Risk Factors
As an early-stage company in the waste-to-energy sector, we face several risks that could impact our ability to achieve our business objectives. These risks include:
● Regulatory and permitting challenges that may delay or restrict our operations;
● The scalability and efficiency of our pyrolysis technology in commercial applications;
● Market adoption of our waste-to-energy solutions and competition from alternative waste management and clean energy technologies;
● The availability, quality, and cost of plastic waste feedstock required for our operations;
● Our ability to secure sufficient financial resources for facility construction, equipment maintenance, and operational expenses;
● Fluctuations in energy and fuel prices that may affect the profitability of our converted products;
● Potential environmental liabilities and compliance with evolving environmental regulations;
● Dependence on strategic partnerships, suppliers, and key personnel to maintain and expand operations;
● Risks associated with supply chain disruptions or delays in equipment procurement; and
● Broader economic conditions that could impact investor confidence and financing opportunities.
Our ability to successfully execute our business strategy will depend on our capacity to mitigate these risks while maintaining operational efficiency and adapting to evolving market and regulatory conditions.
Sales and Marketing
To drive growth in our waste-to-energy business, we will implement a comprehensive sales and marketing strategy focused on securing feedstock suppliers, expanding our investor base, and establishing long-term offtake agreements. Our plan includes:
D irect Sales and Business Development – Actively engaging with waste management companies, industrial partners, and municipalities to secure plastic waste feedstock and forge strategic partnerships.
Digital Marketing and Online Presence – Utilizing our website, social media platforms, and targeted advertising campaigns to raise awareness of our waste-to-energy solutions, highlight project milestones, and attract potential investors.
Industry Thought Leadership – Participating in and speaking at industry conferences, sustainability forums, and clean energy summits to position Waste Energy Corp as a leader in waste-to-energy innovation.
Networking and Strategic Partnerships – Leveraging our existing industry relationships and expanding our network to connect with key stakeholders in waste management, renewable energy, and government agencies.
Inbound and Outbound Sales Initiatives – Implementing structured sales outreach programs, including direct engagement with industrial waste producers, referral programs, and inbound lead generation strategies.
Public Relations and Media Engagement – Running media campaigns to enhance brand recognition, share success stories, and highlight the environmental and economic benefits of our technology.
This multi-faceted approach will ensure steady growth by securing critical resources, expanding market reach, and driving long-term business sustainability.
Competition
The waste-to-energy (WTE) industry is an emerging yet increasingly competitive space, with several players developing technologies to convert plastic waste into fuel and other valuable byproducts. Our primary competitors include companies specializing in pyrolysis, chemical recycling, and alternative waste-processing technologies. These competitors range from well-established global firms to emerging startups focused on sustainability and circular economy solutions.
Key Competitors
Brightmark Energ y – A company focused on advanced recycling technologies, including plastic-to-fuel conversion. Brightmark has secured substantial investment and partnerships to scale its operations.
Agilyx Corporation – A pioneer in chemical recycling that converts plastic waste into synthetic crude oil and chemical feedstocks. Agilyx has formed partnerships with major petrochemical companies to expand its footprint.
Alterra Energy – A developer of proprietary thermochemical liquefaction processes, Alterra focuses on converting plastic waste into petrochemical feedstock and fuels.
Licella Holdings – An Australian-based company that has developed a hydrothermal upgrading technology to convert biomass and end-of-life plastics into biocrude and other valuable outputs.
Municipal and Industrial Waste-to-Energy Facilities – Large-scale incineration and gasification plants operated by municipalities or waste management firms compete in the broader WTE market by offering alternative waste disposal solutions.
Competitive Advantages
While many of our competitors have significant financial backing, established infrastructure, and strategic partnerships, Waste Energy Corp differentiates itself through:
Focused Thermal Depolymerization Technology – Our process is designed to efficiently convert plastic and tire waste into clean energy with minimal environmental impact.
Scalability and Rapid Deployment – Unlike some competitors requiring massive infrastructure investments, our modular approach allows us to scale quickly and adapt to various locations.
