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

We previously identified a material weakness in our internal control over financial reporting and we may, in the future, identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in our financial statements or cause us to fail to meet our period reporting obligations.

Management and our Audit Committee, in consultation with M&K CPAS PLLC (“M&K”), our independent registered public accounting firm, determined that there was a material weaknesses in our internal controls as of June 30, 2025, which was remediated as of December 31, 2025. 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 a company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness in our case related to the ineffective design of certain management review controls across a portion of the Company’s financial statements. Specifically, the controls related to the review of internal and externally prepared reports and analysis utilized in the financial reporting process of outside consultants that aid in the preparation of our financial statements. In order to remediate these material weaknesses, we added more external consultants to assist in the preparation of our financial statements, and assist in the expansion of our accounting and finance department as a result of our recent acquisition.

A prolonged U.S. federal government shutdown could materially and adversely affect our business and operations.

Any disruption in the operations of the U.S. government, including as a result of the recent or future temporary or prolonged shutdowns resulting from the failure of Congress to enact appropriations bills or raise the federal debt ceiling, could materially and adversely affect our business, operations and financial condition. Recently, beginning on October 1, 2025, the U.S. federal government shut down and remained shut down through November 12, 2025, and again beginning on January 31, 2026 through February 3, 2026, during which times certain regulatory agencies, such as the FDA and the SEC, furloughed critical employees and stopped critical activities. During such shutdowns, while the SEC’s EDGAR system remains operational, the unavailability of the SEC staff to review filings, issue and resolve comments, or declare registration statements effective may delay our ability to complete public offerings and obtain timely regulatory approvals. These delays could impact our access to capital markets, hinder strategic transactions, and create uncertainty around our disclosure obligations. Additionally, the lack of interpretive guidance or exemptive relief during a shutdown may increase legal and compliance risks. There can be no assurance that future shutdowns will not materially affect our operations or financial condition.

Federal budget and debt-ceiling disputes may adversely affect capital markets and our financing activities.

Moreover, the uncertainty surrounding government funding debates and debt-ceiling negotiations can negatively affect market conditions, investor sentiment, and the liquidity of small-cap and microcap issuers such as ours. If market volatility or trading disruptions were to occur during the current or future government shutdowns, our ability to execute at-the-market offerings or other financing transactions under our effective shelf registration statement or through private equity offerings could be materially impaired.

Accordingly, any federal government shutdown or protracted budget impasse could materially and adversely affect our regulatory compliance, financing options and capabilities, and overall financial condition.

Under the February 2026 Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing.

The February 2026 Purchase Agreement contains, among others, the following restrictive covenants: (A) from the date of the Purchase Agreement between us and certain investors until 30 days following the later of (a) the earliest of the date that (i) the initial registration statement registering for resale all shares issuable upon conversion of the 2026 Notes (the “Conversion Shares”) has been declared effective by the SEC, (ii) all of the Conversion Shares and February Warrant Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (iii) following the one year anniversary of the Closing Date provided that a holder of Conversion Shares and October Warrant Shares is not an affiliate of us, or (iv) all of the Shares and February Warrant Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and counsel to us has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Conversion Shares and February Warrant Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders; we may not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or common stock equivalents or file any registration statement or amendment or supplement thereto other than a registration statement providing for the resale of the Warrant Shares and the shares of Common Stock issuable upon conversion of the Notes (the “Conversion Shares”), subject to certain other limited exceptions.

If we require additional funding while these restrictive covenants remain in effect, we may be unable to effect a financing transaction on terms acceptable to us, or at all, while also remaining in compliance with the terms of the October Purchase Agreement, or we may be forced to seek a waiver from the investor party to the October Purchase Agreement, which such investor is not obligated to grant to us.

Additionally, the October Purchase Agreement requires us to hold a meeting of our stockholders at the earliest practicable date (and in no event later than 60 days after the closing) to seek stockholder approval and, if such approval is not obtained at the initial meeting, to hold a second meeting on or prior to the 60th calendar day following such meeting, and thereafter every 90 days to seek stockholder approval until the earlier of the date stockholder approval is obtained or December 31, 2026, whichever is sooner, which may be time consuming and costly.

Risks Related to Engineered Biomass and Organic Recycling

We are subject to extensive environmental laws and regulations that may increase our operating costs or expose us to liability.

Our engineered soils, remediation, and logistics operations involve the handling, transport, and processing of materials that are subject to federal, state, and local environmental laws and regulations. These include those governing air emissions, water discharges, solid and hazardous waste, and site remediation. Compliance with these laws may require significant capital expenditures, administrative resources, and operating restrictions. Any actual or alleged failure to comply could result in civil or criminal penalties, project delays, or reputational harm. In addition, we may be held liable under strict liability statutes such as the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), even for contamination not caused by our own operations.

Changes in environmental laws and standards may impose additional costs and limitations on our operations.

Legislative and regulatory changes related to climate change, PFAS contamination, soil quality, and permitting frameworks may materially impact our business. For example, more stringent discharge thresholds or reclassification of materials we handle could require us to retrofit existing equipment, modify site operations, or alter how we transport and process soils. These changes could limit our ability to obtain or renew environmental permits or require significant new investments to remain in compliance.

We face risks associated with seasonality and weather that may impact our operations and revenue.

Our engineered soils, remediation, and logistics services are subject to seasonal demand and may be significantly affected by weather conditions. Adverse weather, including heavy rain, storms, or flooding, can delay project start times, suspend field operations, reduce hauling efficiency, or result in temporary site closures. These disruptions can negatively affect backlog conversion, customer satisfaction, and quarterly revenue variability.

Our biomass and recycling and organic recycling business is performed in one state, Florida.

To date, ZEI has only performed services in the State of Florida and its business is subject to catastrophic weather and other natural events from time to time. If weather conditions in Florida prevent us from fulfilling purchase orders, we do not have a back up location and our revenue will be impacted.

Our operations are concentrated at a single permitted facility, and any disruption to that facility could severely impair our biomass recycling business.

Substantially all of our biomass recycling operations are conducted at our permitted organics processing facility in Myakka City, Florida. We do not currently operate any secondary processing facilities. A disruption at the Myakka City facility — including as a result of fire, equipment failure, severe weather, flooding, or regulatory action — could render us unable to accept feedstock, process organic waste, or produce and deliver finished engineered soil and mulch products. Any extended shutdown of the Myakka City facility would materially impair our biomass recycling revenue and could result in the loss of customer relationships and permit standing that would be difficult to recover. We do not currently maintain business interruption insurance that we believe would fully offset the financial impact of a prolonged shutdown. The concentration of our processing operations at a single location represents a significant operational risk that is not present in businesses operating multiple facilities.

Our biomass recycling operations are entirely dependent on maintaining permits issued by the Florida Department of Environmental Protection, and any revocation, suspension, or modification of those permits could halt our operations.

