BASA 10-K & 10-Q changes, risk factors and insider trading

We presently have extremely limited cash resources to meet our current or future capital requirements. We do not expect to generate significant revenues for the foreseeable future, and we may not be able to raise the funds estimated at 5six million dollars we require immediately or the funds we may require require in the future, which would leave us without resources to continue our operations. We have faced difficulties recently in raising needed needed capital and may continue to have difficulty raising needed capital in the near or longer term as a resultbecause of, among other factors, the very early stage of our business plan. Further, we may consume any available cash resources more rapidly than currently anticipated, resulting resulting in the need for additional funding sooner than anticipated. Our inability to raise funds could lead to decreases in the price of our common stock and the failure of our businesses.

We have generated nominal revenues to date in our current BRFP business model and have generated significant losses from operations. Our revenues are not significant enough to be able to generate profits, and this condition is expected to continue for the foreseeable as we seek to raise funding and invest in our manufacturing capabilities as well as our sales and marketing efforts. We have incurred operating losses since the inception of our basalt fiber business and will continue to incur net losses until we can produce sufficient revenues to cover our costs. In addition, a number ofseveral factors continue to hinder our ability to attract capital investment, and no assurances can be given that we will be able to to raise capital in the future on acceptable terms, or at all. We have concluded that these conditions, in aggregate, raise substantial doubt about our ability to continue as a going concern. Our independent auditors have included in their audit reports for our most recent fiscal years an explanatory paragraph that states that our net loss and working capital deficiency raises substantial doubt about our ability to continue as a going concern. If we are unable to increase our revenues and establish profitable operations over time, our business business might fail.

We have a limited operating historyhistory, and we have incurred net losses in the past and expect to incur additional losses in the future.

We have a limited operating history in our current business model and have not generated meaningful revenues and have not recorded a profit since the inception of our current business model. As a result of this limited and overall negative operating history, and the uncertainty of our business model, investors have limited ability to assess our future prospects,future, and we cannot reliably forecast the future results of our operations. We expect to increase our operating expenses in the future as a resultbecause of refining and upgrading our manufacturing and other internal processes, as well as implementing our sales and marketing strategies. In addition, we expect our operating expenses to increase in the future as we expand our operations. If our operating expenses exceed our expectations, or if we do not generate revenues according to our plans, our financial performance wouldwill be adversely affected. If our revenue does not grow to offset these increased expenses, we will likely not be profitable for the foreseeable future. The continuation of losses over time could impair our ability to implement our business plan and finance our company, which could lead to the failure of our business.

We have a short operating history and a new new business model in an emerging market. This makes it difficult to evaluate our future prospects and increases the risk of your investment.

Our limited operating history history in our current BRFP rebar business model also makes it difficult for investors to evaluate our future prospects.future. You must consider our business and prospects in light ofconsidering the significant risks and difficulties we have encountered and will continue to encounter as an early-stage company in a new market. We may not be able to successfully address these risks and difficulties, which could materially harm our business and operating results. In addition, we do not know if our current business model will operate effectively now or in the future. There is a risk, therefore, that current economic conditions or worsening economic conditions, or a prolonged or recurring recession, or any other factors (some of which we may not yet have experienced or anticipated) that have an adverse impact on the construction industry and the potential demand for our rebar product,product would have a significant adverse impact on our operating and financial results.

We currently have very little little limited cash resources as all our fundraising in the last year havehas been expended on operating our business. We will thus require substantial substantial additional capital estimated at 56 million dollars to fund the anticipated growth and expansion of our business and to pursue targeted targeted revenue opportunities. Due to many factors, including the early stage of our business and the lack of liquidity in our publicly traded traded stock, as well as other uncertainties, we have had difficulties in raising necessary capital and there is a material risk that we will be unable to raise additional capital on acceptable terms, or at all. Even if we are presented with opportunities to raise additional capital, we do not know ahead of time the terms of any such capital raising. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below pricesthe atexisting whichshare ourprice. shares currently trade. We may seek to increase our cash reserves through the sale of additional equity or debt securities, including securities convertible into or exercisable for shares of our common stock. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our shareholders. The incurrence of convertible or non-convertible indebtedness would result in increased debt service obligations and could result in operating and financial covenants that would restrict our operations and liquidity. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition and require us to significantly curtail or terminate our operations.

