Financial Analysis

14. STOCK BASED COMPENSATION The Company has a stock option plan and stock incentive plan (Plan). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promote the success of the Companys business. It is intended that options issued under this Plan constitute non-qualified stock options. The general terms of awards under the plan are that 100 % of the awards granted will vest the year following the grant unless an executive employee is granted a multi-year stock option award where an equal amount vests over the next 5 years. The maximum term of options granted is 5 years and the exercise price for all options are issued for not less than fair market value at the date of the grant. During the years ended December 31, 2025 and 2024, the Company recognized stock-based compensation as follows: SCHEDULE OF RECOGNIZED STOCK BASED COMPENSATION 2025 2024 Wages, administrative salaries and benefits $ 440,017 $ 623,000 Professional fees 115,250 50,130 Stock based compensation $ 555,267 $ 673,130 The following table summarizes the Companys stock option activities for the years ended December 31, 2025 and 2024: SCHEDULE OF STOCK OPTION ACTIVITIES Number of shares Exercise price per share Weighted average exercise price Balance, December 31, 2023 1,114,000 $ 1.75 3.61 $ 3.13 Granted 1 …

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7. GOODWILL AND INTANGIBLE ASSETS Goodwill and intangibles assets, all of which relates to the acquisition of ENP Investments in 2018, at December 31, 2025 and 2024 consisted of the following: SCHEDULE OF GOODWILL AND INDEFINITE LIVED INTANGIBLE ASSETS December 31, 2025 December 31, 2024 Goodwill $ 2,534,275 $ 2,534,275 Intangibles Assets: Indefinite lived trade secrets and trademarks 770,000 770,000 Definite lived customer lists 2,350,000 2,350,000 Accumulated amortization on definite-lived intangibles assets (1,160,000 ) (1,000,000 ) Net definite-lived intangible assets 1,190,000 1,350,000 Total intangible assets $ 1,960,000 $ 2,120,000 The amount of amortization for 2025 was $ 160,000 (2024 - $ 160,000 ) and was included in cost of sales in the consolidated statements of income and comprehensive income. Estimated amortization expense over the next five years is as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE 2026 $ 160,000 2027 160,000 2028 160,000 2029 160,000 2030 160,000 …

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12. INCOME TAXES The provision for income tax expense (benefit) is comprised of the following: SCHEDULE OF PROVISION FOR INCOME TAX EXPENSE (BENEFIT) 2025 2024 Current tax, federal $ 673,742 $ 405,475 Current tax, state 50,564 183,429 Current tax, foreign 19,878 115,540 Current tax, total expense 744,184 704,444 Deferred income tax, federal 114,484 101,053 Deferred income tax, state 40,915 45,714 Deferred income tax, foreign - - Deferred income tax, total expense (benefit) 155,399 146,767 Total $ 899,583 $ 851,211 Income taxes paid in cash, net refunds received, during the years ended December 31, 2025 and 2024 were as follows: SCHEDULE OF INCOME TAXES PAID IN CASH United States $ (107,188 ) $ 52,367 State of Illinois - - Canada 927,345 - Total $ 820,157 $ 52,367 The following table reconciles the income tax expense at the U.S. Federal statutory rate to income tax expense at the Companys effective tax rates. SCHEDULE OF RECONCILIATION OF INCOME TAXES $ % $ % 2025 2024 $ % $ % Income before income tax - United States $ 4,561,178 $ 4,472,950 Income before income tax - Canada (627,055 ) 479,850 Income before income tax - Panama (666,745 ) - Income before income tax 3,267,378 4,952,800 US federal statutory tax rate 686,149 21.0 % 1,040,088 21 % Illinois state income tax, net of federal tax benefit 344,367 10.5 % 371,708 7.5 % Foreign tax effects - Canada 151,906 4.7 % (35,952 ) (0.7 )% Foreign tax effects Panama 140,016 4.3 % Valuation allowance (49,801 ) (1.5 )% (395,348 ) (8.0 …

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3. LEASES Naperville Operating Lease In January 2016, NanoChem Solutions Inc. leased a space in Naperville, IL for office and research and development. The lease was for an initial five years and renewable every five years for a further five years. In March 2024, the Company consolidated NanoChem operations into the Peru, IL locations and terminated the lease in Naperville, IL. The Company had to pay a penalty of $ 35,910 and forfeited the $ 5,440 security deposit to terminate the lease early and incurred a loss of $ 41,350 on early termination of the lease that is shown on the consolidated statement of income and comprehensive income as a part of non-operating income (loss). Panama Operating Lease In 2024, the Company executed a contract to lease 37,500 sq. ft for manufacturing space with a lease term of 122 months with the option to renew the lease for a further 36 months at the end and total payments during the term, starting at $ 31,324 per month with a 3% increase each year, or $ 3,461,568 in total. The Company recorded the present value of the lease payments over the term as a lease liability and an ROU asset. The Companys incremental borrowing rate of 7 % was used as the discount rate since the rate implicit in the lease was not readily determinable. The lease liability related to this operating lease, which represents the present value of the lease payments, and the corresponding ROU asset were both $ 2,341,339 at inception of the lease. The ROU asset was $ 2,111,027 …

