WAST.OTC.PinkWaste Energy CORP
10-Q: Waste Energy Corp. Reports Q3 Losses, Going Concern Warning
Sentiment:
Quarterly Report
Waste Energy Corp. reported a net loss of $985,026 for the nine months ended September 30, 2025, alongside a going concern warning and ineffective disclosure controls.
Delay expectedRenewable energy assets acquired for $468,048 are pending customs clearance and are expected to be completed and custody transferred by the end of November 2025, delaying their capitalization and placement in service.Shares from private placements totaling $150,000 (10,000,000 shares at $0.05, and two separate 2,500,000 shares at $0.02 each) were not issued as of September 30, 2025, but are intended to be issued before November 30, 2025.Shares for debt settlement with a principal shareholder ($100,000) and two vendors ($15,000 and $24,000) were not issued as of September 30, 2025.A promissory note (Note A) for $117,000 went into default during 2024, and management is currently negotiating an extension.The note receivable from Enderby Entertainment Inc. for $1,828,000 went into default on September 30, 2024.
Capital raiseManagement intends to finance operating costs over the next twelve months with existing cash on hand, loans from third parties, related party debt, and proceeds from the issuance of stock.The company expects to derive additional cash resources through the sale of equity or debt securities or by obtaining a credit facility.Received $150,000 from private placements for shares to be issued.Received $280,000 from the issuance of convertible notes.Received $250,000 from the issuance of notes payable.
Worse than expectedThe company continues to report significant net losses, with an accumulated deficit exceeding $50 million.Working capital deficit has worsened from $(3,170,689) to $(4,100,304).The company explicitly states "substantial doubt about the Company's ability to continue as a going concern."Disclosure controls and procedures were deemed "not effective" due to material weaknesses.Derivative liabilities increased significantly, indicating potential future financial obligations.Several notes payable and notes receivable are in default or deemed non-collectible.
Summary
- Net loss for the nine months ended September 30, 2025, was $985,026, a significant improvement from $2,737,682 in the prior year.
- Revenue for the nine months ended September 30, 2025, was $299,167, compared to no revenue in the same period of 2024.
- The company has a substantial accumulated deficit of $50,943,442 and negative working capital of $4,100,304 as of September 30, 2025.
- Management issued a going concern warning, indicating substantial doubt about the company's ability to continue operations.
- Disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting.
- A capital advance of $468,048 was made for renewable energy assets, which are pending customs clearance and capitalization.
- Derivative liabilities increased significantly to $1,554,288 from $40,943 at December 31, 2024, primarily due to changes in stock price and volatility.
Sentiment
Score: 2
Explanation: The company faces severe financial distress, evidenced by a going concern warning, substantial accumulated deficit, and negative working capital. While there's a strategic pivot and some revenue generation, the overall financial health is extremely poor, compounded by ineffective internal controls and ongoing legal issues. The reduction in net loss is a positive, but it's from a very low base and doesn't alleviate the fundamental solvency concerns.
Positives
- Net loss significantly reduced to $985,026 for the nine months ended September 30, 2025, from $2,737,682 in the prior year.
- Generated $299,167 in revenue from consulting services and recyclable material intake for the nine months ended September 30, 2025, compared to no revenue in the prior year.
- Successfully settled a note payable to one of its principal shareholders through the issuance of common shares valued at $100,000.
- Acquired renewable energy assets for $468,048, signaling progress in the new waste-to-energy business focus.
Negatives
- Substantial doubt about the company's ability to continue as a going concern due to significant operating losses, accumulated deficit of $50,943,442, and negative working capital of $4,100,304.
- Disclosure controls and procedures were not effective as of September 30, 2025, due to material weaknesses in internal control over financial reporting.
- Derivative liabilities increased significantly to $1,554,288 as of September 30, 2025, from $40,943 at December 31, 2024, driven by changes in stock price and volatility.
- A promissory note for $117,000 is in default, and management is negotiating an extension.
- A note receivable from Enderby Entertainment Inc. for $1,828,000 is in default and deemed potentially non-collectible, with an allowance for credit losses of $2,426,286.
- The company is a defendant in a lawsuit claiming damages of $752,500 related to a contingent commitment on an uncollected invoice.
- Cash and cash equivalents remain low at $47,419 as of September 30, 2025.
- High customer concentration, with one customer generating 100% of total consulting revenue for the nine months ended September 30, 2025, and 83% of total accounts receivable as of September 30, 2025.