GiveGiven the early-stage nature of our company, we have limited accounting and financial reporting personnel (including the current lack of a full-time Chief Financial Officer) and other resources with which to address our internal controls and related procedures. We and our independent registered public accounting firm have identified material weaknesses in our internal controls over financial reporting related to (i) the U.S. GAAP expertise and experience of our internal accounting personnel and (ii) a lack of segregation of duties within accounting functions. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.

WeAs of December 31, 2024, we currently owe approximately $2,144,357,695 $2,144,357 plus $554,595$983,466 of accrued interest under a 20% Secured Convertible Promissory Note held by The Richard A. LoRicco Sr. and Lucille M. LoRicco Irrevocable Insurance Trust DTD 4/28/95, which is a related party associated with our director Ronald J. LoRicco, Sr. This note matured on February 12, 2024,2023, and as of the date of this Annual Report, no event of default has been called by the note holder. The Company has continued to accrue interest under the covenants of the note holder.until such time of renewal or reset.

Given our current limited cash cash resources at this time,resources, we have been unable to repay this indebtedness, and interest on this indebtedness continues to accrue. If all or any of these note holders elect to call an event of default under these notes, we may have increased difficulty raising additional funds funds and we could be forced into bankruptcy.

Currently, our primary product is BasaFlex™. We are also developing and marketing secondary sources of basalt fiber-based product revenue, band we expect that sales of BasaFlex™ and other basalt fiber and BFRP products will account for a significant amount of our anticipated revenue revenue potential for the foreseeable future. We currently market and sell BasaFlex™ and these other products on a limited basis in the UnitedNorth StatesAmerica given our limited resources and current lack of manufacturing capacity. Because BFRP products are different from traditional steel rebar and similar traditional products, we cannot assure you that BasaFlex™ and/or our other basalt fiber products will be widely accepted in the market, and demand may not increase as quickly as we expect. Also, we cannot assure you that BasaFlex™ and our other products will compete effectively as an alternative to other more well-known and well-established alternatives such as products made from steel. Since BasaFlex currently represents our primary product, and our other products are BFRP-based, we are significantly reliant on the level of recurring sales of BasaFlex™ and decreased or lower than expected sales of BasaFlex™ for any reason would cause us to lose substantially all of our revenue.

We may be unable to derive the benefits benefits that we currently anticipate from the Supplier Agreement with CPPB and the Distributor Agreement with USS, and Manuel A. Rodriguez, an an affiliate of CPPB and USS, may become subject to conflicts of interest as a resultbecause of these agreements.

On December 10, 2021, we entered entered into a strategic commercial relationship, comprised of two principal five yearfive-year agreements: the Supplier Agreement CPPB and the Distribution Distribution Agreement with USS. CPPB and USS are related parties via the common control of Manuel A. Rodriguez (who has been appointed to our Board of Directors). As a result of these agreements, our business will be dependent on the efforts of CPPB and USS in both purchasing and distributing our products as well as having our products gain qualification for use in construction materials. We may be unable to derive the benefits we currently anticipate from these agreements for several reasons, including, without limitation: (i) failure of CPPB to purchase sufficient quantities of our products, (ii) failure of USS to find new customers for our products, (iii) the inability of CPPB, USS and our company to have our products qualified for use in construction materials and construction projects and (iv) we may generated extraordinary losses in our results of operations due to the pricing arrangements we have agreed to with CPPB and USS. In the event we do not derive the benefits we anticipate from these agreements or generate losses as a resultbecause of them, our results of operations will suffer, and our business might fail.

Our operating results may fluctuate fluctuate from period to period as a resultbecause of a number ofseveral factors, many of which are outside of our control. The following and similar factors may affect our operating results:

Achieving revenue and subsequent growth will require that we reestablish and develop additional infrastructure in our manufacturing capability as well as in sales, technical and client support functions. Our lack of capital resources has significantly delayed our plans to augmentrestart our manufacturing capacity,capacity in a new facility to be located in Ohio, and there is a risk that we will not have the capital to obtain, develop and maintain the capacity we previously maintained or other capabilities necessary for us to implement our business plan. We will continue to design plans to establish market growth,awareness addingof manufacturing,BFRP products, reestablish previous manufacturing capacities as well as add manufacturing capabilities, technical, sales and sales support resources as capital permits. If we are unable to reestablish and scale our manufacturing capability or use any of our current marketing initiatives or the cost of such initiatives were to significantly increase, or such initiatives are not successful, we may not be able to attract new customers or retain customers and clients on a cost-effective basis, and as a result, our revenue and results of operations would be affected adversely.