Strategic Feedstock and Offtake Agreements – By securing stable sources of plastic waste and building strong relationships with energy buyers, we mitigate risks associated with feedstock availability and market demand.
Environmental and Regulatory Compliance – Our emphasis on sustainability, including efforts to address PFAS contamination and carbon credit generation, positions us ahead of competitors in regulatory compliance and environmental responsibility.
Market Challenges
Despite our competitive advantages, we face challenges such as:
Competition for Plastic Feedstock – As waste management companies and recyclers seek alternative uses for plastic waste, securing a consistent supply of feedstock remains a priority.
Regulatory and Policy Changes – Shifting government policies on waste management, carbon emissions, and renewable energy incentives can impact market dynamics.
I nvestment and Market Awareness – Some competitors have access to larger capital reserves, making it critical for us to expand our investor base and raise awareness about our innovative approach.
By leveraging our technological strengths, strategic partnerships, and aggressive market expansion, Waste Energy Corp is well-positioned to establish itself as a leader in the waste-to-energy sector.
Intellectual Property and Technology
Waste Energy Corp is committed to advancing proprietary solutions in the waste-to-energy sector, with a focus on our patent-pending AI Emission monitoring and carbon credit automation technology and advanced thermal conversion process technology. Our innovative process efficiently transforms discarded plastics and tires into valuable energy products while minimizing environmental impact.
We are actively pursuing intellectual property protection, including patents, trademarks, and trade secrets, to safeguard our technological advancements. Our intellectual property strategy includes:
Patent Protection – We have filed a preliminary provisional patent application through a third party for a utility patent that provides a new method of using AI-based technologies and systems to automate, monitor and control emissions data and feedstock quality related to identifying PFAS and other potentially toxic feedstocks before entering our waste conversion systems. The patent application also provides a new data-based method to automate the carbon credit creation process using our fully integrated waste conversion technology system. We have retained a third-party company with more than 25 years of experience and hundreds of patents obtained to assist us with our patent application process.
Trade Secrets and Proprietary Processes – Our specialized feedstock handling, emissions control, and product refinement techniques are proprietary and provide a competitive advantage in the waste-to-energy market.
Trademark and Brand Development – We are establishing recognized trademarks to reinforce our position as a leader in sustainable energy solutions.
As we continue to develop and optimize our technology, we will assert our intellectual property rights against unauthorized use while remaining open to strategic partnerships and licensing opportunities.
Additionally, while we are confident in the originality of our approach, we remain vigilant regarding third-party patents and intellectual property claims in the industry. We will take necessary actions to protect our rights and ensure compliance with existing legal frameworks.
Our commitment to ongoing research and development will further strengthen our technology, positioning Waste Energy Corp at the forefront of the waste-to-energy industry.
Government Regulation and Compliance
The waste-to-energy (WTE) industry operates within a complex regulatory landscape that includes environmental protection, waste management, emissions control, and energy production. Waste Energy Corp is committed to full compliance with all applicable federal, state, and local regulations to ensure responsible operations and long-term sustainability.
Regulatory Considerations
Our advanced thermal conversion technology machines must comply with various regulatory frameworks, including but not limited to:
Environmental Protection Agency (EPA) Regulations – Compliance with the Clean Air Act (CAA), Resource Conservation and Recovery Act (RCRA), and other environmental laws governing emissions, waste handling, and pollutant discharge.
State and Local Environmental Permits – Each facility we develop will obtain the necessary air quality permits, solid waste processing approvals, and hazardous materials handling certifications.
Occupational Safety and Health Administration (OSHA) Standards – Ensuring workplace safety for employees involved in processing, maintenance, and energy production .
Department of Energy (DOE) and Renewable Energy Incentives – Monitoring federal and state incentives for renewable energy, including tax credits, grants, and carbon offset programs.
Carbon Credits and Sustainability Standards – Positioning our technology to participate in carbon credit markets by reducing landfill waste and lowering greenhouse gas emissions.