Risks
- Substantial doubt about the company's ability to continue as a going concern due to significant operating losses, accumulated deficit, and negative working capital.
- Inability to efficiently manage operations.
- General economic and business conditions.
- Negative operating cash flow.
- Inability to obtain additional financing on acceptable terms or at all.
- Inability to collect outstanding loans.
- Increases in capital and operating costs.
- Risks relating to regulatory changes or actions.
- Litigation proceedings from LarCo Holdings, LLC claiming $752,500 in damages, which the company intends to dismiss.
- Material weaknesses in internal control over financial reporting, leading to ineffective disclosure controls and procedures.
- High customer concentration, with one customer generating 100% of total consulting revenue for the nine months ended September 30, 2025, and 83% of total accounts receivable as of September 30, 2025.
Future Outlook
Management anticipates further losses as the company pursues business opportunities. The ability to continue as a going concern is dependent on generating profits, adequate cash flows, and/or obtaining necessary financing. The company expects to require $900,000 to fund operating expenditures for the next twelve months, planning to secure this through equity or debt securities or a credit facility. The company is evaluating various business opportunities in the waste-to-energy industry.
Management Comments
- Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from third parties, related party debt and proceeds from the issuance of stock.
- There are no assurances that the Company will be able to secure funding on terms that are acceptable to the Company or at all.
- The Company intends to file a motion to dismiss this claim against it, as it has never collected on the specified invoice and the Company's agreement for partial payment of this loan was solely dependent on collecting this customer balance.
- Management determined, with the advice of legal counsel that it is too early to estimate the outcome of this claim.
Industry Context
Waste Energy Corp. is transitioning its business focus to the waste-to-energy industry, aiming to convert plastic and tire waste into valuable energy products and environmental commodities. This strategic shift positions the company in a growing sector driven by environmental concerns and the demand for sustainable energy solutions. The company is also developing AI-based emissions monitoring and carbon credit creation technology, aligning with broader trends in environmental technology and carbon markets. This move away from digital platform consulting, NFT markets, and movie rights reflects a pivot towards a more tangible and environmentally focused business model, though it faces significant financial challenges during this transition.
Comparison to Industry Standards
- NA
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Lead Director | James Geiskopf | NA | 2024-06-28 | Resignation |
| Executive Chairman / Board Member | Cameron Chell | NA | 2024-12-19 | Resignation |
| Chief Financial Officer | Swapan Kakumanu | Braden Glasbergen | 2025-03-05 | Resignation of Swapan Kakumanu |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Internal Control Weaknesses | Disclosure controls and procedures were not effective as of September 30, 2025, due to material weaknesses in internal control over financial reporting. | 2025-09-30 | Raises concerns about the reliability of financial reporting and compliance with SEC requirements. |
Legal Proceedings
- LarCo Holdings, LLC filed a joint complaint against Business Instincts Group Inc. (BIG) and the Company on July 31, 2024, in Arizona Superior Court, claiming damages of $1,321,382, with the Company potentially liable for $752,500. The Company intends to file a motion to dismiss, arguing its commitment was contingent on collecting a specific customer invoice, which has not occurred.
Related Party Transactions
- Accounts payable and accrued expenses owed to James Geiskopf: $74,244 as of September 30, 2025.
- Accounts payable and accrued expenses owed to Cameron Chell: $130,032 as of September 30, 2025.
- Accounts payable and accrued expenses owed to Scott Gallagher: $39,367 as of September 30, 2025.
- Accounts payable and accrued expenses owed to Business Instincts Group Inc. (BIG), founded by Cameron Chell: $542,492 as of September 30, 2025.
- Settled $117,476 debt owed to RTB LLP (company owned by Swapan Kakumanu) by issuing 1,174,760 shares, which had not yet been issued as of September 30, 2025.
- Note receivable from Enderby Entertainment Inc. (partner in jointly-owned subsidiary EnderbyWorks, LLC) for $1,828,000 is in default and deemed potentially non-collectible.
- Informal month-to-month rental agreement for corporate office with a related party, incurring $0 rent expense for the nine months ended September 30, 2025, but $24,000 in 2024.
- Pledged an uncollected invoice of $752,500 as collateral for Business Instincts Group, Inc. (BIG) to obtain a loan from LarCo Holdings, LLC, leading to current litigation.
Stakeholder Impact
- Shareholders: Significant dilution risk from potential future equity raises; uncertainty regarding the company's going concern status; potential negative impact from legal proceedings and ineffective internal controls; potential for future value if the waste-to-energy pivot is successful.
