HyOrc (OTCQB: ASPZ) leans on new methanol projects amid going-concern risk
HyOrc Corporation reported a development-stage quarter for the period ended March 31, 2026, with a net loss of $84,660 and cash of $134,736. Total assets were $21.9 million, driven largely by goodwill and patents tied to its clean energy technologies.
The 2MW Biliran geothermal plant in the Philippines remains offline after grid-related damage and typhoon impacts, contributing to minimal current revenue and ongoing losses. Management disclosed substantial doubt about the Company’s ability to continue as a going concern without new funding or successful project execution.
HyOrc is pivoting toward waste-to-methanol and clean power projects, including a 50-50 Portuguese joint venture targeting about 2,800 tonnes of methanol per year and a Bulgarian waste-to-methanol project designed for 18,000–20,000 tonnes annually. Subsequent agreements and technology validation support this strategy, but projects remain pre-revenue and capital intensive.
Positive
- None.
Negative
- Substantial doubt about going concern: Management states that recurring losses, minimal revenue and dependence on new financing raise substantial doubt about HyOrc’s ability to meet obligations over the next 12 months.
- Key geothermal asset offline: The 2MW Biliran plant remains non-operational due to infrastructure damage and unresolved counterparties/insurance issues, removing a potential 60% profit share over a 25-year project life.
- Intangible-heavy balance sheet with limited cash: Of $21.9 million in total assets, $19.36 million is goodwill and patents, while cash is only $134,736, increasing sensitivity to funding delays or project setbacks.
Insights
HyOrc is pivoting to waste-to-methanol but faces going-concern risk and stalled legacy assets.
HyOrc is transforming from geothermal operations into a waste-to-methanol and clean power platform, backed by patents valued at $3.60M and goodwill of $15.76M. Q1 2026 showed a modest net loss of $84,660 with cash of $134,736, but essentially no operating revenue.
The 2MW Biliran geothermal plant remains offline after infrastructure damage and over 250 prior grid trips, eliminating a potential profit stream. Management explicitly highlights substantial doubt about the Company’s ability to continue as a going concern without new funding and successful project deployment, signaling elevated financial risk.
Strategically, HyOrc is building a European pipeline: a 50-50 JV in Portugal targeting roughly 2,800 tonnes of methanol annually and a Bulgarian waste-to-methanol project sized for 18,000–20,000 tonnes per year. Both rely on project financing and grants such as EU programs, so execution and funding outcomes will determine whether the current intangible-heavy balance sheet can translate into sustainable cash flow.
Key Figures
Key Terms
reverse acquisition financial
going concern financial
waste-to-methanol technical
refuse-derived fuel (RDF) technical
Project Funding, Build and Transfer Agreement (PFBT) financial
goodwill impairment financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from January 1st 2026 to March 31st 2026
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file number:
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| PART I - FINANCIAL INFORMATION | |||
| ● | ITEM 1. Financial Statements | 2 | |
| ● | ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | |
| ● | ITEM 3. Quantitative and Qualitative Disclosures About Market Risk | 28 | |
| ● | ITEM 4. Controls and Procedures | 29 | |
| PART II - OTHER INFORMATION | |||
| ● | ITEM 1. Legal Proceedings | 30 | |
| ● | ITEM 1A. Risk Factors | 31 | |
| ● | ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds | 35 | |
| ● | ITEM 3. Defaults Upon Senior Securities | 35 | |
| ● | ITEM 4. Mine Safety Disclosures | 35 | |
| ● | ITEM 5. Other Information | 35 | |
| ● | ITEM 6. Exhibits | 36 | |
| SIGNATURES | 37 | ||
| 1 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HYORC CORPORATION. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| US Dollars |
| AS AT | 31 March 2026 | 31 December 2025 | ||||||
| (Un-Audited) | (Audited) | |||||||
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| Patents | ||||||||
| Goodwill | ||||||||
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| LIABILITIES AND STOCK HOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Advance and other payables | ||||||||
| Subscription money Advance | - | |||||||
| Total current liabilities | ||||||||
| EQUITY | ||||||||
| Common Stock | ||||||||
| Share capital | ||||||||
| Other Stock holders Equity | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Additional Paid in Capital | ||||||||
| Common Stock Subscribed | ||||||||
| Total Equity | ||||||||
| Total Equity and Liabilities | ||||||||
These financial statements were approved and authorised for issue by the Management and signed on its behalf by:
| 2 |
HYORC CORPORATION. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| AS AT MARCH 31 | US Dollars |
| Note | 2026 | 2025 | ||||||||
| (Un-Audited) | (Un-Audited) | |||||||||
| ASSETS | ||||||||||
| Current Assets | ||||||||||
| Cash and cash equivalents | ||||||||||
| Trade Receivable | ||||||||||
| Total current assets | ||||||||||
| Non-Current Assets | ||||||||||
| Property, Plant and Equipment | ||||||||||
| Plant and equipment | ||||||||||
| Intangible assets | ||||||||||
| Patents | ||||||||||
| Goodwill | ||||||||||
| Total intangible assets | ||||||||||
| Total non-current assets | ||||||||||
| Total Assets | ||||||||||
| LIABILITIES AND STOCK HOLDERS’ EQUITY | ||||||||||
| Current Liabilities | ||||||||||
| Advance and other payables | ||||||||||
| Subscription money Advance | ||||||||||
| Total current liabilities | ||||||||||
| EQUITY | ||||||||||
| Common Stock | ||||||||||
| Share capital | ||||||||||
| Other Stock holders Equity | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Additional Paid in Capital | ||||||||||
| Common Stock Subscribed | ||||||||||
| Total Equity | ||||||||||
| Total Equity and Liabilities | ||||||||||
These financial statements were approved and authorised for issue by the Management and signed on its behalf by:
| 3 |
HYORC CORPORATION. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| FOR THE PERIOD ENDED | US Dollars |
| Note | 31 March 2026 | 31 December 2025 | ||||||||
| Revenue | ||||||||||
| Gross profit | - | |||||||||
| OTHER INCOME | ||||||||||
| Other Income | ||||||||||
| Total Income | - | |||||||||
| EXPENSES | ||||||||||
| Administrative and other expenses | ( | ) | ( | ) | ||||||
| Amortization loss | - | ( | ) | |||||||
| Total Expense | ( | ) | ( | ) | ||||||
| Net loss for the period | ( | ) | ( | ) | ||||||
These financial statements were approved and authorised for issue by the Management and signed on its behalf by:
| 4 |
HYORC CORPORATION. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| FOR THE THREE MONTH ENDED MARCH 31 | US Dollars |
| Note | 2026 | 2025 | ||||||||
| Revenue | - | |||||||||
| Gross profit | - | |||||||||
| EXPENSES | ||||||||||
| Administrative and other expenses | ( | ) | ( | ) | ||||||
| Total Expense | ( | ) | ( | ) | ||||||
| Net loss for the period | ( | ) | ( | ) | ||||||
These financial statements were approved and authorised for issue by the Management and signed on its behalf by:
| 5 |
HYORC CORPORATION. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
| FOR THE PERIOD ENDED MARCH 31, | US Dollars |
| Common Stock | Addition paid in capital | Common Stock Subscribed | Accumulated deficit | Total | ||||||||||||||||
| Balance at January 1, 2025 | - | ( | ) | |||||||||||||||||
| Shares issued for Services availed | - | - | ||||||||||||||||||
| Shares issued during the year | - | - | ||||||||||||||||||
| Common stock subscribed | - | - | - | |||||||||||||||||