Resource Group operates the Myakka City facility under permits issued by the Florida Department of Environmental Protection (“FDEP”) that authorize the receipt, processing, and distribution of organic waste and related materials. Our ability to conduct biomass recycling operations is entirely dependent on maintaining these permits in good standing. FDEP permits are subject to renewal, modification, suspension, and revocation based on compliance history, changes in environmental regulations, community complaints, permit condition violations, and regulatory priorities. The permitting framework governing composting and organic waste processing facilities in Florida has become increasingly scrutinized, and future regulatory changes could impose additional operating conditions or restrict the volume or types of materials we are permitted to process. If any of our FDEP permits were suspended, revoked, or materially modified, we could be required to curtail or cease operations at the Myakka City facility, which would have an immediate and material adverse effect on our revenues, financial condition, and results of operations.

Our business is dependent on a limited number of municipal and government contracts, which may be subject to political and funding risks.

A portion of our revenue derives from government contracts for soil remediation, infrastructure support, and materials supply. These contracts are awarded through competitive bidding and may be subject to delays, renegotiation, or cancellation based on budget availability, political changes, or performance-based reviews. The loss of any significant municipal or agency customer or failure to win expected bids could have a material adverse effect on our financial condition and results of operations.

Our real estate holdings and facility operations require significant capital, management, and regulatory compliance.

We own and lease several properties that house soil processing, storage, and remediation activities. These properties must comply with zoning, permitting, and environmental requirements, and require continuous investment for maintenance, safety, and operational efficiency. If we are unable to operate these facilities profitably or repurpose them for alternative uses, we may not achieve an acceptable return on our invested capital.

Our business relies on skilled labor, specialized equipment, and operational execution to meet customer demands.

The success of our soil processing and remediation operations depends on access to qualified personnel and properly functioning, specialized equipment. Labor shortages, particularly in field services or trucking, including as a result of immigration policies, may constrain our ability to meet project schedules. Furthermore, we have faced challenges hiring employees in our compost business due to the remote location of our facilities. Equipment downtime, supply delays, or execution failures may increase project costs, reduce customer satisfaction, or delay revenue recognition.

Our logistics operations depend on a small number of licensed commercial drivers, and the loss of key drivers or an inability to recruit qualified replacements could materially impair our transportation capacity.

ZEI’s logistics operations are staffed by a workforce of 20 full-time employees, 11 of whom are CDL-licensed commercial drivers. These drivers operate our fleet of grapple trucks, walking floor trailers, and other heavy equipment, and their availability is directly tied to our ability to fulfill customer commitments. The market for CDL-licensed drivers is highly competitive and subject to persistent shortages driven by an aging driver workforce, stringent licensing requirements, and competition from larger carriers offering higher compensation. The loss of two or three experienced drivers could meaningfully reduce ZEI’s operational throughput. We cannot assure you that we will be able to attract and retain a sufficient number of qualified CDL drivers to support our operations, particularly as we seek to grow our logistics volume. If we are unable to maintain adequate driver staffing, our ability to service customers, generate logistics revenue, and support the transportation needs of our biomass recycling operations would be materially and adversely affected.

Our processing and transportation operations depend on a fleet of specialized equipment financed through multiple lenders, and the unavailability of equipment or equipment financing could impair our operational capacity.

Our biomass recycling and logistics operations are dependent on a fleet of specialized processing equipment and transportation vehicles, including trommel screeners, grinders, shredders, grapple trucks, and trailers. As of December 31, 2025, this equipment is financed through approximately fifteen separate equipment finance facilities with multiple lenders. Our ability to conduct operations is contingent on this equipment remaining in good working order, replacement parts being available, and our equipment financing facilities remaining in effect. If we default on any equipment finance obligations, lenders may repossess the collateralized equipment, directly impairing operational capacity. Additionally, if our financial condition deteriorates, we may be unable to refinance maturing equipment facilities or obtain financing for necessary equipment replacements or additions. The loss of access to key pieces of processing or transportation equipment even temporarily could disrupt customer service, reduce throughput, and materially and adversely affect our revenues and results of operations.

Our logistics business involves safety risks and the materialization of such risks will affect our business operations and financial results.

Transportation is a key component of our logistics business and involves inherent safety risks, which may not be eliminated through implementing the current risk management policies and control measures, such as safety inspections on our vehicles and safety awareness training for our drivers. The provision of our logistics services may present risks and dangers, such as improper operation of vehicles, vehicle or equipment failure and other issues arising from driving. The materialization of any of such risks may result in personal injury, business disruption or negative impact on our business.

Our trucking operations involve complex logistics that may be disrupted by operational, regulatory, or market conditions.

Our business includes operating and coordinating a fleet of trucks to transport green waste, engineered soils, and other bulk materials between job sites and our processing facilities. These operations require reliable scheduling, routing, and maintenance systems to ensure timely and compliant deliveries. We rely on third-party owner-operators of vehicles to perform certain of our logistics services, and loss of any such third-party owner-operators, or our inability to engage additional third-party owner-operators as our business grows, could negatively impact our results of operations and financial condition. Disruptions such as driver shortages, increased costs to engage third-party owner operators when needed, increased regulatory oversight on vehicle emissions or weight limits, limited availability of replacement parts, or road access restrictions may negatively impact our efficiency and increase costs. In addition, failure to maintain Department of Transportation compliance, vehicle safety records, or insurance coverage could result in fines or suspension of operations.

We face operational, regulatory, and economic risks associated with green waste projects.

Green waste handling and processing, including the receipt, sorting, and reuse of organic materials such as yard clippings, branches, and wood debris, are subject to environmental and permitting regulations. These projects may involve odor control, vector management, and contamination risks that require specialized handling and site management protocols. Changes in organic waste diversion mandates, composting regulations, or material classification standards may affect our ability to process or resell green waste economically. Additionally, fluctuations in demand from end-markets such as compost facilities, biomass plants, or soil amendment users may limit our ability to monetize collected material, which could increase storage costs or disposal expenses.

Disruptions in the supply chain for key inputs could adversely affect our operations.

Our operations rely heavily on a consistent and cost-effective supply of organic feedstocks and amendments such as yard waste, food scraps, biosolids, wood chips, and bulking agents, many of which are subject to seasonal availability, local collection programs, and third-party contracts. Any disruption to this supply chain—caused by extreme weather events, transportation bottlenecks, labor shortages, or geopolitical instability—could constrain production, increase costs, and impact our ability to meet contractual obligations or serve growing markets.

Compliance with environmental regulations is costly and subject to change.

The engineered soils and composting industry is subject to complex environmental regulations at the federal, state, and local levels, governing areas such as permitting, emissions, stormwater runoff, leachate control, and zoning. Maintaining compliance with these laws requires ongoing investments in monitoring, equipment, and staff training, and changes in regulations—such as stricter air or water standards—could increase operating costs or limit expansion. Failure to comply with such regulations could result in fines, permit revocation, or reputational harm.