Additionally, our plans for manufacturing expansion through augmentation of new equipment and technology are of concern because they are proprietary in nature, and only available from a limited number of suppliers. Any interruption in sourcing through this supply chain will have an adverse impact toon our ability to meet athe growing market demand.demand for our product offerings.

We are developing a network of active channel partners which refer clients to us within different business verticals and geographies. This includes our relationship with USS. If we are unable to obtain and maintain contractual relationships with key channel partners, or establish new contractual relationships with potential channel partners, we may experience loss of sales and increased costs and resource constraints in adding customers, which could have a material adverse effect on us. The number of clients we are able tocan add through these marketing relationships is dependent on the marketing efforts of our partners over which we exercise limited control.

We currently market and sell BasaMix™ and BasaFlex™ on a very limited basis, mainly throughdirectly distributionto partnersend but also directly.users. We plan to significantly increase the scope of our sales and marketing activities, as we reestablish and grow to include approvals and new material specifications with all major federal, state, and local agencies and design-build firms. In particular, weWe are seeking to develop concrete industry partnerships, targeting large concrete concrete manufacturers and contractors. For specific marketing purposes, we have begun to develop industry-specific educational materials, such such as white papers and other collaterals to further educate our markets on the use and value of our products versus traditional steel rebar. rebar. We are participating in industry committees and associations such as ASTM International (formerly the American Society for Testing and and Materials) and the Advisory Council of Managing Agents (known as ACMA). The commercial success of BasaFlex™ and our other basalt fiber products ultimately depends upon several factors, including ultimate material acceptance and necessary specifications required to to drive demand generation. BasaFlex™ and our other products may not gain significant increased market acceptance in the construction industry. While positive customer experiences can be a significant driver of future sales, it is impossible to influence the way this information is transmitted and received amongst participants in the construction industry.

In addition, we may not be be able to establishreestablish or maintain a suitable sales force or enter into or maintain satisfactory marketing and distribution arrangements with with others. Our marketing and sales efforts may not be successful in increasing awareness and sales of BasaFlex™ or our other products. Furthermore, other marketing efforts like advertising, trade shows and educational seminars may not increase revenue to the extent we currently anticipate.

Competition for employees in our industry is intense,significant, and we may not be able to attract and retain the highly skilled employees whom we need to support our business.

Our success depends on our ability to attract, train and retain qualified personnel. Competition for qualified technical and business personnel in the construction products industry is intensesignificant, and we mayare notpresently be ableunable to hire sufficient personnel to support the anticipated growth of our business. If we fail to attract and retain qualified personnel, our business will suffer. We may not be able to hire and retain such personnel at compensation levels consistent with our market. Many of the companies with which we compete for experienced employees have greater resources and are able tocan offer more attractive terms of employment. In particular, candidates making employment decisions with respect to publicly traded companies often consider the value of any equity they may receive in connection with their employment. As a result, any lack of liquidity or significant volatility in the price of our publicly traded common stock may adversely affect our ability to attract or retain highly skilled personnel. In addition, we invest significant amounts of time and expense in training employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements and the quality of our services and our ability to serve our clients could diminish, resulting in a material adverse effect on our business.

Our business depends, in part, part, on our ability to innovate and create new or improved products and processes, including relating to manufacturing, as well as related trade secrets and know-how. There is a risk that we may be unable to innovate due to lack of financial or personnel resources, and even if we do innovate, we may be unable to file new patent or trademark applications, or that if filed, any future patent or trademark applications will result in granted patents and trademarks. Our inability to innovate could harm our ability to compete effectively.

However, there can be no assurance that our technology will not be found in the future to infringe upon the rights of others or be infringed upon by others. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made, and patent applications were filed. Because patents can take many years to issue, there may currently be pending applications of which we are unaware that may later result in issued patents that our products or product candidates infringe. For example, pending applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that our product infringes. In such a case, others may assert infringement claims against us, and should we be found to infringe upon their patents, or otherwise impermissibly utilize their intellectual property, we might be forced to pay damages, potentially including treble damages, if we are found to have willfully infringed on such parties’ patent rights. In addition to any damages, we might have to pay, we may be required to obtain licenses from the holders of this intellectual property. We may fail to obtain any of these licenses or intellectual property rights on commercially reasonable terms. Even if we are able tocan obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies technologies licensed to us. In that event, we may be required to expend significant amounts of time and resources to develop or license replacement technology. If we are unable to do so, we may be unable to develop or commercialize the affected products, which could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. Conversely, we may not always be able to successfully pursue our claims against others that infringe upon our technology. Thus, the proprietary nature of our technology or technology licensed by us may not provide adequate protection against competitors.