| Loss for the year | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance at December 31, 2025 | ( | ) | ||||||||||||||||||
| Balance at January 1, 2026 | ( | ) | ||||||||||||||||||
| Balance | ( | ) | ||||||||||||||||||
| New Shares issued | - | - | ||||||||||||||||||
| Loss for the period | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance at March 31, 2026 | ( | ) | ||||||||||||||||||
| Balance | ( | ) | ||||||||||||||||||
| 6 |
HYORC CORPORATION. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
| FOR THE PERIOD ENDED MARCH 31, | US Dollars |
| Note | 2026 | 2025 | ||||||||
| Cash flows from operating activities | ||||||||||
| Loss for the year | ( | ) | ( | ) | ||||||
| Movements in working capital: | ||||||||||
| Subscription money Advance | ||||||||||
| Advance and other payables | - | |||||||||
| Net cash provided by operating activities | ||||||||||
| Net increase in cash and cash equivalents | ||||||||||
| Cash and cash equivalents at January 1, | ||||||||||
| Cash and cash equivalents at March 31, | ||||||||||
The above statement of cash flows should be read in conjunction with the accompanying notes
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HYORC CORPORATION AND SUBSIDIARY
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was initially organized in the name of Asia Properties, Inc. on April 6, 1998, as a Wyoming Corporation, seeking opportunities to invest in real estate. On April 3, 2019. the Company moved its jurisdiction from the State of Nevada to the State of Wyoming. The Company’s common stock is trading in the OTC Market under the symbol “ASPZ”.
On
June 27, 2024, the Company acquired a Texas hydrogen technology company, SRE Power, Inc (“SRE”) for
This merger provided HyOrc with:
| ● | Operational experience in power plant construction. |
| ● | A platform to commercialize engine and clean fuel technologies. |
| ● | A publicly traded vehicle to access capital markets. |
Joint Venture Agreement
On September 15th 2025, the company has entered into Joint venture Agreement with Start Lda (A Portugal based company) for forming a Joint venture based company, HYORC START GREEN FUELS, LDA with 50-50 share in the Joint venture company.
As per the agreement the company has to contribute the following as per agreement,
| (i) | One 35 TPD RDF gasifier unit (currently in factory, ready for deployment); |
| (ii) | One methanol synthesis reactor to convert 25 TPD of syngas to methanol; |
| (iii) | One HyOrc engine to utilize 10 TPD of syngas for onsite power generation; |
| (iv) | Engineering, integration, commissioning, and technology management. |
In addition to this the company will bring the Patents which the company acquired as part of Business combination which took place in 2024. This Intellectual Property will be the property of the company there will be no share in this.
Start Lda contributing land, permits, and local infrastructure support. The JV Company will be responsible for generating and distributing profits equally between the parties.
As of March 31, 2026, no capital contributions or operational activities have commenced. Accordingly, no transactions related to this arrangement have been recognized in the Company’s consolidated financial statements for the quarter ended March 31, 2026.
The Company has evaluated this arrangement and determined that, as of March 31, 2026, no consolidation or equity method accounting is required, as no controlling financial interest or investment exists as of the reporting date.
| 8 |
Basis of Presentation
The Company’s fiscal year ends on December 31.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) in all material respects and have been consistently applied in preparing the accompanying financial statements.
Reverse Acquisition and Principles of Consolidation
As
described above, on June 27, 2024 (the “Acquisition Date”), the Company entered into a reorganization and stock purchase
agreement (“agreement”) with SRE and the 100% shareholders of SRE whereby the SRE shareholders desired to sell and the Company
agreed to purchase SRE shares thereby making SRE, a wholly owned subsidiary of the Company. The Company issued
Further, at the closing, the then Board member of the Company. Debra Childers had tendered her resignation as the director and the officer of the Company and the then Board considered and deemed it advisable to the best interest of the Company to fill the vacancy in the Board by appointing Reginald Fubara, Shinichi Hirano and James McNaught-Davis as the members of the Company’s Board of Directors effective as of the closing.
We determine SRE an accounting acquirer based on the following facts: (i) after the reverse acquisition, former shareholders of SRE held a majority of the voting interest of the combined company; (ii) former Board of Directors of SRE possess majority control of the Board of Directors of the combined company; (iii) Reginald, being the member of the management of SRE is responsible for the management of the combined company. As such, we have treated the financial statements of SRE as the historical financial statements of the combined company (“consolidated financial statements” / “financial statements”).
We have identified the Company as the legal acquirer, as it is the entity that issued securities. Comparatively, we have identified SRE as the legal acquiree, the entity whose equity interests are acquired in line with ASC 805-40 – Reverse Acquisitions. (Refer to Note 3).
Consequent to the reverse acquisition, the financial statements of the newly combined entity represent a continuation of the financial statements of the accounting acquirer/legal acquiree. As a result, the assets and liabilities of the accounting acquirer are presented at their historical carrying values in the consolidated financial statements of the newly combined entity and the assets and liabilities of the accounting acquiree/legal acquirer are recognized on the acquisition date and measured by using the acquisition method. The results of the accounting acquiree’s/legal acquirer’s results of operations are included in the combined company’s financial statements beginning on the acquisition date.
The accompanying financial statements prepared following the reverse acquisition are issued under the name of the accounting acquiree, HyOrc but described as a continuation of the financial statements of the accounting acquirer, SRE, with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree.
That adjustment is required to reflect the capital of the accounting acquiree. Comparative information presented in these consolidated financial statements also is retroactively adjusted to reflect the legal capital of the accounting acquiree.
The accompanying financial statements represent all of the following:
a. The assets and liabilities of SRE recognized and measured at their pre-combination carrying amounts.
b. The assets and liabilities of HyOrc recognized and measured in accordance with the guidance in ASC 805 applicable to business combinations.
| 9 |
c. The retained earnings and other equity balances of the SRE before the business combination.
d. The amount recognized as issued equity interests in the financial statements determined by adding the issued equity interest of SRE outstanding immediately before the business combination to the fair value HyOrc determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure (that is, the number and type of equity interests issued) reflects the equity structure of HyOrc, including the equity interests which HyOrc issued to the SRE shareholders to effect the combination. Accordingly, the equity structure of SRE is restated using the exchange ratio established in the Agreement to reflect the number of shares of HyOrc issued in the reverse acquisition.