Environmental liabilities from contamination or hazardous substances may expose us to financial risk.

Product quality issues or contamination could result in liability and damage customer relationships.

Fluctuations in market demand and economic conditions could negatively impact revenue.

We face intense competition and pressure from alternative products.

We are a Delaware corporation, originally formed in 2021 under the name SGB Development Corp., to engage in real property development using purpose-built, prefabricated modules constructed from both wood and steel. From our inception through 2023, our operations primarily focused on the acquisition, entitlement, and development of residential properties in high-growth markets across the United States. These efforts included the direct acquisition of land, strategic investments in real estate entities, and joint venture partnerships targeting green, single-family and multifamily housing projects.

In 2023 and early 2024, we expanded our strategy by investing in real estate-related artificial intelligence (“AI”) technologies and entering into additional joint ventures in the Southern Texas market aimed at developing sustainable single-family housing. Due to our shift in focus described below, we are no longer pursuing real estate AI related activities. We also announced plans to monetize our real estate holdings by selling properties where third-party appraisals indicated meaningful value appreciation, with proceeds to be reinvested in our current operations.

In June 2025, we completed our acquisition of Resource Group US Holdings LLC (“Resource Group”), which marked a significant strategic shift in our core business. Resource Group, through its subsidiaries, is a vertically integrated, full-service operator in the engineered soils and organic recycling industry. Its operations center on the transformation of targeted organic green waste materials into environmentally friendly soil and mulch products. Through our subsidiary, Zimmer Equipment Inc. (“ZEI”), we provide comprehensive waste logistics and collection services for our own products as well as for products of third parties through ZEI’s owned fleet of high-capacity transportation equipment and third-party contractors engaged by us. ZEI offers year-round collection and disposal services through high-capacity grapple trucks, open-top walking floor trailers, and variable-sized containers serving green waste generators, landscaping companies, golf courses, communities, and municipalities. Resource Group works with ZEI to streamline operations by internalizing certain transportation services, reducing over-the-road mileage, lowering disposal costs, and maximizing efficiency.

We currently operate in three segments: biomass recycling, logistics, and real estate. For the year ended December 31, 2025, we operated in four segments and generated $8,220,449 in revenue, of which approximately $5,935,296 was generated from our logistics business, $2,266,983 was generated from our biomass recycling business, and $18,170 was generated from our technology sector. While our logistics business operated by our subsidiary, ZEI, and our biomass recycling business operated by our subsidiary, Resource Group, are expected to serve as our primary operational focuses going forward, we also currently intend to continue to monetize our legacy real estate assets and joint venture interests.

July 2025 Equity Offering and Related Agreements

On July 29, 2025, we entered into a Securities Purchase Agreement with two investors (the “July 2025 Purchase Agreement”) pursuant to which we sold 309,691 shares of Common Stock (15,485 as adjusted for the Reserve Split) at $0.9094 per share ($18.19 as adjusted for the Reserve Split), together with pre-funded warrants exercisable for 173,681 shares of common stock (8,684 as adjusted for the Reserve Split) at an exercise price of $0.0001 per share, and five-year warrants to purchase 483,372 shares of Common Stock (24,169 as adjusted for the Reserve Split) at $0.9094 per share ($18.19 as adjusted for the Reserve Split). The warrants were sold at $0.125 per warrant, resulting in aggregate gross proceeds of approximately $560,422. Dawson James Securities, Inc. acted as financial adviser in connection with the offering and received 150,000 restricted shares of common stock and a $20,000 expense reimbursement.

The July 2025 Purchase Agreement provided the investors with a 75-day right of first refusal to participate in any proposed sale of our equity or debt securities, subject to certain exceptions, and prohibited us during that period from entering into any transaction that could interfere with or substitute for a proposed $100 million private-placement financing (the “Treasury Opportunity”) to establish a cryptocurrency treasury reserve. The investors were required to present such an opportunity within three business days of signing, with Dawson James Securities, Inc. serving as exclusive placement agent. The agreement further established specific milestones for presenting, documenting, and consummating a Treasury Opportunity; if those milestones were not met (a “Treasury Opportunity Failure”), the investors’ right of first refusal and related restrictions expired and the consulting agreement that we entered into with Bill Panagiotakopoulos, appointing him as executive consultant at an annual salary of $200,000 to assist in pursuing the Treasury Opportunity also terminated.

In connection with the July 2025 Purchase Agreement, we entered into a forbearance agreement with the assignees of the Arena Debentures, under which the assignees agreed to forbear from exercising rights or remedies relating to certain defaults until sixty-one days after any Treasury Opportunity Failure. We retained a sixty-day period following any such failure to redeem or arrange the purchase of the outstanding Arena Debentures at 115% of principal. Unless and until a Treasury Opportunity Failure occurred, we were restricted from redeeming or arranging the purchase of the Arena Debentures.

The use of proceeds from the July 2025 Purchase Agreement was designated as follows: $100,000 to reimburse deferred expenses incurred by the Company’s Chief Executive Officer, $200,000 to pay outstanding legal fees, and the remaining proceeds for working-capital purposes, subject to Mr. Panagiotakopoulos’s reasonable consent.

Additionally, effective July 29, 2025, we entered into a waiver and consent with Arena Business Solutions Global SPC II, LTD, which waived certain rights under existing agreements to permit the offering pursuant to the July 2025 Purchase Agreement. In consideration for the waiver and consent, we issued a five-year pre-funded warrant exercisable for 100,000 shares of common stock (5,000 as adjusted for the Reserve Split) at a nominal exercise price of $0.0001 per share.

October 2025 Private Placement

On October 16, 2025, we entered into a securities purchase agreement (the “October Purchase Agreement”) with institutional investors for the issuance and sale in a private placement transaction of 360,000 shares of a newly designated series of Series B Non-Voting Convertible Preferred Stock convertible at an initial conversion price of $1.36 per share ($27.20 as adjusted for the Reserve Split) into 6,617,647 shares of our common stock (330,882 as adjusted for the Reserve Split) and warrants to purchase up to 6,617,647 shares of our common stock (330,882 as adjusted for the Reserve Split) exercisable at an initial exercise price of $1.36 per share ($27.20 as adjusted for the Reserve Split), subject, among other things, to adjustment, shareholder approval and certain beneficial ownership limitations set by each holder, for a combined purchase price of $25.00 for each share of Series B Preferred Stock and accompanying warrant, which pricing was designed to be in accordance with the “Minimum Price” requirement as defined in the Nasdaq rules. The private placement closed on October 17, 2025. The net proceeds to us were approximately $8.175 million, after deducting placement agent fees and the payment of other offering expenses associated with the offering that were payable by us.