Our success depends, in part, part, on our ability to protect our proprietary rights to the technologies used in our products and our proprietary scientific protocols. We We depend heavily upon confidentiality agreements with our current and former officers, employees, consultants, and subcontractors to maintain maintain the proprietary nature of our technology and our manufacturing processes. These measures may not afford us complete or even sufficient protection and may not afford an adequate remedy in the event of an unauthorized disclosure of confidential information. If we fail to protect and/or maintain our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property. In addition, others may independently develop technology similar tolike ours, otherwise avoiding the confidentiality agreements, or produce patents that would materially and adversely affect our business, prospects, financial condition, and results of operations.

We must increase the value of our brand in order to generate and grow our revenues. We intend to develop a reputation based on the high quality of our rebar and related related products as well as on our culture and the experience of our customers. If we do not make investments in areas such as education, marketing, marketing, and brand awareness, as well as personnel training, the value of our brand may not increase or may be diminished. Any incident, real real or perceived, regardless of merit or outcome, that adversely affects our brand, such as, but not limited to, product failure, accidents, and failure to comply with federal, state, or local regulations, could significantly reduce the value of our brand, expose us to negative publicity and damage our overall business and reputation and negatively impact our financial condition and results of operations.

We substantially rely on the efforts of our current senior management, including Jackie Placeres, our Interim Acting Chief Financial Officer.Officer and our Chief Executive Officer Michael Nelson. Our business would be impeded or harmed if we were to lose hereither individual’s services. In addition, we currently need to fill key officer and other positions, such aas permanent Chief Financial Officer and Chief Executive Officer. If we are unable to attract, train and retain highly skilled finance, accounting, technical, managerial, manufacturing, product development, sales, and marketing personnel, we may be at a competitive disadvantage and unable to increase revenue. The failure to attract, train, retain and effectively manage employees could negatively impact our research and development, sales and marketing and reimbursement efforts. In particular, the loss of sales personnel could lead to lost sales opportunities as it cancould take several months to hire and train replacement sales personnel. Uncertainty created by the turnover of key employees could adversely affect our business.

Our independent directors and executive officers have limited experience in the management of public companiescompanies, which poses a risk for us from a corporate governance perspective.

Our directors and executive officers are inexperienced with respect to the corporate governance of public companies. Our directors are often required to make decisions regarding related parties, such as the approval of related party transactions, compensation levels, and oversight of our accounting function. Our directors and executive officer also exercise substantial control over all matters requiring stockholder approval, including the nomination nomination of directors and the approval of significant corporate transactions. We do not have a majority of independent directorsdirectors, and we have not yet been able to implement certain corporate governance measures, the absence of which may cause stockholders to have more limited protections protection against transactions implemented by our Board of Directors, conflicts of interest and similar matters. Stockholders should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

Depending on our customer demand and the availability of raw materials, we may be faced with having to source and purchase raw materials from alternative suppliers, and/or at prices that are above the current market price, or in greater volumes than available. Additionally, other factors such as the added capacity of competing steel and/or alternative FRP’s could create negative pricing pressure, which would negatively affect our profit profit margins.

In addition, socioeconomic and political events beyond our control could lead to a shortage of basalt or volatility in the prices for basalt. The recent war in Ukraine has led the world to issue sanctions on the government of Russia. This has shut down our ability to procure basalt fiber material from our secondaryprimary supplier, UWF/Kamenny Vek.BWF. While we are managing through this particular challenge, similar or worse shortages of, or volatility in the price of, basalt could adversely affect our business and the results of operations.

Government contracts generally are subject to a variety of governmentalgovernment regulations, requirements and statutes, the violation or alleged violation of which could have a material adverse effect on our business.

Our business plan will partially be driven in material part by our ability to enter into contracts funded by federal, state, and local governmental agencies. Our contracts with these governmental agencies would generally be subject to specific procurement regulations, contract provisions and a variety of socioeconomic socioeconomic requirements relating to their formation, administration, performance, and accounting and often include express or implied certifications certifications of compliance. Further, government contracts typically provide for termination at the convenience of the customer with requirements to pay us for work performed through the date of termination. We may be subject to claims for civil or criminal fraud for actual or alleged violations of these various governmental regulations, requirements, or statutes. Further, if we fail to comply with any of these various governmental regulations, requirements, or statutes or if we have a substantial number of accumulated Occupational Safety and Health Administration or similar workplace safety violations, any government contracts to which we are a party could be terminated, and we could be suspended from government contracting or subcontracting, including federally funded projects at the state level. Even if we have not violated these various governmentalgovernment regulations, requirements or statutes, allegations of violations could harm our reputation and require us to incur material costs to defend any such allegations or lawsuits. Should one or more of these events occur, it could have a material adverse effect on our business, financial condition, and results of operations.