For periods before the reverse acquisition, the stockholders’ equity of the combined entity is presented on the basis of the historical equity of SRE before the acquisition, retroactively recast to reflect the number of shares received in the acquisition.
Use of Estimates
The preparation of the Company’s financial statements in conformity with U.S.GAAP requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of revenues and expenses for the periods covered and certain amounts disclosed in the notes to the financial statements. These estimates are based on information available through the date of the issuance of the financial statements and actual results could differ from those estimates. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:
| ● | provisions for income taxes and related valuation allowances and tax uncertainties | |
| ● | business combinations and purchase price allocations | |
| ● | recoverability of long-lived assets and contract assets and their related estimated lives | |
| ● | evaluation of goodwill and intangible assets for impairment | |
| ● | accruals for estimated liabilities | |
| ● | Credit loss on accounts receivable and other non-current assets |
Comprehensive Loss
Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. There was no difference between net loss and comprehensive loss presented in the financial statements for the period ended March 31, 2026 and 2025.
Segment Reporting
In accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business activities are managed and evaluated. ASC 280 establishes standards for companies to report financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance. The CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one operating and reportable segment.
The key measures of segment profit or loss reviewed by our CODM are revenue and operating costs. These metrics are reviewed and monitored by the CODM to manage and forecast cash. The CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
| 10 |
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, certificates of deposits and money market funds that are readily convertible into cash, all with original maturity dates of three months or less.
Concentration of Credit Risks
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and receivables. The Company places its cash and cash equivalents with financial institutions.
Customer Concentration Risk
For the quarter ended March 31, 2026, no sales recorded and for the year ended December 31, 2025 the entire sales pertained to only two customer. The Company’s reliance on major customers presents a concentration risk. Loss of this customer or a significant reduction in their order could have a material adverse effect on the Company’s financial performance for the period ended 2025. The company does not have any regular business operations in the current period and no regular customers and hence there is no credit risk for the current period 31 March 2026.
Related Parties
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. All transactions are recorded at arm’s length prices, reflecting the fair value of the goods or services exchanged.
Income Taxes
The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred tax assets will not be realized. The Company assesses its income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.
| 11 |
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The hierarchy is presented down into three levels based on the reliability of the inputs.
| Level 1 | Quoted prices are available in active markets for identical assets or liabilities. | |
| Level 2 | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| Level 3 | Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. |
The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments.
Accounts Receivable, Net
Accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are the dues from customers and are shown net of applicable reserves for doubtful accounts as shown on the face of the balance sheet. This balance also includes amounts for services performed but not yet invoiced, for which the Company has an unconditional right to consideration, and for which collectability is reasonably assured, as the related services have been completed and acknowledged by the third party. There were no accounts that had been placed on non-accrual status. The credit loss (allowance for doubtful accounts) has been estimated by management based on historical experience, current market trends and, for larger customer accounts, their assessment of the ability of the customers to pay outstanding balances. Past due balances and other higher risk amounts are reviewed individually for collectability. Changes in circumstances relating to the collectability of accounts receivable may result in the need to increase or decrease the allowance for doubtful accounts in the future.
The
credit loss (allowance for bad debt) recognized was $
Property, Plant and Equipment, Net
Property, plant and equipment consist of the following:
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT
| 2026 | 2025 | |||||||
| Plant and Equipment-net | ||||||||
Property, plant and equipment, net (“PP&E”) is stated at cost less accumulated depreciation and amortization and any accumulated impairment losses. Depreciation and amortization are computed using the straight-line method over the assets’ estimated useful lives.
PP&E consists of unproved properties and, thus, the costs associated with such properties are not subject to depletion. The Company historically has acquired unproved properties by purchasing individual or small groups of leases directly from mineral owners which leases historically have not been subject to specified drilling projects. Capitalized costs associated with unproved properties, which includes leases that have expired or have been deemed uneconomic, are fully impaired.
Major renewals and improvements are capitalized. Replacements, maintenance, and repairs, which do not significantly improve or extend the useful life of the assets, are expensed when incurred.
Upon the sale or retirement of assets, costs and the related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in the results of operations.
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The Company evaluates its long-lived assets or asset groups for indicators of possible impairment by determining whether there were any triggering events that could impact the Company’s assets. If events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable the Company performs a comparison of the carrying amount to future net undiscounted cash flows expected to be generated by such asset or asset group. Should an impairment exist, the impairment loss is measured based on the excess carrying value of the asset over the asset’s fair value generally determined by estimates of future discounted cash flows.
Revenue Recognition
The Company adopted Accounting Standards Codification (“ASC”) 606 upon inception.
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract was determined to be within the scope of ASC 606, the Company assessed the goods or services promised within each contract and determined those that were performance obligations, and assessed whether each promised good or service was distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606.
PFBT Agreement with BGI
SRE and Biliran Geothermal, Inc. (BGI) entered into a 25-year Project Funding, Build and Transfer Agreement (PFBT Agreement) in June 2021 for a 50 MW geothermal facility at Sitio Pulang Yuta, Brgy. Cabibihan, Caibiran, Biliran Province, Philippines. Under this arrangement:
| ● | SRE finances, designs, constructs, installs and commissions the geothermal power plant in phases, beginning with a 2 MW module commissioned in September 2023. |
| ● | SRE also finances and upgrades the existing 13.2 kV distribution lines of Biliran Electric Cooperative (Bileco) to evacuate energy to the national grid. |
| ● | Upon final acceptance, SRE Power provides operation and maintenance (O&M) and technical support services over the 25-year term. |
| ● | Revenue comprises fixed construction and commissioning fees, reimbursements for agreed costs, and a variable share of electricity generation proceeds, all invoiced monthly per the contractual formula. |
The Company identified the PFBT Agreement constitutes a single, enforceable contract. The distinct performance obligations under the Agreement are as follows:
| ● | Design, construction, installation and commissioning of plant modules |
| ● | O&M and technical support services during operations |
| ● | Revenue share from daily electricity generation |
Transaction price for the agreement consists of fixed fees for construction and commissioning, variable consideration based on BGI’s monthly electricity sales share and reimbursements of agreed costs. Estimates of variable consideration are included only to the extent that significant reversals are not probable.
| 13 |
Construction & Commissioning: Revenue is recognized over time when the module passes commissioning tests and BGI has practical acceptance evidence.
O&M & Technical Support: Revenue is recognized over time using an input method (e.g., labor hours, machine-hours) as support services are rendered.
Electricity-Generation Share: Recognize over time on an output basis tied to daily meter readings of power delivered.
For
the year ended December 31, 2024, the revenue recognized of $
During 2025, the Biliran 2 MW geothermal power plant was offline due to an ongoing legal dispute between SRE Power and BGI. SRE Power is actively pursuing a recovery and enforcement strategy with external legal counsel. Revenue decreased significantly compared to 2024 due to the Biliran plant being offline; however, the Company generated limited revenue from engineering services and equipment sales.
