our Consolidated Financial Statements.

Note 2 of the Notes to Consolidated Financial Statements, which is incorporated by reference into this MD&A, describes the significant accounting policies we use in our Consolidated Financial Statements.

3 unchanged sentences

Warrant Liability

The Company accounts for the Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

The Company accounts for the Warrants in accordance with the guidance contained in ASC 815 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period.

6 unchanged sentences

Words such as “believe,” “anticipate,” “expect,” “will,” “may,” “should,” “intend,” “plan,” “estimate,” “predict,” “potential,” “continue,” “likely,” “would,” “could” and similar expressions are intended to identify forward-looking statements.

Investors are cautioned that all forward-looking statements involve risk and uncertainties including, without limitations, dependence on sales forecasts, changes in consumer demand, seasonality, impact of weather, competition, reliance on suppliers, risks inherent to international trade, changing retail trends, the loss or disruption of our manufacturing and distribution operations, cyber security breaches or disruption of our digital systems, fluctuations in foreign currency exchange rates, economic changes, as well as other factors set forth under the caption “Item 1A, Risk Factors” in this Annual Report on Form 10-K and other factors detailed from time to time in our filings with the Securities and Exchange Commission.

Investors are cautioned that all forward-looking statements involve risk and uncertainties including, without limitations, dependence on sales forecasts, changes in consumer demand, seasonality, impact of weather, competition, reliance on suppliers, risks inherent to international trade, changing retail trends, the loss or disruption of our manufacturing and distribution operations, cyber security breaches or disruption of our digital systems, fluctuations in foreign currency exchange rates, economic changes, and other factors detailed from time to time in our filings with the Securities and Exchange Commission.

Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate.

5 unchanged sentences

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 7. Management’s Discussion and Analysis