- Creditors: Risk of non-payment due to going concern issues and defaulted notes; potential for debt-to-equity conversions.
- Employees/Management: Changes in key management roles; uncertainty regarding the company's long-term viability.
- Customers: Potential impact on service delivery if financial issues persist, though new revenue streams are emerging.
- Suppliers/Vendors: Risk of delayed or non-payment, as evidenced by debt settlements through share issuance.
Next Steps
- Secure additional financing through equity or debt securities or a credit facility to fund $900,000 in operating expenditures for the next twelve months.
- Complete customs clearance and obtain custody of renewable energy assets by the end of November 2025, then reclassify the capital advance to Property, Plant, and Equipment and begin depreciation.
- Issue shares from private placements and debt settlements before November 30, 2025.
- Negotiate an extension for the defaulted $117,000 promissory note.
- File a motion to dismiss the lawsuit from LarCo Holdings, LLC.
- Continue evaluating various business opportunities in the waste-to-energy industry.
Key Dates
| Date | Description |
|---|---|
| 2010-07-20 | Company incorporated under the laws of Nevada as Redstone Literary Agents, Inc. |
| 2017-08-01 | Incorporated Nevada subsidiary, AppCoin Innovations (USA) Inc., for blockchain consulting. |
| 2017-10-09 | Company signed an agreement with RTB LLP to provide accounting services. |
| 2017-12-04 | Swapan Kakumanu appointed as Chief Financial Officer. |
| 2018-02-14 | Subsidiary AppCoin Innovations (USA) Inc. changed name to ICOx USA, Inc. |
| 2018-11-28 | Incorporated Delaware subsidiary, Cathio, Inc., for blockchain technology in Catholic community. |
| 2019-06-02 | Company agreed to pledge an uncollected invoice of $752,500 as collateral for Business Instincts Group, Inc. (BIG) to obtain a loan from LarCo Holdings, LLC. |
| 2019-09-03 | Company changed name from ICOx Innovations Inc. to CurrencyWorks Inc. |
| 2020-10-20 | Cathio, Inc. dissolved. |
| 2021-02-10 | Granted 2,066,666 stock options to consultants. |
| 2021-03-19 | Granted 180,000 stock options to a consultant. |
| 2021-04-01 | Cameron Chell appointed as Executive Chairman. |
| 2021-05-05 | Loaned $400,000 to Fogdog Energy Solutions Inc. via convertible promissory note; also granted 180,000 stock options to a consultant. |
| 2021-06-15 | Granted 2,900,000 stock options to a consultant. |
| 2021-06-22 | Incorporated Motoclub LLC and EnderbyWorks, LLC as Delaware subsidiaries. |
| 2021-08-20 | Loaned an additional $850,000 to Fogdog Energy Solutions Inc. via convertible promissory note. |
| 2022-06-14 | Issued a promissory note payable for $117,000 (Note A). |
| 2022-08-01 | Scott Gallagher appointed as President. |
| 2022-08-09 | Promissory note extension signed, extending maturity date of Note A to February 14, 2023. |
| 2022-08-24 | Company changed name from CurrencyWorks Inc. to MetaWorks Platforms, Inc. |
| 2022-08-26 | Granted 8,300,000 stock options to officers and directors and 1,000,000 stock options to an officer. |
| 2022-09-06 | 180,000 stock options held by a consultant were forfeited. |
| 2023-01-31 | Amendment signed to extend maturity date of Note A to February 14, 2024. |
| 2023-02-22 | Granted 750,000 stock options to an officer. |
| 2023-03-15 | Signed agreement to become 100% owner of EnderbyWorks, LLC, forgiving $190,147 in payables and assuming a $1,828,000 secured promissory note from Enderby Entertainment Inc. |
| 2023-04-21 | Granted 7,000,000 stock options to officers and directors, 2,500,000 stock options to consultants, and 1,500,000 stock options to a consultant. |
| 2023-06-16 | Acquired software including Web3 business metaverse platform, AI avatar technology, and domain portfolio. |
| 2023-07-05 | Issued convertible promissory notes for $700,000 and $154,250 as consideration for software acquisition. |
| 2024-01-06 | Issued 920,000 shares to Scott Gallagher in settlement of $18,400 owed for services; granted 9,000,000 stock options to directors, officers, and consultants. |
| 2024-03-01 | Issued 2,500,000 shares for $50,000 cash; converted $25,000 of debt into 625,000 shares; issued 4,600,000 shares for $184,000 production and media broadcast agreement. |