Engineering related services
During the year ended 2025, the Company generated revenue from technical services performed at the Heilbronn and Altbach power stations. These projects are operated by Sener Bonatti, with Joule Energy GmbH acting as a subcontractor through which the Company provides engineering-related services.
The Company provides personnel sourcing, mobilization, and logistical support services to customers engaged in energy infrastructure projects. These services include identifying and introducing skilled personnel, coordinating mobilization to project sites, and arranging travel, accommodation, and related administrative support. Personnel introduced by the Company are employed directly by the customer, and the Company does not provide supervision or direct management of such personnel.
The Company’s contracts generally include a single performance obligation, consisting of a stand-ready obligation to provide integrated personnel sourcing and support services over the contract term. The individual activities performed are not distinct within the context of the contract, as they are highly interrelated and are delivered as part of a continuous service offering.
Revenue
from service arrangements is recognized over time, as the customer simultaneously receives and consumes the benefits of the services
as they are performed. The Company measures progress using an output-based method, typically based on hours worked or services provided,
which faithfully depicts the transfer of services to the customer. For the quarter ended March 31, 2026, the Company recognized revenue
from technical and engineering services of $
Commission income
The Company also facilitated the sale of HyOrc 500kW Rankine Cycle turbines manufactured by its technical partner, Vaigunth Enertek, to customers. In these arrangements, the Company does not control the underlying goods and does not have inventory risk or responsibility for fulfillment. Its sole obligation is to arrange for the sale between the manufacturer and the end customer.
Accordingly, the Company acts as an agent in these transactions and recognizes revenue on a net basis, representing the commission earned.
Commission
revenue is recognized at a point in time when the Company satisfies its performance obligation of facilitating the transaction, which
occurs when the underlying sale is arranged and the Company has completed its role in the transaction. For the quarter ended March 31, 2026,
the Company recognized commission revenue of $
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Other Non-Current Assets
Other non-current assets represent capitalized costs incurred for the construction of geothermal plant, which is in progress, that is constructed and commissioned by SRE under the PFBT Agreement (Refer to Revenue Recognition).
BGI will own all equipment, machinery, supplies, facilities, and designs that are supplied, installed, or utilized for the Geothermal Facility. However, BGI agrees to create a Lien over these assets in favor of SRE. This Lien serves as security to ensure repayment for the work that SRE performs on the Geothermal Facility. The Lien will not extend to Bileco Lines because The Bileco Lines are owned by Bileco, not BGI. The parties acknowledge this distinction, ensuring BGI does not impose financial claims over infrastructure it does not control. This provision protects SRE’s financial interests while clarifying ownership limitations regarding the distribution lines.
Considering
the persistent grid instability in April 2024 of the equipment which resulted in over 250 grid trips that caused progressive stress and
wear to critical equipment and the legal dispute with BGI as described in Note 2 below, the management assessed that the qualitative
indicators for impairment existed and hence a qualitative assessment was performed. Based on the management’s judgement, the Company
has recognized an impairment loss to the extent of around $
During
the year ended December 31, 2025, the Company lodged a refund claim of $
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities represent dues or accruals to vendors against whom operating expenses are incurred.
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Business Combinations
The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is an asset representing the excess cost over the fair market value of net assets acquired in business combinations. In accordance with Intangibles - Goodwill and Other (Topic 350), goodwill is not amortized but is tested annually for impairment or on an interim basis when indicators of potential impairment exist. Goodwill is tested for impairment at the reporting unit level. The Company’s reporting units discrete financial information is available and management regularly reviews the operating results. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the reporting structure.
The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the applicable reporting units include, but are not limited to, changes in macroeconomic conditions, industry and market considerations, cost factors, discount rates, competitive environments and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required. The Company also has the option to proceed directly to the quantitative test. Under the quantitative impairment test, the estimated fair value of each reporting unit is compared to its carrying value, including goodwill. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized, up to a maximum amount of goodwill allocated to that reporting unit. Management can resume the qualitative assessment in any subsequent period for any reporting unit.
For the periods ended March 31, 2026 and 2025, management performed a qualitative impairment assessment of our reporting units, of which there were no indications that it was more likely than not that the fair value of our reporting units were less than their respective carrying values. As such, a quantitative impairment test was not required, and no impairment was recognized during the year ended March 31, 2026 and 2025.
Earnings (Loss) per Common Share
Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive.
The financial statements of the combined entity reflect the equity of the HyOrc including the equity interests issued as part of the reverse acquisition in 2024. As a result, EPS is calculated on the basis of the capital structure of HyOrc. In line with ASC 805-40-45-2(d), the following is considered:
In calculating the weighted-average number of common shares outstanding (the denominator of the earnings-per-share [EPS] calculation) during the period in which the reverse acquisition occurs:
a. The number of common shares outstanding from the beginning of the period to the acquisition date is computed on the basis of the weighted-average number of common shares of SRE outstanding during the period multiplied by the exchange ratio established in the agreement.
b. The number of common shares outstanding from the acquisition date to the end of the period is the actual number of common shares of the HyOrc outstanding during that period.
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The basic EPS for each comparative period before the acquisition date presented in the financial statements following a reverse acquisition is calculated by dividing (a) by (b):
a. The income of the SRE attributable to common shareholders in each of those periods.
b. SRE’s weighted-average number of common shares outstanding multiplied by the exchange ratio established in the agreement.
The
issued and outstanding common shares of SRE through the acquisition date was
The
weighted-average number of common shares for 2025 was
Intangible Assets
Intangible assets primarily consist of patents owned by SRE which have been granted by the Indian government due to work done at the Indian R&D centre. HyOrc is expanding patent coverage with the application process primarily in the USA, EU, Japan through existing bilateral and multilateral cooperation agreements. These patents were acquired through an assignment agreement entered by SRE in May 2024 through which SRE acquired ownership interests in the patents including utility models and design patents and registrations and applications assigned by the Assignor.
The
consideration terms were agreed in such a way that the Assignor is entitled to
Accordingly,
the Company issued
The patents have an indefinite useful life because it is expected to contribute to cash flows indefinitely and the associated costs of renewal are not significant. The patents are tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired in accordance with ASC 350-30-35-18. For December 2025 and 2024, management performed a qualitative impairment assessment, of which there were no indications that it was more likely than not that the fair value of the patents were less than their respective carrying values. As such, a quantitative test was not required, and no impairment was recognized during the quarter ended March 31, 2026 and 2025 respectively.
In connection with the reverse acquisition, the Company identified intangible assets, which are solely customer relationships (refer to Note 3). For December 2024, management performed a qualitative impairment assessment of these intangible assets, of which there were indications that it is more likely than not that the fair value of these intangible assets units were less than their respective carrying values. As such, a quantitative impairment test was performed and the intangible assets were fully impaired with a corresponding impairment loss recognized in the Statement of operations for the year ended December 31, 2024.
