ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Annual Report. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See “Forward-looking Statements” for a discussion of the uncertainties and assumptions associated with these statements. Our actual results may differ materially from those discussed below.
Water Pollution Control Permit
Through the Company’s subsidiaries, a Water Pollution Control Permit (“WPCP”) Application will need to be filed with the Nevada Department of Environmental Protection (“NDEP”) Bureau of Mines and Mining Reclamation (“BMMR”) for the approval of the permits necessary for a small-scale mineral processing facility planned for the Tonopah Property. The plant will perform laboratory testing, pilot testing, and custom processing of precious metal ores and concentrates from mining industry clients. Processing of ore materials will employ standard mineral processing techniques including gravity concentration, froth flotation and chemical leaching and carbon stripping.
The WPCP must be approved prior to commencing the planned construction of our processing plant in Tonopah, Nevada.
In connection with the WPCP application, NDEP suggested that we take the following actions: (i) retain a Nevada Certified Environmental Manager (“CEM”), (ii) perform Meteoric Profile II water testing on ground water directly below the mill as well as surrounding wells located off site, and (iii) determine baseline values of water using the Meteoric Profile II results. NDEP regulations require that the Company delay any new construction planned for “metal extraction” until after the permits are in place.
Advanced Surveying & Professional Services, a Professional Land Surveyor (“PLS”), completed surveys and testing of the Tonopah property required for the application of our required permits. After completion of the survey, it was determined the property is 1,186 acres. The scope of work the PLS completed includes: (i) setting a total of 19 permanent monuments at angle points along lines, (ii) setting eight permanent monuments locating US Hwy 95, (iii) recording a professional map indicating longitude and latitude for all corners, and (iv) providing a digital map accessible in AutoCAD software.
Site Preparation
We have completed the initial grading of specific designated areas on the 40 undisturbed acres of land including clearing all vegetation, removing of all scrap metal, and the excavation of the building pad for the preparation of the new 21,875 square foot processing plant and have completed the removal of all the extra and unnecessary materials and old equipment that have accumulated on the land. We refurbished a trailer that will act as our construction office.
Business Plan
We seek to establish ourselves as a custom processing and permitted toll milling service provider. Our business plan is to build a facility on our Tonopah property, which includes an analytical lab, pyrometallurgical, and hydrometallurgical recovery plant.
The Company’s intention is to become a fully permitted custom toll milling and processing company that facilitates the extraction of precious and strategic minerals from mined material. The Company will need to obtain permits for the planned construction and operation of our permitted custom processing toll milling facility with state-of-the-art equipment capable of processing gold, silver and platinum metal groups. Many junior miners do not have the capital or the ability to permit a processing facility, yet they have a large supply of mined material that requires milling to be performed. It is often cost prohibitive or impractical for these mine operators to send their materials to processing mills owned by the large mining companies, or to other customers badly needing milling and processing services.
While Nevada has a historic role as a mining center with good proximate geology and ample mined product, very little custom processing toll milling capacity remains in the state. During the last several decades, other processing facilities have been shuttered due to high costs of regulations and the vertical integration of milling within large mining companies leaving junior miners with few options for local milling services. As a result, we are in a unique position among processing facilities because we are capable of truly permitted custom processing. If and when our Tonopah processing facility is constructed, permitted, and becomes operational, management believes the Company could have the only independent custom toll milling ball mill within a 300-mile radius, which may allow us to serve miners in the western United States, Canada, Mexico, and Central America. However, until construction and permitting are completed and operations commence, we are not able to provide these services or realize this potential competitive advantage.
Many junior miners are undercapitalized, have limited access to capital markets and have a large supply of mined material that requires milling to be performed. Many large mining companies reserve their milling capacity for their inventory, which does not make providing third party services worthwhile. This provides the Company with an opportunity to provide these potential customers with badly needed milling and processing services. If operations commence, certain mining customers may be able to take their tailings (the material left over after the desired minerals have been extracted) from material deposited with the Company and return those tailings to the originating mines, which could reduce the Company’s need to dispose of such tailings.