If we do not comply with certain federal or or state laws, we could be suspended or debarred from government contracting,contracts, which could have a material adverse effect on our business.

Various statutes to which our our operations areare, or may in the future be subject, including laws prescribing a minimum wage and regulating overtime and working conditions, provide for mandatory suspension and/or debarment of contractors in certain circumstances involving statutory violations. In addition, the federal and various state statutes provide for discretionary suspension and/or debarment in certain circumstances, including as a result of being convicted of, or being found civilly liable for, fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public contract or subcontract. The scope and duration of any suspension or debarment may vary depending upon the facts of a particular case and the statutory or regulatory grounds for debarment. Any suspension or debarment from government contracting could have a material adverse effect on our business, financial condition, and results of operations.

We plan to sell our products primarily to the construction industry. The construction industry is cyclical and can exhibit a great deal of sensitivity to general economic economic conditions. Low demand from the construction industry could adversely impact our financial position, results of operations and/or our our cash flows. Economic or other conditions that adversely impact the global, national, or local construction industry may be novel and singular, in nature, such as the COVID 19 virus, or more seasonal and recurring, such global building supply chain shortages, interest rate fluctuations which impact new construction, and a lack of government funding for construction initiatives. These conditions, most of which will be beyond our control, could adversely impact business and the results of operations.

Political events, such as the imposition of tariffs or the dissolution of trade agreements, may negatively impact the supply chain and other factors related to our business. Such events could materially impact the supply and pricing of critically necessary raw materials for the manufacture of our products. products. For example, the basalt fiber roving, the primary raw material used in the manufacture of BasaFlex, and our other products are sourced from many parts of the world, and any such events could materially impact our supply and/or pricing. These events could also have adversely an adverse impact on the construction industry and demand for our products in general. Impacts from such events could adversely impact business and results of operations.

There may be legacy issues (including potential liabilities) arising from or is associated with prior management and prior business operations, including potential litigation.

Our company has been in operation operation since 2006 and as a public company since 2009. During this time, our company has entered and exited several businesses and has undergone undergone three name changes. Current management has only been engaged sinceover withthe ourlast company4 since 2021,years, and in that time has had to address several legacy issues which arose under our previous management, including the 2021 settlement of the lawsuit with Raw Energy, and the resolution of the judgment awarded to the California State Teachers Retirement System and Eagle Supply Products, among others. As such, we face the risk that all prior issues and resulting potential liabilities have not been identified, resolved, or accounted for, and if we are required to addresses any new issues as they arise, our management may become distracted from fulfilling our business objectives and we may be faced with unforeseen costs, expenses and liabilities which could damage our reputation and adversely impact our results of operations.

Our products are anticipated to be used in a wide variety of residential, commercial, and industrial applications. We face an inherent business risk of exposure to product liability or other claims in the event our products are alleged to be defective or that the use of our products is alleged to have resulted in harm to others or to property. We may, in the future, incur liability if product liability lawsuits against us are successful. Moreover, any such lawsuits, whether successful or not, could result in adverse publicity tofor us, which could cause our sales to decline. We maintain insurance coverage to protect us against product liability claims, but that coverage may not be adequate to cover all claims that may arise, or we may not be able to maintain adequate insurance coverage in the future at an acceptable cost. Any liability not covered covered by insurance or that exceeds our established reserves could materially and adversely impact our business, financial condition, and results of operations. In addition, consistent with industry practice, we provide warranties on many of our products. We may experience the costs of warranty claims (limited to replacement) when the product is not performing to the satisfaction of the claimant even though it has not caused harm to others or property. We estimate our future warranty costs based on historical trends and product sales, but we may fail to accurately estimate those costs and thereby will fail to establish adequate warranty reserves for them. Warranty claims are not insurable.

At the dateAs of this AnnualDecember Report,31, 2024, we have an outstanding 20% secured promissory note in the aggregate principal amount of $2,144,357, convertible at the option of the principal holder (a trust associated with one of our directors, Ronald J. LoRicco, Sr., which trust acts as agent for all noteholders) into shares of our common stock at a price per share equal to $0.275. If this note is converted into shares of common stock, our issued and outstanding shares would increase. In the event a market for our common stock develops, to the extent that the holder of this note converts such a note, our existing shareholders will experience dilution to their ownership interest in our company. In addition, to the extent that the holder converts such a note and then sellsells the underlying shares of common stock in the open market, our common stock price may decrease.