Notwithstanding the ongoing litigation with Biliran Geothermal, Inc., management has evaluated the impact of such matters in accordance with ASC 350-30-35 and determined that they do not represent a triggering event for impairment. The underlying patents are not project-specific and may be deployed across multiple potential applications and future projects. Management is actively pursuing additional opportunities expected to commence in 2026, for which these patents are expected to generate future economic benefits. Accordingly, management concluded that there are no indicators that it is more likely than not that the fair value of the patents is less than their carrying amount, and therefore, no impairment loss has been recognized for the year ended December 31, 2025.
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Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Recent Accounting Pronouncements
Recently Adopted Standards
ASU 2023-09 — Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollar amounts and percentages, with specific categories and further disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pre-tax income (loss) by the applicable statutory rate. The ASU also requires disclosure of income taxes paid disaggregated by federal, state, and foreign jurisdictions. The Company adopted ASU 2023-09 effective January 1, 2025 on a prospective basis. The Company is currently evaluating the specific disclosure requirements under the standard and will include the applicable disclosures in future filings, as appropriate. The adoption did not have a material impact on the Company’s consolidated financial statements.
ASU 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, as well as other segment items and a description of its composition. The ASU also requires entities with a single reportable segment to provide all disclosures required under the standard. The Company adopted ASU 2023-07 effective January 1, 2025. The adoption had a financial statement disclosure impact only and did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Standards Not Yet Adopted
ASU 2023-08 — Accounting for and Disclosure of Crypto Assets
In December 2023, the FASB issued ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The ASU requires entities to subsequently measure qualifying crypto assets at fair value, with changes in fair value recognized in net income each reporting period. The ASU also establishes specific disclosure requirements, including information about significant crypto asset holdings, contractual sale restrictions, and changes in such holdings. The guidance applies to crypto assets that meet all of the following criteria:
| ● | Meet the definition of intangible assets as defined in the ASC Master Glossary; | |
| ● | Do not provide enforceable rights to or claims on underlying goods, services, or other assets; | |
| ● | Are created or reside on a distributed ledger based on blockchain or similar technology; | |
| ● | Are secured through cryptography; | |
| ● | Are fungible; and | |
| ● | Are not created or issued by the reporting entity or its related parties. |
ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted. The Company does not currently hold any crypto assets. Accordingly, the adoption of ASU 2023-08 is not expected to have a material impact on the Company’s consolidated financial statements; however, the Company will continue to monitor its investment activities and evaluate the impact of the standard should it acquire crypto assets in the future.
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ASU 2024-03 — Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires public business entities to disclose, in the notes to financial statements, specified information about certain costs and expenses included in expense line items presented on the face of the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.
ASU 2025-05 — Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets: The ASU provides a practical expedient permitting entities to assume that conditions at the balance sheet date remain unchanged over the life of current accounts receivable and current contract assets when estimating expected credit losses. The guidance is effective for annual and interim reporting periods beginning after December 15, 2025, with early adoption permitted. The Company does not expect ASU 2025-05 to have a material impact on its consolidated financial statements.
ASU 2025-06 — Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software: The ASU requires entities to begin capitalizing software development costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform its intended function (the “probable-to-complete recognition threshold”). The amendments are effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the amendments using a prospective, modified retrospective, or retrospective transition approach. The Company is currently evaluating the impact of ASU 2025-06 and will assess the impact upon adoption.
ASU 2025-11 — Interim Reporting: Narrow-Scope Improvements
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements: The ASU requires entities to disclose events occurring since the end of the last annual reporting period that have a material impact on the entity. The amendments apply to all entities that present interim financial statements in accordance with GAAP. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The amendments may be applied either prospectively or retrospectively. The Company expects ASU 2025-11 to impact its disclosures only and does not expect it to affect its results of operations, financial condition or cash flows.
Note 2. GOING CONCERN
The
Company has a net loss of $
SRE
is the operator of the 2MW geothermal power plant in Biliran Philippines and is entitled to
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Biliran Geothermal Project (2MW) – Operational Status as of March 31, 2026
As of March 31, 2026, the 2MW geothermal power plant in Biliran remained offline and non-operational due to infrastructure damage. The project began experiencing persistent grid instability in April 2024, resulting in over 250 grid trips that caused progressive stress and wear to critical equipment. On October 05, 2024, the plant was taken offline following a technical inspection that revealed accumulated damage to key systems, making continued operation unsafe. Shortly after this shutdown, Typhoon Kristine-Trami struck the region and caused additional physical damage to the facility. Despite the existence of an insurance policy intended to cover such events, we have not received confirmation that a claim has been activated, and we have not received cooperation from the project counterparties responsible for managing the insurance process.
The company continues to engage stakeholders and explore legal and commercial remedies to protect our position, recover losses, and restore the project’s operational viability.
The Company’s ability to continue as a going concern in the next twelve months following the date the financial statements are available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results.
Management Plans
Management has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs.
While uncertainties remain with respect to the timing of insurance recovery and revenue realization, management is reasonably certain in the Company’s ability to meet its operational and financial obligations over the next twelve months through a combination of funding, asset deployment, and resolution of existing claims but it cannot provide assurances that it will be successful in doing so.
These circumstances raise substantial doubt as to the ability of the Company to meet its obligations as they come due. If it is unable to obtain sufficient amount of additional capital, it may be required to reduce the scope of its planned development. The accompanying financial statements do not include any adjustments that might result from these uncertainties.
The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Refer Note 11 for subsequent events.
NOTE 3. REVERSE ACQUISITION
The Company evaluated the acquisition of SRE pursuant to ASC 805 and ASU 2017-01, Topic 805, Business Combinations. As described in Note 1, we have identified the Company as the legal acquirer, as it is the entity that issued securities. Comparatively, we have identified SRE as the legal acquiree, the entity whose equity interests are acquired in line with ASC 805-40 – Reverse Acquisitions.
Accordingly, the acquisition date fair value of the consideration transferred by SRE was based on the number of equity interests SRE would have had to issue to give the owners of HyOrc the same percentage equity interest in the combined entity that results from the reverse acquisition.
The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition. In the reverse acquisition described above, HyOrc’s assets and liabilities were measured in accordance with the guidance in ASC 805 on Business Combinations and Goodwill is measured as the excess of fair value of consideration effectively transferred by SRE, the accounting acquirer over the fair value of the net assets of HyOrc, the accounting acquiree on the acquisition date.