Our Compliance Strategy
To navigate regulatory complexities and maintain compliance, we will:
Engage Environmental and Regulatory Experts – Partner with legal and environmental consultants to ensure our operations meet all permitting and compliance requirements.
Develop Robust Environmental Management Systems – Implement monitoring and reporting systems to track emissions, waste inputs, and energy outputs to maintain regulatory transparency.
Secure Necessary Permits Before Expansion – Work closely with state and local agencies to obtain permits before facility deployment to prevent operational delays.
Stay Ahead of Emerging Regulations – Actively monitor policy changes related to waste-to-energy technology, emissions reductions, and renewable energy classifications.
Promote Industry Best Practices – Adhere to industry-leading environmental and safety standards to position Waste Energy Corp as a responsible leader in sustainable energy production.
By proactively addressing regulatory challenges, Waste Energy Corp ensures operational stability, mitigates legal risks, and strengthens its position in the waste-to-energy market.
Investment Company Act of 1940 Considerations
We intend to conduct our operations so that we do not fall within the definition of an “investment company” under the Investment Company Act of 1940.
Under Section 3(a)(1)(A) of the Investment Company Act of 1940, a company is deemed to be an “investment company” if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. We believe that we will not be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act of 1940 because we will not engage primarily or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, our new business is a services and development business that provides a turnkey set of services for companies to develop and integrate blockchain and cryptocurrency technologies into their business operations.
Under Section 3(a)(1)(C) of the Investment Company Act of 1940, a company is deemed to be an “investment company” if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of our company’s total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” We intend to monitor our holdings and conduct operations so that on an unconsolidated basis we will comply with the 40% test. Nevertheless, because we may accept tokens, coins or equity in payment for our services, to the extent permitted under applicable law, we may acquire “investment securities” having a value exceeding 40% of the value of our company’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. In that case, we intend to rely on a safe harbour exemption from the Investment Company Act of 1940 for so-called “transient investment companies.”
Consistent with the “transient investment company” safe harbour, we will have to reduce our holdings of “investment securities to not more than 40% of our total assets as soon as is reasonably possible and in any event within one year from the earlier of (i) the date on which we own securities and/or cash having a value exceeding 50% of the value of our company’s total assets on either a consolidated or unconsolidated basis or (ii) the date on which we own or propose to acquire “investment securities” having a value exceeding 40% of the value of our company’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. This reduction could be attempted in several ways, including the disposition of securities and the acquisition of other assets that would not constitute investment securities for purposes of the Investment Company Act of 1940. If we are required to sell securities, we may sell them sooner than we otherwise would, the sales may be at depressed prices, and we may never realize the anticipated benefits from, or may incur losses on, those investments. We may not be able to sell some investments due to contractual or legal restrictions or the inability to locate a suitable buyer. We may also incur tax liabilities when we sell our assets. If we decide to try to acquire additional assets that would not constitute investment securities, we may not be to identify and acquire suitable assets. If these steps do not a sufficient reduction in our holdings of investment securities within the prescribed period, we will be to some of our securities holdings and invest the proceeds in U.S. government securities and cash items, with a potential .
Because we can rely on the “transient investment company” safe harbour only once during any three years, we may not accept tokens, coins or equity in payment for our services during the period that this safe harbour is not available.
If we become obligated to register our company as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act of 1940 imposing, among other things:
limitations on capital structure;
restrictions on specified investments;
prohibitions on transactions with affiliates; and
compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.
If we were required to register our company as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement and a court could appoint a receiver to take control of us and liquidate our business, all of which would have a material adverse effect on us.
Employees
As of April 21, 2025, we have two executive officers, Scott Gallagher, who is our president, and Braden Glasbergen, who is our chief financial officer, secretary, and treasurer and no employees. Our management oversees all responsibilities in the areas of corporate administration, business development, and research. We also employ consultants on an as-needed basis to provide specific expertise in areas of product design and development and other business functions including marketing and accounting. We intend to expand our current management to retain skilled directors, officers, and employees with experience relevant to our business focus.