In addition to the custom processing and permitted toll milling business, the Company is exploring the establishment of an industrial park on the Millers property in Esmeralda County, Nevada. The industrial park would serve as a central hub for renewable energy generation and storage, operating around the clock to attract and support tenants committed to producing NetZero goods and services, with a focus on data centers and AI farms. The industrial park will include a commercial solar farm, battery storage plus land dedicated to industrial storage, waste-to-energy generation and industrial manufacturing. The Company is actively exploring various funding sources to advance the establishment of the industrial park. Once operational the industrial park is envisioned to include a 2 GW solar farm, large battery storage centers, four 100,000 square foot data centers plus several industrial partners engaged in recycling industrial waste materials that include discarded windmill blades, corporate carpets, and other industrial manufacturing operations that are large consumers of renewable energy.
In addition to the custom processing and permitted toll milling business, the Company is exploring the establishment of an industrial park on the Millers property in Esmeralda County, Nevada. The industrial park would serve as a central hub for renewable energy generation and storage, operating around the clock to attract and support tenants committed to producing NetZero goods and services, with a focus on data centers and AI farms. The industrial park will include a commercial solar farm, battery storage plus land dedicated to industrial storage, waste-to-energy generation and industrial manufacturing. The Company is actively exploring various funding sources to advance the establishment of the industrial park. Once operational the industrial park is envisioned to include a 2 GW solar farm, large battery storage centers, four 100,000 square foot data centers plus several industrial partners engaged in recycling industrial waste materials that include discarded windmill blades, corporate carpets, and other industrial manufacturing operations that rely on are large consumers of renewable energy.
The planned industrial park will be called the ACRG Greenway to Power TM Renewable Energy Industry Park. It is envisioned as a large-scale industrial project planned on the 1,183 acre Millers property. The state-of-the-art facility will serve as a central hub for renewable energy generation and storage, operating 24/7/365 to attract and support tenants committed to producing NetZero goods and services. The industrial park will be designed to attract high-tech data centers and other energy-intensive industries by leveraging its unique advantages. These unique advantages include:
Direct proximity to the 16,787 acre Millers Solar Energy Zone (SEZ).
Planned Greenlink West grid access through NV Energy Esmeralda substation.
Located next to Highway 95 with access to the Hawthorne Railway.
388 acre-feet of water rights (126 million gallons annually).
Strategic access to a major fiber optic junction.
120-kV electrical power substation located on the Miller property.
Existing cell phone tower located on the Millers property.
The above advantages are leveraged to establish a state-of-the-art industrial park centered around the ability to provide reliable power from an industrial scale solar farm supported by battery storage, the construction of four 100,000 square foot data centers, ownership of exclusive water rights, and a commitment to sustainability. The Company is exploring opportunities in industrial storage whereby part of the 1,183 acre property will be allocated to be used for industrial storage by third-party companies. The industrial storage operations will transition over time into waste-to-energy and industrial manufacturing operations as the solar farm becomes operational, providing access to green electricity for NetZero manufacturing. We have identified the industrial storage of discarded commercial windmill blades as a potential business, where the windmill blades are initially stored and later recycled on site. The fiberglass and plastic are repurposed while the remaining residue is used for cement production and waste-to-energy processes, converting the remaining material into usable energy forms such as steam. Other waste-to-energy materials include industrial carpets and composite materials.
The Company will seek to raise equity capital to fund the initial industrial park project development stages which include the creation of overall project plans, enhanced operational and financial analysis, screening and selection of potential partners and vendors, and securing city, state and federal support for the project. This includes, but is not limited to, laying the groundwork through infrastructure, regulatory, and labor partnerships. Parallel to the above activities the Company will explore various grants (direct grants and matching grants) and low-cost debt funding sources to support the initial project development stages.
As the project becomes more defined, additional equity and debt will be secured to fund further project development, including the build-out of infrastructure, construction of four 100,000 square foot data farm structures, completion of the milling facility and four separate 0.5 GW solar farms in addition to attracting waste-to-energy and industrial storage operations to the location. The potential total scope of the ACRG Greenway to Power™ Renewable Energy Industrial Park, if fully developed as currently contemplated, could involve multi-year capital investment that management currently estimates could reach several billion dollars, inclusive of anticipated third-party investments. These estimates are preliminary, subject to change, and dependent on market conditions, financing availability, regulatory approvals, and execution risk.