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The following table summarizes the preliminary purchase price allocation of HyOrc:
SCHEDULE OF PRELIMINARY PURCHASE PRICE
| Total | ||||
| Customer relationship - Intangibles | $ | |||
| Goodwill | ||||
| Purchase price consideration effectively transferred | $ | |||
The
fair value consideration effectively transferred was determined based on the number of common stock which SRE would have had to issue
to the owners of HyOrc at the fair value per share of SRE on the date of acquisition to provide the same ratio of ownership (
Pursuant to the reverse acquisition, the Company engaged an independent third-party valuation specialist to determine the fair value per share of SRE which as determined using the fair value of net assets as on the acquisition date. Given the limited operations of HyOrc in the period preceding the acquisition, the fair value per common share of SRE was considered to be more reliable and reflects the economic substance of the consideration effectively transferred.
The fair value of net assets of SRE as on the acquisition date is as follows:
SCHEDULE OF FAIR VALUE OF NET ASSETS
| Total | ||||
| Property, plant and equipment, net | $ | - | ||
| Other intangible assets | ||||
| Cash and cash equivalents | ||||
| Accounts payable and accrued liabilities | ( | ) | ||
| Fair value of net assets | $ | |||
| Number of SRE shares outstanding on the acquisition date | ||||
| Fair Value per share on the acquisition date | $ | |||
SRE
would have had to issue
HyOrc
had
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Accordingly, the equity structure in the financial statements reflect the sum of SRE’s issued equity immediately before the reverse acquisition, and the fair value of the hypothetical consideration effectively transferred. The equity structure (i.e., the number and type of equity interests issued) reflects the equity structure of HyOrc. However, the balance is adjusted to reflect the par value of the outstanding shares of HyOrc, including the number of shares issued in the reverse acquisition and the difference is recognized as an adjustment to the Additional paid-in capital. For periods before the reverse acquisition, the stockholders’ equity of the combined entity is presented on the basis of the historical equity of the SRE before the acquisition, retroactively recast to reflect the number of shares received by SRE in the acquisition.
Goodwill is primarily attributable to the go-to-market synergies that are expected to arise as a result of the acquisition and other intangible assets that qualify for separate recognition. The goodwill is not deductible for tax purposes.
The results of HyOrc have been included in the consolidated financial statements since the acquisition date.
Note 4. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consist of the following:
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT
| March 31, 2026 | December 31, 2025 | |||||||
| March 31, 2026 | December 31, 2025 | |||||||
| Plant and equipment, net | $ | $ | ||||||
Depreciation
expense for the three months ended March 31, 2026 and 2025 was $
The Company’s historical unproved property interests related to consideration paid in March 2017 for an oil well working interest near Ganado, Texas, originally acquired by Symba America Oil & Gas, which subsequently changed its name to SRE Power, Inc. in 2022.
Following the cessation of oil extraction activities, management performed a qualitative impairment assessment in accordance with ASC 360-10-35 and determined that the fair value of the unproved property interests was negligible. Accordingly, the carrying value of these properties was fully impaired in prior periods.
During the year ended December 31, 2025, the underlying property interest was disposed of for proceeds of $
Note 5. COMMITMENTS AND CONTINGENCIES
From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or loss contingencies. A liability is recorded when and if it is determined that such a liability for litigation or loss contingencies is both probable and estimable.
Although the results of legal proceedings and claims cannot be predicted with certainty, the Company is not currently a party to any legal proceedings, which would, individually or in the aggregate, have a material adverse effect on its results of operations, cash flows, or financial position except for matters disclosed elsewhere in these financial statements, including the Biliran dispute and arbitration proceedings related to Joule Energy GmbH.
Note 6. INCOME TAXES
Deferred
taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.
The differences relate primarily to net operating loss carry forwards. For the quarter ended March 31, 2026, and 2025, the Company did
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The
Company has evaluated its income tax positions and has determined that it does
The Company is not presently subject to any income tax audit in any taxing jurisdiction, though its 2022-2023 tax years remain subject to examination by U.S. federal and state jurisdictions.
Note 7: ACCOUNTS RECEIVABLES (NET)
As of March 31, 2026, the Company had certain receivables recorded from a counterparty. However, based on external confirmation received from the counterparty, they indicated a position that amounts were payable by the Company. Management evaluated this discrepancy and determined, based on its accounting records and supporting documentation, that no shipments occurred during 2024 or 2025 that would give rise to additional charges, and all invoices received from this supplier had been fully settled. In the absence of any supporting invoices or documentation substantiating the counterparty’s claim, no liability has been recognized in the books as of March 31, 2026. Further, the Company has recorded a full allowance for expected credit losses against the receivables from this counterparty, reflecting uncertainty regarding their collectibility. Additionally, based on management’s assessment of the facts and circumstances, including the lack of supporting evidence and the Company’s contractual position, the likelihood of any obligation arising is considered remote. Accordingly, no contingent liability has been recognized or disclosed in accordance with ASC 450.
NOTE 8: COMMON STOCK
On
May 13, 2025, the Company issued
The
fair value of the equity instruments granted was measured on the grant date based on the closing market price of the Company’s
common stock, as the shares are publicly traded and represent Level 1 inputs under the fair value hierarchy. The grant date fair value
of the shares was determined to be $
As the services were rendered and no future service or performance conditions were associated with the awards, the entire grant date fair value was recognized as stock-based compensation expense upon issuance.
Accordingly,
the Company recognized total stock-based compensation expense of $
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The Company accounts for share-based payments to non-employees in accordance with ASC 718, which requires measurement at grant date fair value and recognition of expense as the related goods or services are received. The details of stock issued are as follows:
SCHEDULE OF STOCK ISSUED
| Name of the person | No. of common shares issued | Price at which share is issued | Common stock ($) | Additional paid-in capital ($) | ||||||||||||
| Guy Russell | | |||||||||||||||
| Gerald Anozia | | |||||||||||||||
| Neelan Samaratunga | | |||||||||||||||
| Neelan Samaratunga | | |||||||||||||||
| Nancy White | | |||||||||||||||
| James McNaught-Davis | | |||||||||||||||
| Shinichi Hirano | | |||||||||||||||
| Manoharan Sundaralingam | | |||||||||||||||
| K. Reginald Fubara | | |||||||||||||||
| Total | ||||||||||||||||
NOTE 9: COMMON STOCK SUBSCRIBED
As
of December 31, 2025, the Company had entered into subscription agreements and share issuance arrangements relating to
Subsequent
to year-end and through March 27, 2026, the Company issued an additional
In addition, on January 16, 2026, the Company entered into a subscription agreement for the purchase of
These subsequent issuances do not result in a retroactive adjustment to the shares outstanding as of March 31, 2026, but are disclosed to reflect changes in the Company’s capital structure subsequent to the reporting date.
NOTE 10: SUBSEQUENT EVENTS
Subsequent
to March 31, 2026, the Company entered into a definitive agreement with On Energy and its affiliated entities relating to the development
of a waste-to-methanol project in Bulgaria.
Based on preliminary engineering design parameters, the facility is expected to support production of approximately 18,000 to 20,000 tonnes of methanol per year. The project has obtained the regulatory requirements necessary for development and is considered ready to proceed toward construction and implementation, positioning it at an advanced stage relative to many comparable waste-to-fuel projects.