ITEM 1A. RISK FACTORS
An investment in our common stock involves several very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this annual report in evaluating our company and our business before purchasing our securities. Our business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks. You should invest in our common stock only if you can afford to lose your entire investment.
Risks Related to Our Common Stock
Because we can issue additional shares of common stock, our stockholders may experience dilution in the future.
We are authorized to issue up to 400,000,000 shares of common stock, of which 138,036,826 shares of common stock were issued and outstanding as of May 9, 2025. Our board of directors has the authority to cause us to issue additional shares of common stock without the consent of our stockholders. Consequently, stockholders may experience dilution in their ownership of our stock in the future.
If the outstanding stock options or convertible notes are exercised or converted, then we will be required to issue additional shares of our common stock, which will result in the dilution of our stockholders’ ownership of our stock.
Because we do not intend to pay any cash dividends on our common stock shortly, our stockholders will not be able to receive a return on their shares unless they sell them.
We do not anticipate paying any cash dividends on our common stock soon. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors and will depend upon, among other things, our results of operations, cash flows and financial condition, operating and capital requirements, and other factors the board considers relevant. We may never pay any dividends. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.
Our stock is a penny stock. Trading of our stock is restricted by the SEC’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.
Our stock is a penny stock. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined in Rule 15g-9) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets more than $5,000,000 or individuals with a net worth over $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with the current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules investor interest and limit the marketability of our common stock.
The Financial Industry Regulatory Authority sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules promulgated by the SEC, the Financial Industry Regulatory Authority ( “FINRA” ) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Before recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.
Cybersecurity and Information Security
Waste Energy recognizes the critical importance of protecting its information assets and maintaining the confidentiality, integrity, and availability of its operational technology (OT) and information technology (IT) systems. As such, the company has implemented a comprehensive cybersecurity program designed to mitigate risks and ensure compliance with applicable laws and regulations.
Key elements of our cybersecurity program include:
Risk Management: We conduct regular risk assessments to identify and evaluate potential cybersecurity threats, vulnerabilities, and the potential impact on our operations and financial reporting.
Security Controls: We maintain a layered defence strategy that includes technical, administrative, and physical security controls to protect our systems and data . This includes but is not limited to:
Intrusion detection and prevention systems.
Firewalls and network segmentation.
Access controls and identity management.
Data encryption and backup procedures.
OT security measures that are specific to waste energy facilities.
Incident Response: We have established an incident response plan to address cybersecurity incidents in a timely and effective manner. This plan includes procedures for detection, containment, eradication, recovery, and post-incident review.
Employee Training: We provide regular cybersecurity awareness training to our employees to educate them about potential threats and their responsibilities in protecting company information.
Third-Party Risk Management: We assess the cybersecurity practices of our third-party vendors and service providers to ensure they meet our security standards.
Regulatory Compliance: We are committed to complying with all applicable cybersecurity laws and regulations, and we continuously monitor and update our program to reflect changes in the regulatory landscape.
Financial Reporting Considerations: While our cybersecurity program is primarily focused on protecting operational and information systems, we recognize the potential impact of cybersecurity incidents on our financial reporting. We maintain controls designed to ensure that material cybersecurity risks are appropriately considered in our financial reporting processes, in accordance with IFRS requirements.
While we believe our cybersecurity program is robust, cybersecurity threats are constantly evolving. Therefore, we continuously evaluate and enhance our security measures to mitigate emerging risks. However, there can be no assurance that we will prevent all cybersecurity incidents. Any significant cybersecurity incident could have a material adverse effect on our operations, financial condition, and reputation.
Key Considerations:
Industry-Specific Risks: Waste energy facilities often involve critical infrastructure, making them potential targets for cyberattacks. The statement should emphasize OT security.
IFRS and Materiality: While IFRS focuses on financial reporting, cybersecurity incidents can have financial implications. The statement should acknowledge this connection.
Regular Updates: Cybersecurity risks evolve rapidly, so the company’s program and disclosures should be regularly updated.