February 2026 Private Placement

On February 12, 2026, we entered into a securities purchase agreement (the “2026 Purchase Agreement”) with certain institutional investors (the “2026 Purchasers”) for the issuance and sale in a private placement transaction (the “2026 Private Placement”) of Senior Convertible Notes (“2026 Notes”) in the aggregate principal amount of $6,042,985.39. The 2026 Notes bear interest at a rate of 12% per annum, mature 13 months from the date of issuance, are payable in ten monthly installments in an amount equal to 110% of (i) 1/10th of the principal of the 2026 Notes (ii) plus accrued interest, with the first installment due and payable on the earlier of 180 days from the Closing Date or 90 days following the date that the registration statement registering the Common Stock to be issued upon conversion of the 2026 Notes and upon exercise of the 2026 Warrants (as defined below) is declared effective by the SEC and, without taking into account any accrued and unpaid interest, are initially convertible, at the option of the holder, into an aggregate of 21,505,287 shares of the Company’s common stock (1,075,264 as adjusted for the Reserve Split), par value $0.001‌ (the “Common Stock”), at a conversion price of $0.281 per share ($5.62 as adjusted for the Reserve Split) (the “Conversion Price”). In connection with the 2026 Private Placement, we also issued the Purchasers warrants (collectively, the “2026 Warrants”) to purchase an aggregate of 38,751,991 shares of Common Stock (1,937,600 as adjusted for the Reserve Split), of which (i) Warrants to purchase 21,505,287 shares of Common Stock (1,075,264 as adjusted for the Reserve Split) (the “First Warrants”) are exercisable immediately upon issuance and (ii) Warrants to purchase 17,246,704 shares of Common Stock (862,335 as adjusted for the Reserve Split) (the “Second Warrants) cannot be exercised by the Purchasers unless and until Stockholder Approval (as defined below) is obtained. The First Warrants have a term of six years from the date of issuance and will be exercisable at a price of $0.15594 per share of Common Stock ($3.1188 as adjusted for the Reserve Split), and the Second Warrants have a term of six years from the date that Stockholder Approval is obtained and will be exercisable at a price of $0.15594 per share of Common Stock ($3.1188 as adjusted for the Reserve Split).

The 2026 Private Placement closed on February 17, 2026 and we received net proceeds to the Company of approximately $5.4 million, after deducting placement agent fees and the payment of other offering expenses associated with the offering that were payable by the Company and excluding any deductions for make whole payments made to certain of the investors.

The Notes

The Notes are convertible, at the option of the holder, at any time after the date of issuance, into that number of shares of Common Stock equal to the principal amount of the Notes, plus all accrued and unpaid interest and late charges and any other unpaid amounts, at the Conversion Price of $0.281 per share ($5.62 as adjusted for the Reserve Split), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events. The holders of the Notes are prohibited from converting the Notes into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the option of the holder, 9.99%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such exercise.

The 2026 Notes are redeemable by us at any time, at our option, in whole or in part, at a redemption price equal to 110% of the sum of the principal amount to be redeemed plus accrued interest, if any.

The 2026 Notes contain customary events of default. If an event of default occurs, from and after the occurrence, and during the continuance of, an such event of default, the interest rate of the 2026 Notes shall automatically increase to 18% per annum until such event of default is cured. Additionally, if an event of default occurs, the holders of outstanding 2026 Notes may, regardless of whether such event of default has been cured, require the Company to redeem all or any portion of the outstanding Notes at a price equal to the greater of (i) the product of (A) the value of the 2026 Notes to be redeemed multiplied by (B) 110% and (ii) the product of (X) the value of the 2026 Notes to be redeemed, divided by the Conversion Price (the “Conversion Rate”), multiplied by (Y) the product of (1) 110% multiplied by (2) the greatest closing sale price of the Common Stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment.

Pursuant to the 2026 Notes, the Company shall not enter into or be a party to a Fundamental Transaction (as such term is defined in the 2026 Notes) unless (i) the successor entity assumes in writing all of the obligations under the 2026 Notes and the other transaction documents and (ii) the successor entity is a publicly traded corporation whose common stock is quoted on or listed for trading on an eligible market, as set forth in the 2026 Notes.

While the 2026 Notes are outstanding, subject to certain exempt issuances, if the Company sells, offers or grants any option or right to purchase, or otherwise disposes of or sells any equity security or equity-linked or related security, any convertible securities any preferred stock or other securities, the holders of outstanding Notes shall have the right, in their sole discretion, to require that the Company apply up to 30% of the gross proceeds from such sales or offers to redeem all, or any portion, of the outstanding Notes at a price equal to 110% of the amount of the Note being redeemed.

Without giving effect to any default interest or penalties which may accrue thereunder, assuming the full conversion of the 2026 Notes plus accrued interest in full into Common Stock without regard to any conversion limitations set forth in the 2026 Notes (assuming the 2026 Notes accrued interest at 12% for a period of thirteen (13) months), approximately 24,300,975 shares of Common Stock (1,215,049 as adjusted for the Reserve Split) would be issuable upon conversion.

Pursuant to the Second Warrants, the Company agreed to file a proxy statement with the SEC within 45 days of the Closing Date and hold a meeting of stockholders at the earliest practical date after the date following the filing thereof (and in no event later than 90 days after the Closing Date) (the “Stockholder Meeting Deadline”) for the purpose of obtaining such approval as may be required under the applicable rules of Nasdaq from the Company’s stockholders with respect to the issuance of all of the Warrant Shares upon the exercise of the Second Warrants in accordance with their terms (including adjustment provisions set forth therein) (the “Stockholder Approval”).

The Company agreed to use its reasonable best efforts to obtain such Stockholder Approval. If, despite the Company’s reasonable best efforts the Stockholder Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Company is obligated to cause an additional stockholder meeting to be held on or prior to the 90th calendar day following the failure to obtain Stockholder Approval. If, despite the Company’s reasonable best efforts the Stockholder Approval is not obtained after such subsequent stockholder meetings, the Company shall cause an additional Stockholder Meeting to be held every 90 days thereafter until such Stockholder Approval is obtained, or (ii) the Second Warrants are no longer outstanding, whichever is sooner.

The Warrants

Exercise Price

The First Warrants are immediately exercisable upon issuance, have a term of six years from the date of issuance, and are exercisable for shares of Common Stock at a price of $0.15594 per share ($3.1188 as adjusted for the Reserve Split). The Second Warrants shall become exercisable on such date, if ever, that Stockholder Approval is obtained, have a term of six years from the date of Stockholder Approval, and will be exercisable for shares of Common Stock at a price of $0.15594 per share ($3.1188 as adjusted for the Reserve Split). The exercise price and number of shares of Common Stock issuable upon exercise of the Warrants are subject to customary adjustments pursuant to stock dividends, stock splits or similar events.