The Company expects to participate in the project through technology licensing, engineering services, and related project development activities.
Additional information regarding this agreement was disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 24, 2026.
In addition to above the company has formed a Joint venture company named HYORC START GREEN FUELS, LDA, with Start LDA a Portugal based company for production of Green methanol (Waste to Methanol strategy) on 15th September 2025. The company expects to produce 8 tonnes/day and 2800 tonnes/ year of methanol in this JV. For this methanol the company has identified potential customer Prio Bid Lda, Portugal largest biodiesel producer with whom MOU has been signed on February 25th, 2026.
The company has entered into another Memorandum of Understanding with GB Railfreight Limited on February 16th 2026, for sale of HyOrc locomotives which can operate using Natural gas, Bio fuel and LPG. As per MOU in Q1 and Q2 of 2026 the company should complete the technical design, the company is in the midst of Technical design process.
Management has evaluated subsequent events through May 7, 2026, the date the financial statements were available to be issued.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
Overview
HyOrc Corporation is a development-stage energy technology company focused on the commercialization of proprietary waste-to-fuel and clean power generation systems. The Company’s core technologies include refuse-derived fuel (RDF) gasification for methanol production and externally fired engine systems for distributed power generation.
During the three months ended March 31, 2026, the Company continued its transition from legacy geothermal operations toward the development and deployment of its waste-to-methanol and clean energy platform. This transition reflects a strategic repositioning toward scalable industrial projects supported by project-level financing and strategic partnerships.
At present, the Company’s activities are primarily focused on advancing project development, securing capital, and validating its technology platform. Accordingly, revenue generation remains limited and is expected to increase upon successful execution and commissioning of planned projects.
Key Developments
Technology Validation – Waste-to-Methanol
Subsequent to the reporting period, the Company achieved independent validation of its RDF-to-methanol process at its R&D facility in India. The validation confirmed full process functionality, including feedstock preparation, gasification, syngas cleaning, methanol synthesis, and product recovery, with no material non-conformities identified.
This milestone materially reduces technical risk and supports the Company’s transition toward commercial deployment.
Portugal – Porto Project
The Company continued advancing its planned waste-to-methanol facility in Porto, Portugal, which is intended to serve as its first commercial-scale deployment of its technology platform. During the period, the Company progressed engineering planning, funding strategy development, and regulatory positioning in preparation for project execution.
Subsequent to the reporting period, the Company further advanced the project through the progression of its partnership structure and the submission of an application under the European Union’s Strategic Technologies for Europe Platform (“STEP”) program, targeting grant funding to support development and deployment.
These developments represent meaningful progress toward commercialization of the Company’s waste-to-methanol platform, although no capital contributions had been made as of March 31, 2026.
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European Pipeline – Bulgaria
The Company is advancing its integrated waste-to-methanol project in Bulgaria in partnership with On Energy and related entities. Based on preliminary engineering and regulatory positioning, the project is considered to be at an advanced development stage and is progressing toward potential construction and implementation, subject to funding and final approvals. The Company is participating in funding initiatives aligned with EU decarbonization programs, including the Innovation Fund.
This project supports expansion of the Company’s European pipeline and long-term deployment strategy.
Capital Strategy
The Company continues to prioritize capital formation through a combination of equity financing, strategic partnerships, and non-dilutive funding sources, including grant programs aligned with its project development strategy.
Results of Operations
Revenue
Revenue for the three months ended March 31, 2026 remained minimal, reflecting the Company’s focus on development activities rather than operating projects. In the prior year period, revenue was derived from engineering and technical services, which were not a focus during the current quarter.
Operating Expenses
Operating expenses consisted primarily of general and administrative costs, including professional fees, contractor expenses, and public company compliance costs. The Company continues to maintain a disciplined cost structure while advancing its development activities.
Net Loss
The Company reported a net loss of approximately $84,660 for the period, consistent with its development-stage profile and limited revenue base.
Liquidity and Capital Resources
Cash Position
Cash and cash equivalents totaled approximately $134,736 as of March 31, 2026, compared to $19,417 at December 31, 2025. The increase reflects capital contributions received during the quarter.
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Cash Flows
Operating cash outflows reflect ongoing expenses and working capital needs. Financing inflows were derived from investor contributions.
Net cash provided during the period was primarily attributable to subscription money advances received from investors, partially offset by operating expenses incurred during the quarter.
Capital Requirements
The Company will require additional capital to support operations and execute its project strategy. Management is actively pursuing equity financing, project-level funding, and grant programs.
Balance Sheet Discussion
Intangible Assets and Goodwill
The Company’s asset base includes goodwill and intellectual property. Management has determined that no impairment indicators were present during the period. The value of these assets is dependent on successful commercialization.
Accounts Receivable
Certain receivables remain subject to collection uncertainty. Management has recorded appropriate allowances and continues to monitor recoverability.
Going Concern
The Company continues to operate with limited revenue and ongoing losses. Its ability to continue as a going concern is dependent upon securing additional financing and successfully executing its development strategy. Management believes it can meet its obligations through capital raising and project advancement; however, no assurance can be given.
Outlook
The Company remains focused on:
| ● | advancing the Porto project | |
| ● | progressing the Bulgaria development | |
| ● | securing grant and project financing | |
| ● | continuing technology validation and deployment |
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to certain market risks in the normal course of its business, including interest rate risk, foreign currency risk, and credit risk. Due to the Company’s current stage of development and limited operational activity, its exposure to market risk remains relatively limited.
Interest Rate Risk
As of March 31, 2026, the Company does not have any outstanding debt instruments subject to variable interest rates. Accordingly, the Company does not currently have material exposure to interest rate fluctuations. Future project-level financing arrangements may introduce exposure to interest rate risk, which the Company will evaluate and manage as such financing is secured.
Foreign Currency Risk
The Company’s operations and planned project developments involve multiple jurisdictions, including Europe and India. As a result, the Company may be exposed to foreign currency exchange rate fluctuations in future periods.
As of March 31, 2026, substantially all reported amounts are denominated in U.S. dollars, and foreign currency exposure is not considered material. However, as the Company advances its international projects, including its planned facility in Portugal and development activities in Bulgaria, exposure to currency fluctuations may increase.
Credit Risk
The Company maintains cash balances with financial institutions and may be exposed to credit risk in the event of default by such institutions. The Company mitigates this risk by maintaining its cash with reputable financial institutions.
The Company also has accounts receivable balances that are subject to collection risk. Management has evaluated these balances and recorded allowances for expected credit losses where appropriate.
Liquidity Risk
The Company’s primary liquidity risk arises from its need to secure additional financing to support operations and project development. As a development-stage entity, the Company is dependent on capital raising activities and project-level financing to fund its operations and execute its business strategy.