Related Party Operating Lease
The Company leases its corporate office space from an affiliate of its majority stockholder under a related-party operating lease, which resulted in the recognition of a right-of-use asset and lease liabilities on the balance sheet as of December 31, 2025 (see Note 5 – Operating Lease – Related Party).
Rescission of SWIS LLC Transaction
On November 21, 2025, the Company entered into a Rescission Agreement with LaunchIT LLC to unwind the prior acquisition of SWIS LLC. Under the terms of the rescission, LaunchIT returned 1,470,000 shares of the Company’s common stock to the Company, and the Company retired and canceled those shares, resulting in a permanent reduction in the number of shares outstanding. In exchange, the Company transferred 100% of the equity interests in SWIS LLC back to LaunchIT, effective as of the closing date of the rescission.
The Company also agreed to provide LaunchIT total consideration of $230,000 in cash and note payable, consisting of $25,000 paid at closing, an additional $100,000 paid in early December 2025, and a $105,000 promissory note payable in four equal monthly installments during the first quarter of 2026.
As a result of the Rescission Agreement, the Company deconsolidated SWIS LLC as of November 21, 2025. Because the original SWIS acquisition was accounted for as an asset acquisition and the related developed technology intangible asset had been fully impaired as of December 31, 2024, the rescission and deconsolidation did not have a material impact on the Company’s results of operations for 2025. No gain or loss was recognized on the rescission transaction, as it was accounted for as an equity transaction with a former shareholder. Following the rescission, the Company no longer holds any interest in SWIS LLC and has redirected its focus to its core toll milling and critical minerals processing strategy.
Subsequent Changes to Management
Subsequent to year-end, on February 27, 2026, the Company appointed Luke McPherson as its new Chief Financial Officer to enhance financial oversight, technical accounting capabilities, and internal control remediation efforts. The Company’s former Chief Financial Officer, Sharon L. Ullman, transitioned to the role of Chief Regulatory and Sustainability Officer. Management believes this leadership change strengthens the Company’s financial reporting and compliance functions as it continues to address identified material weaknesses in internal control over financial reporting.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024.
The following table summarized our results of operations for the periods presented:
For the Years Ended
December 31,
Operating expenses:
General and administrative expenses
Impairment Expense
Total operating expenses
Loss from operations
Other income (expense):
Other income
Interest expense
Total other expense, net
Loss before income tax provision
Income tax provision
Net (loss)
Basic and diluted net loss per common share
Basic and diluted weighted average common shares outstanding
Revenues
We had no revenues from any operations for the years ended December 31, 2025 and 2024. Furthermore, we do not anticipate any significant future revenue until we have sufficiently funded construction and begin operations.
General and Administrative Expenses
General and administrative expenses were $1,406,459 and $992,142 for the year ended December 31, 2025 and 2024, respectively. The increase was primarily due to increases in expenses related to accounting, legal, consulting fees, amortization expense, and board compensation. We anticipate that future administration and operating expenses will increase for fiscal 2025 as we work toward completion of the planned merger.
Impairment Expenses
Impairment expense was $0 for the year ended December 31, 2025, compared to $4,574,871 for the year ended December 31, 2024. In 2024, management determined that the carrying amount of the SWIS developed technology intangible asset (approximately $4.57 million) was not recoverable and recorded a full impairment charge (see Note 3). No similar impairment was needed in 2025, as the SWIS asset had already been fully written off.
Other Income and Expenses
During the years ended December 31, 2025 and 2024, other expenses increased by $148,366. The increase is primarily due to an increase in interest expense of $144,510 and a decrease in other income of $3,856.