The principal holder of the the $2,144,357 convertible note mentioned above (a trust associated with one of our directors, Ronald J. LoRicco, Sr., which trust acts as as agent for all noteholders) is party to a security agreement with us granting such holder a secured interest in all of our assets. In addition, our agreements with this principal noteholder contain a negative covenant explicitly requiring such a holder’s consent in order for us to incur any debt or issue of any equity securities. The interests of such debt holders are senior to the rights of our common stockholders and may impede our ability to obtain new financing. Furthermore, such holder’s interest may not coincide with the interests of other stockholders, and such holder may become subject to conflicts of interest given its affiliation with one of our directors. These conflicts may not be resolved in favor of our common stockholders.

On September 15, 2022, the the Company extended the debt for a newly issued amended and restated secured convertible promissory note with a new principal balance of of $2,144,357 bearing an interest rate of 20% per annum due and payable February 12, 2024. No additional consideration was provided. As of this filingfiling, the note remains unpaid, and no entry of default has been provided to the company. The company fully expects an extension of the terms to be completed. The Company was notified on February 28, 2025, by the representatives of trust the UCC filing had been extended through August 5th, 2030.

Historically, we have raised funds from accredited investors through the sale of restricted common stock. Generally, common stock sold privately to accredited investors has certain resale restrictions under the securities laws that include elements of minimum holding periods, certain other requirements with respect to financial filings of our company and other requirements. Once these requirements are met, holders of the restricted common stock are able to remove resale restrictions and sell freely in the open market. As our common stock has a limited market for resale, a substantial additional supply of stock caused by previously restricted stock coming into the market for resale could have a materially,materially negative impact on our stock price.

Our articles of incorporation authorizeauthorizes the Board of Directors, without the approval of the shareholders, to cause shares of preferred stock to be issued in one or more more series, with the numbers of shares of each series to be determined by the Board of Directors. Our articles of incorporation further authorize authorize the Board of Directors to fix and determine the powers, designations, preferences and relative, participating, optional or other rights (including, without limitation, voting powers, preferential rights to receive dividends or assets upon liquidation, rights of conversion or exchange into common stock or preferred stock of any series, redemption provisions and sinking fund provisions) between series and between the preferred stock or any series thereof and the common stock, and the qualifications, limitations or restrictions of such rights. In the event of issuance, preferred stock could be used, under certain circumstances, as a method of discouraging, delaying, or preventing a change of control of our company. Although we have no present plans to issue additional series or shares of preferred stock, we can give no assurance that we will not do so in the future.

As of the date of this Annual Report, we had warrants outstanding that were exercisable for an aggregate of 142,434,090145,434,090 shares of common stock. The shares of common stock are issuable upon exercise of these warrants are substantial, currently constituting approximately 57% 56% of the total number of shares of common stock currently issued and outstanding. Therefore, the exercise of a large numberexercising of these warrants and public sales of the shares of common stock underlying these warrants would cause substantial dilution tofor our stockholders and could adversely impact the price of our common stock from time to time. The timing for such dilution and adverse price impact is uncertain as we have no control over when warrants held by third parties will be exercised. For more information regarding the terms of our warrants, please refer to the footnotes accompanying the audited and unaudited financial statements included as part of this Annual Report.

Under the terms of certain of our outstanding warrants (notably the Warrant AsA’s and Warrant BsB’s issued in our August 2021 and January 2022 private placements), the exercise price of such warrants may be adjusted downward in certain circumstances. If a downward adjustment were to occur in the exercise price of such warrants, the exercise of such warrants would result in the issuance of a significant number of additional shares of our common stock and cause significant dilution. Moreover, the public sale of such shares could adversely impact the price of our common stock from time to time.

We may issue a significant amountnumber of shares of common stock in the future, including shares of common stock upon conversion of preferred stock or convertible notes we have or may issue, or upon the exercise of warrants currently outstanding or which we may issue in the future. Future sales of a substantial number of shares of these shares of common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock, and could make it more difficult for us to raise funds in the future through public or private offerings of our securities.

We do not know whether our our securities will be registered or exempt from registration under the laws of any state. A determination regarding registration will be made by those broker-dealers,broker dealers, if any, who agree to serve as market makers for our common stock. We have not yet applied to have our our securities registered in any state and will not do so until we receive expressions of interest from investors resident in specific states after they have viewed this Annual Report. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities. You should therefore consider the resale market for our common stock to be limited, as you may be unable to resell your shares without the significant expense of state registration or qualification.