Cashless Exercise

In the event there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”), the Warrants may be exercised, in whole or in part, by means of a “cashless exercise” in which case the holder will be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing, (x) (A) as applicable, the volume weighted average price (“VWAP”) of the Common Stock on the date immediately preceding the exercise date (if the notice of exercise is (1) both executed and delivered on a day that is not a Trading Day (as defined in the Warrant) or (2) both executed and delivered on a Trading Day prior to the opening of “regular trading hours) or the bid price of the Common Stock as of the time of the holder’s execution of the applicable notice of exercise (if the notice of exercise is executed during “regular trading hours” on a Trading Day), less the exercise price of the Warrant, multiplied by (B) the number of Warrant Shares that would be issuable upon exercise of the Warrant if the exercise were by means of a cash exercise rather than a cashless exercise, by (y) the price used in (A).

Fundamental Transaction

If a Fundamental Transaction (as such term is defined in the Warrant) occurs, then the successor entity will succeed to, and be substituted for the Company, and may exercise every right and power that the Company may exercise and will assume all of the Company’s obligations under the Warrants with the same effect as if such successor entity had been named in the Warrant itself. If holders of the Common Stock are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the Warrant following such Fundamental Transaction. In certain circumstances, the holder will have the right to receive the Black Scholes Value of the Warrant calculated pursuant to a formula set forth in the Warrants, payable either in cash or in the same type or form of consideration that is being offered and being paid to the holders of the Common Stock as described in the Warrants.

Commercial Credit Group Promissory Notes

Effective December 30, 2025, our wholly owned subsidiary Resource Group entered into a Negotiable Promissory Note and Security Agreement in the principal amount of $1,507,658 (the “First CCG Note”) and Negotiable Promissory Note and Security Agreement in the principal amount of $1,047,528 (the “Second CCG Note”; and together with the First CCG Note, the “CCG Notes”) with Commercial Credit Group (the “Lender”) to finance the purchase of a Komptech Crambo shredder and a Diamond Z horizontal grinder for approximately $2.54 million with a 30% down payment of approximately $700,000 that had previously been deployed under a rental arrangement.

The First CCG Note is payable as follows: the first installment of $265,266 was due on December 30, 2025, followed by 48 monthly installments of $25,879. The Second CCG Note is payable as follows: the first installment of $195,000 was due on December 30, 2025 followed by 48 monthly installments of $17,761. The Notes are secured by all the assets of RG Group of whatever nature and kind, wherever located, in which RG Group now or hereafter has any right or interest (the “Collateral”). Upon a default by RG Group (as defined in the CCG Notes), which includes, among other things, the failure to make any payment under the CCG Notes on the date on which such payment is due, the failure by RG Group to perform any other obligation under the CCG Notes, Lender at any time deeming the security afforded by the Notes unsafe, inadequate or at any risk or any of the Collateral in danger of misuse, concealment or misappropriation, the affairs of RG Group so evolve such that, in Lender’s sole discretion, Lender becomes insecure as to the performance of the CCG Notes, RG Group shall incur, create, assume, cause or suffer to exist any mortgage, trust, lien, security interest, pledge, hypothecation, other encumbrance (other than Lender’s interest), or attachment or execution of any kind whatsoever upon, affecting or with respect to the Collateral or any of Lender’s interests under the CCG Notes, RG Group shall sell, pledge, assign, rent, lease, lend, destroy or otherwise transfer or dispose of any Collateral or RG Group fails to obtain or maintain insurance on the Collateral satisfactory to Lender in its sole discretion, the rate of interest under the CCG Notes will automatically increase to at the maximum lawful rate permitted by law not to exceed eighteen percent (18.0%) per annum, RG Group is to immediately deliver possession of the Collateral to the Lender, and the Lender, without demand or notice, may, among other things, at its option accelerate the maturity of and declare the entire indebtedness under the Notes immediately due and payable and take possession of and sell all or part of the Collateral.

Austerra Restructuring

On December 31, 2025, the Company and Norman Berry II Owners, LLC (“NB Owners”), entered into a Restructuring and Collateral Agreement with Austerra to restructure the Company’s outstanding indebtedness of approximately $7.0 million (including accrued interest in excess of $750,000) originally issued by LV Peninsula and secured by the Lake Travis project site in Lago Vista, Texas.

Pursuant to the Restructuring Agreement, LV Peninsula entered into a Loan Modification Agreement securing $2.0 million of the remaining balance with its property in Durant, Oklahoma, bearing interest at 13.50% per annum with interest-only payments for 12 months and a maturity date of December 1, 2028. LV Peninsula also delivered a Deed in Lieu of Foreclosure conveying full title to the Lago Vista property to Austerra, conditionally extinguishing $5.0 million of the original secured debt. In connection therewith, LV Peninsula issued a conditional promissory note in the principal amount of $5,000,000, bearing interest at 13.50% per annum with interest-only payments for 12 months and a maturity date of December 1, 2028. The conditional note will automatically go into effect if, within 24 months of execution: (i) the development, construction, flood-plain remediation, and all material improvements to the Lago Vista property have not been substantially completed in accordance with the agreed project plan, or (ii) the entire outstanding indebtedness owed to Austerra, inclusive of the Oklahoma and Georgia property obligations, has not been paid in full. Upon sale of the Lago Vista property, the Company will receive 70% of any net sale proceeds in excess of $5.0 million (plus any additional new funds provided for finalization of the project, including accrued interest and/or penalties).

In addition, the Company entered into a Pledge Agreement pledging its 50% membership interest in Norman Berry to Austerra as collateral, and a Collateral Transfer Agreement granting Austerra a security interest in a $209,333 promissory note payable to the Company by Norman Berry. All obligations under the Restructuring Agreement are cross-collateralized and cross-defaulted across the Texas, Oklahoma, and Georgia properties.

The below disclosure included in this Management’s Discussion and Analysis of Financial Condition discusses the Company’s financial results for years ended December 31, 2025 and 2024. In June 2025, the Company acquired Resources Group and ZEI, and the operations of Resources Group and ZEI became the primary focus of the Company’s business. As a result of the acquisitions and change in focus of our core business, the year-to-year comparisons set forth below, and amounts reported in financial statements subsequent to June 2025, will materially change and the below will not be representative of, or directly comparable, to our future operating results.

Revenues

During the year ended December 31, 2025, we generated revenues of $8,220,449 primarily from the sale of materials, including compost, engineered soils, and mulch, as well as from the collection, processing, and disposal of organic and construction-related waste. Revenues also included proceeds from converting a portion of collected waste into saleable materials. For the year ended December 31, 2024, we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $207,552. This increase of $8,012,897 resulted from the acquisition of Resource Group during the year ended December 31, 2025.

Costs of Revenues

Cost of revenue for the year ended December 31, 2025, were $5,829,174 compared to $182,656 for the year ended December 31, 2024. This increase of $5,646,518 in costs resulted primarily from acquisitions that increased generated revenues during the year ended December 31, 2025. Gross profit for the year ended December 31, 2025 was $2,391,275, representing a gross margin of approximately 29%, reflecting the cost structure of our first partial year of integrating Resource Group’s organics processing and logistics operations.