Commodity and Market Risk
The Company’s future operations are expected to be influenced by market prices for methanol, energy, and related commodities. While the Company is not currently exposed to commodity price fluctuations due to limited operations, future revenues from its waste-to-methanol and energy projects will depend on prevailing market conditions.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
As of March 31, 2026, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.
There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives. Due to inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.
Management’s Responsibility
Management is responsible for establishing and maintaining adequate internal control over financial reporting and disclosure controls and procedures. The Company continues to evaluate and enhance its internal control environment as it expands its operations and progresses toward commercial deployment of its projects.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in certain legal proceedings arising in the ordinary course of its business, as described below.
The Company cannot predict the outcome of these matters. However, based on information currently available, the Company does not believe that these proceedings will have a material adverse effect beyond amounts already reflected or disclosed in its financial statements.
LCIA Arbitration – Joule Energy and Related Parties
On April 20, 2026, the Company’s wholly owned subsidiary, SRE Power Inc., commenced arbitration proceedings under the rules of the London Court of International Arbitration (“LCIA”) against Joule Energie GmbH, Joule Enerji, and Kontrolmatik Teknoloji Enerji ve Mühendislik A.Ş.
The arbitration arises out of a service agreement dated August 18, 2025 and relates to disputes concerning project management, personnel mobilization, and associated contractual obligations. The arbitration is seated in London, England and is governed by the laws of England and Wales.
The Company is seeking relief in connection with amounts owed and other contractual matters. As of the date of this report, the arbitration is in its initial stages, and no determinations have been made.
Biliran Geothermal Project – Philippines (BGI Matter)
The Company is involved in an ongoing dispute related to its geothermal project in Biliran, Philippines, operated through its subsidiary SRE Power Inc.
As previously disclosed, the project has been offline since October 2024 following infrastructure damage and operational issues. The Company is engaged in discussions and pursuing legal and commercial remedies with counterparties in connection with project operations, insurance matters, and related obligations.
While the outcome of these matters cannot be predicted with certainty, the Company does not currently believe that any such proceedings, individually or in the aggregate, will have a material adverse effect on its financial position beyond amounts already reflected or disclosed in its financial statements.
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ITEM 1A. RISK FACTORS
An investment in the Company’s securities involves a high degree of risk. In addition to the other information contained in this report, investors should carefully consider the following risk factors, as well as those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The occurrence of any of the following risks could materially adversely affect the Company’s business, financial condition, results of operations, and prospects.
The Company is a development-stage entity with limited revenue and a history of operating losses.
The Company has generated minimal revenue in recent periods and has incurred operating losses. For the three months ended March 31, 2026, the Company reported a net loss of approximately $84,660.
The Company’s ability to achieve profitability is dependent on its ability to successfully develop, finance, and deploy its projects, including its waste-to-methanol and energy generation initiatives. There can be no assurance that the Company will generate significant revenues or achieve profitability in the near term.
The Company requires additional capital to fund its operations and project development activities.
The Company is dependent on external financing to support its operations and execute its business strategy. Its ability to continue as a going concern is contingent upon its ability to secure additional funding, including equity financing, project-level financing, and grant funding.
Failure to obtain sufficient funding on acceptable terms could delay or prevent the Company from advancing its projects and achieving commercialization.
The Company’s business strategy depends on the successful development and execution of large-scale projects.
The Company’s growth strategy is centered on the development of waste-to-methanol and clean energy projects, including its planned facility in Portugal and development initiatives in Europe.
These projects require significant capital investment, regulatory approvals, engineering execution, and operational expertise. Delays, cost overruns, or failure to successfully execute these projects could materially adversely affect the Company’s business.
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The Company’s technologies are subject to validation, scaling, and commercialization risks.
Although the Company has achieved successful pilot-level validation of its waste-to-methanol process, the transition from pilot-scale validation to full commercial deployment involves significant technical and operational risks.
There can be no assurance that the Company’s technologies will perform as expected at commercial scale or that they will be adopted by customers or partners.
The Company is exposed to risks associated with international operations.
The Company’s operations and planned projects span multiple jurisdictions, including Europe and Asia. As a result, it is subject to risks associated with international business operations, including:
| ● | regulatory and permitting requirements | |
| ● | political and economic conditions | |
| ● | foreign currency fluctuations | |
| ● | supply chain and logistics challenges |
These risks may impact project timelines, costs, and overall execution.
The Company is subject to risks related to legal proceedings and disputes.
The Company is involved in legal proceedings, including arbitration and disputes with counterparties related to project activities.
These matters may result in significant costs, management distraction, and potential adverse outcomes. While the Company is actively pursuing its legal rights, there can be no assurance as to the outcome of such proceedings or their impact on the Company’s business.
The Company has concentration risk related to key projects and partners.
The Company’s current strategy is focused on a limited number of key projects and strategic partnerships. The success of the Company is therefore dependent on the advancement and execution of these projects.
The loss, delay, or failure of any key project or partner relationship could have a material adverse effect on the Company’s business.
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The Company’s intellectual property may not provide sufficient protection.
The Company’s business depends in part on its proprietary technologies and intellectual property, including patents related to its energy systems.
There can be no assurance that the Company’s intellectual property rights will provide meaningful protection against competitors, or that the Company will not face challenges to its intellectual property.
The Company’s common stock is traded on the OTCQB market and may be subject to volatility and limited liquidity.
The Company’s common stock is quoted on the OTCQB market, which is generally characterized by lower trading volumes and higher volatility compared to national securities exchanges.
These factors may result in significant price fluctuations and limited liquidity for investors.
Future issuance of equity securities may result in dilution.
The Company may issue additional shares of common stock or other securities in connection with capital raising activities, project financing, or strategic transactions.
Such issuances may result in dilution to existing shareholders and could adversely affect the market price of the Company’s common stock.
Forward-looking statements are subject to risks and uncertainties.
This report contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those anticipated in such statements due to a variety of factors, including those described in this section.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
During the three months ended March 31, 2026, the Company received subscription proceeds totaling approximately $199,979, which were recorded as subscription money advances pending issuance of shares. No shares were issued during the quarter ended March 31, 2026.
Any future issuance of shares associated with these subscription proceeds is expected to be conducted in reliance upon exemptions from registration under the Securities Act of 1933, as amended, including Regulation S and/or Section 4(a)(2), as applicable.
Use of Proceeds
Proceeds received from investors during the period were used for general working capital purposes, including operating expenses, professional fees, and ongoing project development activities.
The Company intends to continue using available capital to support its strategic initiatives, including advancing its waste-to-methanol and clean energy projects, as well as pursuing financing and partnership opportunities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
The following exhibits are filed as part of this report:
| Exhibit No. | Description | |
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 | |
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 | |
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | |
| 32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 | |
| 101 | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HyOrc Corporation | ||
| Date: May 7, 2026 | ||
| By: | /s/ K. Reginald Fubara | |
| K. Reginald Fubara, | ||
| Chief Executive Officer | ||
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