| 2024-03-22 | Converted $400,000 Fogdog promissory note and $46,071 accrued interest into an 11.5% equity stake in Fogdog. |
| 2024-05-13 | Incorporated new Florida subsidiary, Energy Works, Inc. |
| 2024-06-07 | Converted $15,000 of debt into 1,499,400 shares. |
| 2024-06-11 | Entered into a Convertible Loan Agreement for $375,000. |
| 2024-06-20 | Converted $15,000 of debt into 1,704,545 shares. |
| 2024-06-27 | Converted $15,000 of debt into 2,138,275 shares. |
| 2024-06-28 | James Geiskopf resigned from the Board of Directors. |
| 2024-07-02 | Closed on a convertible promissory note for $90,000 net ($115,200 principal) with one subscriber. |
| 2024-07-04 | Converted $10,125 of debt into 3,164,063 shares. |
| 2024-07-31 | LarCo Holdings, LLC filed a joint complaint against BIG and the Company in Arizona Superior Court. |
| 2024-08-20 | Company acquired certain assets of Fogdog for full and final settlement of notes receivable and made a $200,000 payment for licensing fee. |
| 2024-09-06 | Company changed name from MetaWorks Platforms, Inc. to Waste Energy Corp. |
| 2024-09-30 | Enderby Entertainment Inc. note receivable in default, accrues 18% interest. |
| 2024-12-19 | Cameron Chell resigned from the Board of Directors; converted $12,000 of debt into 2,105,263 shares. |
| 2025-01-02 | Converted $12,000 of debt into 3,000,000 shares. |
| 2025-02-10 | Converted $12,000 of debt into 3,000,000 shares. |
| 2025-02-18 | Converted $10,000 of debt into 2,439,024 shares. |
| 2025-03-04 | Converted $9,200 of debt into 1,533,333 shares. |
| 2025-03-05 | Swapan Kakumanu resigned as Chief Financial Officer. |
| 2025-03-12 | Entered into private placement agreement for 10,000,000 shares for $50,000, shares not yet issued. |
| 2025-06-05 | Received an additional $50,000 under existing Convertible Loan Agreement. |
| 2025-06-06 | Entered into a promissory note agreement for $107,000 net ($123,050 principal) with one subscriber. |
| 2025-06-16 | Entered into two private placement agreements, each for 2,500,000 shares for $50,000, shares not yet issued. |
| 2025-06-29 | Entered into a promissory note agreement for $75,000 net ($95,120 principal) with one subscriber. |
| 2025-07-04 | Agreed to settle $15,000 payable to a vendor through share issuance, shares not yet issued. |
| 2025-07-10 | Amended Convertible Loan Agreement, extended maturity to July 10, 2026, received additional $100,000, revised conversion price to $0.20 per share. |
| 2025-07-15 | Operating lease for office premises commenced. |
| 2025-08-15 | Settled note payable to a principal shareholder through issuance of common shares valued at $100,000, shares not yet issued; agreed to settle $24,000 payable to a vendor through share issuance, shares not yet issued. |
| 2025-08-26 | Issued a $150,000 convertible redeemable note to the Holder. |
| 2025-08-27 | Entered into a promissory note agreement for $75,000 net ($95,120 principal) with one subscriber. |
| 2025-09-30 | End of quarterly period. |
| 2025-11-10 | Latest practicable date for shares outstanding (138,036,826 shares). |
| 2025-11-13 | Date of filing of the 10-Q report. |
Recommendation
strong sellThe company faces severe financial distress, explicitly stating 'substantial doubt about the Company's ability to continue as a going concern.' This is supported by a massive accumulated deficit of over $50 million, worsening negative working capital, and consistently negative operating cash flows. The significant increase in derivative liabilities and multiple defaulted notes payable further highlight the precarious financial position. While the strategic pivot to waste-to-energy and initial revenue generation are noted, they are insufficient to offset the fundamental solvency issues. The ineffective disclosure controls and ongoing litigation add to the high-risk profile. Without a clear path to sustainable profitability and significant capital injection, the risk of further value erosion or even bankruptcy is extremely high, making it a strong sell for investors.
Keywords
Waste Energy Corp, 10-Q, Quarterly Report, Waste-to-Energy, Renewable Energy, SEC Filing, Financial Results, Going Concern, Net Loss, Working Capital, Derivative Liability, Corporate Governance, Risk Factors, Capital Advance, Recycling, Consulting Services, AI Emissions Monitoring, Carbon Credits
Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.