Liquidity and Capital Resources
As of December 31, 2025, we had cash of approximately $5,000 and total current assets of approximately $48,000, compared to total current liabilities of approximately $4.5 million, resulting in a working capital deficit of approximately $4.4 million. We have not generated any revenues from operations and have incurred recurring operating losses, including a net loss of approximately $1.9 million for the year ended December 31, 2025. These conditions significantly constrain our liquidity and limit our ability to fund ongoing operations.
Recent Financing and Capital Transactions
During 2025, the Company completed several significant equity transactions that materially affected its capital structure. On December 31, 2025, the Company converted $1.73 million of debt owed to its majority stockholder, Granite Peak Resources, LLC (“GPR”), into equity through the issuance of 1,644,906 shares of common stock at a conversion price of $1.05 per share. This debt-for-equity conversion eliminated all remaining obligations under the related-party line of credit and reduced future cash interest requirements, although it did not provide additional liquidity.
In addition, in November 2025, the Company rescinded its prior acquisition of SWIS, LLC (formerly LaunchIT). As a result of this rescission, 1,470,000 shares of common stock were returned to the Company and retired, reducing the number of issued and outstanding shares. The rescission resulted in the deconsolidation of SWIS and removed the associated assets and obligations from the Company’s balance sheet.
As a result of these transactions, the Company had 14,099,393 shares of common stock outstanding as of December 31, 2025. Management believes these actions strengthened the Company’s balance sheet by reducing liabilities and simplifying the capital structure; however, the Company continues to have limited liquidity and remains dependent on additional financing to fund operations.
We have historically financed our operations primarily through advances and funding from our majority stockholder under a related-party line of credit. During the year ended December 31, 2025, we received $1.18 million in proceeds from related-party convertible notes under this arrangement. In late December 2025, the remaining outstanding balance under the line of credit, including accrued interest totaling $1,727,152, was converted into 1,644,906 shares of our common stock. While this conversion eliminated a significant debt obligation and reduced future interest expense, it did not provide any new cash to the Company.
As of December 31, 2025, our cash position remained extremely limited, and we continued to have no revenue-generating operations. These factors, together with our recurring losses and significant working capital deficit, raise substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm has included an explanatory paragraph in its audit report for the year ended December 31, 2025 expressing substantial doubt about our ability to continue as a going concern. Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Since inception, we have financed our operations from a combination of:
issuance and sales of our Class A common stock;
issuance of promissory notes payable with related and non-related parties;
issuance of convertible promissory notes payable with related and non-related parties; and
cash advances from related parties
We have experienced operating losses since our inception and had a total accumulated deficit of $115,474,299 as of December 31, 2025. We expect to incur additional cost and require additional capital as we continue to implement our expansion plan. During the year ended December 31, 2025, our cash used in operating activities was $1,150,681. During the year ended December 31, 2024, our cash used in operating activities was $112,786.
Known Trends and Uncertainties
As of December 31, 2025, our current assets were significantly less than our current liabilities, resulting in a working capital deficit. This deficit, together with recurring operating losses and negative cash flows from operations, raises substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of these consolidated financial statements. Our ability to continue as a going concern is dependent on our ability to obtain additional financing and, over time, generate revenue and cash flows sufficient to meet our obligations. Management is actively evaluating financing alternatives and cost containment measures; however, there can be no assurance that additional capital will be available on acceptable terms or at all.
Internal and External Sources of Liquidity
Our primary internal source of liquidity is cash on hand, which was $5,296 as of December 31, 2025. We do not currently generate positive operating cash flows. Our external sources of liquidity include related party financing (notably from GPR), potential equity issuances, and possible third-party debt arrangements. The Company does not have any off-balance sheet financing arrangements.
Material Cash Requirements and Commitments
Our primary short-term cash requirements are to fund working capital and service short-term debt. Working capital requirements can vary significantly from period to period, particularly as a result of additional development expenses. As of December 31, 2025, the Company had no material commitments for capital expenditures. However, significant capital will be required to fund the construction of the Tonopah processing facility and the planned industrial park. The Company anticipates that these requirements will be met through a combination of equity and debt financing, as well as potential government grants and strategic partnerships. The general purpose of these expenditures is to advance the Company’s business plan, including the development of permitted custom processing toll milling operations and the ACRG Greenway to Power™ Renewable Energy Industrial Park.