General And Administrative Expenses

General and administrative expenses for the year ended December 31, 2025 were $4,177,064 compared to $1,525,707 for the year ended December 31, 2024. This increase of $2,651,357 resulted primarily from additional expenses from the acquisition of Resource Group now being recognized.

Professional and Consulting Fees

Under the February 2026 Purchase Agreement and April 2026 Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing.

The February 2026 Purchase Agreement and April 2026 Purchase Agreement contain restrictive covenants which restrict our ability to issue securities or file additional registration statements. If we require additional funding while these restrictive covenants remain in effect, we may be unable to effect a financing transaction on terms acceptable to us, or at all, while also remaining in compliance with the terms of the respective purchase agreements, or we may be forced to seek a waiver from the purchasers party to the February 2026 and April 2026 Purchase Agreements, which such purchasers are not obligated to grant to us.

A registration default under the Registration Rights Agreement we entered into in connection with the April 2026 Private Placement could result in liquidated damages obligations that would adversely affect our cash position.

Pursuant to the Registration Rights Agreement (the “April 2026 RRA”) that we entered into with the investors in connection with the April 2026 Private Placement, we are obligated to file and maintain the effectiveness of one or more registration statements covering the resale of the shares of Common Stock issuable upon conversion of the Initial April 2026 Notes and Second April 2026 Notes, additional shares of our Common Stock that may become issuable under the Initial April 2026 Notes and Second April 2026 Notes as a result of an Alternate Conversion, as well certain additional shares of our Common Stock that may be issuable upon conversion or exercise of convertible promissory notes and warrants that we may sell and issue to the purchasers pursuant to the April 2026 Purchase Agreement. Pursuant to the April 2026 RRA, if we fail to satisfy our registration obligations under the April 2026 RRA, including by failing to file or obtain or maintain the effectiveness of the required registration statements within specified time frames, we may be required to pay liquidated damages to the investors. Unless waived by the investors, we will be required to pay liquidated damages due to our failure to fulfill all of our obligations under the April 2026 RRA.

A substantial portion of our outstanding indebtedness has matured or requires significant payments in the near term, and our failure to repay, refinance or restructure such indebtedness could materially and adversely affect our business, financial condition and results of operations.

A significant portion of our outstanding indebtedness has matured or requires substantial debt service payments in the near term. Beginning on or about July 14, 2026, we are required to make monthly installment payments on the February 2026 Notes in an amount equal to 110% of one-tenth of the outstanding principal amount thereof plus accrued and unpaid interest. Our note payable to Loeb requires a payment of approximately $1.8 million at its September 7, 2027 maturity. In addition, certain of our notes payable, including a $2.5 million mortgage note payable to the Gail Baird Foundation that matured on April 21, 2025 and a $50,000 note that matured on April 30, 2025, were not repaid at maturity; although the applicable lenders have not declared these notes in default and we have continued to pay interest thereon, the lenders could elect to exercise remedies, and unpaid matured indebtedness could trigger cross-default provisions in our other debt instruments. If we are unable to pay, refinance, restructure or otherwise satisfy our indebtedness as it becomes due, whether with the proceeds of the Second Closing of the April 2026 Private Placement (which is conditioned on the satisfaction of certain conditions that have not been met), other financings or cash from operations, our lenders could exercise remedies against us and our assets, including collateral securing certain of these obligations, and we could be forced to curtail our operations, which would materially and adversely affect our business, financial condition and results of operations.

If we fail to comply with the continued listing requirements of Nasdaq, our Common Stock may be delisted and the price of our Common Stock and our ability to access the capital markets could be negatively impacted.

Our Common Stock is currently listed for trading on Nasdaq. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum stockholders’ equity of $2.5 million and a minimum closing bid price of $1.00 per share or risk delisting, which would have a material adverse effect on our business. A delisting of our Common Stock from Nasdaq could materially reduce the liquidity of our Common Stock and result in a corresponding material reduction in the price of our Common Stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

On January 26, 2026, we received a letter from Nasdaq notifying us that for the preceding 30 consecutive business days (December 5, 2025 through January 20, 2026), our Common Stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2) (“Minimum Bid Price Requirement”). The notice had no immediate effect on the listing or trading of our Common Stock, which continues to trade on the Nasdaq Capital Market under the symbol “RENX.” In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had a compliance period of 180 calendar days, or until July 27, 2026, to regain compliance with Nasdaq Listing Rule 5550(a)(2). On December 8, 2025, our stockholders approved and authorized us to amend our Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split at a ratio of 1-for-5 to 1-for-20, and on March 26, 2026, we effected the 1-for-20 reverse stock split of our then-outstanding Common Stock. Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that any listed company that fails to meet the Minimum Bid Price Requirement and has effected a reverse stock split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, will not be eligible for an automatic 180-day grace compliance period and the Nasdaq Listing Qualifications Department is obligated to immediately issue a delisting determination if it should fail to meet any continued listing requirements. Therefore, if we were to fail to meet any continued listing requirements within the applicable time periods we would immediately be issued a delisting determination. Further, the Nasdaq rule provides that a company will not be considered to have regained compliance with the minimum bid price requirement if the company takes an action to achieve compliance (such as a reverse split) and that action results in its security falling below the numeric threshold for another listing requirement.

On April 10, 2026, we received written notice (“Listing Notification”) from the Listing Qualifications staff of Nasdaq notifying us that we had regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Capital Market maintain a minimum bid price of $1.00 per share. Nasdaq notified the Company in the Listing Notification that for the last 10 consecutive business days, from March 26, 2026 through April 9, 2026, the closing bid price of our Common Stock had been at $1.00 per share or greater and, accordingly, we had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.

Additionally, Nasdaq recently proposed a new rule change (as amended on June 18, 2026) to (i) adopt Listing Rules 5450(a)(3) and 5550(a)(6) to require issuers listed on the Nasdaq Global and Capital Markets, respectively, to maintain a minimum Market Value of Listed Securities (as defined in Nasdaq Listing Rule 5005(a)(23)) of at least $5.0 million for a period of 30 consecutive business days, and (ii) amend Rule 5810 to suspend trading and immediately delist from Nasdaq securities of issuers that do not satisfy the proposed new requirements, and Rule 5815 to set forth the procedures for requesting a hearing before a Hearings Panel and the scope of the Panel’s discretion (collectively, the “Proposed $5 Million MVLS Rule”). On April 28, 2026, the SEC notified Nasdaq that it had determined to delay the implementation of the new standards to seek additional public feedback on the Proposed $5 Million MVLS Rule, providing the public at least 21 days to comment on the proposed rule. On July 22, 2026, the SEC approved the Proposed $5M MVLS Rule, permitting Nasdaq to implement the rule. However, subsequently on July 29, 2026, the implementation of the Proposed $5 Million MVLS Rule was automatically stayed after notices of petition were filed. As of August 11, 2026, the market value of our listed securities was approximately $5.2 million. If the stay on the implementation of the Proposed $5 Million MVLS Rule is lifted and the market value of our listed securities does not meet the $5.0 million requirement as of the date it goes into effect, our securities will be subject to delisting.