While we believe our products have great market potential and have begun to gain some acceptance in the market (as evidenced by the beginning of revenue growth which occurred in 2021 as discussed below), we are currently conducting relatively limited operations due to a lack of adequate funding.funding and manufacturing facilities. We are working to secure additional funding toand increasea ournew manufacturing capacityfacility in Ohio to meet what we believe will be increasing demand for our products, but until such funding is obtained, there will remain substantial doubt regarding our ability to continue as a going concern.

In the past fiscal years, inflation inflation has not had a significant impact on our business. However, during the second half of 2021, throughout 2022 and into 2023,2024, the U.S. economy has entered into a period of increasing inflation. Should inflation persist or increase, interest rates rise and could have a significant effect on the economy in general and, thereby, could affect prices for raw materials we use, demand for our products, our ability to attract and retain skilled labor and our future operating results.

The recent war in Ukraine has has led the world to issue sanctions on the government of Russia. This has shut down our ability to procure basalt fiber material from our our secondaryprimary supplier, UWF/Kamenny Vek. However, our primary supplier Mafic is US based, and has ample capacity to support our current and anticipated future needs with 100% domestic source of raw materials.BWF. Nonetheless, we are currently qualifying alternate material from other suppliers to preserve our options.

Revenue – We had $376,096 $434,275 of revenues as a result of sales of finished goods sold for the year ended December 31, 2023,2024, compared to $1,356,165$317,665 in the prior year. While the decreaseincrease in revenue in the year over year periods was material due to our ability to sell some BasaFlexBasaMix™ product in 2023,2024, overall revenues have been minimal due to our lack of funding and as a result of our limited manufacturing capabilities as we await the new BasaMax equipment.

Cost of goodsGoods soldSold – During the year ended December 31, 2023,2024, we had cost of sales of $248,313compared$172,191 compared to $2,025,926$167,223 in the prior year. During 2023,2024, wethe company lost money on a gross margin basis due to normal inefficiencies in the start-up and ramping and scaling process, including limited initial sales volume, and further due to extremely narrow margins on the initial sales of our products as we began introducing them to the marketplace as well as limited manufacturing capabilities.

Since the inception, we have incurred incurred net operating losses and generated negative cash flows in operations. As of December 31, 2023,2024, we had an accumulated deficit of $56,262,389. At$57,991,785. On December 31, 2023,2024, we had cash of $55,248$82,222 compared to $$30,340$55,248 at December 31, 2022,2023, and as of the date of this Annual Report, we have minimal cash on hand, and any funds we can presently raise (either from revenue generating operations or through investment) are are rapidly consumed.

Also, we have incurred and continue to incur significant general and administrative and other expenses associated with our product development and the establishment and proposed expansion of our manufacturing facility, beginning revenue generating operations, developing our business model, stock-based compensation and operating as a public company. We expect operating losses to continue for the foreseeable future, and we presently require and expect to continue to require substantial additional financing for continued support of our BFRP manufacturing business until we cangenerate generate sufficient revenues to achieve positive cash flow.

In addition, throughout 2024, 2023, we entered into several simple Promissory Notes with certain related parties and their associates for total proceeds $1,145,000.$378,000. These These notes each carried a 12-month term atof interest between 10% to 20% simple interest and are now due or about to come due. The accumulated interest under theseall outstanding notes is currently approximately $287,725.$697,119. Given our limited cash resources at this time, we have been unable to repay this indebtedness. While we may seek to extend the maturity dates of this indebtedness, we may be unsuccessful in doing so. If all or any of these note holders elect to call an event of default under these notes, we may have increased difficulty raising additional additional funds and we could be forced into bankruptcy.

Notwithstanding proceeds from from the sale of our common stock in early 2022, the current working capital and projected sales revenue are insufficient to maintain our our current operations. In order to scale up our manufacturing operations and reach a level of sales revenue sufficient to provide positive positive cash flow, we require funding of about 56 million dollars for both our expansion plan and our operating deficit through the scaling period. We will attempt to raise this capital through third party financing, including a private placement and/or public offering of our securities as well as bridge loan arrangements. We cannot provide any assurances that the required capital will be obtained or if financing is available, that the terms of such required financing may be acceptable to us. If we are unable to obtain adequate financing, we may reduce our operating activities to reduce our cash use until sufficient funding is secured, and our business might fail.