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11. LONG TERM DEBT Debt, all of which is with StockYards Bank and Trust, at December 31, 2025 and 2024 consisted of the following: SCHEDULE OF LONG TERM DEBT December 31, 2025 December 31, 2024 ENP Mendota, 10 -year mortgage, 7.18 % interest, monthly payments through to January 2030, collateralized by real property and all rents on said property $ 351,377 $ 387,577 ENP Peru, 10 -year mortgage, 7.18 % interest, monthly principal and interest payments through January 2030, collateralized by real property (1 st mortgage) 2,595,681 2,658,381 ENP Peru, 10 -year mortgage, 5.4 % interest, monthly principal payments plus interest through June 2032, collateralized by real property (2nd mortgage) 237,317 243,957 Nanochem, 5 -year note payable, 7.0 % interest, monthly principal payments plus interest through August 2029, collateralized by manufacturing equipment 1,257,285 1,545,945 NanoChem, 3 -year note payable, 4.90 % interest, monthly principal and interest payments through June 2025, collateralized by real property - 345,036 NanoChem, 3 -year note payable, 6.5 % interest, interest only payments through to July 2024, then monthly principal and interest payments through December 2025, collateralized by manufacturing equipment - 1,355,285 317 Mendota, 5 -year note payable, 6.79 % interest, interest only payments through June 2024, then monthly principal and interest payments through June 2028 with lump sum payment of $ 2,024,710 due in June 2028, collateralized by real property - 2,223 …

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(w) Recent Accounting Pronouncements . In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 ( Topic 740) Improvements to Income Tax Disclosures . The new guidance is intended to enhance annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entitys operations. The amendments in this standard require disclosure of additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the rate reconciliation) for federal, state, and foreign income taxes. They also require greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. In addition to new disclosures associated with the rate reconciliation, the amendments in this update require information pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The amendments in this update are effective on January 1, 2025 for annual periods beginning after December 15, 2024, and early adoption is permitted. We adopted this guidance which resulted in additional required disclosures included in our consolidated financial statements for the year ended December 31, 2025 and income tax …

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17. SEGMENTS AND SIGNIFICANT CONCENTRATIONS The Company operates in two segments : (a) Energy and water conservation products (as shown under the column heading EWCP below), which consists of a (i) liquid swimming pool blankets which save energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blankets and which are designed to be used in still or slow moving drinking water sources. (b) Biodegradable polymers, also known as TPAs (as shown under the column heading BCPA below), used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake. The third product line is nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen fertilizer after initial application and allows less fertilizer to be used. These products are made and sold by the Companys TPA division. The Company also manufactures food grade products that are made and sold by the TPA division. The Companys reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies. The economic factors that impact the nature, amount, timing, and uncertai …

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2. SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements have been prepared on a historical cost basis, except where otherwise noted, in accordance with accounting principles generally accepted in the United States applicable to a going concern and reflect the policies outlined below. (a) Cash and Cash Equivalents . The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with several financial institutions. As of December 31, 2025 and 2024, the Company did not have any cash equivalents. Certain term deposits previously included in cash and cash equivalents have been reclassified to reflect this policy. Accordingly, the prior year comparative statement of cash flows has been reclassified to present term deposits with original maturities greater than three months within investing activities. These reclassifications had no effect on previously reported net income, total assets, or shareholders equity. (b) Term Deposits . Term deposits with original maturities greater than three months but less than one year are classified as current assets and carried at amortized cost, which approximates fair value. Interest income is recognized on the accrual basis. At December 31, 2025, the Company had three term deposits that are maintained by commercials banks. The first term deposit is for $ 313,225 and matures in …

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15. CAPITAL STOCK During the year ended December 31, 2025, 107,000 shares were issued upon the exercise of employee stock options (2024 47,000 ) and 99,966 shares were issued upon the exercise of consultant stock options (2024 33,000 ). The Company declared a special dividend of $ 0.10 per share on May 7, 2025, paid on May 28, 2025 to shareholders of record on May 19, 2025 for a total payment of $ 1,274,753 . The Company declared a special dividend of $ 0.10 per share on April 23, 2024, paid on May 16, 2024 to shareholders of record on April 30, 2024, for a total payment of $ 1,255,053 . …

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18. SUBSEQUENT EVENTS In March 2026, the Company had a term deposit in the amount of $ 752,682 mature. In the three months ended March 31, 2026, the Company issued 15,000 shares to employees upon the exercise of employee stock options.

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