There is no assurance that we will maintain compliance with all applicable requirements for continued listing on Nasdaq. If our Common Stock were delisted from Nasdaq, trading of our Common Stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our Common Stock on an over-the-counter market, and many investors would likely not buy or sell our Common Stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our Common Stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our Common Stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our Common Stock, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital.

A single holder affiliated with a member of our Board of Directors holds shares of Series C Preferred Stock representing substantial voting power, which allows it to exert significant influence over us.

In June 2026, pursuant to the Exchange Agreement, we issued 7,169 shares of Series C Preferred Stock and a warrant to purchase up to 619,084 shares of Common Stock to Index Equity US, LLC, an entity managed by Bjarne Borg, a member of our Board of Directors, in exchange for the extinguishment of approximately $7.2 million of related-party indebtedness. The Series C Preferred Stock votes together with our Common Stock as a single class on an as-converted basis, subject to the applicable beneficial ownership limitation, which is currently set at 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock as if such shares of Series C Preferred had been converted but may be increased up to 19.99% at the election of the holder. As a result, Index Equity US, LLC has significant voting power. Additionally, the holders of a majority of the outstanding Series C Preferred Stock have consent rights over certain corporate actions, including the creation of securities ranking senior to or pari passu with the Series C Preferred Stock. As a result, Index Equity US, LLC is able to exert significant influence over matters submitted to a vote of our stockholders and over corporate actions requiring the consent of the Series C Preferred Stock, and its interests may differ from those of our other stockholders.

Beginning on or about September 1, 2026, the April 2026 Notes may be converted into shares of our Common Stock at prices below the prevailing market price, which could result in substantial dilution and could depress the trading price of our Common Stock.

The holders of the April 2026 Notes have the right, at any time after the later of (i) the date of receipt of stockholder approval, which was obtained on June 12, 2026, and (ii) 120 calendar days following the Initial Closing Date (September 1, 2026) to convert their April 2026 Notes, in whole or in part, into shares of Common Stock in an Alternate Conversion at a conversion price equal to the greater of (x) the April 2026 Note Floor Price of $0.534 and (y) 92% of the lowest volume-weighted average price of our Common Stock during the ten trading days preceding the applicable conversion. Because Alternate Conversions are priced at a discount to prevailing market prices, they may result in the issuance of a substantial number of shares of Common Stock at prices below the then-current market price of our Common Stock, would dilute the interests of our existing stockholders, and could place sustained downward pressure on the trading price of our Common Stock, particularly if holders convert and sell shares of Common Stock on a recurring basis. If the price of our Common Stock were to decline to the April 2026 Note Floor Price, the $6,300,000 aggregate principal amount of the Initial April 2026 Notes, without giving effect to accrued interest, would be convertible into in excess of 11 million shares of Common Stock, and the Second April 2026 Notes, if issued, would be subject to the same terms.

Market Opportunity and Growth Strategy

We believe the market backdrop for organics recycling provides a durable tailwind for our business. State and local governments are increasingly adopting organics-diversion requirements and restrictions on the landfilling of green waste, expanding the feedstock available to permitted processors, while demand for engineered soils, mulch, compost and organic growing media continues to grow across agricultural, commercial, landscaping and infrastructure end markets. In particular, domestically produced, waste-derived substrates are increasingly preferred by commercial and municipal buyers over imported and mined alternatives, such as Canadian sphagnum peat, virgin topsoil and imported bark products, reflecting supply-chain disruptions, rising import costs and tariffs on imported inputs, and procurement mandates favoring recycled-content materials.

With that in mind, we are developing our permitted Myakka City, Florida facility into what we believe will be a differentiated organic substrate production platform. The planned deployment of the UTM 1200 system described above is designed to move our output beyond bulk mulch and compost into consistent, specification-grade engineered soils and organic growing substrates, including growing media formulated to serve as a domestically produced replacement for imported sphagnum peat-based products. Permitted organics processing facilities face significant barriers to entry, including capital intensity, land requirements and regulatory complexity, and our platform combines the permitted site and approximately 9 million tons of entitled sand reserves acquired in connection with the Resource Group acquisition with ZEI’s collection and logistics network, which helps secure feedstock supply and internalize transportation costs, allowing us to source raw organic material, process it and deliver finished products within a single vertically integrated system.

Our two primary operating segments, compost sales and logistics, carry complementary margin profiles: for the six months ended June 30, 2026, our compost sales segment generated a gross margin of approximately 64%, while our logistics segment generated a gross margin of approximately 23%. As our compost sales and substrate production business grows relative to our logistics business, we believe this segment mix has the potential to expand our consolidated gross margin over time. Revenue for the quarter ended June 30, 2026 of $4,255,906 represented an increase of approximately 7.5% over revenue of $3,958,124 for the quarter ended March 31, 2026, with sequential growth in both our logistics and compost sales segments. Our growth strategy contemplates organic expansion, including increased processing throughput and new substrate products at Myakka City and expanded collection and logistics services, and we may from time to time evaluate acquisitions or investments that complement our vertically integrated platform. Any such expansion will require additional capital and is subject to the risks described under “Item 1A. Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025.

Company History

We were formed as a Delaware corporation in 2021 under the name SGB Development Corp. and, prior to our June 2025 acquisition of Resource Group, focused primarily on residential real property development and related real estate investments. In December 2025, we changed our name to RenX Enterprises Corp. to reflect our new strategic direction. See Note 1 — Description of Business for additional background.

The April 2026 Notes are initially convertible, at the option of the holder, at any time after the date of issuance, into that number of shares of Common Stock equal to the principal amount of the April 2026 Notes, plus all accrued and unpaid interest and late charges and any other unpaid amounts, at the Initial April 2026 Conversion Price of $2.895 per share, subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events. Subject to the receipt of stockholder approval, which was obtained at our 2026 Annual Meeting on June 12, 2026, the holders of the April 2026 Notes shall have the right, at any time after the later of (i) the date of the receipt of the stockholder approval and (ii) 120 calendar days following the Initial Closing Date, to convert their April 2026 Notes or any portion thereof into shares of Common Stock (an “Alternate Conversion”) at a conversion price equal to the greater of (x) a floor price of $0.534 (which is equal to 20% of the Nasdaq Minimum Price applicable to the Initial Notes) (the “April 2026 Note Floor Price”) and (y) 92% of the lowest volume weighted average price in the ten trading days prior to the date of such Alternate Conversion. See Note 7 — Notes Payable and Notes Payable – Related Party for a complete description of the April 2026 Private Placement.