This overview provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of of these trends is important to understand our financial results for the three and sixNine months ended March 31, 2024 and 2023, respectively. respectively. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this report, and our audited consolidated financial statements and accompanying notes included in the Annual Report in Form-10-K Form 10-K for the period ended December 31, 2024 and filed with the SEC on April 15, 2025.

Revenue: We had revenue of $37,972$1,513 and $65,946$67,459 from sales of finished goods for the three and sixnine months ended JuneSeptember 30, 2025, compared to $86,891$288,385 and $146,340$434,725 in the prior year. While the decrease in revenue in the year-over-year periods was relatively significant due to our manufacturing constraints and limited working capital.

Cost of goods sold: During the three and sixnine months ended JuneSeptember 30, 2025, we had cost of sales of $23,548$109,878 and $38,307$148,185 compared to $30,194$137,738 and $34,453$172,191 in the prior year. We lost money on a gross margin basis due to normal inefficiencies in the start-up and ramping and scaling process, including limited limited initial sales volume, and further due to extremely narrow margins on the initial sales of our products as we began introducing them to the marketplace as well as paused manufacturing capabilities and relying on outside vendors to assist in fulfillment of goods and services. During the three months ended September 30, 2025, we shipped our excess inventory to a university for testing.

Sales, General, and Administrating Expenses: During the three and sixNine months ended JuneSeptember 30, 2025, selling, general, and administrative were $579,416$175,616 and $687,926$863,542 compared to $228,935$360,740 and $339,486,$1,067,519, respectively in the prior year. The primary components of selling, general, and administrative expenses were as follows:

Payroll and related costs: During the three and sixnine months ended JuneSeptember 30, 2025, payroll and related costs were $7,269$118,977 and $54,554,$148,235, respectively compared to $54,554 $159,468 and $45,463$208,389 in the prior period. The decrease was due to the full reduction of staff in 20232024 and 2025 where under advisement of consultants to the Board of the Directors, the Chairman and Chief Executive Officer shuttered all sales and administrative operations for the Company. The Company expects to return to a fully staffed operation by year end 2026.

Consulting fees: During the three and sixnine months ended JuneSeptember 30, 2025, consulting fees were $69,000$245,533 and $314,533 compared to $0 and $0 in the prior period.period, respectively. The Company utilized financial consultants in the prior period2025 in connection with its equity financing, management of the Company and fundraising.

Legal fees: During the three three and sixnine months ended JuneSeptember 30, 2025, legal fees were $35,869$49,426 and $150,981$200,407 compared to $36,235$24,800 and $61,344$44,059 in the prior period. Legal fees increased primarily due to ongoing matters in the current period.

Accounting and audit fees: During the three and sixnine months ended JuneSeptember 30, 20252025, accounting and audit fees were $20,968$19,009 and $26,968,$13,977, respectively, compared to $6,000 $12,000 and $30,000$42,000 in the prior period. Accounting and audit fees consisted of annual audit fees and the cost of outside consultants in the preparation of the Company’s financial statements.

Since inception, we have incurred net operating losses and negative cash flow. As of JuneSeptember 30, 2025, we had an accumulated deficit of $59,158,776.$59,223,377. We have incurred incurred general and administrative expenses associated with our product development and compliance while concurrently setting up our manufacturing manufacturing facility, beginning operations, and developing our business plan. We also continue to incur legal fees arising from ongoing activities activities due to fundraising. We expect operating losses to continue in the short term, and we require additional financing for expanding our manufacturing capability and generally scaling our business until we can generate sufficient revenues to achieve positive cash flow. These conditions raise substantial doubt about our ability to continue as a going concern.

Net cash used in operating activities amounted to $428,539$112,310 for the and sixnine months ended JuneSeptember 30, 20242025, compared to $196,071$1,055,849 for 2024. The decrease in net cash provided provided by (used in) operating activities was primarily a result of a decrease in operational activities.

During the sixnine months ended JuneSeptember 30, 2025 and JuneSeptember 30, 2024, we used $0 and $0 net cash for investing activities, respectively.

We do not believe that our our cash on hand as of JuneSeptember 30, 2024,2025, will be sufficient to fund our current working capital requirements to the point where we are generating positive cash flow. We have recently entered into several convertible promissory notes to help fund operations and will require additional working capital in the short term. We continue working towards securing more working capital with a preference towards debt which may be convertible to equity. However, there is no assurance that we will be successful in our efforts or, if we are, that the terms will be beneficial to our shareholders.