Trends in Capital Resources and Changes in Mix/Cost
During the period, the Company’s capital structure shifted from debt to equity as a result of the conversion of the GPR line of credit into common stock. This reduced interest expense but increased shareholder dilution. The cost of capital remains high due to the Company’s financial condition and market volatility. Future financing may be more expensive or dilutive, and there is no assurance that such financing will be available on acceptable terms.
Risks and Uncertainties
The Company is subject to risks from inflation, rising interest rates, and volatility in capital markets, which may adversely affect its ability to raise capital. Additionally, the mining and renewable energy sectors are experiencing increased regulatory scrutiny and competition for funding, which could impact the Company’s liquidity and capital resources.
Convertible Promissory Notes Payable
The Company has historically relied on related-party financing, primarily from Granite Peak Resources, LLC (“GPR”), to fund operations. During 2025, outstanding balances under the related-party line of credit were converted into common stock, resulting in the elimination of all principal and accrued interest balances as of December 31, 2025. These conversions reduced the Company’s debt obligations but did not provide additional liquidity. See Notes 5 and 7 to the consolidated financial statements for detailed information regarding the related-party line of credit, amendments, conversions, and equity issuances.
Management Plan and Known Trends and Uncertainties
We will require significant additional capital in the near term to fund our ongoing operating expenses, maintain our status as a public company, pursue permitting activities, and advance the development of our planned toll milling facility. Our existing cash resources are not sufficient to fund these activities beyond the very near term. Accordingly, our ability to continue as a going concern is dependent on our ability to obtain additional financing through equity or debt offerings, strategic partnerships, or continued financial support from our majority stockholder. There can be no assurance that such financing will be available when needed, on acceptable terms, or at all.
In evaluating our liquidity outlook, management has considered all currently known trends, events, and uncertainties. We do not expect to generate operating revenues unless and until our Tonopah toll milling facility becomes operational, which is dependent on obtaining substantial capital and regulatory approvals. In the meantime, we expect to continue to incur operating losses and negative cash flows as we fund legal, accounting, regulatory, and other public company costs. These conditions contribute to the substantial doubt regarding our ability to continue as a going concern.
During 2025, we experienced significant changes in our business activities, including the rescission of our prior SWIS transaction, which resulted in the deconsolidation of that business. While this action was taken to conserve resources and refocus the Company on its core toll milling and critical minerals processing strategy, it does not provide a source of future revenue or liquidity. We will continue to closely monitor our cash requirements and may adjust our operating plans, delay expenditures, or pursue additional strategic alternatives as necessary to preserve liquidity while we seek additional funding.
Cash Flows
Years Ended
December 31,
Net cash used in operating activities
Net cash provided by investing activities
Net cash provided by financing activities
Increase (decrease) in cash
Operating Activities
Net cash used in operating activities was $1,050,681 for the year ended December 31, 2025, primarily due to the net income for the year, common stock issued for services, amortization of operating right of use assets, increases in prepaid expenses, accrued interest, accrued expenses, and accounts payable.
Net cash used in operating activities was $112,786 for the year ended December 31, 2024, primarily due to the net loss for the year, amortization expense, net of expenses paid directly by related party and increases in accruals for settlement of lawsuit, accrued interest, and accounts payable, related party.
Investing Activities
For the years ended December 31, 2025, and 2024 the Company conducted no investing activities.
Financing Activities
Net cash provided by financing activities was $1,155,258 for the year ended December 31, 2025, primarily due to proceeds from convertible promissory notes, related party.
Net cash provided by financing activities was $77,100 for the year ended December 31, 2024, primarily due to proceeds from convertible promissory notes, related party.
Off-Balance Sheet Arrangements
During the year ended December 31, 2025, we did not engage in any off-balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.
Effects of Inflation
We do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.
Critical Accounting Policies and Estimates
Our significant accounting policies are more fully described in the notes to our unaudited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. We believe that the accounting policies below are critical for one to fully understand and evaluate our consolidated financial condition and results of operations.