At the 2026 Annual Meeting, our stockholders approved, pursuant to Nasdaq Listing Rule 5635(d), the issuance of up to 26,779,029 shares of Common Stock upon conversion of the Initial April 2026 Notes and the Second April 2026 Notes and of up to an additional 179,213,485 shares of Common Stock upon conversion of Additional April 2026 Notes (in each case assuming that such notes accrue interest at 10% for a period of 12 months and that the conversion price is reduced to the floor price provided for in the April 2026 Notes). As a result of such approvals, commencing 120 calendar days following the date that the Initial April 2026 Notes were issued (September 1, 2026), the holders of outstanding Initial April 2026 Notes shall have the right to complete an Alternate Conversion at the Alternate Conversion Price equal to the greater of (x) the April 2026 Note Floor Price and (y) 92% of the lowest VWAP in the ten trading days prior to the date of such Alternate Conversion.

We filed the Initial April 2026 Registration Statement with the SEC on May 15, 2026, and amended it on each of June 22, 2026 and July 13, 2026, in which amendment we removed shares of Common Stock issuable upon conversion of the Second April 2026 Notes and Second April 2026 Warrants in response to comments received from the SEC. The Initial April 2026 Registration Statement was declared effective by the SEC on August 5, 2026; however, as of the date of this Quarterly Report, neither the Second Closing nor any Additional Closing has occurred, and no February 2026 Notes have been repaid with the proceeds of the April 2026 Private Placement.

June 2026 Related Party Debt Exchange

On June 11, 2026, we entered into an exchange agreement with Index Equity US, LLC, a related party (the “Debtholder”), which was amended on June 15, 2026 (as amended, the “Exchange Agreement”), pursuant to which we exchanged $7,169,072.79 of principal and accrued interest outstanding (the “Outstanding Debt”) under an Amended and Restated Promissory Note, dated January 1, 2025, originally issued by us to MCS Lending, LLC, a related party, and assigned to the Debtholder on June 9, 2026, for (i) 7,169 shares of a newly designated series of Series C Convertible Preferred Stock, par value $0.001 per share (“Series C Preferred Stock”), and with a stated value of $1,000.00 per share, initially convertible, at the option of the holder, into an aggregate of 2,476,338 shares of Common Stock at an initial conversion price of $2.895 per share, and (ii) a common stock purchase warrant to purchase up to 619,084 shares of Common Stock at an initial exercise price of $2.895 per share, in each case subject to adjustment, stockholder approval (to the extent required under the applicable rules of Nasdaq) and certain beneficial ownership limitations. On June 11, 2026, we issued the shares of Series C Preferred Stock and such warrant to the Debtholder, and the Outstanding Debt was cancelled. Bjarne Borg, a member of our Board of Directors, is the manager of the Debtholder.

The terms of the Series C Preferred Stock are set forth in a Certificate of Designation filed with the Secretary of State of the State of Delaware on June 10, 2026. The conversion price of the Series C Preferred Stock is subject to proportional adjustment for stock dividends, stock splits and similar events, and to full-ratchet adjustment in connection with certain dilutive issuances, in each case subject to a floor price of $1.50 per share (with a cash true-up payable if a holder converts following a dilutive issuance that would otherwise have reduced the conversion price below such floor price). If the Series C Preferred Stock were converted in full at the floor price, we would issue up to 4,779,333 shares of Common Stock, not taking into account any dividends that may be paid in additional shares of Series C Preferred Stock. Dividends accrue on the Series C Preferred Stock at a rate of 8% per annum, compounding quarterly (increasing to 9% per annum if not paid in cash), and may be paid in cash, in additional shares of Series C Preferred Stock or by an increase in the stated value of the Series C Preferred Stock. Holders of the Series C Preferred Stock may not convert shares of Series C Preferred Stock to the extent that, after giving effect to such conversion, the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, upon at least 61 days’ prior notice to us, up to 19.99%) of our outstanding Common Stock. See Part I, Item 1. Financial Statements Note 10 – Stockholder’s Equity included elsewhere in this Quarterly Report on Form 10-Q for additional information regarding the terms of the Series C Preferred Stock.

Interest Income

During the three months ended June 30, 2026 and 2025, we earned $0 and $23,984 of interest income. This decrease of $23,984 resulted from a decrease in notes receivable balance during the three months ended June 30, 2026.

Loss on Exchange Transaction

During the three months ended June 30, 2026 and 2025, we recognized a loss on exchange transactions of $2,215,127 and $0, respectively.

Results of Operations for the Six Months Ended June 30, 2026 and Six Months Ended June 30, 2025

The following table sets forth, for the periods indicated, the dollar value represented by certain items in our Statements of Operations:

Revenues

During the six months ended June 30, 2026 and 2025, we generated revenues of $8,214,030 and $1,420,681, respectively, primarily from logistics, collection, processing and disposal services provided by our subsidiary ZEI ($6,217,295 for the 2026 period), and from the sale of materials, including compost, engineered soils, and mulch, by Resource Group ($1,996,735 for the 2026 period). Revenues also included proceeds from the conversion of a portion of collected waste into saleable materials. For the six months ended June 30, 2025, we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $18,170. This increase of $6,793,349 resulted from the acquisition of Resource Group during 2025 and the resulting change of focus in our core business.

Cost of Revenues

Cost of revenue for the six months ended June 30, 2026, were $5,524,079 compared to $869,356 for the six months ended June 30, 2025. This increase of $4,654,723 in costs resulted primarily from additional revenues generated as a result from the acquisition of Resource Group and the resulting change of focus in our core business. Gross profit for the six months ended June 30, 2026 was $2,689,951, representing a gross margin of approximately 32.7%.

Payroll and Related Expenses

Payroll and related expenses for the six months ended June 30, 2026 were $2,065,693 compared to $1,137,426 for the six months ended June 30, 2025. This increase of $928,267 in expenses resulted primarily from additional employees hired to support the growth of our logistics and compost sales operations following the acquisition of Resource Group.

Marketing and Business Development Expenses

Marketing and business development expenses for six months ended June 30, 2026 were $1,297,870 compared to $240,439 for the six months ended June 30, 2025. This increase resulted from additional spending on marketing related activities during the six months ended June 30, 2026.

General And Administrative Expenses

General and administrative expenses for six months ended June 30, 2026 were $3,337,811 compared to $1,879,489 for the six months ended June 30, 2025. This increase of $1,458,322 resulted primarily from a full six months of Resource Group and ZEI operating overhead, including insurance, facility and vehicle-related costs, and from the increased costs of operating as a public company.

Professional and Consulting Fees

Professional and consulting fees for six months ended June 30, 2026 were $1,753,481 compared to $467,180 for the six months ended June 30, 2025. This increase of $1,286,301 resulted primarily from the increased cost of professional fees in relation of being a public company, including increased audit and accounting fees, legal fees associated with our financing transactions and registration statements, and consulting fees supporting the integration of Resource Group.

Interest Expense

During the six months ended June 30, 2026 and 2025, we incurred interest expense of $4,141,183 and $1,784,845, respectively. This increase of $2,356,338 resulted from an increase in the balance of our notes payable.